Watch CBS News

How to get a good rate on a high-yield savings account

Senior man looking at his savings on a tablet
If you're looking for a good rate for a high-yield savings account then consider using an online bank. Getty Images

If you're looking for a secure way to protect and grow your money a high-yield savings account can help. With recent interest rate hikes courtesy of the Federal Reserve, the appeal of these accounts has significantly increased in recent months, making now a great time to open a high-yield account.

High-yield savings accounts work similarly to traditional savings accounts except that they come with a much higher annual percentage yield (APY). Current rates for regular savings accounts are around 0.33% to 0.35% for the year but interest rates for high-yield savings accounts are exponentially higher, falling somewhere between 3.50% to 4.50% or more, depending on the lender and other factors. For just a $5,000 deposit that's the difference between earning $16.50 over twelve months versus $175.00.

But how do you find the highest rate for a high-yield savings account? That's what we will explain below. You can start researching rates to see how much more you could be earning here now.

How to get a good rate on a high-yield savings account

Here are two of the most reliable ways one can secure a high rate for a high-yield savings account:

Shop around

If you have the time and patience - and are committed to getting the highest interest rate out there - then shop around for an account before signing on the dotted line. There are many banks and credit unions that would be happy to have your business so don't open an account with the first lender that offers you a favorable rate. Look around and see if you can get something higher. If not, you can always circle back to the initial offer, although you should know that rates on high-yield accounts fluctuate and may not be identical day to day. That said, no one knows for sure where the rate environment is heading so you could see even higher rates in the future.

Either way, do your homework and look around before committing to one institution. And be sure to check for any maintenance fees or any other penalties that could potentially eat away at the interest your account should be earning. A high-interest rate account with pricey fees may not be as valuable as an account with a slightly lower interest rate that comes without any major penalties.

Start exploring your high-yield savings accounts options online now!

Consider an online bank

Because there are fewer costs involved with opening and maintaining an online banking institution these sorts of banks typically offer higher interest rates on high-yield savings accounts than banks with physical locations can. This isn't always the case but it's something to keep in mind as you search for the highest rate out there. Online banking institutions generally provide higher rates and lower fees than banks with physical locations (in fact, some of the more well-known banks may not even offer high-yield options at all). 

There are two things to note about online high-yield savings accounts, though. You may not have easy access to an ATM to deposit or withdraw from your account, so calculate how much you can comfortably avoid using before funding the account. Also, because these are online you typically won't have an in-person resource to help with your account if there's an issue.

If those factors don't bother you and you're willing to go the online route then you'll likely secure a good rate than if you pursued an account at a physical location.

Other considerations

Have more questions about a high-yield savings account? Check out the below resources to learn more.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.