How to Open a High-Yield Savings Account

To find and open a high-yield savings account that's right for you, start with some research regarding rates, terms, and account features. Check our daily ranking of the best high-yield savings account rates to get a head start. Then, opening a new account is usually an easy process that can be completed online or in person at a bank or credit union.

Below, you'll find featured savings and cash management accounts—from banks, credit unions, and other financial institutions that use partner banks—available from our partners, followed by information on how to find the highest savings account rates nationwide.

1. Shop for the Top Rates

Hundreds of savings accounts at banks and credit unions are accessible via the internet. If you hope to beat inflation, you may need to move funds into a high-yield savings account outside your primary bank. There's no limit to the number of checking and savings accounts you can have at multiple banks.

That said, you may already bank at a top-paying institution. So, check what you can earn in a savings account at your existing bank or credit union. Then, review the top national high-yield savings account rates.

Many of the top rates are offered by online banks. Internet-only banks don't carry the overhead costs of physical branches and often pay the most competitive deposit rates in the country. However, many brick-and-mortar institutions now offer separately-branded online banks with competitive rates.

When shopping for rates, be sure to read the fine print regarding:

• Rate: Is the rate introductory or promotional, and available for a limited time only?
• Compounding: How often is earned interest added to your balance?
• Minimum requirements: Do you need a minimum account balance to earn the high-yield APY?
• Maximum requirements: Can you earn high-yield interest rates only up to a certain account balance?

2. Choose the Institution Best for You

After identifying rates of the top-paying savings accounts, it's time to figure out the right choice for you. If you find your existing bank's savings rate competitive and worthwhile, open a new account with your current bank. You'll enjoy the convenience of a single bank login, instantaneous transfers between checking and savings accounts, and a streamlined signup process.

But if you're like most rate shoppers, you'll find that you can earn more by opening a savings account at a new institution. Top national rates are often 10 to 12 times higher than the national average rate.

If a top rate is from a credit union, ensure you qualify. Banking at a credit union requires you to first become a member of that institution. Any credit union appearing on Investopedia's ranking of the top savings accounts accepts members nationwide, although some may require a small membership fee in the form of a charitable donation.

Review any fees that may be associated with the institution's account. Common bank fees include:

• Inactivity fees
• Account closing fees
• Paper statement fees

You may also want to research the institution by reviewing complaints regarding high-yield savings accounts in the Consumer Financial Protection Bureau's Consumer Complaint Database. However, there are very few complaints—only 53 out of over 5 million complaints total—as the CFPB has taken action against companies that misrepresented high-yield savings accounts.

3. Complete the Account Application

Once you've selected your new high-yield savings account institution, complete the required application, likely online. In most cases, it should only take 10 minutes or so.

You will need to provide the institution with your:

• Full name
• Address
• Telephone number
• Email address
• Identification number, such as your Social Security number (SSN) or Taxpayer Identification Number (TIN)
• Driver's license, passport, or other government-issued photo ID number
  

You'll also need to decide whether to open this account as a single individual or jointly with another person, such as your spouse. If you opt for a joint account, provide all of the second applicant's information, as well.

You can visit a branch if you're opening an account at a physical bank in your community. But even with local institutions, you can likely open an account online. This saves you a trip to the branch and makes for a faster process than in-person with a banker.

4. Fund Your New Account

Some institutions require you to set up an electronic transfer of funds from an outside account into your new account. You may be asked to do so immediately to fund the minimum initial deposit, while others allow you some time, and others don't have minimum deposit requirements.

Ways to fund a new savings account include:

• Transfer from another bank
• Send a paper check
• Perform a mobile deposit of a check

Funding your new account from an existing bank account usually requires you to provide the institution's routing and account numbers. The online application may also ask for your bank's login credentials to instantly verify the account.

If not, your new account may send two trial deposits to the account you're linking, which you'll use for account verification over the next few days.

5. Enroll in Online Banking and Download the App

Once you've opened your new account, it's typically wise to enroll in online banking. You may be able to do this right away after completing your online application. For some banks and credit unions, you may have to wait a few days until you get an email or letter with the account information for online enrollment.

As you set up online banking, note your username and password in a secure physical place or with password storage software. Then, set up the bank's app on your smartphone or tablet. Bank apps are free for customers. Within the app, you'll need to log in with your username and password to interact with your accounts.

6. Establish Beneficiaries

Unless you already did this during the application process, log in to your account and designate one or more beneficiaries. Beneficiaries are those you name to inherit your account balance should something happen to you.

Almost all accounts allow for establishing a primary beneficiary. Many also accommodate secondary beneficiaries, who inherit the account balance if the primary beneficiary isn't alive.

A typical scenario is to designate your spouse as the primary beneficiary (if they are not jointly named on the account) and your children as secondary beneficiaries. But your beneficiary choices are up to you and your situation.

7. Turn On Alerts and E-Statements

Review your choices for account alert options. You might want to get alerts regarding deposits or withdrawals over a certain amount or if your account balance drops below a designated amount. You can often choose whether activity alerts are sent by email, text, or notifications from the app.

Also, consider whether you want electronic account statements. E-statements may offer more secure protection against identity theft, and some online-only banks may require opting into e-statements—or charge a monthly fee if you request paper statements.

8. Link Additional Transfer Accounts

If you set up a transfer for the initial deposit, you likely linked an external bank account to your new high-yield savings account. But with most accounts, you can link multiple external bank accounts. This can be useful if you bank at multiple institutions or often transfer funds to your children's accounts.

Start the account linking process immediately so it's ready when you need it; the setup can take a few days.

9. Follow Your Account's Rules

Lastly, understand all of your account's rules and requirements to avoid future fees. Fees could quickly eat into any interest returns.

While some accounts have no monthly fees, others do have such fees. But there are usually specific actions you can take to avoid them. These actions could include:

• Carrying a certain minimum balance in the account
  
• Setting up a direct deposit for a minimum amount monthly
• Establishing a recurring transfer
• Having a linked account at the same institution
  

Frequently Asked Questions (FAQs)

Bottom Line

High-yield savings accounts can be great for accumulating money for future purchases or emergencies, and they're usually quick and easy to open. Some of these financial institutions might also offer high-yield checking accounts. Typically, you'll find that your primary banking institution doesn't offer the best rates, so opening a new account at a different institution can be smart. Online-only banks tend to offer the best rates, although this isn't always true. You'll earn much more than a typical savings account, but keep an eye on fees that might eat up that interest.