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Where can I get 5% interest on my savings account?

Published in High-Yield Savings Accounts 3 mins read

You can find several financial institutions currently offering 5% Annual Percentage Yield (APY) or even higher on their savings accounts. These high-yield savings accounts provide a great opportunity to grow your savings more quickly than traditional accounts.

Top Savings Accounts Offering 5% APY or More

Several online banks and credit unions are leading the way with highly competitive interest rates. Here's a list of institutions that offer 5.00% APY or more on their savings accounts:

Institution Account Type Annual Percentage Yield (APY) Notes
Digital Federal Credit Union Primary Savings Account 6.17% Often requires membership
LendingClub LevelUp Savings 5.00% Check balance tiers and requirements
Poppy Bank Premier Online Savings Account 5.00% Typically an online-only account
Ivy Bank High-Yield Savings Account 5.00% High-yield focus
Varo Bank High-Yield Savings Account 5.00% Often has requirements to earn top APY

Rates are subject to change and may have specific balance requirements or other conditions to qualify for the stated APY. It's always advisable to check the latest terms directly with the financial institution.

Understanding High-Yield Savings Accounts

High-yield savings accounts generally offer significantly higher interest rates compared to standard savings accounts offered by traditional brick-and-mortar banks. These accounts are often found at online-only banks, which have lower overhead costs and can pass those savings on to their customers in the form of better rates.

Key characteristics often include:

  • Competitive APY: Rates are typically well above the national average for savings accounts.
  • Online Access: Managed primarily through online platforms or mobile apps.
  • FDIC/NCUA Insurance: Most reputable high-yield accounts are insured by the FDIC (for banks) or NCUA (for credit unions) up to $250,000 per depositor, per institution, ensuring the safety of your funds.

Factors to Consider Before Opening an Account

When choosing a high-yield savings account, it's essential to look beyond just the APY. Consider the following:

  • Minimum Balance Requirements: Some accounts require a certain minimum balance to open or to earn the stated APY.
  • Monthly Fees: Check if there are any monthly service fees and how to waive them (e.g., maintaining a minimum balance, setting up direct deposit).
  • Eligibility Criteria: For credit unions, you might need to meet specific membership requirements (e.g., living in a certain area, being part of a particular organization).
  • Withdrawal Limits: Savings accounts are subject to federal limits on certain types of withdrawals or transfers (typically six per statement cycle).
  • APY Tiers: Some accounts offer different APYs based on your balance, with higher balances sometimes earning a lower rate, or vice-versa for promotional tiers.

By researching and comparing these options, you can find a savings account that not only offers a competitive interest rate but also fits your financial habits and goals. For the most up-to-date information on high-yield savings accounts, it's recommended to consult financial news outlets and comparison sites regularly, as rates can change frequently.