Whether you’re saving for a rainy day, building an emergency fund, or shifting cash savings away from more volatile investments, securing a competitive interest rate is crucial in today’s economic environment. With inflation rates often outpacing the average interest rate on savings, it’s more important than ever to make sure your savings are working for you.
High-yield savings accounts, which offer interest rates far above the national average, can help you outpace inflation, but to earn the best possible returns, you’ll need to know where to look and what requirements to meet. Fortunately, in 2024, high-yield savings rates are still near 20-year record highs, thanks to the Federal Reserve’s interest rate hikes. This has created an opportunity for savers to earn mid-to-high 4% to 5% on their cash balances.
But how can you qualify for the best rates, and are the requirements worth it? Let’s dive into your options. If you’re looking for high returns without too many strings attached, we’ve got you covered. If you’re open to meeting specific criteria for slightly higher interest, there are some accounts that allow you to earn up to 5.00% APY. Here’s a breakdown of the best options available right now.
The High-Yield Savings Landscape in 2024
First, it’s essential to understand the importance of earning a high annual percentage yield (APY) on your savings. With inflation running higher than the average savings account rates in the U.S., if you aren’t earning at least 3% or more on your savings, you’re essentially losing money in real terms. When your interest rate falls below inflation, your savings are eroded over time, losing purchasing power.
In 2024, thanks to the Federal Reserve’s aggressive interest rate hikes throughout 2022 and 2023, banks have been able to offer some of the highest savings account rates in nearly two decades. The average savings rate for many traditional banks still hovers around 0.25% to 0.50%, which is well below the rate of inflation. But high-yield savings accounts, typically offered by online-only banks, can offer significantly higher returns, with rates ranging from 4.00% to 5.00% or more.
However, the best rates often come with specific conditions. Whether it’s meeting a minimum balance, receiving regular direct deposits, or even meeting certain health goals, there are several ways you can earn top-tier interest.
Option #1: Earn 5.00% APY with Direct Deposit at mph.bank
If you’re comfortable meeting a basic requirement of direct deposits, mph.bank offers an enticing 5.00% APY on balances up to $50,000. This is one of the highest rates available right now. To qualify, you simply need to set up direct deposits totaling at least $2,000 each month. These can be multiple deposits, as long as the total for the month reaches the $2,000 mark.
Key Features:
- No Monthly Fees: mph.bank doesn’t charge monthly maintenance fees, which is a big win for savers.
- Zelle & Mobile Check Deposit: The account comes with modern banking features, including Zelle for easy transfers and mobile check deposit.
- No Minimum Balance: There are no minimum deposit or balance requirements to open or maintain the account, making it accessible to anyone who meets the direct deposit requirement.
It’s important to note that while mph.bank’s 5.00% APY is impressive, other accounts may offer higher rates, but they often require more effort on your part. Some high-yield checking accounts may require you to make 12–15 debit card purchases per month, which could be a hassle if you don’t regularly use a debit card.
mph.bank stands out because it doesn’t require debit card use, and it offers a high rate for larger balances (up to $50,000). It’s ideal for savers who want to maintain a substantial balance without having to jump through additional hoops.
Option #2: Fitness Bank – 5.00% APY with a Health-Focused Twist
For the health-conscious saver, Fitness Bank offers an unusual and unique approach to earning high interest. Its Ultra Savings Account offers a 5.00% APY, but to qualify for this top rate, you must meet two specific criteria:
Elite Checking Account: You need to open an accompanying Elite Checking Account at Fitness Bank. This checking account must maintain an average daily balance of at least $5,000.
Step Count Requirements: You must meet a daily step goal to earn the top interest rate. Specifically, you need to average 10,000 steps per day throughout the month. For those 65 or older, the requirement drops to 7,500 steps per day.
The interesting part of this program is that Fitness Bank doesn’t require you to buy a fitness tracker or wearable device. Instead, you can use its step tracking app on your smartphone. This can be a great incentive for people who are already health-focused or those looking to boost their fitness levels while earning a high APY.
Key Features:
- No Balance Cap: Unlike some high-yield accounts, Fitness Bank doesn’t cap the balance on which you can earn 5.00% APY. If you’re able to meet the requirements, you could potentially earn 5% on your entire savings.
- Mobile Banking: As an online bank, Fitness Bank offers mobile banking features, including the ability to track your steps using its app.
For people who are already active and want to make the most of their fitness journey, this is a fun and unique way to combine savings and health goals. It’s also a good option for those who are willing to meet the daily step goal and maintain the required balance in a checking account.
Option #3: Varo Bank – 5.00% APY on Smaller Balances
Varo Bank is another option for those who want to earn 5.00% APY, but with a smaller balance. Varo offers 5.00% APY on balances up to $5,000, which is ideal for people who want to earn high interest but don’t have a huge savings balance to work with. However, to qualify for the 5% APY, you must meet the following requirements:
- Direct Deposits: You need to receive at least $1,000 in direct deposits each month.
- No Monthly Fees: Varo does not charge any monthly maintenance fees, making it a great choice for those who want a straightforward savings account without hidden charges.
Key Features:
- Mobile Banking: Varo is a completely mobile-first bank, so you can manage your savings easily through its app.
- No Minimum Balance: While you need to receive direct deposits, you won’t be penalized for having low or variable balances, as long as you meet the direct deposit threshold.
Varo is a great option if you want to earn a competitive interest rate on a smaller balance. With no minimum requirements beyond the direct deposit, it’s easy to qualify for and maintain. It’s also one of the best options for those who prefer banking through a mobile app.
Comparing Your Options: Which One is Right for You?
To summarize, here’s a quick comparison of the three top options for earning 5% APY on your savings:
| Bank | APY | Requirements | Balance Cap |
|---|---|---|---|
| mph.bank | 5.00% | $2,000 in monthly direct deposits | $50,000 |
| Fitness Bank | 5.00% | Average 10,000 steps/day (7,500 for seniors) + $5,000 average daily balance in Elite Checking | No cap |
| Varo Bank | 5.00% | $1,000 in monthly direct deposits | $5,000 |
Frequently Asked Questions
What is a high-yield savings account?
A high-yield savings account offers a higher interest rate than regular savings accounts, often 4-5% APY.
How do I qualify for the highest APY on my savings?
Meet requirements like direct deposits, minimum balance, or specific activity levels.
Can I withdraw money from a high-yield savings account anytime?
Yes, but some accounts limit the number of withdrawals per month.
Is my money insured in a high-yield savings account?
Yes, FDIC-insured accounts protect up to $250,000 per depositor, per bank.
What is the difference between high-yield savings accounts and certificates of deposit (CDs)?
High-yield savings accounts offer flexibility, while CDs lock your money for a set period.
How can I maximize my earnings in a high-yield savings account?
Meet the bank’s requirements and choose accounts with the best APY.
Conclusion
Earning 5% APY on your savings in 2024 is still very much possible, but the key is understanding what’s required to qualify for these top rates. Whether it’s maintaining direct deposits, meeting a fitness goal, or simply using a checking account, there are different options to suit various lifestyles and preferences.
If you don’t mind meeting certain conditions, you can maximize your savings by taking advantage of these high-yield accounts. If you’re looking for simplicity, Pibank offers a solid 4.60% APY without any requirements, making it an excellent option for those who want to avoid extra steps.
