Best High-Yield Savings Accounts of February 2025
A high-yield savings account can be a simple and low-risk way to earn money with your savings. Some of the best high-yield savings accounts have an annual percentage yield (APY) of 4% to 5%. In comparison, the national average is 1.75%, and traditional banks offer a yield of less than 1% on average.
High-Yield Savings Accounts
High-Yield Savings Account Rates
| Institution Type | Rate |
|---|---|
| Bank | 0.45% |
| Credit union | 1.54% |
| Online bank | 2.96% |
Source: Curinos LLC as of February 7, 2025
Average APYs also tend to vary by state. However, you might be able to open an account at a bank based in a different state, especially if it's an online bank.
Average High-Yield Savings Account Rate by State
| State | Average Rate |
|---|---|
| Alabama | 1.66% |
| Alaska | 2.48% |
| Arizona | 1.94% |
| Arkansas | 1.93% |
| California | 1.18% |
| Colorado | 1.88% |
| Connecticut | 2.08% |
| Delaware | 2.42% |
| District of Columbia | 2.28% |
| Florida | 1.27% |
| Georgia | 1.73% |
| Hawaii | 2.58% |
| Idaho | 2.20% |
| Illinois | 1.41% |
| Indiana | 1.37% |
| Iowa | 1.63% |
| Kansas | 1.97% |
| Kentucky | 1.52% |
| Louisiana | 1.84% |
| Maine | 2.43% |
| Maryland | 1.80% |
| Massachusetts | 1.76% |
| Michigan | 1.57% |
| Minnesota | 1.73% |
| Mississippi | 1.76% |
| Missouri | 1.37% |
| Montana | 2.23% |
| Nebraska | 2.07% |
| Nevada | 2.04% |
| New Hampshire | 2.16% |
| New Jersey | 1.73% |
| New Mexico | 1.94% |
| New York | 1.31% |
| North Carolina | 1.72% |
| North Dakota | 2.26% |
| Ohio | 1.25% |
| Oklahoma | 1.92% |
| Oregon | 1.91% |
| Pennsylvania | 1.28% |
| Rhode Island | 2.38% |
| South Carolina | 1.95% |
| South Dakota | 2.32% |
| Tennessee | 1.48% |
| Texas | 1.24% |
| Utah | 2.23% |
| Vermont | 2.33% |
| Virginia | 1.76% |
| Washington | 1.65% |
| West Virginia | 2.10% |
| Wisconsin | 1.55% |
| Wyoming | 2.36% |
Source: Curinos LLC as of February 7, 2025
What Is a High-Yield Savings Account?
A high-yield savings account (HYSA) is a savings account that has an annual percentage yield (APY) higher than what you'd get from a traditional savings account. They offer higher interest rates on your deposits, which can help you protect your money from the eroding effects of inflation while keeping your money in an easily accessible account.
High-yield savings accounts sometimes have initial deposit or monthly balance requirements, but there are also options with low or no requirements and no monthly maintenance fees. You'll often find higher APYs from online-only financial institutions, but some banks and credit unions with physical branches also offer high-yield accounts.
High-Yield Savings Calculator
You can use a savings calculator to see how much you might earn from using a high-yield savings account instead of a traditional account.
The difference can be significant. For example, if you put $10,000 into a high-yield savings account with a 5% APY, and the APY stays the same for the entire year, you could earn $500 in interest during the first year. But if your savings account has a 0.50% APY, close to the national average, you'll only earn $50 in interest—$450 less.
To use the calculator, enter how much you'll initially deposit and expect to contribute each month. You can also use the advertised APY for various accounts and how long you'll keep the money in the account to find out how much interest you might earn. However, financial institutions can change the APY at any time, so your actual earnings might be slightly higher or lower, depending on how it changes.
Savings calculator
Pros and Cons of High-Yield Savings Accounts
Consider the pros and cons of high-yield savings accounts before opening an account.
| Pros of HYSAs | Cons of HYSAs |
|---|---|
| Earn more interest than you would with a traditional savings account | The APY can change at any time |
| Easily access your money without paying early withdrawal fees, like you might with a CD | Depositing and withdrawing cash might be more difficult if you use an online-only HYSA |
| Most HYSAs provide $250,000 per person, per ownership category, in deposit insurance for accounts that you have at the financial institution, protecting you in case the financial institution fails | Might lead to lower returns than a CD or investing the money |
Who Should Get a High-Yield Savings Account?
You may want to get a high-yield savings account if you're setting aside savings for short- and medium-term savings. The money could be used for anything, but common examples include:
- Emergency fund
- Down payment
- Wedding
- Moving costs
- Vacation fund
If you want to keep your finances simple, you could look for a financial institution that offers a high-yield savings account and a checking account. Otherwise, you could open a new high-yield savings account and transfer your savings whenever you find an account that offers a higher APY than your current savings account.
Learn more: Ways to Use a High-Yield Savings Account
How to Choose the Best High-Yield Savings Account
When choosing the best high-yield savings account for your needs, compare accounts from multiple financial institutions. You may find that the APY varies depending on where you open an account.
But also consider account requirements, access and features:
- Initial deposit requirements: Many high-yield savings accounts don't require you to deposit a minimum amount of money to open the account or maintain a minimum daily or monthly balance. But if you're just starting out, you may want to review the terms to be sure.
- How the APY works: Some high-yield savings accounts have tiered APYs that depend on your balance. For example, you may only earn a high APY up to a certain balance, or you may need to maintain a minimum balance to qualify for a higher rate.
- Deposit insurance: Most banks and credit unions are part of the FDIC or NCUA, respectively. As a result, you'll receive $250,000 per person, per ownership category, in deposit insurance for accounts that you have at the financial institution. The insurance protects you from losses if the financial institution fails.
- How you access your funds: Review how you can withdraw money from the account. Electronic transfers and wire transfers are common options, and some accounts allow you to get money from an ATM or branch.
- Limits on transfers and withdrawals: After a rule change in 2020, financial institutions are no longer required to limit you to six or fewer "convenient transfers and withdrawals" from savings accounts each month—such as online and ACH transfers. But review the account agreement because they can still choose to impose a limit and decline your requests or charge you a fee for excess withdrawals.
Alternatives to High-Yield Savings Accounts
A high-yield savings account can be a good option for many financial goals. But a high-yield checking account or money market account might make more sense for everyday expenses. And for longer-term goals, such as retirement or a purchase that's several years off, a certificate of deposit (CD), brokerage account or tax-advantaged retirement account may be a better fit.
Here's a brief look at how some of the common alternatives work:
- Money market account: A money market account is like a hybrid of a checking and savings account. It lets you easily access funds with checks or a debit card, but also offers a higher interest rate than a checking account—or even than many traditional savings accounts. However, some money market accounts have high minimum deposit and monthly balance requirements.
- CD: A certificate of deposit could offer a higher APY than a high-yield savings account, but you need to keep your money locked in the CD for a specific period of time to gain the most benefit. Withdrawing money before the CD matures could lead to an early withdrawal penalty. In contrast, you can withdraw money from a savings account at any time. And if you also have a checking account at the same financial institution, moving money between the accounts may be easy and nearly instantaneous.
- Investment account: Investing money in a brokerage or retirement account can make more sense for long-term goals because you're likely to earn more on your investments than you'll get from interest earnings. But investments can also decrease in value, which can be especially risky if you might need the money soon. You don't risk losing money in a high-yield savings account, which is why it might be a better option than investing for certain shorter-term goals.
| Money Market Account | CD | Investment Account | |
|---|---|---|---|
| Average APY | 0.92%* | 2.54% for one-year term* | N/A |
| FDIC or NCUA insurance? | Yes | Yes | No |
| Easy access to funds? | Yes | No | Yes |
| Fees | Monthly maintenance, overdraft, ATM, check-related, nonsufficient funds, excess withdrawal and wire transfer | For early withdrawals | For certain types of trades |
*Source: Curinos LLC as of February 7, 2025, for an MMA with a $2,500 deposit and one-year CD with a $10,000 balance
Common High-Yield Savings Account Terms to Know
You might come across several new terms while researching high-yield savings accounts:
- APY: The annual percentage yield is the annualized rate of return on your savings account based on the interest rate and compounding. Banks often advertise the APY rather than the interest rate.
- ACH transfer: ACH is short for automated clearing house, which is the main way financial institutions electronically transfer money for direct deposits, bill payments and transfers to and from external bank accounts.
- ATM access: Some high-yield savings accounts may come with an ATM card, allowing you to access your funds from the bank's ATM network. Using the card to get money from an out-of-network ATM could incur a fee.
- Minimum balance: Some banks require you to deposit a minimum amount to open the account.
- Monthly maintenance fee: While rare among high-yield savings accounts, a monthly maintenance fee is a service charge to maintain your account. You may be able to get the fee waived if you maintain a minimum balance or meet certain requirements, such as having a checking account at the financial institution.
Frequently Asked Questions
Compare Your Options to Make the Most of Your Savings
Depending on your situation, it may be worth looking into high-yield savings accounts, money market accounts, CDs and different types of investment accounts. A high-yield savings account could end up being one of the best options for your short- and medium-term savings. But it's still important to compare the options from different banks and credit unions to figure out which one will work best for you.
About the author
Louis DeNicola
Louis DeNicola is freelance personal finance and credit writer who works with Fortune 500 financial services firms, FinTech startups, and non-profits to teach people about money and credit. His clients include BlueVine, Discover, LendingTree, Money Management International, U.S News and Wirecutter.
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