The National Credit Union Administration (NCUA) extends similar coverage to deposit accounts at member credit unions. The FDIC insures accounts at member banks up to $250,000 per depositor, per account ownership type, and per financial institution. You can’t lose money in an online savings account if you’re saving at an FDIC-insured bank or an insured credit union. Can You Lose Money in a High-Yield Savings Account? Those measures can include multifactor authentication, data encryption and secure data storage. In terms of security, banks and other financial institutions that offer high-yield savings accounts institute a number of measures to protect your personal and financial information. When you deposit money into a high-yield savings account, you’re keeping it at a bank that’s FDIC-insured or a credit union with NCUA insurance to protect your deposit. High-yield savings accounts are generally considered to be safe places to keep your money. Instead, you access your money via web browsers or mobile banking apps. Online banks operate on the internet and typically do not have branches. The advantage of opening a high-yield savings account with an online bank is that they don’t usually charge monthly maintenance fees. A monthly maintenance fee is a fee certain banks charge you to keep your account open. Depending on the bank, this may be as low as $1 or even $0. A minimum deposit requirement for a high-yield savings account is the amount you’ll need to deposit to open the account. High yield means that a savings account offers a higher-than-average interest rate. It’s calculated based on your principal deposits and the interest you earn as you go. Compounding interest is interest earned on your previously accrued interest. The annual percentage yield or APY on a savings account reflects the interest you could earn on your savings over the course of a year when compounding interest is factored into the equation. Understanding what they mean can help you to find the right savings option. When researching high-yield savings accounts, there are certain terms you’re likely to come across. The Federal Open Market Committee (FOMC) predicts rates to reach about 4.90% this year-which could mean more high-yield savings rates surpassing 4.00% APY. It’s likely rates will continue to go up through 2023. The Fed issued seven rate hikes in 2022 and has already hiked rates this year as well. Savings rates have been on the rise for more than a year. But banks may also raise rates as part of a promotion, making it tougher to predict when rates will go up or down. Banks tend to adjust savings rates according to fluctuations in the federal funds rate, which can change multiple times per year. High-yield savings rates are variable and can change depending on several factors. When Will High-Yield Savings Rates Go Up? Federal Reserve rate cuts can trigger further reductions in savings account APYs. At some point, high-yield savings rates may stabilize or even begin to fall. However, banks may only be willing to go so far in raising rates to attract savers. Rate hikes often translate to banks paying higher rates for deposit accounts. When the federal funds rate adjusts, banks typically follow suit and shift rates for savings and other deposit accounts accordingly. That’s largely due to the Federal Reserve’s decision to increase the federal funds rate, which is the interest rate at which banks lend money to one another overnight. High-yield savings account rates were on a steady upward trend through 2022, and that upward trend has continued into 2023. Among high-yield saving account offerings, online banks tend to feature the best rates for savers. High-yield savings rates follow a similar trend for other deposit accounts, including money market and certificate of deposit accounts.
Today’s highest savings account interest rate is 4.25%. To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks. The online savings accounts must be nationally available to appear on this list. Minimum deposit requirements of $10,000 or higher affected scores negatively, as did high minimum balance requirements to avoid fees. We also considered whether there were complex tier structures or requirements to earn the APY or other stipulations to earn the APY. Here’s the weighting assigned to each category for high-yield savings accounts: All of the accounts on our list are online-based high-interest savings accounts. We ranked each account on 12 data points within the categories of APY, fees, minimum requirements, customer experience and digital experience. To create a list of the best online high-yield savings accounts, Forbes Advisor analyzed 73 online savings accounts at 53 financial institutions, including a mix of traditional brick-and-mortar banks, online banks, and credit unions.
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