Savings account rates sail above 5% — here are 11 top picks (2024)

PHNjcmlwdCB0eXBlPSJ0ZXh0L2phdmFzY3JpcHQiIHNyYz1odHRwczovL3N0YXRpYy5teWZpbmFuY2UuY29tL3dpZGdldC9teUZpbmFuY2Vfdmlld3BvcnRfZGV0ZWN0aW9uLmpzPjwvc2NyaXB0PjxzY3JpcHQgYXN5bmMgdHlwZT0idGV4dC9qYXZhc2NyaXB0Ij5teWZpV2F0Y2hXaWRnZXQoJ215ZmlXaWRnZXRfMScpO215ZmlXYXRjaFdpZGdldCgnbXlmaVdpZGdldF8xLjEnKTs8L3NjcmlwdD4=Lauren Williamson is the Financial and Home Services Editor for the Hearst E-Commerce team. She previously served as Senior Editor at Chicago magazine, where she led coverage of real estate and business, and before that reported on regulatory law and financial reform for a magazine geared toward in-house attorneys. You can reach her at lauren.williamson@hearst.com.Hearst Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.Mobile app users, click here for the best viewing experience.The last time you could find 5% interest rates on a savings account, Brad Pitt and Jennifer Aniston were still a thing, Carrie Underwood was just a reality TV contestant, and Desperate Housewives was one of the most popular shows. Times have changed, but 5% interest savings accounts are back — and easier than ever to open. So if you haven’t moved your money around since low-rise jeans were in fashion, it’s time to take another look at your money. While many traditional banks still offer lower interest rates, high-yield savings accounts at online banks are paying out substantially larger ones.What kind of difference could it make? Let’s say you have $1,000. If you deposit it in a savings account earning an average APY (0.53%, according to Bankrate’s latest survey), in 10 years your money would earn $54 in interest. However, let’s now put that $1,000 in a 5% interest rate savings account — in 10 years, your money would grow by nearly $650. Here’s where you could get a 5% APY or more right now.5% interest savings account optionsNewtek Bank: 5.25% APY Total Direct Bank: 5.20% APYCFG Bank: 5.17% APYVio Bank: 5.15%Popular Direct: 5.15% APYUFB Direct: 5.06% APYCIT Bank: 5.05% APYTAB Bank: 5.02%Salem Five Direct: 5.01% APYDollar Savings Direct: 5.0% APYMy Banking Direct: 5.0% APY Why savings account interest rates are so highThe average interest rate on savings accounts has more than quadrupled since March 2022, when the Federal Reserve began aggressively hiking the rate banks charge each other to borrow money, also known as the federal funds rate. Although the Fed doesn’t control interest rates on consumer products like savings accounts, its actions affect them. And whenever it raises the federal funds rate, other interest rates tend to follow suit.On top of that, deposits at banks have fallen dramatically over the past year, which means financial institutions are eager to attract new customers. Total deposits at U.S. banks fell by $472 billion during the first quarter of 2023, the greatest decline in 39 years, according to the Federal Deposit Insurance Corporation (FDIC). Robust coffers, however, allow banks to lend money more readily — and the interest they earn on those loans, in turn, is how they make most of their money. Paying out higher interest rates on savings accounts and CDs helps bring more customers into the fold and shores up the banks’ balance sheets.Online banks in particular have been offering especially high rates, in part because they don’t have the overhead of the big traditional banks — no physical branches, for example. They pass their savings on to customers in the form of excellent interest rates on high-yield savings accounts. Yet online banks function much like any other bank: If they’re federally insured by the FDIC, your money will be protected up to 250,000 per depositor. They may or may not have minimum deposit and monthly fee requirements. And you can withdraw and deposit money into your bank account as often as you like (though some banks charge a fee for more than six withdrawals from a savings account in a month).Here’s how the details break down for these online banks that are offering a 5% APY or more.CFG BankAPY: 5.17%Minimum opening deposit: $1,000Minimum balance to qualify for APY: $1,000Deposit frequency: Any timePhysical branches: In Baltimore and AnnapolisATM network: May use Allpoint ATMs across the country with no feeTotal Direct BankAPY: 5.07%Minimum opening deposit: $25,000Minimum balance to qualify for APY: $2,500Deposit frequency: Any timePhysical branches: NoneATM network: NonePopular DirectAPY: 5.05%Minimum opening deposit: $100Minimum balance to qualify for APY: $0.01Physical branches: In New York, New Jersey, and Florida (as Popular Bank)ATM network: May use Allpoint ATMs with no feeSalem Five DirectAPY: 5.01% APY Minimum opening deposit: $10Minimum balance to qualify for APY: $0Physical branches: In northeastern Massachusetts (as Salem Five)ATM network: May use Allpoint ATMs across the country with no fee; will reimburse up to $15 a month in fees for using other ATMsDollar Savings DirectAPY: 5.0% Minimum opening deposit: $0Minimum balance to qualify for APY: $0Physical branches: NoneATM network: You may link your checking account from another bank to your Dollar Savings Direct savings account for ease of transfers and withdrawalsMy Banking DirectAPY: 5.0% Minimum opening deposit: $500Minimum balance to qualify for APY: $1Physical branches: In the Northeast and Midwest (as Flagstar Bank)ATM network: In the Northeast and MidwestNewtek BankAPY: 5.0%Minimum opening deposit: $0Minimum balance to qualify for APY: $0Physical branches: NoneATM network: May use MoneyPass ATMs with no feeHow to open a savings account at an online bank Nearly half of Americans now have a high-yield savings account, according to a recent Forbes Advisor survey. Of people who don’t have one yet, 24% say they think it would be too complex or take too long.However, opening a high-yield savings account is easier than you might think (and you don’t even necessarily have to totally switch banks if you want to maintain a checking account somewhere else, for example). It only takes a few minutes and can be done from the comfort of your home. (Newtek Bank, for example, says it can take as little as two minutes.)Just follow these steps:Select an account: Consider what factors are important to you. In addition to APY, think about things like monthly fees, minimum balance requirements, ease of withdrawals, and customer service.Gather your personal information: You’ll need the same information you’d provide when opening a traditional bank account, such as your social security number and/or driver’s license number, as well as the details for an existing checking or savings account so you can make your first deposit.Fill out an application: All that stuff you gathered in the last step? Time to enter it in the application. (Tip: Make sure you do so over a secure network, such as your password-protected home network, in order to guard your personal details.)Wait for approval: Some banks process applications immediately, while others may take a few days. Make your first deposit: Once your account is open, it’s time to make your first deposit! Review minimum balance requirements and ensure you meet them with the first transfer. If you plan on maintaining all your previous accounts, you're done! However, if you plan on closing one or more, make sure that you first reroute any direct deposits or automatic withdrawals.Other savings accounts to considerEditorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at lauren.williamson@hearst.com.