The banks and credit unions offering the best rates change month to month
The highest savings account interest rates are almost never at the big national banks. Chase, Bank of America, and Wells Fargo typically offer rates between 0.01% and 0.05% annually, which means your money barely grows. The best rates come from online banks and credit unions, where you'll find accounts paying between 4% and 5.35% annually — though the exact top rate shifts as the Federal Reserve changes its benchmark rate.
Online banks like Marcus (by Goldman Sachs), Ally Bank, American Express Personal Savings, and Discover Bank have historically offered the highest rates because they have lower overhead costs than brick-and-mortar branches. Credit unions often match or beat these rates for their members, especially if you meet their membership requirements. The catch is that these accounts usually have no physical branch, so you manage everything online or by phone.
The rate you see advertised today may not be the rate next month. When the Federal Reserve raises or lowers its benchmark rate, savings account rates follow within weeks. This means comparing rates is useful for right now, but you should check again before you move money.
Key Takeaways
- Online banks and credit unions consistently offer rates 50 to 100 times higher than traditional big banks.
- The exact top rate changes monthly based on Federal Reserve decisions, so the "best" bank shifts over time.
- You can compare current rates on sites like Bankrate, DepositAccounts, or NerdWallet, which update daily.
- Credit unions may require membership in a specific group or geographic area, so check membership rules before opening an account.
- FDIC insurance (at banks) or NCUA insurance (at credit unions) protects up to $250,000 per account, regardless of the rate.
Online banks that regularly compete for the highest rates
Marcus, Ally Bank, American Express Personal Savings, and Discover Bank have been the most consistent competitors for top rates over the past two years. Marcus offers no monthly fees and no minimum balance. Ally Bank includes a no-penalty CD option alongside its savings account. American Express requires you to be a cardholder, but cardholders get the same rate as non-cardholders on savings. Discover Bank offers both savings accounts and money market accounts at similar rates.
These banks all use FDIC insurance, which means your money is protected up to $250,000 even if the bank fails. None of them have physical branches, so you cannot walk in to deposit cash — you transfer money electronically or deposit checks by phone camera. This is not a problem if you have direct deposit or another bank account to transfer from, but it matters if you regularly handle cash.
Rates at these banks have ranged from 4.5% to 5.35% over the past 18 months, depending on Federal Reserve policy. The highest rate is not always the best account if it comes with fees, minimum balances, or restrictions on how often you can withdraw. Read the full terms before you open an account.
Credit unions and how to find one that fits your situation
Credit unions are member-owned financial institutions that often pay higher rates than banks because they operate as nonprofits. Many credit unions offer savings rates between 4% and 5.5%, and some offer even higher rates on special savings products. The tradeoff is that you must be a member to open an account, and membership rules vary widely.
Some credit unions are open to anyone in a geographic area (like a county or city). Others require you to work for a specific employer, belong to a specific organization, or be related to someone who already belongs. A few credit unions allow you to join by making a small donation to a nonprofit partner. You can search for credit unions in your area using the CO-OP Network locator or the Alliant Credit Union locator, both of which show membership requirements upfront.
Credit unions are insured by the National Credit Union Administration (NCUA), which works the same way as FDIC insurance — your money is protected up to $250,000. If you already belong to a credit union through your employer or a group membership, check what rate they offer before opening an account elsewhere. You may already have access to a competitive rate.
How to compare rates across multiple banks at once
Bankrate, DepositAccounts, and NerdWallet all publish current savings account rates from dozens of banks and credit unions. These sites update rates daily, so you can see which banks are offering the highest rate on any given day. You can filter by account type (savings, money market, CD), by minimum balance, and by whether you want FDIC or NCUA insurance.
When you compare, look at three things: the annual percentage yield (APY), any monthly fees, and the minimum balance required. A 5.3% rate with a $25 monthly fee is worse than a 5.1% rate with no fee. A rate that requires a $25,000 minimum balance may not work if you have $5,000 to save. The comparison sites show all three, so you can see the full picture before you click through to open an account.
After you narrow it down to two or three banks, visit their websites directly to confirm the rate and read the account agreement. Rates on the comparison sites are usually accurate, but the bank's own website is the official source. Some banks offer a higher rate if you set up automatic transfers or meet other conditions, so check for those bonuses too.
Why big national banks offer lower rates
Chase, Bank of America, Wells Fargo, and Citibank offer savings rates between 0.01% and 0.05% because they do not need to compete for deposits. They have millions of customers who use them for checking accounts, mortgages, and credit cards, and many of those customers keep savings accounts there out of habit or convenience. They also have the cost of maintaining thousands of physical branches, which online banks do not have.
If you have a big bank account, moving your savings to an online bank or credit union does not mean you have to close your checking account. Many people keep a checking account at their big bank for everyday use and a savings account at an online bank for money they want to grow. This is a common strategy and there is no penalty for doing it.
The only reason to keep savings at a big bank is if you need to deposit cash regularly and do not have access to another bank's ATM network. If that is your situation, ask your bank whether they offer any higher-rate savings products or money market accounts. Some do, though the rates are still usually lower than online banks.
What happens to your rate when the Federal Reserve changes policy
Savings account rates are tied to the Federal Reserve's benchmark interest rate, which is the rate banks charge each other for overnight loans. When the Federal Reserve raises its benchmark rate, banks raise savings rates within days or weeks. When the Federal Reserve lowers its benchmark rate, savings rates fall just as quickly. This is why the "best" rate changes so often.
You cannot predict when the Federal Reserve will move, but you can watch for announcements. The Federal Reserve meets eight times a year and announces its decision on a specific day. Financial news sites cover these announcements, and you can also read the Federal Reserve's own statement on its website. If you are deciding whether to move money to a savings account, checking the Federal Reserve's recent decisions and economic outlook can give you a sense of whether rates are likely to stay stable or change soon.
Once you open a savings account, your rate is not locked in the way a CD rate is. Your bank can lower your rate at any time, and they usually announce the change 30 days in advance. If your rate drops significantly, you can move your money to a different bank. This is one reason to check rates every few months — if your current bank's rate falls behind, switching takes about a week and costs nothing.
Frequently Asked Questions
Can I move money between banks without losing interest?
Yes. When you transfer money from one bank to another, the money in transit is still yours and still earns interest at your old bank until it clears. Once it lands in the new account, it starts earning interest at the new rate. The transfer itself takes three to five business days, and you do not lose any interest during that time.
What if I need to withdraw money from a high-yield savings account?
You can withdraw money anytime without penalty. High-yield savings accounts have no withdrawal limits or fees. The money usually lands in your checking account within one to three business days. The only restriction is that some banks limit how many times you can transfer money out per month, but most have removed this rule.
Is my money safe in an online bank?
Yes, as long as the bank is FDIC-insured. All the online banks mentioned here are FDIC-insured, which means your money is protected up to $250,000 even if the bank fails. You can verify a bank's FDIC status on the FDIC's official website. Online banks are regulated the same way as traditional banks.
Do I have to keep a minimum balance to get the advertised rate?
It depends on the bank. Some online banks like Marcus and Ally have no minimum balance requirement. Others require $500, $1,000, or more. The comparison sites show the minimum balance for each account, so check before you open. If you have less than the minimum, look for a bank that does not require one.
What is the difference between a savings account and a money market account?
Money market accounts usually offer slightly higher rates than savings accounts, but they often require a larger minimum balance and may limit how many checks you can write per month. For most people, a regular high-yield savings account is simpler and the rate difference is small. Money market accounts make more sense if you have a large balance and want check-writing ability.