According to the FDIC, the national average interest rate for savings accounts stands at 0.39% today. However, numerous banks and credit unions are providing options with significantly higher returns.
Many institutions currently offer high-yield savings accounts featuring an annual percentage yield of 4% or greater. These accounts present opportunities for savers to accelerate progress toward their financial goals.
Several federally insured high-yield savings accounts are available with APYs at or above 4%. Interest rates, fees, and requirements are current as of the publication date, and consumers are advised to verify details directly with financial institutions.
Digital Federal Credit Union provides a Primary Savings Account with a 5% APY on balances up to $1,000. Balances exceeding that amount earn 0.05% APY. The account requires a $5 minimum opening deposit and has no monthly maintenance fee. Membership eligibility depends on various factors including relationships with current members or employment with qualifying companies.
Varo Bank's High-Yield Savings Account offers 5% APY on balances up to $5,000, with balances above that threshold earning 2.5% APY. The account has no minimum balance requirement or monthly fees and includes an automatic round-up feature.
The Pibank Savings account provides a 4.6% APY with no fees or minimum balance requirements. Interest accrues daily and is credited monthly on the 15th.
FitnessBank, a division of Affinity Bank, offers a Savings Account with a 4.45% APY. It requires a $100 minimum opening deposit and carries a $10 monthly maintenance fee that can be waived with a $100 average daily balance. Customers opening an Elite Checking account can increase their rate to 4.75% APY.
Ivy Bank's High-Yield Savings Account offers 4.1% APY on balances of $2,500 or more, with lower balances earning 0.05% APY. Interest compounds daily and credits monthly.
Bread Savings provides a High-Yield Savings Account with a 4.05% APY and no monthly fees. A $100 minimum deposit is required to open the account, and interest compounds daily with monthly crediting.
Jenius Bank Savings offers a 4.05% APY with no minimum deposit or balance requirement and no monthly fees. Customer service is available 24 hours a day, seven days a week.
LendingClub's LevelUp Savings account currently offers 4% APY with no minimum balance requirement. To earn the advertised rate, account holders must deposit at least $250 monthly; otherwise, the balance earns 3% APY. The account has no monthly fees, and interest compounds daily with monthly crediting.
The AlumniFi Savings account uses a tiered structure: balances up to $24,999 earn 3.5% APY, balances between $25,000 and $99,999 earn 3.75% APY, and balances of $100,000 or more earn 4% APY. Accounts are held at Michigan State University Federal Credit Union with NCUA insurance up to $250,000.
Current, a financial technology company, offers bank accounts with sub-accounts called "Savings Pods." Users can earn 4% APY on up to $2,000 per Pod, with a maximum of $6,000 across all Pods, by making monthly direct deposits of at least $200. Without meeting this requirement, the rate drops to 0.25% APY. Balances above $6,000 do not earn interest.
The interest earned from a 4% APY account depends on the deposited amount and duration. For instance, $1,000 deposited for one year with daily compounding would yield approximately $40 in interest, assuming no additional contributions. A $10,000 deposit would generate about $400 in interest over the same period. Adding $100 monthly to a $10,000 deposit would result in approximately $421.84 in interest earnings after one year.
To maximize returns from such accounts, consumers can start with a higher initial deposit, make regular contributions, ensure interest compounds frequently, minimize withdrawals to maintain the principal balance, and select accounts without fees or with manageable minimum balance requirements.
Accounts offering 4% APY are becoming less common. Recent Federal Reserve rate cuts suggest deposit account rates may continue to decline. Additional rate reductions could occur, making current higher rates potentially temporary. Consumers seeking to lock in current rates might consider certificates of deposit as an alternative to high-yield savings accounts.