How to earn 5% on a high-yield savings account
Though the cost of borrowing has skyrocketed, there is one big benefit of today's high interest rates you should be taking advantage of: major high-yield earnings on savings.
Today's best high-yield savings accounts can get you 4% to 4.5% or even more on your savings balance. Plus, they often charge no monthly fees and relatively low minimum balance requirements (if any). These accounts can help you earn hundreds of dollars each year in interest, depending on your balance.
With ongoing Federal Reserve rate hikes sending the Fed's target rate range above 5%, a select few savings accounts offer 5% APY — and more that earn close to that. Below, we'll cover what you need to know if you're looking to maximize your interest rate.
Compare today's top savings rates here.
How to earn near 5% APY on savings
They may look good on the surface, but many accounts offering over 5% APY today come with added restrictions that can limit your earnings or make saving more complicated (more on that shortly). So, you may want to look for accounts with fewer restrictions and no monthly fees that still earn near 5% APY.
Here are a few to consider:
CIT Bank: 4.85% APY
CIT Bank's Platinum Savings Account earns 4.85% APY — just a small amount under 5%. You'll need to deposit $100 at opening and maintain a balance of $5,000 or more to earn the high rate. There are no account opening or monthly maintenance fees with this account.
Laurel Road: 4.80% APY
When you open a high-yield savings account with Laurel Road (a division of KeyBank) you can earn a 4.80% APY. There are no monthly maintenance fees, and you don't need to meet any minimum deposit or balance requirements for this account.
Bask Bank: 4.75% APY
The Interest Savings account from Bask can get you 4.75% APY on your savings balance. There are no monthly fees, and the only requirement is that you deposit some amount within 15 days of account opening.
Learn more about top savings account rates available now.
What to know about accounts with more than 5% APY
If you want to earn more than 5% on your savings account, you may need to jump through a few hoops. There are fewer options than those within the 4.5% to 5% range, and they often come with more restrictions.
Watch out for higher monthly fees and minimums than many other competitive high-yield savings accounts offer. You may also encounter requirements to open multiple accounts with the bank or promotional rates that only apply up to a certain threshold.
For example, Varo Bank offers an online savings account with a 5% APY. However, you'll only earn that rate on up to $5,000. For any amount above that, you'll only earn 3%. Plus, you must have a Varo Bank Account to open the savings account, receive at least $1,000 in direct deposits each month and have a positive balance in both accounts at the end of the month.
Or, consider CFG Bank. This bank's high-yield savings option is technically a money market savings account and earns 5.07% APY. However, you must deposit and maintain at least $1,000 in the account or face a $10 monthly maintenance fee.
While these may not be deal breakers in exchange for a yield above 5%, you should decide if they're worth the added effort compared to an account with a slightly lower yield and fewer restrictions.
The bottom line
If you're not already using a high-yield savings account, you could be missing out on a lot of added value on the money you save. Luckily, there are plenty of accounts to choose from that offer competitive rates and terms to help you maximize your savings.
To find the best account for you, make sure you consider the interest rate alongside other account details — fees, minimums, account access and other restrictions — that can affect your savings over the long run. Whether you choose a 5% APY or one closer to 4.8% or even 4.5%, you can rest assured knowing your money is working for you.
Looking for an easy way to save? Compare today's top high-yield savings accounts.
