For years, I kept $15,000 in my regular savings account, proudly watching it earn about $7.50 per year in interest. Yes, you read that right – seven dollars and fifty cents. Then I discovered high yield savings accounts and realized I had been leaving over $700 per year on the table.
Opening a high yield savings account online was one of those “why didn’t I do this sooner?” moments that completely changed how I think about saving money, helping my funds grow significantly faster while giving me peace of mind that I’m maximizing my earnings with zero additional risk.
Whether you’re building an emergency fund, saving for a down payment, or simply want better returns on your savings, you can do this as well.
You can open a high yield savings account online whenever you like, and I’ll show you how to do it below.
With this, you’ll earn 10-15 times more interest than traditional savings accounts without any additional risk.
How to open high yield savings account online
You can easily open a high yield savings account through online banks, credit unions, or traditional banks with high-yield online accounts.
Alternatively, if you prefer in-person banking, some credit unions offer competitive savings rates and allow you to open accounts at their branches.
The first time I opened a high yield savings account online, the entire process took less than 15 minutes, and I immediately started earning significantly more interest.
Method 1: How to open high yield savings account online through online banks
The first time I ever opened an account with an online bank, I was amazed by how simple the process was and how much higher the interest rates were, and let me tell you, it was a smooth experience.
Here’s how you can open a high yield savings account with an online bank:
Step 1: Research and compare online banks
Start by researching reputable online banks that offer high yield savings accounts.
Popular options include:
Marcus by Goldman Sachs Ally Bank Discover Online Savings American Express Personal Savings Capital One 360 CIT Bank Synchrony Bank Barclays Online Savings LendingClub High-Yield Savings
Online banks can offer higher rates because they don’t have the overhead costs of physical branches.
I compared interest rates from eight different online banks, and they ranged from 4.25% to 5.30% APY, compared to 0.01-0.10% at my traditional bank.
Step 2: Compare interest rates and features
Don’t just look at the interest rate – consider these factors:
Annual Percentage Yield (APY): Higher is better Minimum opening deposit: $0 to $100 typically Minimum balance requirements: Most have none Monthly fees: Should be $0 Transaction limits: Federal law limits to 6 withdrawals per month for savings ATM access: Some provide ATM cards Mobile app quality: Check reviews Customer service: 24/7 availability FDIC insurance: Must be FDIC insured up to $250,000
If you’re like me and value convenience, check if they offer mobile check deposit and easy transfers to external accounts.
I prioritized accounts with no minimums, no fees, excellent mobile apps, and rates above 5% APY.
Step 3: Visit the bank’s website
Once you’ve chosen a bank, navigate to their official website.
Look for buttons like:
“Open an Account” “Get Started” “Apply Now” “Start Saving”
Make sure you’re on the official website by checking the URL carefully – watch out for fake sites.
I always verify the website has “https://” and look for security indicators in my browser.
Step 4: Select the high yield savings account
Online banks may offer multiple account types.
Select the high yield savings account, which may be called:
“High Yield Savings” “Online Savings Account” “Premium Savings” “Performance Savings”
Review the account details, including current APY, to ensure it’s the right account.
Step 5: Provide personal information
You’ll need to enter basic personal information:
Full legal name (as it appears on your ID) Date of birth Social Security Number Email address Phone number Current physical address (not a P.O. Box)
This information is required by law for identity verification and tax reporting purposes.
I keep this information in a secure password manager so I can easily access it when needed.
Step 6: Verify your identity
The bank needs to verify you are who you say you are.
This typically involves:
Answering knowledge-based questions about your credit history Providing your driver’s license or state ID number Uploading a photo of your government-issued ID Sometimes a video verification call
These questions might ask about previous addresses, loan amounts, or other information from your credit report.
I once got stumped by a question about a loan I’d forgotten about from years ago, but I was able to look it up in my records.
Step 7: Choose account options
Select your account preferences:
Account nickname: Optional, helps you identify the account (like “Emergency Fund” or “House Down Payment”) Paper or paperless statements: Paperless is faster and more environmentally friendly Communication preferences: Email, text, phone, or mail
I always choose paperless statements and email notifications for real-time updates.
Step 8: Link an external bank account
To fund your new account, you’ll need to link an existing bank account.
You’ll need:
Your current bank’s routing number Your account number Account type (checking or savings)
The online bank will make small test deposits (usually $0.01 to $0.99) to verify the account.
After 1-3 business days, log back in and confirm the deposit amounts.
This verification process ensures security and prevents fraud.
Step 9: Make your initial deposit
Once your external account is verified, transfer your initial deposit.
You can typically transfer:
The minimum required (often $0 for online banks) Any amount up to your daily transfer limit
Transfer options usually include:
Electronic transfer from verified account Mobile check deposit Wire transfer (may have fees) Mailing a check (slowest option)
I transferred $5,000 as my initial deposit using an electronic transfer, which took two business days.
Step 10: Set up automatic transfers (optional but recommended)
One of the best ways to build savings is to automate it.
Set up recurring transfers:
Weekly, bi-weekly, or monthly From your checking account to high yield savings Amount that fits your budget
I set up automatic $500 monthly transfers right after I receive my paycheck.
This “pay yourself first” approach has helped me consistently grow my savings without thinking about it.
Step 11: Download the mobile app
Most online banks have excellent mobile apps for:
Checking your balance and interest earned Making deposits via mobile check capture Transferring money Managing account settings Contacting customer service
Download and log into the app immediately so you can manage your account on the go.
I check my savings growth weekly through the app – watching the interest accumulate is surprisingly motivating!
Step 12: Confirm account opening and start earning
You’ll receive email confirmation that your account is open.
Within days, you’ll see:
Your official account number Confirmation of your first deposit Interest starting to accrue daily
Your interest is typically calculated daily and paid monthly.
And that’s it! Opening a high yield savings account with an online bank is straightforward and financially rewarding.
Method 2: How to open high yield savings account online through traditional banks
Even though online banks typically offer the best rates, some traditional banks have started offering competitive high-yield online savings accounts, and if you’re like me and value having all accounts with one institution, this is a fantastic alternative.
If you’re like me and prefer consolidating accounts with banks you already trust, traditional banks with high-yield online accounts are a fantastic alternative.
To open a high yield savings account through a traditional bank, follow the steps below.
Step 1: Check if your current bank offers high yield savings
Start by checking whether your existing bank has a high yield savings option.
Major banks with competitive online savings accounts include:
Chase (Chase Savings) Bank of America (Advantage Savings) Wells Fargo (Way2Save) Citibank (Accelerate Savings) U.S. Bank (Standard Savings)
Note that traditional banks’ “high yield” rates are typically lower than pure online banks (often 3.5-4.5% vs. 5%+).
However, the convenience of having everything with one bank may be worth it to you.
I checked my bank’s savings rate and found it was only 0.50% APY – nowhere near competitive – so I opened an account elsewhere but kept my checking account for convenience.
Step 2: Log into your online banking
If you’re already a customer, log into your online banking portal.
Most traditional banks make it easy for existing customers to open additional accounts.
Navigate to the “Open New Account” or “Add Account” section.
Step 3: Select the high yield savings product
Choose the savings account with the highest interest rate offered.
Read the details carefully:
Minimum opening deposit requirements Minimum balance to earn the stated APY Monthly maintenance fees (and how to avoid them) Relationship bonuses (higher rates if you have other accounts)
Some banks require you to maintain high balances (like $10,000+) to earn the advertised rate.
My friend’s bank advertised 4% APY but only paid 0.25% on balances under $25,000, which wasn’t disclosed prominently.
Step 4: Complete the application
Since you’re already a customer, the application is streamlined.
You might only need to:
Confirm your personal information Select account preferences Accept terms and conditions
The bank already has your information on file, making this faster than opening with a new institution.
Step 5: Fund your new account
Transfer money from your existing checking or savings account instantly.
Benefits of opening with your current bank:
Instant transfers between your accounts No verification waiting period Immediate access to funds Easy mobile app management
I helped my mom open a high yield savings at her existing bank, and her initial $10,000 deposit transferred instantly.
Step 6: Link to mobile banking
Your new savings account automatically appears in your mobile banking app.
You can immediately:
Check balances Transfer between accounts Set up alerts View interest earned
The seamless integration makes managing your money incredibly convenient.
And that’s how easy it is to open high yield savings accounts through traditional banks!
While rates may be slightly lower, the convenience factor can be significant.
Method 3: How to open high yield savings account through credit unions
If you want a member-focused institution that often offers competitive rates and personalized service, credit unions are incredibly useful for high yield savings accounts.
When my sister was shopping for a high yield savings account, she discovered her credit union offered a rate nearly matching online banks while providing excellent local customer service.
Here’s how to open an account through a credit union:
Step 1: Find credit unions you’re eligible to join
Credit unions are member-owned and require membership eligibility based on:
Employment (specific companies or industries) Geographic location (living or working in certain areas) Organizational membership (unions, churches, associations) Family relationships (relatives of existing members)
Search for credit unions at:
MyCreditUnion.gov (NCUA’s credit union locator) Local community credit unions in your area Your employer’s credit union Professional association credit unions
Many credit unions have expanded eligibility, making it easier to join.
Step 2: Compare credit union savings rates
Check savings rates at multiple credit unions.
Some credit unions offer:
High yield savings accounts (4-5% APY) Money market accounts (similar rates with check-writing) Share certificates (similar to CDs)
Credit unions often call savings accounts “share savings accounts” because depositors are members who own shares of the credit union.
My sister’s credit union offered 4.75% APY on their premium savings account.
Step 3: Join the credit union
To open a savings account, you first need to become a member.
This typically involves:
Completing a membership application online or in person Providing identification Opening a primary share savings account (often $5-$25 minimum) Paying a one-time membership fee ($0-$25 typically)
I joined a credit union by opening a membership share account with just $5.
Step 4: Apply for the high yield savings account
Once you’re a member, apply for their high yield savings product.
You can usually:
Apply online through member portal Call and apply over the phone Visit a branch in person Use their mobile app
Credit unions often have simpler applications than banks.
Step 5: Fund your account
Transfer your initial deposit via:
Transfer from your primary share account External bank transfer Direct deposit Mobile check deposit In-branch deposit
Credit unions may have longer transfer times from external banks (3-5 business days) compared to large online banks.
Step 6: Enjoy personalized service
One advantage of credit unions is their community focus and personalized service.
You can:
Call and speak with actual humans quickly Visit local branches if needed Attend member meetings Access financial education resources
My sister loves that she can walk into her credit union and talk to the same people who helped her open her account.
If you’re currently looking to maximize your savings growth or want to open a high yield savings account, use any of the above methods (through online banks, traditional banks, or credit unions) to start earning more on your money.
If you encounter any issues while opening your account, contact the institution’s customer service for assistance.
What interest rate should I expect from a high yield savings account?
High yield savings account rates fluctuate with the Federal Reserve’s interest rate decisions.
As of 2024-2025, typical rates are:
Online banks: 4.50% – 5.35% APY Traditional banks (online savings): 3.50% – 4.50% APY Credit unions: 4.00% – 5.00% APY Traditional bank branch savings: 0.01% – 0.50% APY
For context, the national average savings account rate is around 0.46% APY, making high yield accounts 10-15 times better.
When I opened my account, I was earning 5.15% APY, which meant my $10,000 earned $515 in interest annually instead of the $5 it would have earned in my old traditional savings account.
Rates change over time, so monitor them and consider switching if your rate becomes uncompetitive.
Is my money safe in a high yield savings account?
Yes, high yield savings accounts are extremely safe if you choose FDIC-insured banks or NCUA-insured credit unions.
FDIC insurance (for banks):
- Protects up to $250,000 per depositor, per institution
- Covers principal and earned interest
- Backed by the full faith of the U.S. government
- No bank failures have resulted in depositor losses since FDIC began
NCUA insurance (for credit unions):
- Same $250,000 coverage
- Same government backing
- Equal safety to FDIC
Always verify your institution is insured by checking:
FDIC BankFind for banks NCUA Credit Union Locator for credit unions
I always look for the FDIC or NCUA logo on the website before opening any account.
Your money is as safe as it is at any traditional bank, regardless of the higher interest rate.
How is interest calculated and paid on high yield savings accounts?
Interest calculation typically works as follows:
Daily calculation: Interest accrues every single day based on your daily balance
Monthly payment: Accumulated interest is deposited to your account monthly
Compound interest: Interest earns interest (exponential growth)
The formula: A = P(1 + r/n)^(nt)
Where:
- A = Final amount
- P = Principal (initial deposit)
- r = Annual rate (as decimal)
- n = Compounds per year (usually 365)
- t = Time in years
Example with $10,000 at 5% APY:
- Daily interest: $10,000 × 0.05 ÷ 365 = $1.37 per day
- After one month: ~$41.67
- After one year: $512.67 (with compounding)
I love watching my daily interest accumulate – it’s like getting paid to save money!
What’s the difference between APY and APR for savings accounts?
APY (Annual Percentage Yield): Shows what you’ll actually earn including compound interest. This is what you should focus on for savings accounts.
APR (Annual Percentage Rate): Simple interest rate without compounding. Used more for loans.
For savings accounts, always compare APY, not APR.
Example:
- 5.00% APR compounded daily = 5.13% APY
- 5.00% APR compounded monthly = 5.12% APY
The difference seems small but adds up over time.
A 5.00% APY means you’ll earn exactly $500 on a $10,000 deposit over one year, regardless of how the bank compounds it.
Are there any downsides to high yield savings accounts?
High yield savings accounts are excellent but have some limitations:
Potential downsides:
- No physical branches: Online banks lack in-person services (though customer service is usually excellent)
- Transfer delays: Moving money from online banks to external accounts takes 1-3 business days
- Transaction limits: Federal Regulation D limits to 6 withdrawals per month (exceeding may incur fees or account conversion)
- Variable rates: APY can decrease if the Federal Reserve lowers rates
- No checks: Most don’t offer check-writing ability
Not really downsides:
- “Too good to be true”: People worry high rates are risky, but FDIC insurance makes them completely safe
- “Hidden fees”: Reputable online banks charge no monthly fees
For me, none of these limitations matter because I use my high yield savings for money I don’t need immediate daily access to.
I keep my emergency fund and savings goals there while using a checking account for daily expenses.
How much should I keep in a high yield savings account?
Financial experts generally recommend:
Emergency fund: 3-6 months of expenses in easily accessible savings Short-term goals: Money needed within 1-3 years (house down payment, car, vacation) Cash reserves: Additional cushion beyond emergency fund for opportunities
Don’t use high yield savings for:
- Daily spending money (keep in checking)
- Long-term investments (consider stocks, retirement accounts for 5+ year horizons)
I keep:
- $15,000 emergency fund (6 months expenses)
- $20,000 house down payment savings
- $5,000 opportunity fund
Total: $40,000 in my high yield savings account, earning me over $2,000 annually in interest.
Money I won’t need for 5+ years is in investment accounts for potentially higher returns.
Can I have multiple high yield savings accounts?
Yes, and there are good reasons to do so:
Reasons to have multiple accounts:
- Separate savings goals (emergency fund, vacation, down payment)
- FDIC insurance beyond $250,000 (spread across multiple banks)
- Take advantage of promotional rates at different banks
- Compare which bank offers best features
Organization strategy:
I have three high yield savings accounts:
- Primary bank: Emergency fund ($15,000)
- Second bank: House down payment ($20,000)
- Third bank: Miscellaneous goals ($5,000)
Each has a specific purpose, making it psychologically easier not to dip into funds designated for specific goals.
Some people prefer one account with mental categories, while I prefer physical separation.
How do I transfer money from my high yield savings account?
Common transfer methods:
Electronic transfers (ACH):
- Link external bank accounts
- Transfer online or through mobile app
- Takes 1-3 business days
- Usually free
- Subject to 6-withdrawal monthly limit
Wire transfers:
- Same-day transfers
- May have fees ($15-$30)
- Good for large, urgent transfers
ATM withdrawals (if account includes ATM card):
- Immediate access
- May have ATM fees
- Counts toward monthly limit
Mobile check deposit:
- Deposit checks into savings
- Usually processed within 1-2 days
I primarily use ACH transfers and plan ahead for any money I’ll need, avoiding the withdrawal limits.
For emergencies, I can transfer to my checking account same-day and access via ATM.
What happens if I need to withdraw money frequently?
Regulation D limits savings account withdrawals to 6 per month.
If you exceed this limit:
First time: Warning from your bank Repeatedly: Account may be converted to checking, closed, or you may incur fees
Withdrawals that count toward the limit:
- Online transfers to external accounts
- Phone-initiated transfers
- Automatic transfers
- Check payments (if offered)
- Overdraft transfers
Withdrawals that DON’T count:
- ATM withdrawals
- In-person bank branch withdrawals
- Mail-in withdrawal requests
If you need frequent access to funds, keep that money in a checking account or high yield checking account instead.
My high yield savings is specifically for money I don’t need to touch often, so the limit has never been an issue.
Open your high yield savings account and start earning more
High yield savings accounts have revolutionized how Americans save money, offering returns 10-15 times higher than traditional savings accounts with the same safety and FDIC insurance.
Whether you’re building an emergency fund, saving for a major purchase, or simply want your money to work harder for you, opening a high yield savings account is one of the smartest financial moves you can make.
I opened my first high yield savings account three years ago with $5,000, and through consistent deposits and compound interest at 5%+ APY, it’s now worth over $27,000 – earning me over $1,400 in interest last year alone compared to the $15 I would have earned at my old bank.
