The best High-interest savings accounts in the USA offer higher interest rates than other savings accounts, to the residents of the United State.
The high-interest savings account pays 20 to 25 times the national average of a standard savings account.
Due to the rapid change of the digital world, many traditional banks have created easy access to accounts for their customers across the country through online account opening, and this has increased the saving rate leading to high-interest savings accounts.
Key Takeaways
- What high-interest savings accounts are?
- The factors to look out for in the best high-interest savings accounts when choosing one such as fees, compounding method of interest rates, withdrawal and deposit options, required minimum balance and deposit, etc.
- The top 10 best high-interest savings accounts in the USA include Varo and Capital One.
What Does A High-Interest Savings Account Mean?
A high-Interest savings account, known as a high-yield savings account is the type of savings account that gives better than average interest rates on every deposit.
Generally, it offers higher interest than the national average and traditional savings accounts.
The Benefit Of a High-Interest Savings Account
Apart from getting a better rate of returns, high-interest savings accounts allow your money to grow risk-free which makes it ideal for short-term term savings.
For instance, investing in the stock market may bring higher annual yields but it incurs risk in the market such as unexpected annual returns or market volatility, but high-interest savings accounts openly give a competitive interest rate on all deposits. Thus, making it an excellent option to grow your savings with no risks associated.
Also, high-interest savings accounts are Federal Deposit Insurance Corporation (FDIC). If your bank has insurance care, this means your savings will be protected irrespective of the failure your bank may experience.
You can also withdraw money whenever you want.
The Downside Of High-Interest Savings Accounts
The negative side of a high-interest savings account is that it is limited to some type of savings. For instance, saving for retirement is not acceptable in it but in a tax-advantaged retirement account.
Also, the interest rates vary depending on the online financial institution you are banking with.
How High-Interest Savings Accounts Work
High-interest savings accounts work similarly to other savings accounts: you deposit and withdraw freely. Though each deposit earns you interest, exceeding the number of withdrawals per month gives rise to a fee.
However, you can open the account online which makes it easier to access your account any time, any day.
Factors To Look Out For In High-Interest Savings Accounts
When deciding to open a high-interest savings account, it is advisable to compare different options in the marketplace due to differences in interest rates and fees.
However, here are some of the factors to consider:
1. Initial Deposit
Check out how much each financial institution requires to open the account and if you can afford it.
2. Interest Rate
Try to understand how much interest the savings account currently pays and evaluate if it will go down or increase in the subsequent years due to its flexibility.
3. Minimum Balance
The minimum balance refers to the amount in your account to keep functioning. Comprehend the minimum balance of every financial institution and go for the one you can meet to avoid fees or invalidation of the interest you expected.
4. Deposit/Withdrawal Options
Consider the alternatives the bank uses to deposit and withdraw money such as a smartphone app for mobile check deposit into the account and deposit by ATM to avoid unnecessary fees.
5. Fees
Some banks charge fees for deposits and withdrawals while some do not. Therefore, assess the fees your bank charges for each transaction made in the account.
6. Linking To Other Accounts
Try to learn if your bank allows creating links between your high-interest savings accounts and deposit account with other banks. And if there are restrictions to linking multiple accounts.
7. Compounding Method
Know from the beginning how your bank compound the interest-whether daily, weekly, monthly, quarterly, semi-annually, or yearly.
Frequent compounding increases interest.
Sticking to computing accounts by APY rather than annual interest rates makes the compounding factor to be taken into account.
So, try to comprehend all these aforementioned factors before opening a high-interest savings account with any financial institution.
The List Of The Top 10 Best High-Interest Savings Accounts In the USA
The best high-interest savings accounts give the most interest rates. They include.
1. Capital One High-Interest Savings Account
Capital One is FDIC-insured and one of the best high-interest savings accounts in the US because of its 360 performance which makes it easier to save for various goals.
It earns 3.00% APY across all balances. It has no monthly maintenance fee and no minimum deposit.
Capital One has a mobile app for managing your savings anytime and also offers a 24/7 service which makes it a safer bank to save for high interest.
2. American Express High-Interest Savings Account
The bank offers strong savings accounts with certificates of deposit that are worth considering. It offers a 2.50% APY with $1 on the minimum balance and no monthly fee.
It is FDIC-insured and by the service of American Express which keeps your savings accessible and secure.
3. Alliant Credit Union High-Interest Savings Account
Alliant credit union presents competitive rates on savings with 1.75% APY. It has no monthly fee however, it accepts $5 for the minimum balance.
It has a user-friendly mobile app for electronic transfers to another account.
4. Synchrony Financial High-Interest Savings Account
Synchrony Financial is a Stanford consumer financial services company that offers a savings account with a 2.45% interest rate and no minimum deposit and monthly payment.
5. Salem Five High-Interest Savings Account
Salem Five Direct is an online component of Salem Five founded in 1855 in Salem, Massachusetts. However, the subsidiary was the initial online bank that began in 1995.
It provides a savings account at a competitive rate of 3.50% APY with low fees ($10 minimum deposit).
7. SoFi High-Interest Savings Account
SoFi, fully known as Social Financial, was published in August 2011 by school students of Stanford business in 2012, 2014, and 2015.
SoFi started presenting federal and private student loan refinancing, mortgages, and personal loans respectively.
In 2019, it introduced SoFi money but it was recently replaced with SoFi savings and checking accounts.
SoFi savings account offers 2.50% for APY with no minimum deposit and monthly fee.
It has a mobile SoFi app for transactions and easy access to your account.
7. Ally High-Interest Savings Account
Ally Financial Inc. is an online financial company having $173.1 billion in assets as recorded on 30th September 2018. It has 6.5 million customers with 8,000 employees.
Ally Bank provides savings accounts with 2.35%APY and no minimum deposit or monthly fees.
It offers other services such as auto loans and investment products, credit cards, mortgages, checking accounts, and CDs.
Your savings are secure with the account.
8. Axos High-Interest Savings Account
Axos is a strong free savings account that offers a competitive interest rate of 0.61% with no maintenance fee, and no minimum balance.
It has a $250 minimum deposit with a free ATM card and tools for the management of your money.
9. CIBC High-Interest Savings Account
CIBC bank USA has agility savings account with an excellent high interest of 5.03% with no monthly cost.
The account is easy to grow your savings and the customers have 24 hours of access to their account.
10. Varo High-Interest Savings Account
Varo has an outstanding savings account with a unique APY program that entices the user to save more.
However, it gives a 2.00% interest rate with no minimum deposit, and a small minimum balance is required to keep the account functional.
It equally does not accept monthly maintenance fees.
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Conclusion
High-interest savings accounts offer high interest better than the interest offered by the traditional savings account.
It works like other savings accounts in the sense that you can open the account online, and deposit and withdraw money.
Varo and Capital One are considered the best because of their unique interest rates and 360 performance respectively.
FAQs
Answers to some of your questions about high-interest savings accounts in the USA.
Which Bank Gives High Interest On Savings Accounts In The USA?
The banks that give high interest on savings accounts in the USA include:
- CFCI Bank: 3.55% APY
- Vio Bank: 3.25% APY
- Dollar Savings Direct: 3.50%APY
- Valley Direct: 3.50% APY
Which Bank Gives 6% Interest In Savings Account?
Digital Federal Credit Union gives 6% interest in a savings account.
Is There A 5% Savings Account?
Yes, there is. Blue Federal Credit Union and Netspend offer a 5% savings account.
Where Can I Get 5% Interest On My Money?
You can get 5% interest on your money through the following banks:
- Current: 4%, up to $6,000
- Blue Federal Credit Union: 5%, up to $1,000
- Varo: 5%, up to $5,000
- Net spend: 5%, up to $1,000
- Aspiration: 3%-5%, up to $10,000.
You can learn more from the video below:
About Author
- I am a writer and researcher, a practical digital marketer, and a copywriter who communicates value to a society based on years of experience and knowledge in the field.
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