8 Best High-Yield Online Savings Accounts of August 2022

More about high-yield savings accounts

What is a high-yield savings account?

A high-yield savings account is a type of federally insured savings product that earns rates that are much better than the national average. They can earn around 1% APY. By comparison, the national savings average is 0.10% APY.

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How much interest will I get on $10,000 after a year in a high-interest savings account?

If your money is in an account that earns a strong rate, your balance will grow faster without any additional effort on your part. With a 1% APY, a savings balance of $10,000 would earn a bit more than $100 after a year. It may not make you rich, but the earnings are much better than an account with a 0.10% APY, which would earn about ten dollars.

How do I choose the best high-interest savings accounts?

Look for accounts that have high interest rates and low service charges. You want to make sure you don’t have to pay a fee each month. Some institutions don’t charge monthly fees, while others do but will waive them if you meet a balance minimum.

Be willing to look beyond the larger, well-known banks. Many smaller institutions — including online banks and apps — feature good rates and low deposit requirements.

» Want to explore checking accounts instead? Take a look at NerdWallet’s best checking accounts

The highest APY savings accounts are easy to access

With online banking, you can access your account securely day or night. Online banks, credit unions and nonbank providers offer some of the best savings rates on the market while charging fewer fees than traditional banks. They also often offer good websites and mobile apps that typically let customers deposit checks and pay bills.

How to open an account with the best interest rates

Depending on the type of financial institution, you can open an account either online or in person. You’ll need to provide your Social Security number and contact information, along with at least one form of identification, such as a driver’s license or a passport. (For a joint account, everyone wanting access to the account must provide this information and ID.) You will often be required to deposit money into the new account right away. You can do that by depositing cash or checks, or through a wire transfer.

» Find high rates across checking, savings and other accounts in NerdWallet's list of high-interest accounts

What to do if you can’t open a high-interest savings account

Occasionally, your application to open an account may not be approved. This is likely because of issues with your previous banking history.

Unpaid bank fees and bounced checks can result in a negative file on ChexSystems, a consumer reporting agency that financial institutions use to evaluate a prospective customer’s banking history.

There are options for customers who have a ChexSystems file, including opportunities to open alternative accounts. For more information, read our primer on what to do if you have a ChexSystems record.

Are high-yield savings accounts safe?

In short, yes. High-yield savings accounts at banks and credit unions are federally insured up to $250,000 per depositor, and many nonbank providers partner with banks for insurance. Accounts at banks are backed by the Federal Deposit Insurance Corp., while credit union accounts are backed by the National Credit Union Administration. This means that even if the financial institution fails, the government makes sure your money is safe and accessible. Read NerdWallet's primer on FDIC insurance to learn more.

High-yield savings account terminology

Here’s a look at some important savings terms to know.

Savings account: A deposit account from a financial institution that earns interest.

Money market account: A type of savings account that often offers higher interest rates in return for a steep minimum deposit. (Think $5,000 or more.)

Interest: Money a financial institution pays into an account over time.

Compound interest: Compound interest is the interest you earn on both your original money and on the interest you keep accumulating. In an account that pays compound interest, the return is added to the original principal at the end of every compounding period, typically daily or monthly. Each time interest is calculated and added to the account, the larger balance earns more interest.

Annual percentage yield: The APY, or annual percentage yield, is the amount of compound interest an account earns in a year. The calculation is based on the account's interest rate and the number of times interest is paid during the year. A savings account with the highest APY grows faster than an account with a lower yield.

» Read more about 10 essential banking terms you need to know

Full list of editorial picks: best high-yield online savings accounts

When selecting the best high-yield online savings accounts, NerdWallet uses multiple data points, including monthly fees, minimum balance requirements, APY, mobile app ratings and customer service availability. Click the financial institution’s name in the table below to read a full review.