8 Best 5% Interest Savings Accounts for October 2024
Written by
Erin Gobler
Edited by
Melanie Grafil
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High-yield savings accounts have been enjoying impressive rates over the past couple of years, helping account holders boost their savings. But with the Federal Reserve’s recent decision to lower the federal funds rate, you may start to see the rate on your savings fall.
Luckily, there are still quite a few high-yield savings accounts on the market that boast rates far higher than the national average, some with rates at 5% or higher.
This guide will help you find the best 5% interest savings accounts for your needs. Keep reading to see GOBankingRates’ picks.
The Best 5% Interest Savings Accounts for October 2024
The best high-interest savings account for your needs will depend on more than just which bank will pay you the highest rate. But more on those other details later. For now, here’s a quick look at the top choices for high-interest savings:
- Varo Savings Account: up to APY
- Digital Federal Credit Union Primary Savings Account: up to APY
- UFB High Yield Savings Account: APY
- Centier Bank Connect Savings Account: up to APY
- Western Alliance Bank Savings Account: APY
- Blue Federal Credit Union Accelerated Savings Account: up to APY
- LendingClub LevelUp Savings Account: Up to
- EverBank Performance Savings Account: Up to
| Bank | APY | Minimum Deposit |
|---|---|---|
| Varo Savings Account | Up to | $0 |
| Digital Federal Credit Union Primary Savings Account | Up to | $5 |
| UFB Direct High-Yield Savings Account | Up to | $0 |
| Centier Bank Connect Savings Account | Up to | $100 |
| Western Alliance Bank Savings Account | Up to | $500 |
| Blue Federal Credit Union Accelerated Savings Account | Up to | $0 |
| LendingClub LevelUp Savings Account | Up to | $0 |
| EverBank Performance Savings Account | Up to | $0 |
Varo Savings Account
Consistently included among the best accounts for high APYs, a Varo savings account can help you reach your goals faster. To save more money quicker, take advantage of Varo’s “Save Your Pay” and “Save Your Change” tools, which transfer a percentage of your pay and a round-up of transactions to your account.
With a starting APY of , you can qualify to earn if you meet two requirements each month:
- Receive direct deposits totaling $1,000 or more.
- End the month with a positive balance in both your Varo Bank Account and Savings Account.
That being said, if you qualify, Varo will pay APY only on your first $5,000 of deposits. Any amount you have in your account beyond the first $5,000 will earn APY. You may want to use Varo alongside another 5% interest savings account because of this.
Digital Federal Credit Union Primary Savings Account
DCU touts that its Primary Savings account features no monthly fees and doesn’t require you to open any additional accounts. You just need a $5 minimum opening deposit to join the credit union, and you need to maintain the balance to retain your membership.
Thanks!
You can earn a whopping , but only on your first $1,000. After that, you’ll only earn 0.05%. Like with Varo, you may want to use DCU alongside another high-yield savings account if you have more than $1,000 you want to earn a yield on.
The main downside is that membership is limited at Digital Federal Credit Union. You can join only if you live in one of the Massachusetts communities listed on the organization’s website or have a connection to a participating employer or organization.
UFB High-Yield Savings Account
There’s plenty to love about the UFB High Yield Savings account, starting with its high APY. At , it’s one of the best APYs on the market, and you won’t have any maintenance or service fees eating away at your earnings.
Though UFB’s yield isn’t quite as high as 5%, you have an opportunity to boost your yield. If you combine UFB’s Freedom Checking with its Portfolio Savings account, you can increase your earnings by up to 0.20%, bringing it up to .
UFB Direct also offers a high-yield money market account, but it requires a daily minimum balance of $5,000 to avoid a monthly fee of $10. You should also know that the money market account has the same maximum APY that UFB’s high-yield savings account offers.
Centier Bank Connect Savings Account
A premium APY of up to can be yours if you link Centier Connect savings and checking accounts.
Centier advertises no fees or minimum balance requirements. However, there are minimum opening deposits — $50 for checking and $100 for savings — and the APY is determined by the number of qualified debit card transactions posted per statement cycle. You’ll need 50 or more to earn the APY. The APY drops considerably if you have fewer transactions.
This essentially means you need to actively use your account at Centier Bank if you want to enjoy its best savings rates. If you already have a bank that you like and aren’t interested in changing, another provider may be a better fit.
Western Alliance Bank Savings Account
Despite being a commercial bank, Western Alliance Bank offers high-yield savings accounts and certificates of deposit to consumers.
The APY for the savings account is , and it has no monthly fees. Western Alliance Bank accounts are FDIC-insured up to the limits required under federal law, which is $250,000.
That being said, Western Alliance Bank is set up to support commercial customers, rather than personal banking clients. This means you may not get the level of support that you would expect from a traditional bank.
Blue Federal Credit Union Accelerated Savings Account
Blue Federal Credit Union offers an accelerated savings account that pays APY on cash deposits up to the first $1,000. Any amount you save above that will receive a declining interest rate, which gradually drops from 5% to 0.15%.
With this account, you can withdraw money and make transfers any time you want, without incurring fees or penalties. You just need to make a $10 donation to the Blue Foundation to start your membership. But don’t worry: $5 of that donation will satisfy your minimum opening deposit requirement.
Like some of the other accounts on this list, Blue’s Accelerated Savings Account may be best for beginning savers with relatively small amounts of capital. If you have more than $1,000 to save, you can spread your funds out across several institutions to lock in a solid APY on your entire balance.
LendingClub LevelUp Savings Account
LendingClub allows you to earn up to APY on your savings – that’s 11 times higher than the national average. First, you’ll earn a standard rate of on your savings, with no strings attached. Then, you can earn an additional yield, up to , if you deposit at least $250 per month into your LevelUp account. If you miss a month depositing $250, no big deal – you’ll simply earn the lower that month.
You can reach the $250 in a single deposit or multiple deposits. Eligible deposits include any deposit made into your account, but doesn’t include interest payments, account bonuses, account credits, or reversals or refunds from the bank.
LendingClub’s savings account has no account fees, no transfer fees, and no minimum balance requirements. And as an online provider, LendingClub makes it easy to set up an account in just a few minutes.
EverBank Performance Savings Account
EverBank is a specialty bank that allows you to earn up to on your savings. For example, with a deposit amount of $50,000, you’d earn an impressive $2,522 on your savings in the first year.
EverBank’s Performance Savings account doesn’t have a minimum balance to open your account, doesn’t have a minimum monthly balance requirement, and doesn’t charge monthly maintenance fees. Your account comes with other benefits like FDIC insurance and daily compounding interest.
How Does a 5% Interest Savings Account Work?
A 5% interest savings account pays an annual return on your savings. First, you open and deposit money into the account. Then, the bank will pay you the account’s stated interest rate.
Banks offer interest on savings accounts in return for using your money to fund loans. For example, your bank might use the money in all of its high-yield savings accounts to fund its personal loans. Then, it passes along a portion of its interest earnings to its savings account holders.
Savings account interest usually compounds either daily or monthly. This is the frequency with which your interest earnings are added to your balance and also begin to earn interest. The more frequently your interest compounds, the more you can earn.
Compounding allows you to earn a bit more on your savings. For example, if you deposit $10,000 into a 5.00% high-yield savings account with daily compounding interest, you would earn $512.67 in the first year. The next year, you would earn $538.96, thanks to compounding.
While traditional banks often pay as little as 0.01% on your savings, high-yield savings accounts, including those that offer 5.00%, pay much higher yields. However, because savings accounts have variable interest rates, they could drop at any time–and likely will if the Federal Reserve continues to lower interest rates.
Choosing a 5% Interest Savings Account
With so many institutions now offering 5% interest savings accounts, it can be tough to make a decision. Here’s a quick four-step process you can follow if you find yourself struggling to do so.
1. Know Your Preferences
A good first step is to consider what matters to you beyond interest rates. Maybe you do a lot of banking on your phone and want to make sure your new account comes with a great app. Or perhaps you value in-person banking and want to be able to speak with a banker at a local branch.
Starting with these in mind makes it easier to narrow down your options as you do your research.
2. Shop for Rates
Once you have a good idea of what you’re looking for in a new bank, you can start comparing interest rates. As you do so, keep in mind that APYs on traditional savings accounts tend to be variable. In other words, just because a bank offers the highest APY today, doesn’t mean it’ll be the same in the future.
This is especially important as interest rates are expected to decline in late 2024 and into 2025. While you may choose an account with a 5.00% APY today, there’s no guarantee it will pay as much a few weeks or a few months from now.
3. Read Online Reviews
By this point, you should have a few banks in mind that meet your preferences and also offer a competitive rate. Now is a good time to read some reviews from other users.
These can be a bit biased. However, if you read through several, you’ll start to notice trends, such as ineffective customer service agents or annoying hidden fees. These are the kinds of things you can learn from customer reviews.
It’s also worth exploring whether the bank as any complaints filed against it. You can read past complaints in the CFPB Consumer Complaint Database or on the Better Business Bureau website. While one complaint isn’t necessarily reflective of a company’s service, repeated complaints could be.
4. Make Your Decision
Now, all that’s left to do is make your decision based on the research you’ve done up to this point. Remember, you don’t have to choose just one bank. You can deposit your savings at a few institutions and consolidate them in a single account later on if you want to try a few options out before finalizing your choice.
5. Open Your Savings Account
Once you’ve chosen the best high-yield savings account, you can go ahead and open it. Most of the banks on our list are online banks, meaning you can open an account without having to visit a local branch. You may be able to open your account in as little as a few minutes by providing your personal and contact information, including your Social Security number.
Once your account is open, you can connect it to another bank account and make your initial deposit. Some banks may require an initial deposit to open your account, while others don’t. As soon as you make your first deposit, you’ll start earning interest in your account.
Final Take
High-yield savings accounts pay you more for the savings you already have. But it’s not always as simple as shopping for the highest APY you can find. It’s also important to consider fees, features and your level of comfort with different online banks and their platforms.
Online banks and credit unions may offer higher APYs than traditional brick-and-mortar banks. But that doesn’t automatically make them the best fit for your goals. The more research you do before choosing an account, the more likely you’ll be to make the best decision for you and your loved ones.
FAQ
- Are there any 5% interest savings accounts?
- Yes, many banks currently offer 5% interest savings accounts, including Varo and Western Alliance Bank, among others.
- Do credit unions have high-yield savings accounts?
- Yes, some credit unions offer high-yield savings accounts. Blue Federal Credit Union and Digital Federal Credit Union are two examples of credit unions that currently pay at least 5.00% APY, if not higher.
- What are the disadvantages of a high-yield savings account?
- One key disadvantage of high-yield savings accounts is that they usually have variable interest rates. The rate you see today may not be the rate you're paid one month from now. If you want to lock in a good rate for long-term savings, consider a CD or money market account instead.
Kellan Jansen, David Nadelle, Andrea Norris and Caitlyn Moorhead contributed to the reporting for this article.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Oct. 9, 2024.
GOBankingRates is a personal finance and consumer interest rate website and an online marketing company serving top-tier banks, credit unions and other financial services organizations. Some companies mentioned in this article might be clients of GOBankingRates, which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by the companies included in the article. All fees and rates are subject to change at the issuers’ discretion. Some interest rates might be short-term or promotional offers only, and it is possible additional terms and conditions must be met to obtain the interest rates listed. Rates and availability might vary by region. Verify terms and conditions before opening an account.
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