High-yield savings accounts are savings accounts that offer a higher-than-average interest rate to depositors.
These types of accounts are typically offered by online banks and credit unions, which may be able to offer higher interest rates because they have lower overhead costs than traditional brick-and-mortar banks.
High-yield savings accounts can be a good option for people who are looking to earn more interest on their savings and who don’t need immediate access to their money.
However, it is important to compare rates from multiple banks and to carefully read the terms and conditions of any high-yield savings account before opening one, as these accounts may have certain restrictions or requirements that could affect your ability to earn the advertised interest rate.
Putting your money in a bank that pays out 6% or more in interest may sound attractive, but you need to be aware of the restrictions.
4 Savings Accounts With >6% Interest
These days, you have a few high-yield savings options with 6.00% APY or more. However, these often come with important terms and restrictions that you must adhere to. Here are the top 4 savings products that offer 6+% interest, in a nutshell:
- Digital Federal Credit Union: Primary Savings Account (6.17% on up to $1,000)
- Mango Money: Savings Account (6% on up to $2,500)
- U.S. Treasury: I Bonds (6.89% on up to $10,000)
- Save: Market Savings (7.60% for a 1-year term)
Let’s go into more detail with each below.
1. Primary Savings Account with Digital Federal Credit Union
The Digital Federal Credit Union (DCU) Primary Savings Account pays up to 6.17% APY with the following fine print:
- Minimum opening deposit is $5.
- Earn 6.17% on the first $1,000 deposited.
- Anything over $1,000 earns 0.16%.
There is no minimum monthly balance and no fees for the Primary Savings Account.
DCU boasts over 1 million members, 5,900 co-op branches, and access to more than 80,000 fee-free ATMs. You can become a member if you reside in a community, are employed by a company, or take part in an organization on the DCU list.
2. Savings Account with Mango Money
Mango Money’s savings account pays up to 6% APY with the following fine print:
- Must have the Mango Card, a prepaid debit card, and deposit $25 to open a savings account.
- To qualify for the 6% APY, you must have a balance of at least $25 and make Signature Purchases of at least $1,500 using your Mango Card.
- If you make Signature Purchases between $750 to $1,499, you earn a fallback rate of 2% on your balance.
- Earn 6% on balances of $25 to $2,500.
- The remaining balance over $2,500 earns 0.10%.
Mango Money allows for up to 6 monthly transfers out of your Savings Account. You can enroll in direct deposit to ensure that you save every month.
3. I Bonds with the U.S. Treasury
U.S. Treasury I Bonds aren’t actually savings accounts, but they’re a great way to save money at a fixed interest rate. This rate fluctuates with inflation and adjusts every six months, depending on the current market. I Bonds earn monthly interest. That said, the government compounds the interest two times annually. You can earn interest on I Bonds for up to 30 years and receive the full payment, principal, and interest when you cash in.
Currently, I Bonds are offered with 6.89% interest on up to $10,000.
4. Market Savings with JoinSave.com
Save’s Market Savings pays:
- 8.26% APY for a 1-year term, minimum deposit of $1,000.
- 7.79% APY for a 2-year term, minimum deposit of $5,000.
- 9.18% APY for a 5-year term, minimum deposit of $5,000.
Save is a wealth management app that offers the security of FDIC-insured savings accounts as well as market returns. Every time you deposit funds, they automatically invest for you. All you have to do is bank as you normally would.
Please note, management fees associated with investments may reduce earnings on your account. Withdrawing prior to maturity will incur additional fees.
Are >6% APY Savings Accounts Worth It?
Savings accounts that offer 6% or more in interest come with many restrictions. So you have to ask yourself, “Is it worth it?” It might not make sense to deposit your savings into these accounts if they require a minimum balance, a certain amount of monthly purchases to be made, or if direct deposits are mandatory.
Also, earning high interest on only a small part of your deposits could make the account lose its appeal.
Think it through. Sticking to a “lower-interest” account might actually earn you more in the long run. Take the Mango Money Savings Account for example. After $2,500, your balance earns just 0.10%.
You could be getting more in interest if you keep your funds in a bank account that pays 2.00% to 4% APY on all balances.
Savings Account Must-Haves
Before you hop on board with the savings account advertising the highest interest rate, keep the following important account characteristics in mind.
- No/low minimum deposit. Check to see if the high-yield savings account requires a minimum deposit. If it does, make sure that you can meet the requirements to earn the highest interest rate available.
- No/low minimum balance. Some banks require a minimum balance to keep the account open and earn interest. If it does, ask how they determine your balance (average daily or monthly) and make sure that you can meet the requirements.
- No/low monthly fees. Monthly maintenance fees range from $0 to as much as $20. If the bank does charge a monthly fee, ask if there are things you can do to waive them. For example, meeting a minimum threshold for direct deposits or spending.
- Mobile/online banking features. You’ll want features like mobile check depositing, the ability to link to external accounts, etc.
- FDIC or NCUA insured. If the account is not FDIC or NCUA insured and the bank goes out of business, there is no guarantee that you will get your money back.
APY is “Annual Percentage Yield,” which is the real rate of return of compound interest.
Save offers the highest APY on a savings account at 9.24%. But your money is locked for 5 years and there is a $5,000 minimum deposit.
Interest rates on savings accounts change frequently: monthly, quarterly, or semi-annually. They often change when there are economic or federal changes.
You can’t lose money from a high-yield savings account unless you put your money in a bank that isn’t FDIC-insured. Otherwise, a high-yield savings account is about as safe as it gets for your money.
The Bottom Line
There are banks that offer savings accounts with 6% or more APY, but most likely not on 100% of the balance.
When you’re shopping around for a high-yield savings account, consider important factors other than the interest rate itself. An account with fewer terms and requirements may be a better option than one with the highest percentage of interest.