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Here’s the good news: You really can’t go wrong with any of these high-yield savings accounts.
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High-yield savings accounts can earn significantly more interest on cash you need in the short term.Dozens of banks offer high-yield savings accounts, but we compared three of the most popular.Remember that interest rates fluctuate. Make sure the account you choose meets your other needs.
Whether you’re building up an emergency fund or saving for a down payment on a house (or both), a high-yield savings account can be a great tool for getting closer to those goals.
There’s no downside to having a high-yield savings account — it grows the money you’re stashing away for a rainy day or a big purchase while keeping it accessible and safe. But because so many banks offer them, it may seem difficult to choose the one that’s right for you. Here’s the good news: You really can’t go wrong.
High-yield savings accounts are attractive for their competitive rates. Even when the Fed’s benchmark rate fluctuates, these accounts tend to earn up to 10 to 15 times more than a traditional savings account, and 20 times more than your typical checking account.
Dozens of banks have high-yield savings accounts and it may come down to where you prefer to bank — an online-only bank, an investment bank, or a robo-advisor, for example — as well as what you’re looking for, whether it’s minimal fees, the highest possible interest rate, the ability to transfer money whenever you want, a connected checking account, 24/7 customer service, or easy access to your account.
To help out, we compared three of the most popular high-yield savings accounts on offer today: the Ally High Yield Savings Account, a favorite among financial planners and super savers; Marcus by Goldman Sachs High Yield Online Savings Account, investment bank Goldman Sachs’ online savings account; and the Wealthfront Cash Account by the popular robo-advisor.
Below you’ll find each of these high-yield savings accounts compared on a variety of metrics.
Ally
Marcus High Yield Savings
Wealthfront
Type of financial institutionOnline bankInvestment bankBanking serviceAnnual percentage yield (APY)0.60% APY0.60% APY*0.35% APYMinimum opening deposit$0$0$1Service fees$0$0$0Debit card or checksNoNoDebit cardTransfer or withdrawal limit6/month6/monthNoneExcess transfer charge$10**N/AN/AMobile appYesYesYesFDIC insurance coverage amount$250,000$250,000$1 millionChecking account availableYesNoAccount has checking featuresCustomer service24/7 by phone, email, or chatBy phone only; M-F 8 a.m.-10 p.m. ET, Sat.-Sun. 9 a.m.-7 p.m. ET24/7 by email; unspecified phone hoursNext stepsAlly Ally High Yield Savings AccountGoldman Sachs Marcus by Goldman Sachs High Yield Online Savings AccountWealthfront Wealthfront Cash Account
*as of June 15, 2022
**currently suspended as a result of the COVID-19 pandemic
You may notice the interest rates vary among these accounts. That’s because interest rates on savings accounts fluctuate depending on inflation and the government’s interest-rate benchmark.
Choosing the account with the highest interest rate today is a fine decision, but know that the rate offered when you open the account isn’t locked in. In short, ensure the account is otherwise desirable — it has low fees, for example — before parking your savings there.
Across the board, high-yield savings accounts offer better rates than a traditional savings account — hence: high-yield — so you’ve already made progress toward automatically building wealth by keeping your money there, regardless of how the rate shifts over time.
The bottom line: Many of us make the mistake of being paralyzed by indecision when it comes to money. Not saving because we don’t know how much to save, not investing because we can’t figure out the best way to invest, or losing money to fees and inflation because we won’t choose a better bank account — I’ve been there and chances are you have, too. Don’t let that hinder you from building wealth.
As financial expert and bestselling author Ramit Sethi puts it, “The single most important factor to getting rich is getting started, not being the smartest person in the room.” Choose an account with little fees and high earning potential, Sethi says, and move on.