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Best high-yield savings accounts for June 2024

Kelly Suzan Waggoner
Updated
Best high-yield savings accounts for June 2024 (PM Images via Getty Images)

If you're still keeping your money with a bank paying out less than 1% APY on your savings, now's the time to move your nest egg to a high-yield account offering significantly stronger yields without fees and requirements that can eat into your earnings.

Today's best high-yield savings accounts ensure you're earning as much interest as possible with rates of 4.5% APY and higher to grow your savings investment — more than 10 times the 0.45% national savings average on traditional deposit accounts. These high-interest accounts offer a safe, stable way to plan for a family vacation, contribute to a loved one’s college plan, save toward retirement or build emergency reserves to weather a rainy day.

FDIC-insured online banks and digital accounts offer the highest rates, though you can find HYSAs offering 4.25% APY through legacy brands like American Express and Discover. And online banking and digital apps make it easy to link accounts at other banks to your HYSA to access and move your money for seamless everyday banking.

The Federal Reserve's 23-year high benchmark rate of 5.25% to 5.5% continues to positively affect rates of return for high-yield savings accounts — but a rate cut is expected this year. FDIC-insured digital banks and online accounts are still paying out variable rates of 5% APY or higher with no or low minimums.

These online-only banks and fintech companies partner with FDIC-insured banks to offer deposit accounts that are federally insured, like accounts at your neighborhood bank. Your money saved in these accounts is insured for up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), if deposited with a credit union.

The best high-yield savings accounts won't charge monthly maintenance fees or require high minimum balances to earn high rates of interest, making them accessible to a wide range of savers. And while the Federal Reserve used to limit withdrawals from these accounts to six a month, that restriction is suspended in the wake of the pandemic, with many banks allowing unlimited withdrawals.

Dig deeper: High-yield savings account vs. traditional savings account: Why it’s worth the switch

  • High savings potential. Without the overhead of a brick-and-mortar bank, digital banks can offer significantly higher interest on your deposit investment — up to 10 times the national average when compared to a traditional savings account.

  • No or low fees. The best digital banks and online accounts come with few fees and low minimum deposit requirements, making it easy to maintain your account long term.

  • Convenient access to your money. View real-time balances and electronically deposit or transfer money through an app or your online account at any point.

  • Federally insured up to $250,000. High-yield savings account deposits are insured by the FDIC or the NCUA for up to $250,000 per person, per account.

Dig deeper: Can you lose money in an HYSA? It's unlikely — but here's what to watch out for

  • Transfers may not be instant. Depending on the bank, you may need to wait up to three days for transfers to or from your account to clear. Many banks allow you to link accounts at other banks for faster transfers, so read the fine print to understand your options and wait times.

  • Limited deposit and withdrawal options. Though you can find banks like Capital One that offer hybrid accounts, online banks generally don’t have their own branches and ATMs — instead, they partner with existing ATM networks. To deposit cash into your high-yield savings account, you’ll need to find an in-network ATM that accepts deposits or deposit the cash into a linked account and then electronically transfer the amount into your savings.

  • Minimum opening deposit may be required. Some high-yield savings accounts require a high opening deposit to earn the best advertised APY. For example, Brio Direct requires a $5,000 minimum balance to earn its high APY. Carefully read the account’s terms and conditions before signing up.

Dig deeper: Fixed vs. variable interest rates: How they work

Digital banking opens up more competitive rates and fewer fees than your neighborhood branch, and it offers robust apps that make it easy to manage money among everyday accounts, including digital check deposits — all from your smartphone or tablet.

Yet interest rates on high-yield savings accounts are variable, meaning the high rates you see today can change over time, and you could be earning a lower rate when the Fed cuts its benchmark interest rate later this year.

So while it's smart to consider APY, make sure the account you choose fits the way you like to bank, along with other factors that include:

  • Promotional rates. Today's HYSAs earn 5% APY and higher, making them a safe spot to grow your money toward a short-term goal or a rainy day. Yet some accounts offer promotional or limited-time rates to entice you to sign up before adjusting to a lower rate based on market conditions.

  • Low or no minimums. The best high-yield savings accounts require no minimum deposit or balance to earn high rates of interest, though other banks may require a minimum opening deposit or that you maintain a specific balance to avoid monthly service fees.

  • Ease of accessing your money. Look for flexibility that includes ATMs and mobile apps that accept checks for deposit — or branch access, if you prefer in-person banking.

  • FDIC or NCUA protections. Like other deposit accounts, HYSAs are federally insured for up to $250,000 per account, per person — which means your money is safe up to the limit.

An HYSA offers flexible access to your money, but it isn’t the only low-risk way to earn interest on your savings. Look to these alternatives that offer safe, steady returns at rates that outpace traditional accounts.

  • Certificate of deposit. A CD guarantees a high fixed rate of return on a principal deposit at the end of an agreed-on term. CDs differ from an HYSA in that you risk a withdrawal penalty if you need to access your money before the CD matures — though a short-term CD ladder can help you leverage high-rates with rolling returns while interest rates are strong.

  • Money market account. Also called a money market savings account, the rate on an MMA can beat those of traditional savings accounts, with the same access to your money.

  • High-yield checking account. A high-yield checking account is like a money market account in that it combines high APYs with checking benefits, but with unlimited debit and check-writing privileges you won't find with an HYSA or MMA.

  • Higher-risk investments. Stocks, index funds and mutual funds average higher returns than HYSAs, yet with higher potential losses.

Dig deeper: High-yield savings vs. money market account: Which is best for growing your savings?

Savings rates strongly correlate with the target interest rate set by the Federal Reserve, the U.S.'s central bank. Called the Fed rate, this target rate sets a benchmark that affects rates on deposit accounts, loans, mortgages and other financial products — and as the Fed rate rises, so do APYs on savings accounts, CDs and money market accounts.

On June 12, 2024, at the conclusion of its fourth rate-setting policy meeting of the year, the Fed announced a hold on the federal funds target interest rate's 23-year high of 5.25% to 5.50%, marking the seventh consecutive time it’s kept the benchmark rate unchanged since July 2023.

In its post-meeting statement, the Federal Reserve acknowledged "there has been modest further progress toward the Committee's 2 percent inflation objective," but also that the "economic outlook is uncertain, and the Committee remains highly attentive to inflation risks."

The Federal Reserve is focused on a 2% inflation goal that's ideal for keeping employment high and prices low. Despite speculation in March of three rate cuts by the end of the year, the Fed reiterated from its May statement that its rate-setting committee "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."

Officials now estimate one rate cut this year with an additional four cuts anticipated in 2025.

It's too early to predict what the Federal Reserve will decide at its next policy meeting on July 30 and July 31, 2024, though officials have signaled a cut to the key interest rate later this year.

Inflation appears to be cooling, falling from a peak of 9.1% in June 2022 to rates that have ranged from 3% and 4% since May 2023. The Consumer Price Index released on June 12 revealed consumer prices rose 3.3% year over year, unchanged from 3.3% in April, which was celebrated as "unequivocally good" by economists and puts pressure on the Fed's timetable for rate cuts. Producer Price Index data released on June 13 reports a 0.2% increase in wholesale prices — the prices manufacturers pay to producers of goods and services — from April's 0.5% increase, adding evidence to cooling inflation.

Adding to the good news is the June 7 jobs report that showed a surge in hiring, with employers adding 272,000 jobs in May — higher than the 175,000 positions added in April.

When asked at a post-meeting press conference whether new inflation data changes the timeline on rate cuts, Federal Reserve Chair Jerome Powell said while it's "plausible" a cut could come as early as September, “We want to gain further confidence. Certainly, more good inflation readings will help with that."

The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on July 31, at 2 p.m. ET.

Dig deeper: When’s the next Federal Reserve meeting? The FOMC — and how it affects your finances

Learn more about how high-yield savings accounts work when narrowing down the best for your budget, lifestyle and financial goals.

High-yield savings accounts provide significantly higher earning potential when compared to traditional savings accounts that average 0.45% nationally, letting your dollars work harder over time. HYSAs offer the convenience of online accessibility and minimal fees, giving you a secure and efficient way to manage your money.

Compound interest is often described as earning interest on your interest. It’s a powerful way to boost your savings over time by earning interest on both your initial deposit and any interest you earn along the way. An account's APY is the total amount of interest you'll earn on your deposit over one year, including compound interest, expressed as a percentage, with many HYSAs compounding daily or monthly.

Yes. Interest you earn on your high-yield savings account is considered taxable income by the IRS. If you earn more than $10 in interest in a calendar year, your bank or financial institution will send you a Form 1099 to file with your annual tax return.

Banks charge higher interest rates on money they lend out to borrowers than the interest they pay on customer deposit accounts. The difference is called a spread, and it’s what banks rely on to make money.

Online banks and digital accounts don't require the overhead of brick-and-mortar branches, allowing them to pass along savings to you in the form of even higher APYs than you might find in your neighborhood.

Yes. Digital banks and financial technology companies — for fintechs — can be FDIC-insured charter banks or partner with traditional banks to offer deposit accounts that are protected by the government for up to $250,000. The FDIC insures the safety of your money, even if the bank or fintech were to fail or go out of business. Look for terms like "member FDIC," "FDIC insured" or "NCUA insured" when comparing your options.

High-yield savings accounts typically offer easy access to funds through online banking, mobile apps and ATMs. However, some accounts restrict the number of withdrawals you're allowed each month. Read the fine print to understand how easily and often you can access your money.

Editor's note: Annual percentage yields and promotional rates for some products can vary by region and are subject to change.

Kelly Suzan Waggoner is personal finance editor at AOL. Before joining AOL, Kelly was managing editor at Bankrate and editor-in-chief at Finder, where she led a team focused on helping people to make unfamiliar financial decisions around banking, lending, credit cards, investments and more. In addition to Bankrate and Finder, Kelly’s expertise has been featured in Nasdaq, Lifehacker and other publications. Today, she's dedicated to empowering those planning for, newly entering or fully enjoying retirement to get the most out of their finances — whether that's saving money, managing debt, maximizing rewards or growing their wealth.

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