Editor's Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. Select will update as changes are made public.
While the economy recovers from the effects of the Covid-19 pandemic, inflation, unfortunately, has skyrocketed to 40-year highs. As a result, the Federal Reserve has decided to raise interest rates.
Interest rates, which you might already be familiar with since they're often referred to regarding loans and mortgages, also affect money sitting in your bank account. Money in your checking and savings accounts can earn interest, and the APYs of these accounts are affected by Federal Reserve interest rates as well.
Below, Select details what you need to know about your bank account interest rate, and why you may want to consider switching banks to take advantage of the latest rate increase.
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Bank account interest rates are on the rise
If you already have a high-yield savings account, you may have noticed a recent hike in your account's APY. That's because the Federal Reserve, the central bank of the United States, has been gradually raising rates to help slow down the pace of inflation. Chances are, your bank has likely followed suit.
This is good news for consumers since the interest earned on the money in your high-yield savings account can further bolster your savings. However, it's important to be strategic about your account to ensure you're getting the maximum return from it.
How to pick and maximize a high-yield savings account
With a high-yield savings account, you can earn a sizable amount of interest (at least in comparison to standard checking and saving accounts). Unfortunately, many of the legacy brick-and-mortar banks offer checking and savings accounts with near-zero interest rates, which means your money is essentially loosing value due to inflation as it does not grow. But with the rising cost of living any additional methods of fighting inflation are worth considering.
To ensure you're getting the maximum amount of interest, make sure you're putting your hard-earned money in a high-yield savings account such as Varo Savings or *American Express® High Yield Savings Account.
It's worth noting that these types of accounts should not be treated like a checking account. If you're regularly pulling money out, it defeats the whole purpose of having a high-yield savings account and your interest earnings will be much less as it will lessen the power of compounding.
A good use of a high-yield savings account is to store money for your emergency fund and other medium to long-term goals like a down payment on a house or car. It's important to note that if you're saving for long-term you'll likely want to invest your money in the market in index funds, which have much more growth potential if you have a lengthy investing time horizon.
There are dozens of high-yield savings accounts available on the market, both through in-person and online banks. While the benefits of each account vary, you should be looking for these core features:
- The highest annual percentage yield, or APY, possible
- A user-friendly website and mobile app
- Customer service that is easily accessible
- No minimum deposit or minimum balance
- It's FDIC-insured
- No fees
Here's a look at some of our favorite high-yield savings accounts that are currently available.
- Welcome bonus frequently offered
- No minimum balance or monthly fees
- Can get paycheck deposited up to 2 days early with direct deposit
- Comes with a checking account, ATM access and no foreign transaction fees
- FDIC insured up to $3 million through the SoFi Insured Deposit Program,* offering far more protection than the standard $250,000 limit.
- Savings APY drops significantly without direct deposit
- Out-of-network ATM fees aren’t reimbursed
- No physical branches
Varo Savings Account
Annual Percentage Yield (APY)
Start earning 1.00% APY, then qualify to earn 3.75% APY on your balance up to $5,000.00 by receiving direct deposit(s) totaling $1,000 or more; and end the month with a positive balance in all your Varo accounts. Balances above $5,000 earn 1.00% APY.
Minimum balance
$0.01 to earn interest
Monthly fee
None
Maximum transactions
Up to 6 free withdrawals or transfers per statement cycle
Excessive transactions fee
None
Overdraft fee
None
Offer checking account?
Yes
Offer ATM card?
Yes, if have a Varo Bank Account
Terms apply.
Read our Varo Savings Account review.
Pros
- Two built-in automatic savings tools, Save Your Pay and Save Your Change, make it easy to grow your savings without any extra effort.
- Earn a strong APY on balances up to $5,000 when you meet the qualifying requirements, with a base rate available even if you don’t.
- No minimum deposit, no monthly fees, and no overdraft fees, so nothing is standing between you and your savings goals.
- Option to add a Varo checking account with ATM access, keeping your banking and savings in one place.
Cons
- The higher APY requires at least $1,000 in monthly direct deposits and a positive end-of-month balance to qualify, so it works best as your primary bank.
- Cash deposits are only available through third-party services, which charge a fee, making it less convenient if you frequently deposit cash.
Vio Bank Online Savings Account
Annual Percentage Yield (APY)
4.09%
Minimum balance
$100 to open
Monthly fee
None, if you opt for paperless statements (otherwise, $5 per month)
Maximum transactions
Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D
Excessive transactions fee
$10 per transaction
Overdraft fees
N/A
Offer checking account?
No
Offer ATM card?
No
Terms apply.
Pros
- Strong APY
- No monthly fees, if you opt for paperless billing
- Up to 6 free withdrawals or transfers per statement cycle*
- Easy-to-use mobile banking app
Cons
- $100 minimum balance to open account
- $5 monthly maintenance fee, if you don't opt for paperless billing
- $10 fee per transaction if you make more than 6 in a statement cycle
- No option to add a checking account
- No ATM access
Marcus by Goldman Sachs High Yield Online Savings
Annual Percentage Yield (APY)
3.40%
Minimum balance
None
Fees
No monthly maintenance, overdraft or excessive transactions fee
Maximum transactions
No limit to the number of withdrawals or transfers you can make
Checking account
No
ATM card
No
Terms apply.
Pros
- No minimum deposit, no minimum balance and no monthly fees, making it one of the most straightforward savings accounts to open and maintain.
- No limit on withdrawals or transfers, so you can move your money as often as you need without penalty.
- Earns a competitive APY with no conditions or hoops to jump through.
- Easy-to-use mobile app makes managing your savings simple from anywhere.
- Also offers no-fee personal loans through Marcus, a useful perk if you ever need to borrow.
Cons
- Higher APYs are available elsewhere, so it may not be the top pick if maximizing your rate is the priority.
- No checking account option, so you’ll need a separate account for everyday spending.
- No ATM access or debit card, making it best suited as a dedicated savings account paired with another bank.
When choosing a high-yield savings account, it's equally important to ask yourself the following questions and make sure you can check off these financial boxes prior to applying:
- Is your high-interest debt paid off?
- Are you able to keep up with your monthly bills?
- Are you filling your retirement accounts, such as your 401(k) or Roth IRA?
While an emergency fund is a core financial tool, in some cases, your money may be better used elsewhere.
Bottom line
As Americans continue to struggle with the effects of inflation, rising interest rates are anticipated to help slow the rise in the price of everyday goods. If you're looking for a way to earn passive income and a place to keep your emergency fund, moving your money to a high-yield savings account can definitely be worth it.
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*New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit received within 25 calendar days of your first Eligible Direct Deposit of $1 or more. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 5/15/2026 and will be available through 12/31/2026. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 0.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 9/23/26. Fees may reduce earnings. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. *SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC's regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks. *Earn up to 4.20% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.90% APY Boost (added to the 3.30% APY as of 9/23/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at sofi.com/banking#4. SoFi Bank, N.A. Member FDIC.
*American Express National Bank is a Member FDIC
