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Why Lock Your Money in a CD? Earn More with the Flexibility of a High-Yield Savings Account
With interest rates on top high-yield savings accounts rivaling or exceeding many CDs, you can grow your money without locking it up for months or years.
Last Updated: January 2025
All members are insured by FDIC or NCUA
We know you’re looking for the best place to grow your savings—We’ve rounded up the best of the best based on the features you care about.
High Yield Savings Account
Certificate of Deposit
Interest Rates
Currently higher rates in many cases
Lower rates than many HYSA offers
Accessibility
Deposit and withdraw funds at anytime
Usually no ability to add money after initial deposit and penalties for withdrawal before the term ends
Flexibility
No term limits
Locked terms
Fees & Penalties
Often no fees
Penalties for early withdrawal
Compounding Interest
Continuous compounding interest
Must renew or reinvest after CD matures
Security
FDIC insured up to $250k
FDIC insured up to $250k
FEATURED FINANCIAL INSTITUTIONS IN
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National Savings Rate Average: National Rate Average:
0.45
%
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Advertiser Disclosure
 
ADVERTISER DISCLOSURE
Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all account options available. *APY (Annual Percentage Yield).Rates / Annual Percentage Yield terms are current as of the date indicated. Rates are subject to change without notice and may not be the same at all branches. These quotes are from banks, credit unions and thrifts, some of which have paid for a link to their website. Bank, thrift and credit unions are member FDIC or NCUA. Contact the financial institution for the terms and conditions that may apply to you.

FAQ’S

What Is a High-Yield Savings Account?
A High-Yield Savings Account (HYSA) is a type of savings account that offers a significantly higher interest rate compared to traditional savings accounts. The main advantage of a HYSA is the ability to earn more interest on your deposits, helping your savings grow faster over time. These accounts are typically offered by online banks, which have lower overhead costs than brick-and-mortar institutions, allowing them to pass the savings on to customers in the form of higher rates.
How Do Online High-Yield Savings Accounts Work?
Online HYSAs work similarly to traditional savings accounts, with the key difference being that they are managed entirely online. You can deposit and withdraw funds, check your balance, and transfer money using your bank’s website or mobile app. Interest is usually compounded daily or monthly and added to your balance regularly. Because online banks save on operating costs, they can offer higher interest rates to customers.
Are Online High-Yield Savings Accounts Safe?
Yes, online HYSAs are safe, as long as they are offered by FDIC-insured banks or NCUA-insured credit unions. The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) insure deposits up to $250,000 per depositor, per bank or credit union, in case of bank failure. Always ensure that the bank offering the HYSA is FDIC or NCUA insured before opening an account.
What Are the Advantages of an Online High-Yield Savings Account?
  • Higher Interest Rates: The primary benefit is the higher interest rate, which helps your savings grow more quickly.
  • Easy Access: You can access your funds at any time via online banking or a mobile app.
  • Low Fees: Many online HYSAs have minimal or no monthly fees, and some even offer free ATM access.
  • FDIC/NCUA Insurance: Your deposits are insured up to $250,000, providing peace of mind.
What Are the Disadvantages of an Online High-Yield Savings Account?
  • Limited Physical Access: Because these accounts are online-only, you may not have access to in-person banking services.
  • Transfer Delays: Transferring money to and from your online HYSA can take a few business days.
  • Variable Interest Rates: The interest rates on HYSAs can change, which means your account’s yield may decrease over time.
How Do I Open an Online High-Yield Savings Account?
Opening an online HYSA is straightforward. First, research and compare different accounts to find one that offers a competitive interest rate, low fees, and features that suit your needs. Once you’ve selected an account, you’ll need to provide personal information, such as your name, address, Social Security number, and a valid form of ID. Most banks allow you to fund your new account via an electronic transfer from an existing bank account.
Can I Lose Money in a High-Yield Savings Account?
HYSAs are considered very low risk. As long as your account is with an FDIC or NCUA-insured institution, your deposits up to $250,000 are protected. However, if the interest rate falls below the inflation rate, your money might lose purchasing power over time, even though the nominal balance doesn’t decrease.
How Often Do Interest Rates Change on High-Yield Savings Accounts?
Interest rates on HYSAs can change frequently, often in response to shifts in the Federal Reserve’s interest rate policies. Banks can adjust rates at their discretion, so it’s wise to monitor your account’s rate and periodically compare it with other available options.
Are There Minimum Balance Requirements?
Many online HYSAs do not have minimum balance requirements, making them accessible to all savers. However, some may require a minimum deposit to open the account or maintain a certain balance to avoid fees. Be sure to check the specific terms of the account you’re considering.