10 Best 5% Interest Savings Accounts for January 2024
Written by
Kellan Jansen
Edited by
Elizabeth Constantineau
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If a global pandemic, turbulent economy and confusing job market have taught people anything, it’s that an emergency fund is more important now than ever. Having to cover unexpected expenses, a job loss or an extended illness is less stressful with an extra bit of cash on hand.
No matter your current financial institution, it never hurts to consider opening a high-yield savings account elsewhere, especially when some online savings account interest rates are at 5% or higher.
This guide will help you find the best 5% interest savings accounts for your needs. Keep reading to see our picks.
The Best 5% Interest Savings Accounts of January 2024
The best high-interest savings account for your needs will depend on more than just which bank will pay you the highest rate. But we’ll get into those other details later. For now, here’s a quick look at our top choices for high-interest savings:
- Wealthfront Cash Account: annual percentage yield up to
- Milli Bank Savings Account: up to a APY
- Varo Savings Account: up to a APY
- Digital Federal Credit Union Primary Savings Account: up to a APY
- UFB High Yield Savings Account:
- Centier Bank Connect Savings Account: up to a APY
- Western Alliance Bank Savings Account: APY
- Blue Federal Credit Union Accelerated Savings Account: up to a APY
- CIT Bank Platinum Savings Account: up to a APY
- Bread Savings High-Yield Savings Account: APY
Wealthfront Cash Account
Wealthfront is a financial services company that offers robot-advised investing and cash savings accounts. It currently pays a APY on any funds stored in a cash account.
Wealthfront can be a good fit for many types of savers. It charges no account fees, has no minimum balance requirement and gives you free same-day withdrawals. You can even connect your cash account to services like Apple Pay and Venmo. This makes it easy to spend money at a variety of merchants, even though it isn’t technically a checking account.
Wealthfront may be best suited for people with large amounts of capital to save. It offers up to $8 million in FDIC coverage through its network of partner banks. This is significantly more than the standard $250,000 FDIC insurance offered by most competitors. So you can store more of your cash in a single account without needing to worry as much.
Milli Bank Savings Account
If you prefer to bank on your mobile device, Milli could be a good fit for you. It’s a mobile-only company that currently offers one of the highest APYs at on the market.
Milli’s app includes a feature called “Jars.” Jars are customizable savings goals that you can contribute to separately. That way, you can pursue more than one goal at the same time without comingling your funds. For example, you could save for a new car and contribute to your emergency fund in separate Jars.
That being said, user reviews for Milli’s mobile app are not very good. In particular, users have complained about long wait times on transfers from other accounts and complicated account funding requirements. But if you just want to put money into an account and save it while earning a high APY, Milli could be the right choice.
Varo Savings Account
Consistently included among the best accounts for high APYs, a Varo savings account can help you reach your goals faster. To save more money quicker, take advantage of Varo’s “Save Your Pay” and “Save Your Change” tools, which transfer a percentage of your pay and a round-up of transactions to your account.
With a starting APY of , you can qualify to earn if you meet two requirements each month:
- Receive direct deposits totaling $1,000 or more.
- End the month with a positive balance in both your Varo Bank Account and Savings Account.
That being said, if you qualify, Varo will pay a APY only on your first $5,000 of deposits. Any amount you have in your account beyond the first $5,000 will earn a APY. You may want to use Varo alongside another 5% interest savings account because of this.
Digital Federal Credit Union Primary Savings Account
DCU touts that its Primary Savings account features no monthly fees and doesn’t require you to open any additional accounts. You just need a $5 minimum opening deposit to join the credit union, and you need to maintain the balance to retain your membership.
You can earn a whopping APY on balances up to $1,000. DCU says a lower rate may apply to any remaining balance above the first $1,000. Like with Varo, you may want to use DCU alongside another high-yield savings account if you have more than $1,000 you want to earn a yield on.
The main downside is that membership is limited at Digital Federal Credit Union. You can join only if you live in one of the Massachusetts communities listed on the organization’s website or have a connection to a participating employer or organization.
UFB High-Yield Savings Account
There is lots to love about the UFB High Yield Savings account, starting with its high APY. At , it’s one of the best APYs on the market, and you won’t have any maintenance or service fees eating away at your earnings.
UFB Direct also offers a high-yield money market account, but it requires a daily minimum balance of $5,000 to avoid a monthly fee of $10. You should also know that the money market account has the same maximum APY that UFB’s high-yield savings account offers.
Centier Bank Connect Savings Account
A premium APY of up to can be yours if you link Centier Connect savings and checking accounts.
Centier advertises no fees or minimum balance requirements. However, there are minimum opening deposits — $50 for checking and $100 for savings — and the APY is determined by the number of qualified debit card transactions posted per statement cycle. You’ll need 50 or more to earn the APY. The APY drops considerably if you have fewer transactions.
This essentially means you need to actively use your account at Centier Bank if you want to enjoy its best savings rates. If you already have a bank that you like and aren’t interested in changing, another provider may be a better fit.
Western Alliance Bank Savings Account
Despite being a commercial bank, Western Alliance Bank offers high-yield savings accounts and certificates of deposit to consumers through its partnership with Raisin, a digital savings marketplace.
The APY for the savings account is , and it has no monthly fees with a minimum deposit of $1. Western Alliance Bank accounts opened through the Raisin storefront are FDIC insured up to the limits required under federal law, which is $250,000.
That being said, Western Alliance Bank is set up to support commercial customers, rather than personal banking clients. This means you may not get the level of support that you would expect from a traditional bank.
Blue Federal Credit Union Accelerated Savings Account
Blue Federal Credit Union offers an accelerated savings account that pays a APY on cash deposits up to the first $1,000. Any amount you save above that will receive a declining interest rate, which gradually drops from 5% to 0.15%.
With this account, you can withdraw money and make transfers anytime you want without incurring fees or penalties. You just need to make a $10 donation to the Blue Foundation to start your membership. But don’t worry: $5 of that donation will satisfy your minimum opening deposit requirement.
Like some of the other accounts on this list, Blue’s Accelerated Savings Account may be best for beginning savers with relatively small amounts of capital. If you have more than $1,000 to save, you can spread your funds out across several institutions to lock in a good APY on your entire balance.
CIT Bank Platinum Savings Account
If you have $5,000 or more to save, CIT Bank’s Platinum Savings account may be one of your best options. The account pays a APY on balances of at least $5,000. You can open an account with less than that, but you would earn only a APY, which is far below the other options on our list. The minimum deposit for the account is $100.
For savers with less than $5,000, CIT Bank’s Savings Connect account is a better option. It pays a APY and still has a minimum opening deposit of $100. The good news is that neither CIT savings account has maintenance fees.
Bread Savings High-Yield Savings Account
Another maintenance fee-free account you may want to consider is the Bread Savings high-yield savings account. It currently pays a APY and has a minimum opening deposit requirement of $100.
One of Bread’s nice features is its transparency around fees. The company clearly explains them on the account sign-up page so you don’t have to search for them yourself. Here are the highlights:
- No monthly maintenance fees
- Free ACH transfers
- Free incoming wire transfers
- Unlimited mobile check deposits
- $25 for outgoing wires
Choosing a 5% Interest Savings Account
With so many institutions now offering 5% interest savings accounts, it can be tough to make a decision. Here’s a quick four-step process you can follow if you find yourself struggling to do so.
1. Know Your Preferences
A good first step is to consider what matters to you beyond interest rates. Maybe you do a lot of banking on your phone and want to make sure your new account comes with a great app. Or perhaps you value in-person banking and want to be able to speak with a banker at a local branch.
If you start by considering these kinds of preferences, it becomes easier to narrow down your options as you do your research.
2. Shop for Rates
Once you have a good idea of what you’re looking for in a new bank, you can start comparing interest rates. As you do so, keep in mind that APYs on traditional savings accounts tend to be variable. So just because a bank offers the highest APY today doesn’t mean it’ll be the same in the future.
3. Read Online Reviews
By this point, you should have a few banks in mind that meet your preferences while paying a competitive rate. Now’s a good time to read some reviews from other users.
These can be a bit biased. But if you read through several, you’ll start to notice trends, such as ineffective customer service agents or annoying hidden fees. These are the kinds of things you can learn from customer reviews.
4. Make Your Decision
Now, all that’s left to do is make your decision based on the research you’ve done up to this point. Remember, you don’t have to choose just one bank. You can deposit your savings at a few institutions and consolidate them in a single account later on if you want to try a few options out before finalizing your choice.
Final Take
High-yield savings accounts pay you more for the savings you already have. But it’s not always as simple as shopping for the highest APY you can find. It’s also important to consider fees, features and your level of comfort with different online banks and their platforms.
Online banks and credit unions may offer higher APYs than traditional brick-and-mortar banks. But that doesn’t automatically make them the best fit for your goals. The more research you do before choosing an account, the more likely you’ll be to make the best decision for you and your loved ones.
FAQ
- Are there any 5% interest savings accounts?
- Yes, many banks currently offer 5% interest savings accounts, including Wealthfront, Milli Bank and Western Alliance Bank, among others.
- Do credit unions have high-yield savings accounts?
- Yes, some credit unions offer high-yield savings accounts. Blue Federal Credit Union and Digital Federal Credit Union are two examples of credit unions that currently pay at least a 5.00% APY.
- What are the disadvantages of a high-yield savings account?
- One key disadvantage of high-yield savings accounts is that they usually have variable interest rates. The rate you see today may not be the rate you're paid one month from now. If you want to lock in a good rate for long-term savings, consider a CD or money market account instead.
David Nadelle, Andrea Norris and Caitlyn Moorhead contributed to the reporting for this article.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Jan. 8, 2024.
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