Best High Yield Savings Accounts 2025

A high yield savings account is a type of deposit account that offers a significantly higher interest rate than traditional savings accounts. While regular savings accounts offer an average of 0.38% APY¹ according to the FDIC's national average, high yield accounts can offer 5 times higher or more. In fact, some accounts featured on our list offer over 10 times the national average.

How it works: You deposit money into the account, and the bank pays you interest on your balance. The interest compounds over time, meaning you earn interest on both your original deposit and previously earned interest. Most high yield savings accounts are offered by online banks, which have lower overhead costs and can pass those savings to customers through higher interest rates.

Your money remains easily accessible while earning substantially more than traditional accounts, making it ideal for emergency funds and your savings goals.

¹ FDIC's national average savings account rate as of June 2025

Yes, high yield savings accounts are just as safe as traditional savings accounts when offered by FDIC-insured banks. The FDIC (Federal Deposit Insurance Corporation) protects your deposits up to $250,000 per depositor, per bank.

This means even if the bank fails, your money is protected by the U.S. government. Some banks offer additional coverage through partnerships with multiple institutions, potentially protecting deposits up to $3 million or more.

APY (Annual Percentage Yield) is the most important number to focus on when comparing savings accounts. It represents the total amount you'll earn in one year, including the effect of compounding interest.

Interest rate is the base rate the bank pays on your deposits before compounding is calculated. The APY will always be equal to or higher than the interest rate because it includes compounding.

Example: If a bank offers a 4.00% interest rate compounded daily, the APY might be 4.08%. This means you'll actually earn 4.08% on your money over the course of a year, not just 4.00%.

Always compare APYs, not interest rates, when choosing between accounts since APY gives you the complete picture of your potential earnings.

The amount varies based on your personal financial situation, but here are general guidelines:

Emergency Fund: Keep 3-6 months of expenses in a high yield savings account. This covers unexpected costs like medical bills, car repairs, or job loss. If your monthly expenses are $4,000, aim for $12,000-$24,000 in savings.

Short-term Goals: Money you'll need within 1-3 years for goals like a vacation, wedding, or home down payment should go in high yield savings rather than investments.

Medium to Long-term Goals: If you're risk-averse and prefer stable, guaranteed returns over the volatility of the stock market, high yield savings accounts can be an excellent place to grow your money safely over longer periods.

Yes, APY rates can change. High yield savings accounts typically offer variable rates, meaning they fluctuate based on market conditions and bank policies.

What affects rates:

• Federal Reserve rates: When the Fed raises or lowers interest rates, savings account rates typically follow

• Bank competition: Banks may raise rates to attract deposits or lower them when they have sufficient funds

• Economic conditions: Inflation, economic growth, and market demand for deposits influence rates

Rate changes: Banks must notify you of rate changes, but they can happen frequently. A rate that's 4.50% today might be 4.00% next month or 5.00% depending on market conditions.

Focus on banks with consistently competitive rates rather than chasing the highest rate at any given moment. The best banks tend to keep their rates competitive over time, and the ones we featured have a history of doing so.