4 Best High Interest
Savings Account Options for 2020

An emergency fund is a must for everyone, regardless of financial status. However, what would be the most convenient way to not only stash your money away but also to grow it? Without a doubt, high-yield savings accounts.

The best high interest savings account will give you a lot more than an ordinary savings account that you use for saving money. Because of the high interest, you’ll have higher yield and accumulate more cash.

In our review, you’ll find out why high-yield savings accounts are superior to the traditional ones. Furthermore, you’ll be able to find and apply for the one that meets your requirements best.

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Top 4 Highest Interest Rate Savings Accounts in 2020

1. Axos Bank

Established back in 2000, Axos Bank is among the oldest online-only banks on the market. It offers comprehensive banking services both to individuals and businesses. As such, it’s ideal for clients that seek all services provided by traditional brick-and-mortar banks. Full Review

  • APY: 0.61%
  • Minimum deposit: $250
  • FDIC Insured

Established back in 2000, Axos Bank is among the oldest online-only banks on the market. It offers comprehensive banking services both to individuals and businesses. As such, it’s ideal for clients that seek all services provided by traditional brick-and-mortar banks. Full Review

2. Chime

Chime is a financial technology company that cooperates with two banks in order to provide its accounts. It offers one of the highest savings account rates and is an excellent choice for online banking enthusiasts who want free access to ATMs across the country. Full Review

  • APY: 1.0%
  • Minimum deposit: None
  • FDIC Insured

Chime is a financial technology company that cooperates with two banks in order to provide its accounts. It offers one of the highest savings account rates and is an excellent choice for online banking enthusiasts who want free access to ATMs across the country. Full Review

3. Ally

Ally offers a competitive high interest savings account that is counted among the highest yield savings accounts available. Ally’s account is famous for its accessibility, ease of use, and interest rate that grows on a daily basis. Full Review

  • APY: 0.60%
  • Minimum deposit: None
  • FDIC Insured

Ally offers a competitive high interest savings account that is counted among the highest yield savings accounts available. Ally’s account is famous for its accessibility, ease of use, and interest rate that grows on a daily basis. Full Review

4. Varo

A Varo Savings Account provides the best savings account interest rates to all clients with steady income and who can control their spending. To start earning interest on your savings account, you’ll need only $0.01. Full Review

  • APY: 0.81%
  • Minimum deposit: None
  • FDIC Insured

A Varo Savings Account provides the best savings account interest rates to all clients with steady income and who can control their spending. To start earning interest on your savings account, you’ll need only $0.01. Full Review

Best High-Yield Savings Accounts in 2020

Axos Bank: Best for yielding interest rates
Chime: Best overall
Ally: Best for designated savings
Varo: Best for small savings amounts

Detailed Reviews

Axos Bank
Axos Bank

BEST FOR

earning a competitive interest rate

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  • APY: 0.61%
  • Fees: None
  • Minimum deposit: $250
  • FDIC insured: Yes
  • ATM access: ATM card upon request
  • Customer support: 24/7 phone, email

Compared to brick-and-mortar banks, Axos Bank offers its clients the best online savings account due to its APY, which is among the best rates on the market. What also helps Axos Bank stand out is the absence of maintenance fees. Besides, it is one of the rare online banks that offer an ATM card upon the client’s request.

Axos Bank compounds interest on a daily basis on its high interest saving account. In other words, Axos credits your savings account with interest earnings each day; this way your balance increases every day, as does the interest you get on it. As a result, your account will grow much faster.

Axos Bank Features

Axos Banks offers one of the best high-yield savings accounts. Its APY of 0.61% is much higher than that of traditional banks. To add to that, it charges no maintenance fees, unlike most other banks. The lack of fees further increases your savings, allowing you to benefit even more from Axos’s competitive daily compound interest scheme.

With Axos Bank, you needn’t worry about the security of your funds. Since Axos is an FDIC member (Federal Deposit Insurance Corporation), it will secure up to $250,000, the maximum amount allowed by law.

Deposits & withdrawals

Another striking feature that makes Axos one of the best online savings accounts is the possibility to obtain an ATM card upon request. With this card, you’ll be able to withdraw money from more than 90,000 ATMs nationwide.

To deposit your cash on your savings account, you can use a range of external services such as Dollar General, ACE Cash Express, etc. that will load your money into your savings account.

Axos Bank Requirements & Fees

Just like other top high yield savings accounts, Axos requires a minimum balance for opening. To open a savings account with Axos Bank, you have to deposit a minimum of $250. Note that this is not a monthly minimum balance requirement. This amount is required only when you open the account. In case your balance dips below this amount at some point, you won’t be charged any penalty fees.

What we liked & didn’t like

Axos Bank offers one of the best high interest savings accounts. Its APY is six times over the national average. It charges no monthly fees, which allows you to save some extra money. Thus, it’s best for prospective clients who like simple and upfront deals with no hidden fees.

Additionally, Axos Bank’s daily interest rate enables your balance to grow extremely fast. This fantastic opportunity to gain a competitive interest rate on your savings makes Axos Bank the best high-yield savings account. Another great feature is the free ATM card available on request, which will give you fee-free access to numerous ATMs across the USA.

The minimum deposit required isn’t that high; however, it’s possible to find offers with smaller minimum requirements. What some traditional prospective clients might mind is the fact that Axos Bank operates exclusively online, meaning it doesn’t have any brick-and-mortar offices.

Chime
Chime

BEST FOR

merging spending and savings accounts

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  • APY: 1.0%
  • Fees: None
  • Minimum deposit: None
  • FDIC insured: Yes
  • ATM access: Free access to Chime network ATMs
  • Customer support: Phone & email on business days, 24/7 through app

Chime came into existence in 2013 as an online alternative to traditional banks. It stands out from other high interest savings accounts by allowing seamless transfers from a savings account to a spending account and vice versa. All the money that you deposit on your account will go to your spending account by default, from where you can transfer them to the savings account.

Joining of these two accounts is fairly beneficial for account holders as it allows them to earn some cash whenever they carry out a purchase together with your highest interest rate savings. Plus, it will enable you to automatically deposit money on your savings account as soon as you receive a payment.

Chime Savings Account Features

Chime’s savings account provides an annual APY of 1.00%, which is the best savings account rate on the market we’ve managed to find. Chime doesn’t charge a monthly fee, nor does it require a minimum deposit or balance. Similarly, there is no limit on the interest you can gain. As long as you have some money on your account, you’ll be able to earn interest.

Chime offers two different programs that will make saving money easier and let you take full advantage of their best savings account rates—Save When You Spend and Save When I Get Paid. The former allows you to save small amounts of cash with every purchase. It rounds every transaction up to the next $1 then transfers the difference to your savings account. The latter enables you to activate a recurring transfer of 10% from your spending account to your highest yield savings account each time you receive your payment.

Deposits & withdrawals

Withdrawing money from your Chime account is pretty straightforward as you can use any ATMs from its vast ATM network across the USA. However, you should be careful not to use an ATM that doesn’t belong to the Chime network. If you do, you’ll be charged a fee of $2.50.

Regarding the security of your funds, you needn’t worry. Chime has partnered with the FDIC, so you may rest assured that all the savings up to $250,000 you have deposited into your highest interest savings account will be safe and secured.

Chime Savings Account Requirements & Fees

As opposed to many traditional or online banks, Chime doesn’t charge any fees whatsoever. So, you’re free from paying monthly, overdraft, or foreign transaction fees. But to earn an interest of 1.00% that Chime provides, you must have a spending account linked with the savings account, as those two are inseparable.

This requirement, however, isn’t necessarily a nuisance as it offers some extraordinary features that aren’t possible with another best savings account. Namely, it allows you to earn some cash and automatically deposit to your savings account via the perks that are specific for the Chime accounts.

What we liked & didn’t like

Chime is undoubtedly among the savings accounts that allow you to earn interest not only on your savings but also on your purchases. It doesn’t charge any fees whatsoever that traditional banks do, which further protects you from unnecessary spending. Furthermore, the two programs that Chime offers makes saving effortless, so you needn’t even bother with making deposits every so often.

The rich network of ATMs makes withdrawing money from your best high-yield savings account quite simple. But you need to be careful to stick to ATMs that belong to the network to avoid paying a $2.50 fee.

Unlike withdrawing, depositing money may be a nuisance due to the lack of physical branches. Thus, you’ll have to look for alternative ways to deposit your money, which might be somewhat costly.

Ally
Ally

BEST FOR

earning interest on smaller amounts

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  • APY: 0.60%
  • Fees: None
  • Minimum deposit: None
  • FDIC insured: Yes
  • ATM access: Yes
  • Customer support: Phone support (Mon-Sat)

Ally is a famous banking institution that operates exclusively online. Its high interest bank accounts are acclaimed for their competitive interest rates. They are a great choice, notwithstanding how much you can save or what the purpose of saving is. Ally offers a fixed interest rate to all clients, not favoring those who deposit more money.

Since it offers to merge your savings and checking accounts, Ally is outstanding for clients who prefer to do all their banking within a single institution. Note, however, that there are no physical branches, so all banking procedures are carried out digitally.

Ally Savings Account Features

Ally’s online savings account rate of 0.60% is among the highest on the market. Though there are banks that offer higher interest rates for larger amounts, Ally’s offer is consistent no matter how much money you deposit. This makes Ally’s accounts the best high interest savings account for clients who can’t afford to save huge amounts.

Instead of opening several savings accounts for different purposes, Ally allows you to divide your savings into up to 10 different “buckets” or categories under a single account. This way, you may have an allocated fund for every saving goal.

Another great feature of Ally’s best online high interest savings account is the ability to link a checking account. This way, you can transfer money from one account to another effortlessly in just a couple of minutes. Furthermore, you can withdraw money from any of the fee-free 43,000+ ATMs across the country using a debit card if you have a checking account.

Ally Savings Account Requirements & Fees

Ally offers one of those top savings accounts that don’t require any deposit, nor does it charge a minimum balance fee. Similarly, it has no maintenance fee, which spares you from extra costs. However, Ally might charge a $10 withdrawal fee per transaction in case you exceed the limit of six withdrawals per month. But, provided that you use your savings account for its genuine purpose, i.e., stashing your money away, you won’t be charged any fee.

Deposits & Withdrawals

The most convenient way to deposit your money to your best high yield online savings account is to link it with the checking account at Ally. If you do so, you’ll be able to withdraw money from ATMs across the USA. Other deposit options include wired transfer or mailed check, mobile check deposit, and electronic transfers from other accounts. To withdraw money from an online savings account, you can use a telephone, electronic, and outgoing wire transfer, as well as a physical check.

Keep in mind that all your savings up to $250,000 are insured, as Ally has partnered with FDIC.

What we liked and didn’t like

Ally offers the best high interest savings account for those clients who don’t have a lot of money to save. Its fixed interest rate enables everyone to earn regardless of the amount of their savings. Another outstanding feature is the option to categorize savings into “buckets” so that you don’t have to open separate accounts.

Furthermore, you can link your savings with a checking account and to facilitate depositing and withdrawing money from your savings account with a high interest rate. Plus, you’ll have access to Ally’s network of over 43,000 ATMs to withdraw money from. Make sure, however, that you don’t exceed the limit of six withdrawals from your savings account per month, as you’ll be charged a $10 fee per transfer.

Provided that Ally’s services are online, clients who seek a brick-and-mortar bank for their savings account should definitely opt for some other solutions.

Varo
Varo

BEST FOR

clients who are building their savings

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  • APY: 0.81% (could be increased to 2.80%)
  • Fees: None
  • Minimum deposit: None
  • FDIC insured: Yes
  • ATM access: Yes
  • Customer support: Phone (Mon-Sun)

Varo is an online bank that offers an above-the-market competitive APY on its savings account. What makes its APY stand out from other high yield savings account rates is the possibility to upgrade it, provided that you meet specific requirements.

Varo also boasts of two ways to spare your money via “Save Your Change” and “Save Your Pay” bonuses. But, for these perks to be applicable, you must have a regular Varo checking account (via Varo bank) opened and linked with your savings account.

Varo Savings Account Features

Varo offers possibly the best savings account interest rates on the market. Namely, its APY of 0.81% is way above the market average. But, you have the chance to upgrade it to even 2.80% if your savings don’t exceed $10,000. In case this happens, your APY will drop to a regular 0.81%. However, to attain the 2.80% APY, you need to fulfill another requirement. You must directly deposit at least $1,000 every month. Furthermore, you need to make at least five purchases with your debit card per month.

What also makes Varo the best bank for a high interest savings account are the two programs that will allow you to save even more money—Save Your Change and Save Your Pay. The former rounds all your transactions to the next $1 and transfers those amounts to your savings account. The latter allows you to choose the percentage of your deposit that will automatically go to your savings account.

All your savings up to $250,000 are FDIC insured.

Varo Savings Account Requirements

Varo doesn’t charge a monthly fee, nor does it require any minimum balance. You can start earning savings account interest with as little as $0.01 on your account. There isn’t an overdraft penalty either, as Varo will decline your transactions if you exceed a $50 overdraft. But, you should be careful not to exceed the limit of six transfers or withdrawals per statement cycle.

To activate all the perks such as an overdraft limit and the two savings programs, you must link your savings account with the Varo Bank account. This will further enable you to withdraw your money on Varo’s network of over 50,000 ATMs.

Deposit and withdrawal

Depositing money into your best saving account is at its simplest when Varo Savings and Varo Bank accounts are linked. Namely, you have the option to set the deposit percentage that will be automatically transferred to the savings account. In case that they aren’t linked, you can deposit money on your savings account via mobile and online transfers.

Those methods also apply to withdrawing money as well. But with linked accounts, withdrawal couldn’t be simpler. Just transfer the amount you want to withdraw and head off to the nearest ATM from the Varo network.

What we liked & didn’t like

Varo undoubtedly has the best high interest savings account offer in 2020 to the savers who want to start small and don’t plan to exceed the limit of $10,000 (supposing that they can meet the monthly income requirement of $1,000).

Linking the Bank and Savings Accounts can be quite handy; plus, it will allow you to save even more. However, those who don’t want to link the accounts won’t be able to activate some extra perks, nor will they be able to withdraw money from ATMs. Additionally, clients who’d want to save more than $10,000 won’t be delighted with the APY limit of 0.81%.

What to Consider When Choosing a High-Yield Savings Account?

High-yield savings accounts allow you to gain 10–25 times more on the interest compared to the average savings accounts with the current interest rate of 0.05%. However, to choose the account that suits you best, it’s advisable to shop around a bit. Here’s what you should pay attention to:

Annual percentage yield

APY or annual percentage yield is the top factor you should take into consideration while researching the best savings accounts for your needs. It represents the actual rate of return earned on a savings account by compounding interest. To put it simply, APY is the interest rate that you earn on your first deposit plus the interest you gain along with other earnings.

Thus, when it comes to the APY, you should always aim higher. But this shouldn’t be the sole factor. It’s important to weigh it against other requirements.

Rate changing frequency

In addition to the highest savings rates, you should pay attention to the bank’s tendency to change them. Namely, a bank may increase or decrease APY due to different reasons. For instance, the rate may increase if the bank is attempting to gain more deposits. On the other hand, rates may decline due to a range of economic factors or emergency situations.

To avoid taking the bait, you should study how often banks tend to change savings account rates. Also, you should check whether and how frequently banks offer teaser interest rates. Then, determine what your prospective earnings would look like the following year.

Minimum deposit requirements

A minimum or opening deposit could be a significant factor when deciding which savings account to opt for. It may greatly differ from bank to bank—some may not require it, while others may demand tens of thousands.

The more you invest in your highest APY savings account, the faster you’ll accumulate money on it. But, make sure that your financial status allows you to cover the minimum deposit required.

Minimum balance requirements

Besides the minimum deposit necessary to open a savings account, some banks may require a minimum balance to gain API or avoid fees. Much like the minimum deposit, minimum balance amounts may range from $0 to thousands of dollars.

Thus, when considering the minimum balance requirements of the best savings account with high interest, it’s crucial to take into account how often you may need that money, as well as whether you’ll be able to maintain the required balance.

Withdrawal alternatives

Before opting for any savings account, you must think about how frequently you’ll need to withdraw that money. All banks have a limit of six transactions per payment cycle, regardless of the transaction types. However, ATM or in-person transactions should not be included in the limitation.

All banks have their specific options for transferring, depositing, and withdrawing funds. Thus, it’s essential to examine them in detail before opting for the best bank for savings account.

Wrap Up

High-interest savings accounts enable you to gain a greater interest rate compared to standard savings accounts. Once you deposit money into such an account, it begins to earn interest. After a while, that interest begins to yield more interest, helping your savings accumulate over time. Thus, the amount that you end up with is significantly higher than the one you have deposited.

People may deposit their money into savings accounts for a range of purposes. The best uses for a high-yield savings account may include buying a home, college savings, big vacation, or wedding. Therefore, if you’re seeking a savings account that will help you save while, at the same time, giving you uncomplicated access to your cash, a high-interest savings account is the right choice.

FAQ

What is a high-yield savings account?

High-interest savings accounts differ from the traditional ones in terms of the interest rate they offer. Namely, high-yield savings accounts have a way higher interest rate than standard accounts. This way, they help your funds accumulate faster while sitting in your account. Such accounts are typically offered by online banks, as they provide a much higher APY (annual percentage yield) than brick-and-mortar banks.

How much interest will I get on $1000 a year in a savings account?

Considering that the interest rate is 1%, the basic amount you’ll earn at the end of the year is $1,010. However, this is only the simple interest which is paid on the principal. The high-yield savings accounts we’ve reviewed will help you earn more in compound interest, which is calculated according to the primary and accumulated yield. Some of the savings accounts that we’ve reviewed compound interest daily, monthly, or quarterly so that you gain interest on interest more quickly.

Can you lose money in a high yield savings account?

There is no risk of losing your funds in high-interest savings accounts, as long as they are provided by legitimate banks which are FDIC insured. Namely, FDIC (Federal Deposit Insurance Corporation) is the federal body that protects all your deposits amounting up to $250,000. Thus, all your funds deposited into high-yield saving accounts we have reviewed are secured and with no risk of a loss.

What is the best high interest savings account?

The best high-yield savings account should allow your funds to grow exponentially according to the amounts you deposit, as well as the primary and compound interest rates. Typically, they are provided by online banks and have an APY (annual percentage yield) way higher than that of standard savings accounts.

Some of the banks that offer the best high interest savings account are:

  • Axos Bank
  • Chime
  • Ally
  • Varo