If you're keeping your savings at one of the biggest U.S. banks, you're likely losing out on a lot of interest your cash could be earning. That's because you can earn literally hundreds of times more with a high-yield savings account. Even better, you don't have to change your checking account to take advantage of nation-leading savings account rates.
Key Takeaways
- Compared to the minuscule rates offered by larger banks, it's easy to score a rate above 5% by utilizing one of our 15 top-paying savings accounts, eight of which are currently offering APYs between 5.25% and 5.33%.
- So long as a bank or credit union is insured with the FDIC or the NCUA, your money (up to $250,000 in deposits) is just as safe with a smaller bank as it is with a larger financial institution.
- Thanks to modern online banking interfaces, transferring money between different financial institutions typically takes just a couple of days, allowing you to easily move your funds between a smaller bank and a larger one as you need.
How Much Do the Big Banks Pay on Savings?
You may wonder whether it's worth moving some of your money to a high-yield savings account, rather than keep it where you do your primary banking. It's true that having money in two places will sometimes require transferring money between banks. But when you see how little some of the country's biggest banks are paying, you'll likely be convinced the substantially higher interest payments you can earn are worth the very slight extra effort.
Savings account rates from the five largest consumer banks in the U.S. (ranked by assets) are shown below. These five banks account for more than a third of all deposits held by all FDIC-insured banks, so millions of Americans hold accounts at these banks.
As you can see, only Citi pays an even remotely competitive interest rate on its savings account, currently 4.35% APY in some markets. (In other markets, its rate is 0.12% APY.) Meanwhile, Chase, Bank of America, and U.S. Bank are paying virtually zero, at 0.01% APY. And while Wells Fargo outdoes those three by several multiples, it's still only paying 0.15% APY, with an option to earn a still unimpressive 0.25% APY if you keep a larger balance in your account.
How Much More Can You Earn With a High-Yield Savings Account?
In stark contrast to the big bank rates, it's easy to score a rate above 5% by choosing from our daily ranking of the top-paying savings accounts. Our list always provides the top 15 account rates currently available to customers nationwide, including eight current offers between 5.25% and 5.33% APY.
| Institution | Rate (APY) | Minimum Ongoing Balance |
|---|---|---|
| BluPeak Credit Union | 5.33% | Any amount |
| TotalDirectBank | 5.26% | $2,500 |
| Milli | 5.25% | Any amount |
| Newtek Bank | 5.25% | Any amount |
| UFB Direct | 5.25% | Any amount |
| Valley Direct | 5.25% | Any amount |
| Evergreen Bank Group | 5.25% | Any amount |
| Vio Bank | 5.25% | Any amount |
The difference in earnings between the big banks and the leading high-yield savings accounts can really add up. Take the example of holding $5,000 in savings for one year.
| How Much More You Can Earn on a $5,000 Balance | ||
|---|---|---|
| Institution | Rate (APY) | Earnings in One Year on a $5,000 Balance |
| U.S. Bank | 0.01% | $ 0.50 |
| Chase | 0.01% | $ 0.50 |
| Bank of America | 0.01% | $ 0.50 |
| Wells Fargo | 0.15% | $ 7.50 |
| Citi | 4.35% | $ 217.50 |
| Best High-Yield Savings Account | 5.33% | $ 266.50 |
As you can see, letting a bank hold $5,000 of your money for a full year and giving you 50 cents in return is not a smart money move, considering it's easy to instead earn upward of $250 on that same balance if you deposit it elsewhere. And if you hold more in savings than $5,000, you stand to gain even more by moving your money.
Only have $1,000 in savings? Sure, your earnings over a year will be less. But you still have the opportunity to earn more than $50 from a high-yield savings account, rather than only a penny per month from the banks paying 0.01% APY.
Have money you know you won't need for months or even years? You can earn an even higher rate—and lock that APY into the future—by depositing funds in a certificate of deposit (CD). Our daily ranking of the best nationwide CD rates includes options paying up to 5.75% APY. Just be sure to pick the duration of your CD carefully so you can avoid an early withdrawal penalty.
Moving Money to Another Bank Is Safe and Easy
If you haven't held an account at a medium or smaller bank before, you may be concerned your money will be less safe at a new bank, or that having funds at two different institutions will be inconvenient. But these are easy worries to dispel.
Federal Protection Covers Banks of All Sizes—as Well as Credit Unions
Any bank that is an FDIC member is equally insured against bank failure. Each depositor is covered for up to $250,000 in deposits at each FDIC institution where they hold funds (and at each NCUA-insured credit union as well). So you are no more or less protected at a small bank than at a large one.
Online banks are also federally insured. Many of the online banks you encounter in our rankings are simply internet divisions of existing physical banks. But even internet-only institutions are FDIC insured. Just look for the words "FDIC Member" or the FDIC logo on the website of any bank where you're planning to open an account.
Using Multiple Banks Is Easier Than You Think
Having your money at more than one bank will involve transferring funds between them. But with today's online banking interfaces, this is extremely easy to do. Transfers typically take one to three days to appear in the receiving account, but so long as you don't move money that you'll need within that time frame to your outside savings account, the process is simple and convenient to manage.
You can also easily set up automated transfers from your primary account to your outside savings account to, say, put away a certain amount each month to reach a special savings goal.
Still Only Want to Use a Bigger Bank?
If you still feel more comfortable depositing your money under the roof of a really big bank, know that some large institutions pay much better rates than others. Above we considered the five largest banks by assets, but within the top 25 largest banks, you have some more competitive options.
| Big Banks That Offer Competitive Rates | U.S. Rank by Size (Assets) | Savings Account Rate (APY) |
|---|---|---|
| Marcus by Goldman Sachs | 8 | 4.30% |
| Capital One | 9 | 4.30% |
| Ally Bank | 20 | 4.25% |
| BMO Alto | 21 | 4.85% |
| American Express | 23 | 4.25% |
| Discover Bank | 26 | 4.30% |
| Nationwide Leader | 5.33% |
Note that most of the above are online-only accounts, though Capital One and BMO Harris operate some physical branches. As we've pointed out, however, this shouldn't cause concern since online banking makes transfers between banks easy to execute.
Rate Collection Methodology Disclosure
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD's minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
FDIC. "BankFind Suite, FDIC Banks by Total Domestic Deposits."
Citi. "Citi High-Yield Savings."
Chase Bank. "Chase Savings Interest Rates."
Bank of America. "Bank Account Interest Rates."
U.S. Bank. "Standard Savings Account."
Wells Fargo. "Savings Accounts and CD (Time Account) Rates."
Marcus by Goldman Sachs. "High-Yield Savings."
Capital One. "Compare Checking & Savings Accounts."
Ally Bank. "Compare Savings."
BMO Bank. "BMO Alto Online Savings Account."
American Express. "High-Yield Savings."
Discover Bank. "Online Savings Account."
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