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Updated: Oct 21, 2024, 3:08pm
The best 5% interest savings accounts can help you reach your financial goals faster. Whether you’re saving for a down payment on a house, paying off student loans or building an emergency fund, the higher your interest rate, the sooner you’ll get there.
Even with national average savings account rates hovering around 0.45% as of October 21, 2024, per the Federal Deposit Insurance Corporation (FDIC), a 5.00% interest savings account isn’t impossible to find. Below, we’ve gathered the best savings accounts paying 5.00% APY (or close to it).
We compared 73 online savings accounts offered by 53 nationally available banks and credit unions to find the best 5% interest savings accounts (or accounts with interest rates close to 5.00% APY). Learn why we picked each account, compare their pros and cons and access individual bank reviews.
Annual percentage yields (APYs) and account details are accurate as of October 21, 2024.
Annual Percentage Yield
4.50%
Minimum Deposit Requirement
$0
Monthly Maintenance Fee
$3
4.50%
$0
$3
We chose M1‘s High-Yield Savings Account as the best option for extra perks because it comes with saving and investing tools in addition to earning 4.50% APY¹ on all balances.
Why We Like It
We like the high APY on this savings account and the fact that it offers FDIC insurance up to Up to $3.75 million² in FDIC insurance.
What We Don’t Like
M1 does not charge a monthly fee to customers with combined balances of $10,000 or higher, but it does charge a fee of 4.50% APY¹ to users with less than $10,000 in assets. Customers can also waive the fee if they have an active personal loan with the company.
Who It’s Best For
Current or prospective M1 brokerage customers should consider this savings account.
M1 isn’t a bank but a fintech company. M1 savings deposits are held by FDIC-insured B2 Bank. Through B2 Bank’s Insured Deposit Network Program, which utilizes the coverage of other FDIC institutions, M1 deposits can be insured up to $5 million³.
Interest compounds and is credited to your account monthly. Customers can earn 4.50% APY¹.
One major benefit of this account is the ability to ensure an amount greater than the individual FDIC limits ($250,000) offered by most institutions. Through its involvement with the B2 Bank’s Insured Deposit Network Program, M1 can insure deposit amounts up to Up to $3.75 million², which could allow you to keep your funds consolidated in one place.
—Lawrence Sprung, CFP and wealth advisor at Mitlin Financial, Inc
¹Obtaining stated APY (annual percentage yield) with the M1 High-Yield Savings Account does not require a minimum account balance. Stated APY is accrued on account balance. APY is solely determined by M1 Spend LLC and its partner banks, and will include account fees that will reduce earnings. Rates are subject to change without notice.
²The cash balance in your Cash Account is eligible for FDIC Insurance once it is swept to our partner banks and out of your brokerage account. Until the cash balance is swept to partner banks, the funds are held in a brokerage account and protected by SIPC insurance.
Once funds are swept to a partner bank, they are no longer held in your brokerage account and are not protected by SIPC insurance. FDIC insurance is not provided until the funds participating in the sweep program leave your brokerage account and into the sweep program. FDIC insurance is applied at the customer profile level. Customers are responsible for monitoring their total assets at each of the sweep program banks. A complete list of participating program banks can be found here.
³M1 High-Yield Savings Accounts are furnished by B2 Bank, NA, Member FDIC (“B2”). M1 is not a bank. B2 Bank is a member FDIC institution and does not itself provide more than $250,000 of FDIC insurance per legal category of account ownership as described in FDIC regulations. Additional FDIC insurance coverage is provided through B2’s Insured Deposit Network Program involving other FDIC insured depository institutions. Deposits may be insured up to $5,000,000 through B2’s Insured Deposit Network Program. Full terms of the Program can be found at m1.com/legal/agreements/hysa_agreement and a complete list of participating banks in the program can be found at m1.com/legal/agreements/depositnetwork
M1 is not a bank. M1 Spend is a wholly-owned operating subsidiary of M1 Holdings Inc.. M1 High –Yield Savings Accounts are furnished by B2 Bank, NA, Member FDIC. The M1 High-Yield Savings Account is a separate offering from, and not linked to, the M1 High-Yield Cash Account offered by M1 Finance, LLC.
Annual Percentage Yield
4.85%
Minimum Deposit Requirement
$0
Monthly Maintenance Fee
$0
4.85%
$0
$0
We picked Bask Bank, an online-only division of Texas Capital Bank because its savings account has no minimum balance requirement or monthly fees and earns 4.85% APY on any balance.
Why We Like It
We like that the only fees you’ll encounter are outgoing wire fees—this is about as close to fee-free as savings accounts get.
What We Don’t Like
This digital bank doesn’t offer support in person or via live chat, but customer support is available on the phone six days a week or via email.
Who It’s Best For
Consider Bask Bank’s Interest Savings Account if you’re looking to avoid fees and earn the highest APY regardless of your balance.
Bask Bank is part of Texas Capital Bank. This savings account charges fees for outgoing wire transfers. Though you can’t walk into a branch as this is an online-only bank, Bask Bank customers have access to both email and phone support. Interest compounds daily and is credited monthly on the last day of each statement cycle. Customers earn 4.85% APY with no minimums or activity requirements. Customers need to make a deposit within 15 days of account opening to avoid closure.
Annual Percentage Yield
up to 4.57%
Minimum Deposit Requirement
$0
Monthly Maintenance Fee
$0
up to 4.57%
$0
$0
UFB High Yield Savings ranked well for ATM access because it comes with a free ATM card and doesn’t charge fees for ATM transactions.
Why We Like It
We like that customers can earn up to 4.57% APY on all balance tiers on their savings balances with no minimum balance requirement and no monthly fee. You don’t need to do anything to qualify for the highest rate, and all balance tiers currently earn the same APY. We’re also fans of the highly rated UFB Direct app, which offers intuitive tools for digital banking.
What We Don’t Like
UFB places a six-per-month limit on certain types of withdrawals from your savings account, including overdraft protection transfers and online and mobile banking transfers, after which you’ll be charged a $10 fee per excess transaction. Luckily, this limit does not apply to ATM withdrawals.
Who It’s Best For
This account is ideal for savers who want to make ATM withdrawals from their savings account without incurring fees or worrying about transaction limits.
Annual Percentage Yield
4.50%
for deposits up to $1 million
Minimum Deposit Requirement
$10
Monthly Maintenance Fee
$0
4.50%
for deposits up to $1 million
$10
$0
We chose the Salem Five Direct eOne Savings account for simple savings because you can earn 4.50% for deposits up to $1 million with no minimum balance or monthly fees to worry about. All you need is a $10 deposit to open an account.
Why We Like It
We like the eOne Savings account’s lack of activity requirements to earn interest and the fact that it can be easily opened online.
What We Don’t Like
The account is only open to new Salem Five Bank customers or existing customers who have a Salem Five Direct eOne Checking account. Branch access is also limited to the Boston area.
Who It’s Best For
This account is ideal for new Salem Five Direct customers or current customers with a Salem Five Direct eOne Checking account who want to earn interest without worrying about meeting requirements or paying monthly fees.
The Salem Five Direct eOne Savings Account is only open to new Salem Five customers or existing customers who have an eOne Checking account. Otherwise, you’re not eligible. You must fund your eOne Savings account with money from outside of Salem Five or Salem Five Direct.
This account could be a good option as there is no monthly fee, and you can start it with as little as $10. These accounts must be opened online, which could be a hurdle for those who are more comfortable opening accounts in person.
—Lawrence Sprung, CFP and wealth advisor at Mitlin Financial, Inc
Annual Percentage Yield
4.60%
Minimum Deposit Requirement
$0
Monthly Maintenance Fee
$0
4.60%
$0
$0
We picked BMO Alto’s Online Savings Account because it offers unlimited transfers and withdrawals with no fees or minimums.
What We Liked
This account offers 4.60% APY on any balance. We also like that this account allows unlimited transfers and withdrawals, making it ideal for those planning to move money frequently.
What We Didn’t Like
This account only allows two methods of funding your account. It doesn’t offer checks or debit cards, either. But perhaps most importantly, customers should know that BMO Alto doesn’t have an app—just an online platform.
Who It’s Best For
This account is best for those who want a guaranteed competitive interest rate on any size savings balance. It’s also a great fit for customers who make frequent transfers in and out of their savings and don’t want to be charged for doing so. Customers who appreciate mobile banking will need to choose another account since BMO Alto offers only an online portal.
BMO Alto is an online division of BMO Bank. BMO Alto has no branch locations and no mobile app, so customers have to do all of their banking through the BMO Alto website. The only way to make deposits into your account is via an ACH transfer.
BMO Alto doesn’t have minimum balance requirements for savings accounts, but your account will be automatically closed if it has a balance of $0 for 90 consecutive days. Interest compounds daily and is credited to your account monthly.
Anyone looking for flexibility in a fully online option could find this option very appealing. This account earns a competitive rate and allows a great deal of flexibility if you need to make a significant number of transfers to and from the account, as there are no restrictions. Be aware that you will not receive checks to write, and BMO Alto does not allow transactions by mail.
—Lawrence Sprung, CFP and wealth advisor at Mitlin Financial, Inc
While they didn’t make our top picks, these honorable mentions have some unique features and perks in addition to competitive interest rates. Depending on your banking preferences and goals, you may find an account below that’s a better fit than the best 5% interest savings accounts ranked above.
A 5% interest savings account is a type of savings account that pays an annual percentage yield (APY) of around 5%. If you have $1,000 in a 5% interest savings account, you’ll earn $50 in interest over the course of a year, compared to only earning $1 in a traditional 0.10% interest savings account.
While 5% interest savings accounts can help you maximize your savings, some banks may require you to set up direct deposits or maintain a minimum balance to earn the advertised APY. There may also be caps on how much of your balance can earn the advertised rate.
A 5% interest savings account offers many benefits, such as:
High-interest savings accounts can be a great tool for earning more money and keeping your funds liquid. They’re ideal for an emergency fund or a large expense you’re saving for and plan to make in the near future, such as a house. I don’t recommend using these accounts to save for expenses that are well off in the future, such as retirement or a child’s education. In these cases, you may be better served by investment accounts, such as an IRA or 529 plan.
– Lawrence Sprung, CFP and wealth advisor
In today’s market, there are plenty of accounts that offer 5% interest on savings. High-yield savings accounts are often a good choice, but CDs and money market accounts are also worth considering.
Start by comparing accounts that offer 5% interest. We listed our top-rated choices for 5% interest savings accounts above, but there are other accounts with similar rates. Next, check for any eligibility requirements you must meet to earn 5% interest. Some accounts may have direct deposit or minimum balance requirements to qualify for the highest advertised interest rate.
Not all accounts have minimum requirements, though. If you’re concerned about being able to meet specific criteria, choose an account that earns 5% on all balances—no strings attached.
To start earning 5% interest on your savings, simply open one of these accounts and make an initial deposit.
To get 5% interest on your savings account, you first need to check what rate your bank offers. If your account pays up to 5.00% APY but you’re not yet earning this rate, you may need to meet specific requirements to qualify for the highest yield. This could mean receiving a certain amount in direct deposits each month, meeting a minimum balance or something else.
If your account doesn’t offer a high APY, you probably need to switch to a high-yield savings account that does. Not only do many of the best high-yield savings accounts pay 5% interest, but some offer even more. Currently, you can find 5% interest savings accounts at M1, Bask Bank, UFB Direct, Salem Five Direct, BMO Alto, Bread Savings, CIT Bank and Varo Bank.
When looking for the best 5% interest savings account to fit your needs, here are a few things to keep in mind:
You can open any of the best 5% interest savings accounts online, and it usually takes 15 minutes or less. Just follow these steps:
Once you’ve completed these steps, consider setting up savings builder tools, such as round-ups or recurring automatic deposits into your savings account.
If you don’t think a 5% interest savings account is right for you, there are other ways to save money and earn interest. Here are a few options to consider:
If you’re looking to maximize your APY, a 5% APY savings account is one of the best options. Here are some tips to help you get the most out of your interest earnings.
To create our list of the best 5% interest savings accounts, Forbes Advisor analyzed 73 high-yield savings accounts from 53 financial institutions, including traditional brick-and-mortar banks, online banks and credit unions. We ranked each institution on 12 data points within the categories of APY, restrictions and limitations, fees, access, customer experience and account minimums.
Below are the weights we assigned to each category:
As a result, accounts with the highest APYs and lowest restrictions and fees ranked highest on our list.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.
Forbes Advisor Banking Reviewer and Writer Emily Batdorf contributed to this article.
The Bask Interest Savings Account account currently has one of the highest rates we’ve found, offering 4.85% APY. The Bread Savings High-Yield Savings Account follows closely behind, offering 4.75% APY.
All of the accounts on this list offer up to or close to 5.00% APY with the ability to pay no monthly fees and varying minimum deposit requirements. Consider which account will be the best fit for your financial goals and immediate savings needs.
