Banks that pay the most on savings accounts right now

The banks paying the highest rates on savings accounts are mostly online banks, not the brick-and-mortar branches you walk into. Online banks like Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank have been offering rates between 4.25% and 5.35% annually, though these rates change weekly based on what the Federal Reserve does. Traditional banks like Chase, Bank of America, and Wells Fargo typically pay between 0.01% and 0.05% on regular savings accounts — roughly 100 times less.

The reason online banks pay more is simple: they have lower overhead costs. They don't maintain physical branches, so they pass those savings to you through higher interest rates. The tradeoff is that you manage your account entirely through a website or app, with no teller to visit. For most people saving money, this is a worthwhile exchange.

Rate changes happen constantly. A bank offering 5.00% today might drop to 4.75% next month if the Federal Reserve cuts rates, or rise to 5.25% if competition heats up. Before you move money, check the current rate on the bank's website — not what you saw last week or what an article said yesterday.

Key Takeaways

  • Online banks consistently pay 50 to 100 times more interest than traditional brick-and-mortar banks on savings accounts.
  • The highest rates right now come from Marcus, Ally, American Express, and Discover, though rates shift weekly based on Federal Reserve policy.
  • You manage online bank accounts through apps and websites only — there are no physical branches, which is why they can pay more.
  • Rates advertised on comparison websites may be outdated by the time you read them, so always check the bank's own website before opening an account.
  • All deposits up to $250,000 are protected by FDIC insurance at banks that carry it, whether the bank is online or traditional.

How to compare rates across different banks

Start by visiting the website of each bank directly and looking for the current Annual Percentage Yield (APY) on their savings account. This number tells you exactly how much interest you'll earn in a year. Write down the APY, any monthly fees, and the minimum deposit required. Most online banks have no monthly fees and no minimum deposit, but some traditional banks charge $5 to $15 per month if your balance drops below a certain level.

Next, check whether the bank is FDIC-insured. This means your money is protected up to $250,000 if the bank fails — a rare event, but important protection. You can verify FDIC insurance by searching the bank's name on the FDIC's official website or by looking for the FDIC logo on the bank's homepage. Credit unions use a similar system called NCUA insurance, which works the same way.

Don't chase a rate that's 0.10% higher if it means paying monthly fees or dealing with a bank that has poor customer service. A $10,000 balance earning 5.00% makes you $500 a year; earning 4.90% makes you $490. The $10 difference disappears if you pay a single monthly fee. Read recent customer reviews on independent sites like Trustpilot or the Better Business Bureau to see whether people actually get their money out when they need it.

Online banks versus traditional banks: what changes for you

With an online bank, you deposit money by transferring it from another bank account or by mailing a check. You withdraw money the same way — by transferring it back to another account or requesting a check. This usually takes one to three business days. You cannot walk in and hand someone cash or get cash back at a teller window. If you need to deposit cash regularly, an online bank may not be the right fit.

Traditional banks let you deposit and withdraw cash in person, which online banks cannot do. They also have customer service staff in branches who can answer questions face-to-face. The cost of this convenience is a much lower interest rate on your savings. Most people who keep savings in a traditional bank earn less than $5 per year on a $10,000 balance.

Some people use both: they keep a small checking account at a traditional bank for cash deposits and withdrawals, and move their savings to an online bank where it actually earns money. This hybrid approach gives you the convenience of a physical branch without sacrificing interest income.

Banks that offer no-fee checking accounts

If you need a checking account (for paying bills, getting cash, making purchases), most online banks offer checking with no monthly fee, no minimum balance, and no overdraft fees — though overdraft policies vary. Ally Bank, Charles Schwab Bank, and Discover Bank all offer checking accounts with no fees and no minimums. Traditional banks like Chase and Bank of America charge monthly fees ($12 to $15) unless you maintain a high balance or set up direct deposit.

Some online banks bundle a savings account and checking account together, which can make sense if you want both. Others let you open them separately. Read the fine print on overdraft protection: some banks automatically transfer money from savings to checking if you overdraw, while others decline the transaction or charge a fee. Knowing this ahead of time prevents surprises.

Credit unions often offer checking and savings accounts with low or no fees, and some pay competitive rates on savings. If you're a member of a credit union, compare their rates and fees to online banks before moving your money. Credit unions are member-owned, so they sometimes offer better terms to long-term members.

Special savings accounts: money market and high-yield options

A money market account is a hybrid between a savings account and a checking account. It usually pays a higher interest rate than a regular savings account, lets you write checks or make transfers, but limits how many withdrawals you can make per month (typically six). Money market accounts at online banks currently pay rates similar to regular savings accounts — around 4.50% to 5.25% — so the main benefit is the checking features, not the rate.

A high-yield savings account is simply a savings account at an online bank that pays a higher rate than traditional banks. There's no special category or qualification — it's just what online banks call their regular savings accounts. The term "high-yield" is marketing language, not a technical distinction. All the online banks mentioned earlier offer what they market as high-yield savings.

Certificates of Deposit (CDs) are a different product entirely. You lock your money away for a set period — three months, six months, one year, five years — and in exchange the bank pays a higher rate. If you withdraw early, you pay a penalty. CDs currently pay 4.50% to 5.50% depending on the term, which is competitive with savings accounts, but you lose flexibility. Use a CD only if you know you won't need the money for the full term.

What to watch for when choosing a bank

Rates change constantly, so a bank that pays 5.25% today might pay 4.75% in six months. This is normal and happens to all banks. When rates drop, your earnings drop too, but your money is still safe. Don't panic or move your money every time a rate changes — the cost of moving money (time, effort, and the possibility of missing a deposit) usually outweighs the benefit of chasing a 0.25% difference.

Watch out for banks that advertise a high rate but only pay it on balances above a certain amount — say, 5.00% on the first $25,000 and 0.50% on anything above that. Read the rate structure carefully. Some banks also offer promotional rates that last only a few months before dropping to a lower permanent rate. The fine print will say how long the promotional rate lasts.

Check the bank's customer service reputation before you open an account. Read recent reviews on independent sites, not just the bank's own website. Look for complaints about transfers taking longer than promised, difficulty withdrawing money, or poor customer service. A bank that's hard to reach when you have a problem isn't worth a 0.50% higher rate.

Moving money from one bank to another

If you decide to switch banks, the process is straightforward. Open an account at the new bank, then transfer your money from the old bank to the new one. Most banks let you initiate an external transfer through their website — you enter the old bank's routing number and your account number, and the money moves in one to three business days. You don't need to close the old account first, though you can once the transfer is complete.

Some banks offer a service where they contact your old bank on your behalf and move everything for you. This is called an ACH transfer or a wire transfer, depending on the amount. For amounts under $25,000, an ACH transfer is free and takes one to three days. Wire transfers are faster (same day or next day) but cost $15 to $30.

Keep the old account open for at least a week after the transfer completes, in case a payment or deposit arrives that you didn't expect. Once you're sure everything has moved, you can close the old account. Closing an account doesn't hurt your credit score.

Frequently Asked Questions

Is my money safe in an online bank?

Yes, as long as the bank is FDIC-insured. Your deposits are protected up to $250,000 per account type per bank, the same as at a traditional bank. Online banks are regulated by the same federal agencies as brick-and-mortar banks. You can verify FDIC insurance on the FDIC's website by searching the bank's name.

Can I get cash from an online bank?

You can withdraw cash by transferring money to another bank account that has an ATM or teller, or by requesting a check. You cannot walk into a branch and withdraw cash because online banks have no branches. Some online banks partner with ATM networks to let you withdraw cash at certain ATMs for free, so check before opening an account if this matters to you.

What happens to my interest if rates drop?

Your interest rate drops too, and you earn less money. This is normal. Your principal (the money you deposited) stays the same and is never at risk. If rates rise, your rate rises with them. You don't lock in a rate at an online savings account the way you do with a CD.

Do I need a minimum balance to open an account?

Most online banks have no minimum balance requirement. You can open an account and deposit $1 if you want. Some traditional banks require $500 to $2,500 to open a savings account. Check the bank's website for the specific requirement before you apply.

How do I know if a bank is FDIC-insured?

Search the bank's name on the FDIC's official website (fdic.gov), or look for the FDIC logo on the bank's homepage. If the bank is not listed on the FDIC website, it is not FDIC-insured, and your deposits above $250,000 are not protected. Credit unions use NCUA insurance instead, which works the same way.