Finding a savings account that pays 5% interest is rare, especially since the national average is only 0.21%. But with the right account, you can grow your savings much faster. While some banks and credit unions still offer rates around 5%, they often come with conditions like balance limits or deposit requirements.
Best 5% Interest Savings Accounts
Not every high-yield savings account below offers a full 5% APY, but some do—and others come close. While recent rate changes have impacted yields, the accounts on this list still stand out for offering some of the best returns available today.
1. Upgrade
Upgrade is an online bank that offers personal loans, rewards checking, and high-yield savings accounts. Operating with the efficiency of modern digital platforms, Upgrade focuses on maximizing customer benefits without the traditional bank overhead.
2. Varo
Varo is a fintech company that acquired its own banking charter in 2020. While it operates like an actual bank, its banking services are offered online and through its app.
3. Consumers Credit Union
Michigan-based Consumers Credit Union is open to anyone who lives, works, or worships in the Lower Peninsula.
4. LendingClub
LendingClub is an online bank known for its personal loans and high-yield savings accounts. Its LevelUp Savings account offers up to 4.50% APY when you deposit at least $250 per month.
5. Digital Federal Credit Union
Digital Federal Credit Union (DCU) is a nationwide credit union based in Massachusetts, serving over 900,000 members across all 50 states. Membership is open through select employers, organizations, family relationships, or residency in certain communities.
6. Netspend
Netspend is a financial services company specializing in reloadable prepaid debit cards that function independently of traditional bank accounts.
7. Blue Federal Credit Union
Blue Federal Credit Union, headquartered in Cheyenne, Wyoming, has been serving members since 1950.
Alternative High-Yield Options
If a 5% interest savings account doesn’t align with your needs, there are other avenues to grow your savings. Each alternative comes with its own set of benefits and considerations.
Certificates of Deposit (CDs)
CDs provide a fixed interest rate for a specified term, offering a predictable return. They often yield higher interest than regular savings accounts but require you to lock in your funds for the term’s duration. Early withdrawals typically incur penalties. For instance, as of March 10, 2025, 1-year Treasury bills are yielding around 3.89%, which can serve as a benchmark for CD rates.
Money Market Accounts
Money market accounts blend features of checking and savings accounts, allowing limited check-writing and debit transactions while offering competitive interest rates. They may have higher minimum balance requirements and could impose monthly fees. It’s essential to compare offerings to find one that aligns with your financial habits.
High-Yield Checking Accounts
Some banks and credit unions offer high-yield checking accounts with interest rates approaching or exceeding 5%. However, these accounts often come with stipulations, such as maintaining a minimum balance, conducting a certain number of monthly debit transactions, or setting up direct deposits. Ensure you can meet these requirements to benefit fully.
Crypto Savings Accounts
Crypto savings accounts allow you to earn interest on your cryptocurrency holdings, often at attractive rates. However, they come with notable risks:
- No FDIC Protection: Unlike traditional bank accounts, crypto savings accounts aren’t insured by the Federal Deposit Insurance Corporation, exposing you to potential loss.
- Market Volatility: Cryptocurrency values can fluctuate significantly, affecting the overall value of your holdings.
- Regulatory Uncertainty: The evolving regulatory landscape can impact the operations of crypto platforms, influencing your investments.
See also: How to Make Money With Cryptocurrency
U.S. Treasury I Bonds
I Bonds are government-backed securities designed to protect your investment from inflation. They offer a composite interest rate comprising a fixed rate and an inflation-adjusted rate, which changes every six months. As of November 1, 2024, through April 30, 2025, the I Bond rate is 3.11%, combining a fixed rate of 1.20% and an inflation rate of 1.91%.
Key considerations include:
- One-Year Minimum Holding Period: You cannot redeem I Bonds within the first 12 months of purchase.
- Early Redemption Penalty: Redeeming I Bonds before five years results in the loss of the last three months’ interest.
- Purchase Limits: Individuals can purchase up to $10,000 in electronic I Bonds annually through TreasuryDirect.
Cash Management Accounts
Offered by brokerage firms and robo-advisors, cash management accounts function similarly to traditional bank accounts but often provide higher interest rates. They typically come with features like:
- Higher FDIC Insurance Limits: Through partnerships with multiple banks, these accounts can offer increased insurance coverage.
- Banking Services: Features may include direct deposit, online bill pay, and access to fee-free ATMs.
When considering these alternatives, assess factors such as liquidity needs, risk tolerance, and how each option aligns with your financial goals.
How to Choose a 5% Interest Savings Account
Not all 5% savings accounts offer the same benefits. Many have balance limits, deposit requirements, or fees that reduce their appeal. Here’s what to consider before opening one.
Restrictions
Some accounts advertise high interest rates but only apply them to a portion of your balance. Others require specific actions, such as setting up direct deposit or maintaining a minimum balance, to qualify for the highest rate. Always read the fine print to ensure you can meet the requirements.
Fees
High-yield savings accounts should help you grow your money, not drain it with fees. Watch out for monthly maintenance fees, withdrawal limits, and ATM fees, which can eat into your earnings.
Reviews and Ratings
Some banks and credit unions have better customer reviews than others. Check ratings and feedback from current customers to see how they handle customer service, mobile banking, and ease of withdrawals.
Perks
Beyond interest rates, some accounts offer additional benefits, such as:
- Early direct deposit: Get access to paychecks up to two days early.
- ATM fee reimbursements: Some accounts refund fees for out-of-network ATM withdrawals.
- Cash back on debit purchases: A few high-yield accounts include rewards on everyday spending.
Member FDIC or NCUA Insurance
FDIC-insured banks and NCUA-insured credit unions provide added security. If a bank or credit union fails, deposits are protected up to $250,000 per depositor, per institution. Always verify that your chosen financial institution is backed by either the FDIC or NCUA before opening an account.
How to Apply for a 5% Interest Savings Account
Most banks and credit unions allow you to apply for a high-yield savings account online. The process typically takes less than 15 minutes.
Each institution has its own application requirements, but most will ask for:
- Basic personal details: Name, address, phone number, and Social Security number.
- Government-issued ID: A passport or driver’s license to verify your identity.
- Initial deposit: Some accounts require a minimum opening deposit, while others let you start with any amount.
Deposit options vary by institution, with many allowing direct deposit or bank transfers. Once your account is set up, make sure you meet any ongoing requirements to maintain the highest interest rate.
Final Thoughts
Finding a 5% savings account takes effort, but the extra interest can help you grow your money faster. Many of the best accounts come with balance limits or deposit requirements, so it’s important to choose one that fits your savings goals.
If you don’t qualify for a true 5% account, alternatives like high-yield checking accounts or CDs can still help maximize your savings. Exploring different options ensures you’re earning the best possible return while keeping your money accessible when you need it.
