More about savings accounts that earn 4% APY or more
Can I earn 4% or more on certificates of deposit?
The best certificate of deposit rates are well above 4%, and many of the top CDs have yields that top even the best savings account rates. But CDs typically require you to lock in your money for the length of the CD term. If you withdraw funds early, you could owe an interest penalty. But there is an exception: no-penalty CDs. These certificates let you withdraw your money anytime after a few days. However, their rates tend to be lower than high-yield CDs, and more in line with online savings accounts. Depending on your needs, a savings account may still be the better option.
How much interest will I get on $10,000 after a year in a high-interest savings account?
If your money is in a high-yield savings account, your balance will grow faster than an account that earns close to the average rate — without any additional effort on your part. With a 4% APY, a savings balance of $10,000 would earn a bit more than $400 after a year. That’s much better than an account with a 0.35%APY, which would earn about $35.
Where can I get 4% interest on my money?
After the recent Fed rate increases, many banks and credit unions have increased the yields on their savings accounts, and many offer rates of 4% or more. See the list above for some options. Read more about the best places to save money and earn interest.
How do I choose the best high-yield savings account?
Along with high rates, look for accounts that don’t charge monthly fees. Some institutions offer savings accounts with no monthly service charges. Others have a monthly fee, but will waive it if you meet a balance minimum. Keep in mind that the best accounts might not be at a large, brick-and-mortar bank.
» Looking for more top savings accounts? See NerdWallet’s best high-yield online savings accounts
Are my savings federally insured?
Generally, yes. High-yield savings accounts at banks and credit unions are federally insured up to $250,000 per depositor, per insured institution, per ownership category. Accounts at banks are backed by the Federal Deposit Insurance Corp., while credit union accounts are backed by the National Credit Union Administration. Nonbank providers can partner with chartered banks for insurance. If the financial institution fails, federal insurance protects your money to keep it safe and accessible.
» Dig deeper. Read about FDIC and NCUA insurance for deposit accounts.
What’s the difference when NerdWallet notes “Member FDIC” vs. “funds insured by FDIC” on savings accounts?
When we describe a savings account that is offered by a bank, we note “Member FDIC,” since the bank is a member of the Federal Deposit Insurance Corp. and the account is federally insured. If a financial technology company — not a bank — offers a savings account, it typically partners with a bank that is an FDIC member to hold the funds so deposits can be insured. In those cases, we note “funds insured by the FDIC.” Savings accounts at credit unions are federally insured by the National Credit Union Administration, so we note “funds insured by the NCUA.”
