Unlock Higher Returns: Your Guide to the Best High-Yield Savings Accounts of 2025 (Rates Over 4.6% Explained!)

In today’s financial world, making your money work harder for you isn’t just a smart move—it’s essential. While traditional savings accounts at many neighborhood banks often offer interest rates that barely move the needle, high-yield savings accounts (HYSAs) have emerged as a powerful alternative, especially with rates climbing to attractive levels. If you’re looking to significantly boost your savings growth, you’ve come to the right place.

This guide will walk you through the best high-yield savings accounts in 2025, with a special focus on those offering Annual Percentage Yields (APYs) above an impressive 4.6%. Finding such an account can mean hundreds, or even thousands, of extra dollars in your pocket over time. We’ll explore what HYSAs are, their compelling benefits, take a close look at some of the top accounts available to US savers, guide you on how to choose the perfect one for your needs, and cover important considerations like safety and taxes. Get ready to unlock higher returns!

1. What Exactly is a High-Yield Savings Account (And Why Should You Care)?

Before diving into the top picks, let’s clarify what a high-yield savings account is and why it deserves your attention.

Defining HYSAs

A High-Yield Savings Account, often abbreviated as HYSA, is a type of savings account that typically offers substantially higher interest rates compared to traditional savings accounts you might find at large, brick-and-mortar banks.¹ This isn’t just a small difference; we’re often talking about rates that can be many times higher. The direct result? Your money grows at a much faster pace, helping you reach your financial goals—whether it’s an emergency fund, a down payment for a house, or a dream vacation—sooner than you thought possible.²

Many of these top high-yield savings accounts are offered by online banks. These institutions generally have lower overhead costs because they don’t maintain extensive networks of physical branches. They can then pass these operational savings onto their customers in the form of better interest rates.⁴

HYSA vs. Traditional Savings: The Interest Rate Advantage

The most significant difference lies in the earning potential. As of early June 2025, the national average APY for traditional savings accounts hovered around a mere 0.60% ⁵, with some sources even citing averages as low as 0.22%.⁴ In stark contrast, HYSAs can offer rates that are 10 to 25 times this national average.⁷ For example, if the national average is 0.60% APY, an HYSA offering 4.6% APY provides nearly eight times more interest on your deposited funds.

This disparity exists largely because online banks, the primary providers of HYSAs, have a different business model. Their lower operating expenses allow them to be more generous with interest rates. Furthermore, banks sometimes raise their APYs to attract more deposits, especially when they need more capital for lending or investment activities, or simply to stay competitive in a bustling market.⁸

How HYSAs Compare to Certificates of Deposit (CDs)

Another savings vehicle you might consider is a Certificate of Deposit (CD). CDs can sometimes offer APYs that are comparable to, or even higher than, HYSAs.² However, there’s a key trade-off: liquidity. When you open a CD, you agree to lock your money away for a predetermined period, which can range from a few months to several years. Accessing those funds before the CD matures typically results in an early withdrawal penalty, which can eat into your interest earnings.²

HYSAs, on the other hand, offer much greater flexibility. While they are designed for saving rather than frequent transactions, you can generally access your money more easily and without penalty.² This makes high-yield savings accounts an excellent choice for funds you might need to access on shorter notice, such as your emergency fund or savings for near-term goals. They strike a balance, offering a better yield than traditional accounts without the restrictive lock-in periods characteristic of CDs. This positioning makes them a versatile tool for many savers who want their cash to work for them while remaining relatively accessible.

2. The Perks of Parking Your Cash in a Top High-Yield Savings Account

Choosing one of the best high-yield savings accounts comes with a suite of benefits that can significantly impact your financial well-being.

• Grow Your Money Faster: This is the headline advantage. A higher APY directly translates to more interest earned on your balance.² Consider this: depositing $10,000 into an account with a 0.5% APY would earn you about $50 in interest over a year. The same $10,000 in an HYSA with a 4.6% APY would earn you $460. That’s an extra $410 working for you, simply by choosing a better account.⁸
• Outpace Inflation (Potentially): Inflation erodes the purchasing power of your money over time. While traditional savings accounts often see their meager interest gains wiped out by inflation, the higher rates offered by HYSAs give your savings a much better chance of keeping pace with, or even exceeding, the rate of inflation.² This helps preserve the real value of your hard-earned money.
• Liquidity and Accessibility: As mentioned, HYSAs provide a good balance of earning potential and access to your funds. This liquidity is crucial for emergency savings, which need to be readily available when unexpected expenses arise, or for short-term goals where you don’t want to tie up your money for long periods.² Most HYSAs offer convenient online and mobile banking, allowing you to manage your account and transfer funds easily.
• Safety and Security (FDIC/NCUA Insurance): This is a critical feature. Funds deposited in HYSAs at banks that are members of the Federal Deposit Insurance Corporation (FDIC) are insured up to $250,000 per depositor, per insured bank, for each account ownership category.² Credit unions offer similar protection through the National Credit Union Administration (NCUA). This government-backed insurance means your money is safe, even if the financial institution were to fail, making HYSAs a low-risk way to grow your savings.²
• Low or No Fees: A significant advantage of many best high-yield savings accounts, particularly those from online banks, is the absence of monthly maintenance fees and low or even no minimum balance requirements.² This ensures that more of the interest you earn stays in your account, rather than being chipped away by recurring charges.
• Ease of Opening and Management: In today’s digital age, convenience is key. Many HYSAs can be opened online in a matter of minutes, and managed entirely through a website or mobile app, from the comfort of your home.¹⁴

These combined benefits make HYSAs far more than just a temporary holding place for cash. They are a strategic financial tool. An emergency fund, for instance, needs to be secure and accessible, but allowing it to earn a competitive interest rate helps it grow and better combat inflation.² Similarly, savings for short-term objectives like a down payment on a car or a major purchase benefit from higher interest without exposure to market volatility.² The prevalent low-fee or no-fee structure further maximizes your actual return.² Consequently, a well-chosen HYSA can become a foundational element of a sound personal finance strategy.

3. The 2025 Interest Rate Climate: What’s Influencing Your Savings Growth?

The attractive APYs currently offered by many high-yield savings accounts are not set in stone. Understanding the factors that influence these rates can help you make more informed decisions.

The Federal Reserve’s Role

Interest rates on HYSAs are typically variable, meaning they can fluctuate up or down over time.⁷ A primary driver of these changes is the monetary policy set by the U.S. Federal Reserve (often called “the Fed”). When the Fed adjusts the federal funds rate—the target rate banks charge each other for overnight loans—it creates a ripple effect across the financial system. Banks often, though not always immediately or identically, adjust their own deposit rates (including those for savings accounts) in response to the Fed’s actions.⁸ If the Fed raises its benchmark rate, HYSA rates tend to climb; if the Fed cuts its rate, HYSA rates may fall.

Current Fed Stance (May/June 2025)

As of May 2025, the Federal Reserve decided to hold its benchmark interest rate steady, maintaining the target range at 4.25% to 4.5%.¹⁷ This decision marked a continuation of a “wait-and-see” approach, similar to the stance taken in its March 2025 meeting where rates were also held at 4.5%.¹⁸ In fact, the federal funds rate has remained unchanged since December 2024.⁹

The Fed has acknowledged that while the economy is showing modest growth and inflation remains slightly above its 2% target, there are increased risks of both higher inflation and rising unemployment.¹⁷ This presents a complex balancing act for future policy decisions.

Projections for the Rest of 2025

Looking ahead, some financial strategists anticipate that the Fed might begin to lower interest rates in the second half of 2025.¹⁷ However, a high degree of uncertainty surrounds these projections. Other commentary suggests that 2025 is shaping up to be a more stable period for savings rates, especially after a year of falling yields in 2024, with the Fed currently pausing any rate cuts.⁹

Bank Competition

Beyond the Fed’s influence, individual banks also adjust their APYs based on their own funding needs and competitive strategies. Online banks, in particular, often compete vigorously for customer deposits by offering attractive rates.⁸ If a bank needs to attract more cash to support its lending activities or bolster its balance sheet, it might increase the APY on its savings products.

What This Means for Savers

For savers, the current environment presents a valuable window of opportunity. The high APYs available now are largely a result of the Fed’s previous rate hikes aimed at combating inflation.⁴ With the Fed currently holding rates steady ⁹, these attractive yields persist. However, the possibility of rate cuts later in the year ¹⁷ suggests that these peak rates may not last indefinitely.

This makes it a good time to open a high-yield savings account and lock in a favorable rate. However, it’s also important to be aware that these rates are variable. Therefore, choosing an account from an institution that has a track record of offering consistently competitive rates, rather than just a temporary promotional high, can be a prudent strategy.⁷ This dynamic market underscores the importance of staying informed and selecting an account that aligns with both current opportunities and potential future shifts.

4. Revealed: The Best High-Yield Savings Accounts for 2025 (APYs Above 4.6% Explained)

Now for the moment you’ve been waiting for: a look at some of the best high-yield savings accounts that, as of June 2025, were offering impressive APYs of 4.6% or higher. This list has been compiled based on recent data from reputable financial information sources including DepositAccounts.com, Investopedia, Forbes Advisor, and NerdWallet.¹¹

It’s crucial to remember that APYs are variable and can change at any time, even after you’ve opened an account. Always verify the current rate directly with the bank before applying.

Comparison of Top HYSAs (APY > 4.6%) as of June 2025

Mini-Reviews/Spotlights:

• Varo Bank (Savings Account):
  Varo Bank, a fintech company that became FDIC-insured in 2020, offers a headline APY of up to 5.00%.11 However, this top rate comes with significant conditions: it applies only to balances up to $5,000, and you must have an accompanying Varo Bank Account, receive qualifying direct deposits totaling at least $1,000 per month, and end the month with positive balances in all Varo accounts.19 If these conditions aren’t met, or for balances over $5,000, the APY drops to 2.50%. There’s no monthly fee, and Varo provides a mobile app, ATM card, and mobile check deposit features.21 This account can be excellent for those who can meet the requirements and have smaller savings balances they want to maximize.
• MSU Federal Credit Union (Savings Builder):
  MSU Federal Credit Union’s Savings Builder account advertises an APY of up to 5.25%.19 This rate is very attractive, but it’s crucial to understand its tiered structure. The 5.25% APY applies only to the portion of your balance from $0.00 to $999.99. For balances between $1,000.00 and $1,999.99, the APY ranges from 3.74% to 5.25%, and for balances of $2,000.00 and above, it drops to between 1.10% and 3.74%.19 There’s no monthly fee, but as a credit union, membership is required, which may involve specific eligibility criteria.4 This account is best for those starting with smaller amounts who can meet membership requirements.
• Axos Bank (Axos ONE® / High Yield Savings):
  Axos Bank, an established online-only bank, offers a competitive 4.66% APY through its Axos ONE® or High Yield Savings accounts.20 Some sources indicate no minimum deposit or balance is needed to earn this APY with the Axos ONE account 20, while others suggest a $1,500 minimum balance might be required to achieve the up to 4.66% rate.11 It’s wise to confirm these details. Axos charges no monthly fees.20 Their digital experience includes a mobile app with features like mobile check deposit and integrations with accounting software like QuickBooks and Quicken.25 However, user reviews for the app are mixed, with some customers reporting it can be clunky, slow, or prone to errors.23 Despite this, Investopedia has recognized Axos as “Best for Savings” 26, highlighting its strong rate offerings.
• Pibank (Pibank Savings):
  Pibank, an online brand of Intercredit Bank, provides a Pibank Savings account with a 4.60% APY.20 A major draw is its fee structure: $0 monthly maintenance fee, no minimum opening deposit, and no minimum balance requirement.20 However, Pibank is an online-only institution that relies exclusively on its mobile app for all banking transactions; there is no web-based platform for account management after opening.27 User reviews for the Pibank mobile app are predominantly poor, with common complaints about the app freezing, offering very limited functionality, and difficulties with money transfers.27 The app uses Plaid for linking external accounts and facilitating transfers.28 Customer support is available seven days a week via phone.27 The high APY is appealing, but potential users must weigh this against the reported challenges with the app-only experience.
• Elevault (Interest Paid Daily):
  Elevault offers a high-yield savings account with a 4.60% APY, and a unique feature is that interest is paid daily.16 There are no monthly fees, and no minimum deposit is required to open an account.20 It’s worth noting that balances over $250,000 do not earn interest with this account.11 Elevault is backed by Southern Bancorp (Member FDIC) and its mobile app is designed around budgeting, allowing users to create customizable “Vaults” for different savings goals and expenses.30 The app also offers peer-to-peer (P2P) payments. User reviews for the Elevault app are generally positive, with users praising its ease of use for budgeting and the daily interest accrual.30 Some users have raised concerns about customer service responsiveness and the ID verification process during onboarding.30
• Fitness Bank (Savings Account):
  Fitness Bank offers a compelling 5.00% APY, but this rate is tied to specific lifestyle and banking requirements.21 To earn this top APY, account holders need a $100 minimum deposit and must maintain at least a $100 balance. More significantly, it requires a linked Fitness Bank checking account with an average daily balance of $5,000 and meeting daily step count goals tracked through a fitness app.21 This makes the account a niche offering, best suited for individuals who are already active and can comfortably meet the linked checking account balance requirement.

When looking at these accounts, it becomes clear that headline APYs often tell only part of the story. The very highest rates, like those from Varo or MSUFCU, frequently come with conditions such as balance caps, direct deposit stipulations, tiered interest structures, or membership hurdles.⁴ These can limit the effective yield for many individuals or restrict who can access the account. Furthermore, a high rate might lose its appeal if managing funds is a frustrating experience due to a poorly designed or unreliable digital platform, as some user feedback suggests for banks like Pibank ²⁸ and to a lesser extent, Axos.²³ Therefore, it’s essential to look beyond the advertised rate and consider the practical usability and any attached conditions to find an account that is not just high-yielding on paper, but also genuinely works for your financial life.

5. Beyond the APY: How to Choose the Best High-Yield Savings Account for You

While a sky-high APY is certainly tempting, it’s not the only factor to consider when searching for the best high-yield savings account that truly fits your individual needs.⁷ A holistic approach will serve you better in the long run.

Fees and Minimums to Watch Out For:

• Monthly Maintenance Fees: These are recurring charges just for having the account open. Actively seek out accounts with no monthly maintenance fees, as these fees can quickly erode your interest earnings, especially on smaller balances.² Fortunately, many top online HYSAs, including those highlighted earlier, come with $0 monthly fees.²
• Minimum Opening Deposit: This is the initial amount of money you need to put into the account to open it. Requirements vary widely; some accounts have no minimum, while others might ask for $100, $500, $1,000, or even more.¹⁰ Choose an account with a minimum deposit that you can comfortably meet.
• Minimum Balance to Earn APY or Avoid Fees: Some HYSAs require you to maintain a certain balance to qualify for the advertised APY or to have a monthly fee waived.² For example, CIT Bank’s Platinum Savings account requires a $5,000 balance to earn its top rate.²² Understand these thresholds before committing.
• Other Potential Fees: Be aware of other less common fees, such as those for domestic or international wire transfers (Laurel Road and EverBank charge for outgoing wires ¹⁹), overdrafts (Laurel Road has overdraft fees ¹⁹), returned paper statements, or stop payment requests.¹⁹ Review the account’s fee schedule carefully.

Account Access and Digital Experience:

• Online and Mobile Banking: Since many HYSAs are offered by online-only banks, robust and user-friendly digital platforms are essential.⁵ Look for an intuitive mobile app and website that allow for easy balance checks, fund transfers, and mobile check deposits.¹⁵ User reviews can offer valuable insights into the quality of a bank’s digital tools.
• ATM Access: While HYSAs are not designed for frequent withdrawals like checking accounts, some do offer ATM cards and may even provide reimbursements for fees charged by out-of-network ATMs.¹⁹ This can be a convenient perk if you anticipate needing occasional cash access from your savings.

Customer Service and Bank Reputation:

• Support Channels: Check the availability and perceived quality of customer support. Can you reach them easily via phone, secure message, or online chat if you have an issue? Note the support hours.¹⁹
• Bank Standing: Consider the bank’s reputation. Look at customer reviews and ratings from independent sources.²⁶ A bank with a solid history and positive feedback can offer greater peace of mind.

FDIC Insurance: Is Your Money Safe?

This is a non-negotiable for most savers. Ensure the financial institution is an FDIC member (or NCUA member if it’s a credit union). This federal insurance protects your deposits up to $250,000 per depositor, per insured bank, for each account ownership category, in the unlikely event the bank fails.² This makes HYSAs a very secure place to keep your savings. Always confirm FDIC insurance coverage before opening an account.²

Withdrawal Limits:

Historically, Federal Reserve Regulation D limited certain types of withdrawals and transfers from savings accounts to six per statement cycle. While this regulation has been suspended, some banks may still enforce these limits or charge fees if you exceed a certain number of transactions.² Because HYSAs are intended for saving rather than daily spending, this is usually not an issue for most users, but it’s good to be aware of your bank’s specific policy.²

Ultimately, the “best” HYSA is a personal decision. What works for a tech-savvy individual who prioritizes a cutting-edge mobile app and is comfortable with an online-only bank might differ from someone who values the option of phone support or has a very large sum to deposit and is thus more concerned with tiered rates or maximum insured amounts. Your anticipated frequency of accessing funds will also influence the importance of features like ATM access or lenient withdrawal policies. The key is to assess your own financial habits, comfort level with technology, and service expectations, and then weigh them against the features and terms of various accounts. This self-assessment will empower you to choose an HYSA that not only offers a great rate but also seamlessly integrates into your financial life.

6. Opening Your High-Yield Savings Account: A Simple Step-by-Step Guide

The good news is that opening one of these best high-yield savings accounts is typically a straightforward and quick process, often completed entirely online in just a few minutes.¹⁴ The convenience of online applications has significantly lowered the barrier to accessing these better rates.

Here are the general steps involved:

1. Compare Your Options: Before you begin, revisit the list of top HYSAs and the “Beyond the APY” criteria discussed earlier. Decide which account best aligns with your financial goals and personal preferences.
2. Gather Your Information: You’ll need to provide some personal details to open an account. Common requirements include ¹⁴:

• Full legal name
• Residential address
• Date of birth
• Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
• A valid government-issued photo ID (like a driver’s license or passport)
• Contact information (phone number and email address)
• Some banks might also ask for employment information and annual income.

3. Complete the Online Application: Navigate to the bank’s secure website and fill out their online application form. This usually involves entering the information you’ve gathered and agreeing to the account terms and conditions. For example, Capital One states their online application for the 360 Performance Savings account takes about 5 minutes.¹⁵
4. Fund Your New Account: Once your application is approved, you’ll need to make an initial deposit. The most common way to do this is by linking an existing checking or savings account from another bank and initiating an electronic (ACH) transfer.¹⁴ Be mindful of any minimum opening deposit requirements for the account you’ve chosen. Discover, for instance, has no minimum opening deposit for its Online Savings Account.¹⁴
5. Confirmation and Access: After successfully opening and funding your account, you should receive an email confirmation from the bank. At this point, you can typically set up your online and mobile banking access, allowing you to manage your new HYSA, track your interest earnings, and make future transfers.¹⁴

The ease of this digital process removes the traditional hurdles of visiting a branch or dealing with extensive paperwork, making it more convenient than ever to start earning more on your savings.

7. The Taxman Cometh: Understanding Taxes on Your HYSA Interest

While watching your savings grow faster in a high-yield savings account is exciting, it’s important to understand the tax implications of the interest you earn.

Interest is Taxable Income

The interest earned from your HYSA is considered taxable income by the Internal Revenue Service (IRS).³⁴ This also applies to interest earned from most other bank accounts, including traditional savings, checking accounts, and CDs. Most states also tax this interest income.

How HYSA Interest is Taxed

The interest you earn is taxed as ordinary income. This means it’s added to your other income (like wages from your job) and taxed at your applicable federal and state income tax rates, based on your overall taxable income and filing status.³⁴ It’s important to note that only the interest earned is taxed, not the principal amount (the money you initially deposited and any subsequent deposits you make).

Receiving Form 1099-INT

Financial institutions are required to report the interest paid to you to the IRS. If you earn $10 or more in interest from a bank in a calendar year, they will send you (and the IRS) a Form 1099-INT by the end of January of the following year.³⁴ This form details the total interest income you received from that institution.

Even if you earn less than $10 in interest from a particular account and therefore don’t receive a Form 1099-INT, the IRS still requires you to report all interest income earned, no matter how small.³⁴

Reporting Interest on Your Tax Return

When you file your federal income tax return, you’ll report your total taxable interest income. This is typically entered on Form 1040, U.S. Individual Income Tax Return (specifically, line 2b as of current forms).³⁴ If your total taxable interest or ordinary dividends exceed a certain threshold (currently $1,500), you may also need to complete and attach Schedule B (Interest and Ordinary Dividends) to your tax return.³⁴

Don’t Let Taxes Deter You

The fact that HYSA interest is taxable should not discourage you from using these accounts.³⁶ The significantly higher interest rates offered by the best high-yield savings accounts mean that even after accounting for taxes, you will almost always end up with a much larger net gain compared to keeping your money in a traditional, low-interest savings account.

For example, imagine you have $10,000.

• In an HYSA earning 4.6% APY, you’d earn $460 in interest. If you’re in a 22% federal tax bracket, the tax on this interest would be approximately $101.20, leaving you with a net gain of $358.80.
• In a traditional savings account earning 0.5% APY, you’d earn $50 in interest. The tax at 22% would be $11, leaving a net gain of only $39. Clearly, the HYSA provides a substantially greater benefit, even after taxes.

While HYSAs are excellent for liquid savings and emergency funds, for long-term goals, particularly retirement, you might also explore tax-advantaged accounts like 401(k)s or Individual Retirement Accounts (IRAs), which offer different tax benefits.³⁴ However, these serve different purposes and often have restrictions on withdrawals that make them unsuitable for short-term savings needs.

Conclusion: Maximize Your Savings in 2025 with the Right HYSA

Choosing one of the best high-yield savings accounts is a smart and effective strategy to make your money work significantly harder for you. As we’ve seen, these accounts offer a compelling combination of higher interest rates that can help your savings outpace inflation, the safety of FDIC or NCUA insurance, and the liquidity needed for emergency funds and short-term goals.

The current financial landscape, with relatively high interest rates holding steady for now, presents a valuable opportunity for savers. By taking action, you can ensure your cash isn’t just sitting idle but is actively growing and contributing to your financial well-being.

We encourage you to review the accounts highlighted in this guide, carefully consider your personal financial needs and preferences using the “Beyond the APY” criteria, and take the simple steps to open an HYSA that aligns with your objectives. Making this choice is a proactive step towards achieving your financial aspirations in 2025 and beyond.

Frequently Asked Questions (FAQ) about High-Yield Savings Accounts

• Q1: What is the absolute highest savings rate I can get right now (June 2025)?
• A: As of June 2025, some accounts like Varo Bank and Fitness Bank offer APYs up to 5.00%.¹¹ However, these top-tier rates often come with specific conditions, such as balance caps (Varo’s 5.00% is on up to $5,000), direct deposit requirements, linked checking accounts, or even activity requirements like meeting daily step counts (Fitness Bank).¹⁹ Accounts from Axos Bank (Axos ONE®), Pibank, and Elevault are offering rates in the 4.60% to 4.66% range, often with fewer or different types of conditions.¹¹ It’s always critical to read the fine print to understand how to qualify for the advertised APY.
• Q2: How often do HYSA rates change?
• A: Rates on HYSAs are typically variable, meaning the bank can change them at any time—either up or down.⁷ These changes are often influenced by shifts in the Federal Reserve’s monetary policy, overall market conditions, and the bank’s own funding needs. Banks can adjust rates without much advance notice.
• Q3: Are there withdrawal limits on HYSAs?
• A: Historically, a federal rule known as Regulation D limited certain types of withdrawals and transfers from savings accounts to six per month or statement cycle. While the Federal Reserve has indefinitely suspended this monthly limit, some banks may still choose to enforce their own transaction limits or charge fees for what they consider excessive withdrawals.² HYSAs are designed for saving money, so they are not ideal for frequent transactions. Check your bank’s specific policy.
• Q4: Can I lose money in a high-yield savings account?
• A: If your HYSA is held at an FDIC-insured bank (or an NCUA-insured credit union), your deposits are protected against bank failure up to $250,000 per depositor, per insured institution, for each account ownership category.² This means you won’t lose your deposited principal up to this limit if the bank becomes insolvent. While the value of your savings could be eroded by inflation if your APY is consistently lower than the inflation rate, the principal amount itself is secure under FDIC/NCUA coverage.
• Q5: Is interest from an HYSA taxed differently than other income?
• A: No, interest earned from a high-yield savings account is generally considered ordinary income and is taxed at the same federal and (if applicable) state income tax rates as your wages, salary, or other earnings.³⁴
• Q6: What happens if my bank fails?
• A: If your bank is FDIC-insured and it fails, your deposits are covered by the FDIC up to the insurance limit of $250,000 per depositor, per bank, per ownership category. You would be able to recover your insured funds.² A similar process applies to NCUA-insured credit unions.
• Q7: Which is better for short-term savings, an HYSA or a CD?
• A: The best choice depends on your need for access to the funds. HYSAs offer greater liquidity, meaning you can typically withdraw your money more easily without penalty. CDs (Certificates of Deposit) usually require you to lock your money in for a specific term (e.g., 6 months, 1 year, 5 years), and withdrawing early often incurs a penalty.² If you think you might need the money before the term is up, an HYSA is generally a better option. If you are certain you won’t need the funds for the duration of the term and want to lock in a specific interest rate (which might sometimes be higher than HYSA rates), a CD could be suitable.
• Q8: Do I need a lot of money to open a high-yield savings account?
• A: Not usually. Many of the best high-yield savings accounts have no minimum opening deposit requirement or very low minimums, such as $0, $25, or $100.⁵ This makes them highly accessible to savers at all levels.
• Q9: Are online banks safe for high-yield savings accounts?
• A: Yes, online banks can be just as safe as traditional brick-and-mortar banks, provided they are members of the FDIC (or NCUA for online credit unions). If they are, your deposits receive the same $250,000 insurance coverage per depositor, per institution, per ownership category.² Many reputable and well-established online banks offer some of the most competitive HYSAs available.

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