Top 12 based on variable annual percentage yield (APY %):
| APY | Institution | Min to Open | Max Balance | Fees | FDIC Insurance |
|---|---|---|---|---|---|
| 4.8% | Valley Direct → | $1 | ∞ | $0 | $250K |
| 4.75% | LendingClub → | $0 | 10000 | $0 | $250K |
| 4.75% | My Banking Direct → | $500 | ∞ | $0 | $250K |
| 4.65% | Bask Bank → | $1,000 | ∞ | $0 - ∞ | $250K |
| 4.65% | Bread Savings → | $100 | $1M | $0 - $25+ | $250K |
| 4.6% | Ivy Bank → | $2,500 | ∞ | $0 | $250K |
| 4.6% | Popular Direct → | $5,000 | ∞ | 0 | $250K |
| 4.55% | CIT Bank → | $0 | ∞ | $0 | $250K |
| 4.52% | TAB Bank → | $0 | ∞ | $0 | $250K |
| 4.41% | Upgrade → | $25 | ∞ | $0 | $250K |
| 4.4% | Apple Card High-Yield Savings by Marcus → | $0 | ∞ | $0 | $250K |
| 4.35% | My Savings Direct → | $0 | ∞ | $0 | $250K |
What is a high-yield savings account?
High-yield savings account is a savings account with higher interest rate than traditional savings accounts, usually offered online-only.
What is APY?
APY or annual percentage yield takes into account not only interest but also the rate at which it compounds. With compounding interest, you earn interest over set intervals of time and the interest you earn is added to the balance.
Interest rate vs. APY
Interest rate - if you have $10,000 in a bank that offers an interest rate of 1%, your interest at the end of the year will be $100 ($10,000 x 1% = $100).
Annual Percentage Yield - continuing from the example above and assuming interest compounds annually, in year 2 your balance will be $10,200 and you will earn $201 instead of $200 at the end of the year 2. After 10 years, your total balance will be $11,046.22 vs. $11,000 if it were simple interest, an extra $46.22 is the compounding effect!