Today, the national average interest rate for savings accounts is just 0.45%, according to the FDIC. But that doesn’t mean you’re stuck earning a low rate on your savings.
Many banks and credit unions offer high-yield savings accounts with 5% APY or more, giving you the opportunity to maximize your saving potential and hit your savings goals even faster.
Here’s a look at some of the top federally insured high-yield savings accounts available today that currently offer 5.00% APY and higher.
Note that interest rates, fees, and requirements are accurate as of the publish date. Please verify account details directly with the financial institution.
Digital Federal Credit Union (DCU) offers a high-yield savings account with the highest APY on our list at 6.17%. The catch: this only applies to balances up to $1,000; balances above $1,000 earn 0.05% APY. But for savers who are just getting started, this could help get the ball rolling on growing their savings.
The minimum deposit needed to open this account is $5.00. There is no monthly maintenance fee or minimum balance required to earn the disclosed APY. Eligibility for membership with DCU is determined by a prospective member’s relationship to a current member, employment at an eligible company, geographic area, or involvement in qualifying organizations.
LendingClub’s LevelUp Savings account currently offers 5.00% APY with no minimum balance required to open an account. In order to earn the highest advertised rate, however, you must deposit at least $250 to the account monthly. If you miss a month, your balance will earn 4.00% APY.
This account also comes with a free ATM card for easy access to your funds, as well as unlimited external transfers. There are no monthly fees associated with this savings account. Interest is compounded daily and credited to your account monthly.
Read our full review of LendingClub Bank
The Premier Online Savings Account from Poppy Bank offers a highly competitive 5.00% APY, guaranteed for the first three months after opening an account. This rate only applies to accounts opened online and a minimum balance of $1,000 must be maintained to obtain the advertised rate.
The Growth Savings account from Forbright Bank offers a highly competitive 5.00% APY with unlimited transfers. There are no monthly fees associated with the account and there is no minimum opening balance requirement. As an added bonus, Forbright Bank is focused on supporting responsible and sustainably oriented projects, including wind turbine repairs, geothermal energy, and affordable housing. That means depositing your money with this bank helps support these efforts.
Read our full review of Forbright Bank
The Ivy Bank High-Yield Savings Account offers 5.00% APY on balances of $2,500 and up. Balances below this threshold earn just 0.05% APY. Interest is compounded daily and credited to your account monthly.
Varo Bank’s High-Yield Savings Account offers an attractive 5.00% APY on balances up to $5,000. Balances below this threshold earn 3.00% APY. There’s no minimum balance required to get started and no monthly fees. This account also allows for automatic round-ups to give your savings a boost over time.
Read our full review of Varo Bank
The amount of interest you can earn with a rate of 5% depends on how much money you deposit. The more money you keep in your account, and the longer you hold it there, the more you stand to earn thanks to compound interest.
For example, if you deposited $1,000 into a 5% interest savings account that compounds interest daily, and left the money there for one year, you’d earn a total of $51.27 in interest (assuming you don’t make any additional contributions).
Now let’s say you deposited $10,000. At the end of the year, you’d earn $512.67 in interest. And if you made an additional $100 contribution each month, you’d end up with $540.62 in interest earnings.
Finding a savings account that pays 5% on your balance is a great way to give your savings a boost and help it grow over time. However, there are additional steps you can take to get the most value out of your account.
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Start with a higher principal balance: The more money you deposit initially, the more interest you earn from the start.
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Contribute regularly: Consider setting up automatic transfers to the savings account. Even small, consistent deposits can make a big difference over time. If you contribute $100 monthly, that’s an extra $1,200 per year that earns 5% interest, which compounds to grow even more.
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Take advantage of compound interest: Make sure that the interest on your account compounds at least monthly, if not daily. The more frequently interest is compounded, the more your money will grow.
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Keep your money in the account: Each time you withdraw funds from your savings account, the principal balance that earns interest decreases, which reduces the overall growth potential. For money that you need for daily spending or paying bills, a checking account or money market account may be a better fit.
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Watch out for fees: Look for a savings account that doesn’t have any monthly maintenance fees or other charges that could eat into your interest. Some high-yield accounts have minimum balance requirements to avoid fees or earn the highest advertised rate, so be sure you can meet those minimums — or choose an account with no minimum balance requirement.
Savings accounts that offer 5% interest are not common historically. The reason rates are so high right now is because of monetary policy decisions by the Federal Reserve to combat rising inflation. Between March 2022 and July 2023, the Fed raised the federal funds rate 11 times, causing deposit rates to skyrocket.
However, now that inflation is under control, the Fed is no longer holding its benchmark rate high. In fact, it cut the federal funds rate by 50 basis points in September and 25 basis points earlier this month. Additional rate cuts are likely in 2025 as well.
All of this means that 5% interest savings accounts are harder to come by, and may not even exist by late 2025.
For those looking to maximize their savings, it might be wise to take advantage of current rates while they remain elevated. If you want to lock in today’s higher rates, you may want to consider a certificate of deposit (CD) instead of a high-yield savings account.
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