The main places to open a high yield savings account

You can open a high yield savings account at three types of institutions: online banks, traditional banks with online options, and credit unions. Online banks typically offer the highest rates because they have lower overhead costs than brick-and-mortar branches. Traditional banks—the ones with physical locations—usually offer lower rates on savings but may give you easier access to a teller or in-person service. Credit unions are member-owned and sometimes offer competitive rates, though availability depends on whether you meet their membership requirements.

The account itself works the same way regardless of where you open it: you deposit money, the bank pays you interest monthly or daily, and you can withdraw funds whenever you need them. The difference is in the rate you earn, the fees charged, and how you access your money. Some online banks have no monthly fees and no minimum balance requirements. Others charge fees if you don't maintain a certain amount or if you exceed a withdrawal limit.

Key Takeaways

  • Online banks generally offer the highest rates because they operate without physical branches and pass the savings to depositors.
  • You can compare current rates across multiple banks on their websites before opening an account—rates change frequently and vary by institution.
  • Most high yield savings accounts have no monthly fees, but some charge if your balance falls below a minimum or if you make too many withdrawals.
  • Opening an account takes 10 to 20 minutes online and requires a Social Security number, proof of identity, and an initial deposit (usually $0 to $25).
  • Your deposits are insured up to $250,000 per account at FDIC-insured banks or NCUA-insured credit unions, protecting your money if the institution fails.

How to compare rates across banks

Rates change constantly, sometimes weekly. The only way to know which bank is paying the most right now is to visit their websites directly and look for the APY (annual percentage yield) listed on the savings account page. Write down the rate, any minimum balance requirement, and any fees. Then check three to five other banks the same way. This takes about 15 minutes and tells you exactly what you're choosing between.

Some banks advertise a high rate for new customers only, then drop it after a few months. Read the fine print to see whether the rate applies to all deposits or just your first deposit, and whether it's a promotional rate with an end date. A bank's website will state this clearly—if it doesn't, contact them before opening the account.

Rate comparison websites exist, but they update slowly and sometimes show outdated numbers. Checking the banks' own websites takes the same amount of time and gives you current information. You can also call a bank's customer service line and ask what the current rate is; they will tell you immediately.

What to do before you open an account

Gather your Social Security number, a government-issued ID (driver's license or passport), and your current address. Have your employer's name and address handy if the bank asks for employment information. If you're opening the account online, you'll also need a way to make your first deposit—either a bank account to transfer from, a debit card, or a check you can photograph and upload.

Decide how much you want to deposit initially. Most banks require $0 to $25 to open an account, though some require $500 or more. If you're moving money from another bank, you can set up an external transfer during the account opening process. The transfer usually takes three to five business days to arrive.

Check whether the bank is FDIC-insured (for banks) or NCUA-insured (for credit unions). This information appears on their website, usually in the footer or on the account details page. FDIC and NCUA insurance protects your money up to $250,000 per account if the institution fails. If you have more than $250,000 to deposit, you can open multiple accounts at different banks to keep all your money insured.

The account opening process, step by step

Most online banks let you open an account entirely on their website in 10 to 20 minutes. You'll enter your name, address, Social Security number, and date of birth. The bank will run a soft credit check (which does not affect your credit score) to verify your identity. You'll then choose a username and password, set up security questions, and decide how you want to receive statements—usually by email.

Next, you'll link a funding source. This means providing the routing and account number of a bank account you already have, or uploading a photo of a check. If you're transferring from another bank, the transfer typically takes three to five business days. Some banks offer instant transfers if you link a debit card, though they may charge a small fee.

Once your account is open, you can log in immediately and see your balance. You won't earn interest until your deposit has cleared and settled in the account. After that, interest accrues daily and is deposited monthly (or sometimes daily, depending on the bank). You can withdraw money anytime through an external transfer back to your original bank account, which usually takes one to three business days.

Fees to watch for

Most high yield savings accounts have no monthly maintenance fee. Some banks charge a fee if your balance drops below a certain amount—often $500 to $2,500—so check the account terms before opening. A few banks charge a fee if you make more than a certain number of withdrawals per month, though this is less common now.

Overdraft fees do not apply to savings accounts because you cannot overdraw them. However, some banks charge a fee if you try to withdraw more than you have or if you attempt an external transfer that fails. Read the fee schedule on the bank's website before opening the account. If a bank charges fees you don't want to pay, choose a different one—many banks have zero fees.

Online banks versus traditional banks with online savings

Online banks (such as Marcus, Ally, and American Express Personal Savings) operate only through websites and apps. They typically offer higher rates because they don't maintain physical branches. They have no tellers, no in-person services, and no way to deposit cash directly. If you need to deposit cash, you'll have to transfer it from another bank account or use a third-party service.

Traditional banks (such as Chase, Bank of America, and Wells Fargo) have physical branches and tellers. Their high yield savings accounts usually pay less than online banks, but you can walk into a branch to deposit cash, speak to someone in person, or resolve problems face-to-face. If you already have a checking account at a traditional bank, opening a savings account there takes minutes and you can link the accounts immediately.

Credit unions are member-owned and sometimes offer competitive rates. You must meet membership requirements to join—often based on where you work, where you live, or a family connection. If you may have access to, credit unions can offer good rates and personalized service. If you don't may have access to, you cannot open an account there.

Moving money in and out of your account

You can deposit money into a high yield savings account by transferring from another bank account you own. This takes three to five business days through a standard external transfer, or one business day through a faster service (some banks charge a fee for this). You can also deposit by mailing a check to the bank's address, though this is slower and less common.

To withdraw money, you request an external transfer back to your original bank account. This also takes one to three business days. You cannot write checks against a savings account, and you cannot use a debit card to withdraw money directly. If you need quick access to cash, keep some money in a checking account and use the savings account for money you're not spending soon.

Some banks limit the number of withdrawals you can make per month (often six), though this rule is less common now. Check the account terms to see whether withdrawal limits apply. If they do and you think you'll need more frequent access, choose a bank with no withdrawal limits or keep your emergency fund in a checking account instead.

Frequently Asked Questions

Can I open a high yield savings account if I have bad credit?

Yes. Banks do not check your credit score when you open a savings account. They run a soft identity verification check, which does not affect your credit. Your credit history does not matter for savings accounts—only for loans and credit cards.

What happens to my interest if I withdraw money before the end of the month?

You still earn interest on the money you had in the account. Interest accrues daily based on your balance, so if you had $5,000 for 20 days and then withdrew it, you earn interest on those 20 days. The interest is calculated and deposited monthly, usually on the last day of the month.

Can I open multiple high yield savings accounts at different banks?

Yes. You can open as many accounts as you want at different banks. Each account is insured separately up to $250,000 by the FDIC or NCUA. Some people open multiple accounts to earn different rates or to organize money for different goals.

Do I have to keep a minimum balance to earn the advertised rate?

Most banks pay the advertised rate on any balance, even $1. Some banks require a minimum balance (often $500 to $2,500) to earn the full rate, and pay a lower rate if you fall below it. Check the account terms before opening to see whether a minimum applies.

How long does it take to start earning interest after I open an account?

Interest starts accruing as soon as your deposit clears and settles in the account, which usually takes three to five business days. Your first interest payment arrives at the end of that month. If you open an account on the 28th of the month, you may not see your first interest deposit until the end of the following month.