The banks and credit unions offering the best rates today
The highest savings account rates are almost always at online banks and credit unions, not at the brick-and-mortar banks most people use. Online banks like Marcus, Ally, and American Express Personal Savings typically offer rates between 4% and 5% annual percentage yield (APY), while traditional banks often offer 0.01% to 0.05%. Credit unions vary widely depending on which one you join, but many offer competitive rates that match or beat online banks.
The reason online banks pay more is simple: they have lower overhead costs. They don't maintain physical branches, so they pass those savings to depositors through higher rates. The tradeoff is that you manage your account entirely through a website or app—there's no teller to visit and no in-person service.
Rates change frequently, sometimes weekly. The rate you see today may be different next month, so checking current offers before opening an account matters. Websites like Bankrate, DepositAccounts, and NerdWallet update rates daily and let you filter by account type and minimum deposit.
Key Takeaways
- Online banks consistently offer the highest rates because they have no physical branches and lower operating costs to pass along to savers.
- Credit unions can match or beat online bank rates, but the rate depends on which credit union you join and what membership category you fall into.
- Traditional banks at shopping centers and on Main Street typically offer rates under 0.1%, making them the slowest choice for savings growth.
- Rates change frequently enough that comparing current offers before you open an account can mean the difference between 4% and 5% APY on the same deposit.
Online banks: where most of the highest rates live
Marcus by Goldman Sachs, Ally Bank, and American Express Personal Savings are the names you'll see most often at the top of rate lists. All three are FDIC-insured, meaning your deposits up to $250,000 are protected if the bank fails. None charges monthly fees on basic savings accounts, and none requires a minimum deposit to open.
The catch is that these banks exist only online. You deposit money by transferring it from another bank account. Withdrawals happen the same way—you request a transfer and it lands in your other account within one to three business days. If you need cash immediately, you can't walk into a branch and ask for it.
Rates at these banks shift based on what the Federal Reserve does with interest rates. When the Fed raises its benchmark rate, online banks usually raise their savings rates within days or weeks. When the Fed cuts rates, online banks cut theirs too, though sometimes more slowly. This means the 4.5% you see today might be 3.8% in six months if the Fed changes course.
Credit unions: competitive rates if you can join
Credit unions are member-owned financial institutions, and many offer savings rates that rival or beat online banks. Some credit unions pay 5% or higher on savings accounts, though usually with conditions—you might need to maintain a minimum balance, make a certain number of debit card transactions per month, or receive direct deposit.
The challenge is that you can only join a credit union if you meet their membership requirements. Some are open to anyone in a geographic area. Others require you to work for a specific employer, belong to a certain profession, or be a member of an organization. A few allow you to join if you open a savings account with them and make a small deposit to a special membership share.
To find credit unions you can join, use the CO-OP Network locator or the Shared Branch locator on the Credit Union National Association website. Search by your zip code or employer. Once you find one that accepts you, ask about their current savings rates and what conditions apply. Rates and requirements vary significantly from one credit union to another.
Traditional banks: why their rates lag so far behind
Chase, Bank of America, Wells Fargo, and most regional banks offer savings accounts with rates under 0.1% APY. On a $10,000 deposit, that's less than $10 per year in interest. The reason they can afford to pay so little is that they have a captive customer base—people who already have checking accounts with them, mortgages, or credit cards, and who don't want to move their savings elsewhere.
These banks also spend heavily on physical locations, advertising, and customer service. Those costs come out of their profits, not out of what they pay savers. They're betting that convenience and brand recognition matter more to most customers than the interest rate.
If you keep savings at a traditional bank, you're essentially paying for the privilege through lost interest. A $10,000 deposit earning 0.05% generates $5 per year. The same $10,000 at an online bank earning 4.5% generates $450 per year. Over five years, that's a $2,225 difference on a single deposit.
How to compare rates across different account types
Not all savings accounts are the same. High-yield savings accounts (HYSA) offer the rates you see advertised—currently 4% to 5% at top online banks. Money market accounts sometimes offer similar rates but may require a higher minimum deposit and allow you to write checks. Certificates of deposit (CDs) lock your money away for a set period (three months to five years) in exchange for a may provide rate, which is often higher than savings accounts.
When comparing, look at the APY, not just the interest rate. APY accounts for how often interest compounds and gives you the true annual return. A 4.50% APY is always better than a 4.50% interest rate compounded monthly, because APY already includes the compounding effect.
Also check the minimum deposit required to open and whether you need to maintain a balance to keep the advertised rate. Some banks offer their highest rate only if you deposit $25,000 or more. Others have no minimum. If you have $5,000 to save, a bank requiring $25,000 minimum won't work for you, even if its rate is the highest available.
When rates change and how to stay on top of them
Savings account rates move in response to Federal Reserve decisions. When the Fed raises its benchmark interest rate, banks have more room to pay savers more. When the Fed cuts rates, banks cut what they pay. The Fed doesn't set savings rates directly—it sets a target range for the federal funds rate, which is what banks charge each other to borrow overnight. Savings rates follow that movement, usually within a few weeks.
You don't need to check rates daily, but checking every few months makes sense. If you opened an account at 4.5% and the rate has dropped to 3.8%, you might want to move your money to a bank still paying 4.5%. Transfers between banks take one to three business days and are free, so switching isn't difficult or costly.
Set a calendar reminder to check rates every three months. Use Bankrate, DepositAccounts, or NerdWallet to see what's current. If your bank's rate has fallen more than 0.5% below the top offers, it's worth moving. Over a year, that 0.5% difference on $10,000 is $50 in lost interest.
FDIC insurance and safety across different banks
All banks mentioned here—online banks, credit unions, and traditional banks—are insured by either the FDIC (Federal Deposit Insurance Corporation) or the NCUA (National Credit Union Administration). This means if the bank or credit union fails, your deposits up to $250,000 are protected and you'll get your money back.
This protection applies per depositor, per bank, per account category. If you have $250,000 in a savings account and $250,000 in a money market account at the same FDIC-insured bank, both are fully covered. If you have $250,000 at two different FDIC-insured banks, both are fully covered. But if you have $300,000 at one FDIC-insured bank in a single savings account, only $250,000 is covered.
The safety of your money doesn't depend on the interest rate. A bank paying 0.01% is just as safe as one paying 4.5%, as long as both are FDIC or NCUA insured. The rate difference is about how much profit the bank is willing to share with you, not about how secure your deposit is.
Frequently Asked Questions
Can I move my money from a traditional bank to an online bank without losing interest?
Yes. Transfers between banks take one to three business days and don't affect your interest accrual. Your old bank pays interest through the day you withdraw, and your new bank starts paying interest the day the deposit clears. You won't lose a day of interest in the transfer.
What's the difference between APY and interest rate?
APY (annual percentage yield) includes the effect of compounding—interest earned on interest. Interest rate is the base percentage the bank pays. A 4.50% APY is always the true annual return you'll receive, while a 4.50% interest rate compounded monthly actually yields about 4.60% APY. Always compare APYs, not interest rates.
Do I need a minimum deposit to open a savings account at an online bank?
Most online banks offering the highest rates have no minimum deposit requirement. You can open an account with $1 and transfer more later. Some banks do require a minimum to earn the advertised rate, so check before you open. Traditional banks are more likely to require minimums than online banks.
Will my rate stay the same if I don't touch my account?
No. Banks change rates based on Federal Reserve decisions and competition. Your rate can go up or down at any time, even if you never withdraw money. Banks must notify you before lowering your rate, but the notification might come via email or your online account statement, so check regularly.
Is it safe to keep all my savings at an online bank I've never heard of?
If the bank is FDIC-insured, your deposits up to $250,000 are protected the same way they are at a major bank. Check the FDIC's bank search tool to confirm the bank is insured. Online banks are typically safer than traditional banks because they have lower overhead and fewer bad loans, not because they're more well-known.