Sooner or later, you’re going to want to stow away some money in a high-interest savings account. It just makes solid financial sense.

Most people use high-yield savings accounts to provide emergency backup capital or to plan for events well down the road. These accounts pay a yield higher than average. Keep in mind that Certificates of Deposit (CDs) are deposit accounts which often pay higher interest rates than any standard savings or money market account.

Our research reveals that, on average, savings accounts yield just 0.10 percent APY and the largest banks in the nation tend to offer even less.

But there’s no good reason to earn less than 1 percent APY on your savings and it’s probably time to make some changes. You can do that by comparing rates offered by the banks on our list. These accounts offer the highest yields available and are easy to set up.

The Listing of Top High-yield Online Savings Accounts With APYs Above 1%:

  • Citibank – APY
  • CIBC Bank – 1.05% APY
  • Vio Bank – 1.04% APY
  • PNC Bank – 1.00% APY
  • Salem Five Direct – 1.00% APY, $100 minimum opening deposit
  • Citizens Access – 1.00% APY
  • Ally Bank – 1.00% APY
  • American Express National Bank – 1.00% APY

These APY (Annual Percentage Yield) offerings were available from July 2020. BanksBestRates’s editorial team update often. Keep in mind that these APY offers may vary according to region.

The Terms

High-yield Savings Accounts are offered by digital and brick-and-mortar banks and credit unions. They generally pay a higher interest rate than traditional savings accounts. They also – at least in most cases – beat the rates offered by traditional checking accounts.

High-yield savings accounts also offer some benefits beyond simply elevated interest rates.

Is Your Money Safe in a High-yield Savings Account?

Safety is a hallmark of high-yield savings accounts, and they’re every bit as safe as a traditional savings product. All the funds in these accounts are insured for up to $250,000 at all banks by the Federal Deposit Insurance Corporation (FDIC) and protected at credit unions via the National Credit Union Share Insurance Fund (NCUSIF).

The best of them offer very low fees or no fees at all.

High-yield savings accounts tend to come with no monthly fees and low fees for standard charges such as fees levied for non-sufficient funds. Online banks tend to lead the field in these sorts of offerings. Online banks can offer higher rates and lower fee structures due to the lower costs associated with brick-and-mortar firms. They then pass overhead savings on to customers in the form of higher yields.

The Roster of High-yield Savings Accounts for August 2020

Citibank – While they only offer their $0 minimum opening deposit accounts in some U.S. states and markets, the Citi Accelerate Savings does offer a very competitive APY in those selected markets. Not available in large states like California and New York, the accounts do feature no minimum balance to open in those states where the accounts are sold.

On the other hand, Citi charges a fee of $4.50 every month, but only if your savings account doesn’t link to a Citibank checking account. The fee is waived if you keep your average monthly balance above $500 even if your savings account does not link to a Citibank checking account. You will be charged $10 a month in the form of a “service fee” if your linked checking and savings accounts don’t meet the minimum requirements.

CIBC Bank – CIBC Bank USA was previously known as The PrivateBank and Trust Company and was founded in 1991. The bank operates out of Chicago and was re-branded as CIBC Bank USA. At 1.05% APY – but requiring a $1,000 minimum opening deposit – the CIBC offering still makes our list.

The company’s Agility Savings Account does not charge maintenance fees or fees for minimum balances. While accounts of any amount earn this generous APY, the total account balance is capped at $1,000,000.

Vio Bank – Their savings account clocks in at a healthy 1.04% APY but does require a minimum opening deposit of $100. Vio Bank is a relative newcomer following its establishment in 2018. Vio is the nationwide online version of MidFirst Bank, an FDIC-insured bank since 1934. MidFirst Bank and was chartered in 1911. Vio Bank also offers a High-Yield Online Savings account and CDs.

Things to Consider When Opening a High-yield Savings Account

Look For a High Annual Percentage Yield

APY is the metric for return and includes compounding, the interest earned on your deposit, and higher is always ideal.

In addition, you’ll want to consider the APY in conjunction with any requirements called for to earn that yield.

You can use BanksBestRates’s compound interest calculator to calculate your potential return.

Rate Changes

It pays to factor in any bank or credit union’s history of adjustments to their interest rates. While CDs feature a constant interest rate over a given period of time, savings account APYs are often variable and subject to change at any time to account for market fluctuations.

Banks adjust APYs for a variety of considerations, and the savings account rate for your money might increase or decrease according to economic factors such as interest rate changes from the Federal Reserve. During 2019, a pair of emergency rate drops by the Fed – in response to the outbreak of the coronavirus — led banks and credit unions to lower their rates.

As APYs are generally variable in nature, you may find that an APY which fluctuates and could dent potential earnings might not offer you the peace of mind found in a CD. At a minimum, you should select a savings account which features a “rate guarantee” of six months to one year.

Minimum Deposit Requirements

A minimum deposit or opening deposit requirement should also factor into your thinking. These minimum deposit levels vary considerably depending on the bank or credit union you choose. Some of these accounts may call for a deposit of $10,000 – or more.

Accounts calling for a higher minimum deposit may offer greater yield, but not in all cases. It pays to check minimum deposit requirements, but in the current market, a number of the most attractive high-yield savings accounts only call for a minimum opening deposit of $100.

Minimum Balance Required

Look out for the “monthly maintenance fee.” It’s a fee banks charge when you dob’t maintain a minimum balance in your account. Banks waive the fee, but only if you maintain their minimum balance standard. These minimum deposit amounts run from nothing to more that $10,000 for some accounts.

How Often Will You Need to Access Your Funds

You should ask yourself how often you’ll need access to your funds and if those conditions will effect your ability to maintain the minimum balance. If you can’t do that, you may not earn the annual percentage yield advertised for the account.

Limits to Withdrawals

Regulation D says that savings account holders may only complete six transactions per month from their savings accounts, and those include online transfers to other accounts, phone transfers, automatic transfers, check or debit transfers and overdraft coverage. The rules apply to money market accounts. Individual banks set options and rules for withdrawals and transferring funds. Know the details of any account at the start to avoid nasty surprises.

Other Considerations and Potential Pitfalls

Consider that there are also limits to the amount of your money protected by FDIC insurance. This coverage applies to holding up to $250,000 per depositor at a given institution and the rule applies to total holdings in savings accounts and CDs combined. Your holdings will be at risk if you exceed the FDIC-insured limit at a single bank. You must confirm that the bank accounts you’re eyeing are FDIC-insured. You can do this via the BankFind tool offered by the FDIC.

You can use BanksBestRates’s savings rate calculators to compare the best savings accounts.

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