Top Rate on a High-Yield Savings Account Rises to New Record (2024)

The full article continues below these offers from our partners.

Today's New High-Yield Savings Account Leader

Back in early December, high-yield savings account rates climbed to a new record high of 5.50% APY. But in the four months since, the leading savings rate stayed the same—until today. Now you can earn 5.55% APY on your savings with My Banking Direct.

My Banking Direct is an online division of Flagstar Bank, which operates more than 400 brick-and-mortar branches in 12 states. Flagstar was acquired in 2021 by New York Community Bank, which was founded in 1859. The combined banks are now organized under the name Flagstar and are the 31st largest U.S. bank by deposits.

A nice perk of My Banking Direct's new leading rate is that it has no minimum balance requirement for earning its high rate, though you will need an opening deposit of $500. In contrast, the now-runner-up Poppy Bank requires a minimum ongoing balance of $1,000.

Like all of the institutions in our daily ranking of the best savings account rates, your deposits with My Banking Direct are federally insured. Because MBD is run by an FDIC-insured parent bank, your MBD deposits of up to $250,000 are also FDIC-insured.

So Many Options to Earn 5.15% or More

Besides the tip-top rates, you have plenty of additional high-paying choices for your savings. Our daily ranking of the best savings account rates includes a total of 18 accounts that pay 5.15% APY or higher. So it's easy to find one that pays many times more than the national rate average of 0.47% APY.

If you do your primary banking at one of the "big banks," you may find their savings account options are paying pennies. So it can be worth moving some of your cash to an outside high-yield account, enabling you to earn much more interest every month.

If you're not used to holding money somewhere other than your primary bank, you might worry that it'll be inconvenient. But online banking makes transfers between institutions extremely easy these days. And though the transfer process can take one to three days, you can plan for this by not moving every penny of your savings to the new account. Just keep some portion in reserve at the bank or credit union where you have your checking account, in case you need immediate access to some of your savings.

Why It's Smart to Also Consider a CD for Some Savings

Another smart option for your cash savings is to stash some of it in a top-paying certificate of deposit (CD). Though you won't have access to funds put in a CD for months or years, depending on the term you choose, your rate will be guaranteed.

That's useful right now because it's likely the Federal Reserve will begin lowering the federal funds rate sometime in 2024. When the fed funds rate goes down, banks and credit unions will start lowering the rates they're willing to pay customers for their deposits, meaning savings account rates will start to decline.

At its meeting that concluded on March 20, the Fed indicated that a majority of its members expect to lower the federal funds rate by 0.75 percentage points by the end of this year. It's unknown at this time if that will actually happen, and even if so, when the first cut will come. But as soon as it appears the Fed is ready to make its move, returns on high-yield savings accounts, money market accounts, and new CDs will start falling.

But for any CD you've already got locked in, that rate is yours to keep until the CD matures. That means you could enjoy one of today's historically high rates until 2025, 2026, or even beyond.

We make CD research easy with our daily ranking of the top nationwide CD rates, which currently pay as much as 5.65% APY. Just remember that cashing out your CD before its maturity date will cause you to incur an early withdrawal penalty, so it's best to think carefully about how much you can lock away and for how long.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account'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.