Money

The best high-yield savings accounts

30 ROCK -- 'A Goon's Deed in a Weary World' Episode 711 -- Jack McBrayer as Kenneth Parcell
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30 ROCK -- 'A Goon's Deed in a Weary World' Episode 711 -- Jack McBrayer as Kenneth Parcell

A high-yield savings account offers a safe way to build wealth. Instead of tying your money to risky investments, it promises stable and consistent growth through the power of compound interest.

The average annual percentage yield across all savings accounts is just 0.08 percent, according to the Federal Deposit Insurance Corp., around 25 times less than what the best high-yield accounts out there offer.

Many accounts hit users with hidden fees, however, and interest rates vary. To determine which high-yield savings accounts are the best overall, CNBC Make It analyzed offerings from more than 200 online and brick-and-mortar banks. We considered each account's APY and ease of use, as well as downsides, such as monthly fees and balance requirements.

Based on our findings, here's our No. 1 choice and some other standout picks that may be better suited to you.

Our pick for the best high-yield savings account

VIO Bank's high-yield online savings account — 2.10 percent

With an APY of 2.1 percent, VIO Bank, the online division of MidFirst Bank, offers one of the most competitive interest rates, and it only requires a minimum deposit of $100 to open an account. What's more, VIO charges no monthly fee and allows users six free monthly withdrawals.

Like many online banks, VIO does not offer ATM cards for savings account holders. It's also unavailable to residents of Hawaii and Alaska.

Interest rate: 2.1 percent
Minimum balance: $100 to open
Monthly fee: None

The best of the rest ...

VIO Bank may offer the best option overall, but if you're looking for an account with an even higher interest rate, or one with ATM access, or one with no minimum balance requirement, here are some alternative options.

Highest interest rate overall

The online platinum savings account from Northfield Bank offers the highest APY overall: 2.25 percent. The only stipulation is that you must maintain a minimum balance of $2,500, or you'll have to pay an $8 monthly fee.

Northfield is primarily a brick-and-mortar bank with a local ATM network accessible to savings account holders, but it also offers a mobile banking option.

Interest rate: 2.25 percent
Minimum balance: None
Monthly fee: None as long as you maintain a balance of $2,500; otherwise, you pay an $8 monthly fee

Best credit union

Alliant offers an interest rate of 1.8 percent on its high-rate savings account, as long as users maintain an average balance of $100. Users also aren't required to pay monthly fees as long as they opt to receive e-statements.

Because Alliant is a credit union, this offer is exclusive only to members, but it's not difficult to join. You qualify if you work for one of Alliant's partner organizations or you can join by choosing to support its partner charity, Foster Care to Success.

Interest rate: 1.8 percent
Minimum balance: $5 to open, which Alliant provides; $100 to start earning interest
Monthly fee: None if you receive e-statements

Best accounts for no minimum balance

Marcus by Goldman Sachs — 1.85 percent

Marcus by Goldman Sachs offers an APY of 1.85 percent and requires no minimum balance to open. You start earning that rate of interest if your account has just $1. The account has no monthly fee and, even better, doesn't charge you for transactions or wire transfers.

Interest rate: 1.85 percent
Minimum balance: None
Monthly fee: None

Barclays' online savings account — 1.85 percent

Like Goldman Sachs, Barclays' savings account also offers an APY of 1.85 percent without requiring a minimum balance or monthly fee. Barclays also provides a savings assistant feature to help users meet their savings goals.

Interest rate: 1.85 percent
Minimum balance: None
Monthly fee: None

Synchrony's high-yield savings — 1.85 percent

Synchrony matches the 1.85 percent offer without imposing a fee or minimum balance requirement. Users also have the option of getting an ATM card, which makes withdrawing money quick and easy.

Interest rate: 1.85 percent
Minimum balance: None
Monthly fee: None

How high-yield savings accounts make you money

High-yield savings accounts build wealth through compound interest. Let's say you put $10,000 in a savings account that earns compound interest at 1 percent per year. Assuming interest compounds on a monthly basis, in one year you'll have made $100.46. In five years, you'll have made $512.49.

When it comes to maximizing growth, compound interest is favorable to simple interest. Simple interest just accumulates interest on the principal sum. So if you have $10,000 earning an APY of 1 percent, one year later you'll have made $100, and five years later you'll have made $500. Compound interest, on the other hand, reinvests the interest you've collected, so that you're essentially building interest on interest. That's where the extra 46 cents and $12.49 come from in the previous example. By the fourth year you're not just earning 1 percent on $10,000, you are earning 1 percent on about $10,400.

The more often your interest compounds, the better. Daily is better than monthly, although the difference is not significant until you're working with hundreds of thousands of dollars.

Many high-yield savings accounts have minimum balance requirements and penalize you with fees or lower APYs if you don't maintain that level of investment. Most only allow you to withdraw or transfer money six times per month without paying a penalty, in accordance with a Federal Reserve Board rule known as Regulation D, so your money isn't as accessible as it would be in, say, a checking account.

Certificates of deposit are even less accessible. Compared with savings accounts they offer higher APYs, but only under the condition that you can't touch the money for an established number of months without paying a penalty. Some checking accounts offer higher APYs too, but they make you jump over a few hurdles, such as spending requirements, to earn them.

The figure above breaks down how much different savings accounts can yield. Let's say you deposit $5,000 into an account with a 2.25 percent APY, add $200 every month and never incur any fees. In one year you'll have $7,543 in your account, and you'll have made $143 in interest.

If you keep that up for 20 years, you'll have about $68,520 in your account and you'll have made $15,520 in interest. That's a lot of money for a savings account, and might be put to better use elsewhere.

When you should use a high-yield savings account

High-yield savings accounts are safe from risk and FDIC-insured, plus they protect you against inflation. You don't want your money just sitting still, since it loses value as prices rise.

But if growing your money is your priority, experts recommend investing, since stocks tend to offer a much higher rate of return. Billionaire Warren Buffett has said his favorite way to invest is using index funds, which are low-cost and diversified baskets of stocks. The average annualized total return for the S&P 500 index over the past 90 years is 9.8 percent. In recent years returns have been closer to 6 percent, still a stark contrast from the 2 percent APY that top savings accounts offer.

In short, a high-yield savings account is great for emergency funds, short-term savings goals and during economic downturns.

How we decided

We compared more than 200 savings accounts offered by online and brick-and-mortar banks, including large credit unions. We also evaluated money market accounts, which, for all intents and purposes, are the same as savings accounts. Traditionally money market accounts offer higher interests at the cost of higher minimum balance requirements. Sometimes their funds are also more accessible.

For each account, we assessed APYs, compound frequency, minimum balance requirements, account accessibility, fee structures, deposit options, reviews, ease of use and insurance policies. All of the accounts included on this list are FDIC-insured up to $250,000. Note that rates and fee structures are subject to change, and that many institutions only allow you to open accounts with new money, meaning you can't simply deposit money already held by that bank or institution.

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