This month, the Federal Open Market Committee (FOMC) — a division of the Federal Reserve responsible for setting monetary policy — met once again to evaluate the health of the economy and make key decisions regarding the federal funds rate.

Following a series of interest rate hikes between March 2022 and July 2023, which were intended to help reverse rising inflation, the Fed held its benchmark rate steady for over a year. However, in September 2024, the Fed decided to lower the federal funds rate by a whopping 50 basis points. It cut its target rate by another 25 bps in November, and again in December.

In all of its 2025 meetings so far, however, the Fed decided to hold the federal funds rate steady at a range of 4.25% to 4.50%.

These decisions impact not only how the economy functions as a whole but also everyday consumers, as they influence rates on savings accounts, credit cards, mortgages, and more.

Statements and forecasts released during FOMC meetings provide valuable information on the economic outlook. Knowing when the Fed meets to discuss monetary policy and make important decisions can help you get a snapshot of the economy’s overall health and adjust your own financial strategy accordingly.

Read more: Should you open a savings account or CD before the Fed's next meeting?

The FOMC holds eight regularly scheduled meetings per year. Its most recent meeting took place May 6-7, 2025. The next one is scheduled for mid-june.

Here's the Fed's full meeting schedule for 2025:

January 28-29

March 18-19*

May 6-7

June 17-18*

July 29-30

September 16-17*

October 28-29

December 9-10*

* Meeting associated with a Summary of Economic Projections.

At these meetings, policymakers assess the health of the economy by evaluating economic indicators such as the Consumer Price Index (CPI), gross domestic product (GDP), and the unemployment rate to shape monetary policy.

The minutes of regularly scheduled meetings are released three weeks after the date of the policy decision. The live press conferences held by Federal Reserve Chairman Jerome Powell are also livestreamed and recorded.

Once each meeting concludes, the FOMC releases its policy decisions at 2 p.m. Eastern time. Then the Fed Chairman holds a press conference at 2:30 p.m.

Read more: How the Federal Reserve rate decision affects mortgage rates

The next meeting is expected to provide Americans with an update on the federal funds rate. The Fed lowered its target rate in September, November, and December 2024, but did not make any new changes so far in 2025.

"In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent," the FOMC wrote in a recent statement. "In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities...The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective."

Experts believe that the Fed will reduce the federal funds rate again in 2025. However, the number and size of these rate cuts remains to be seen.

Read more: How much control does the president have over the Fed and interest rates?

It’s not possible to predict with certainty what the Fed will decide regarding the federal funds rate. That said, many economists expect two rate cuts this year.

The FOMC holds eight regularly scheduled meetings per year. But this doesn’t necessarily mean the committee will decide to change rates at every meeting. Members assess the economy's performance and the committee adjusts monetary policy accordingly.

The Fed’s current target range is 4.25%-4.50%.

The Federal Reserve lowered the federal funds rate for the third time this year — and there may be more cuts next year.

Rate cuts can be cause for celebration, particularly if you're planning to buy a home or pay off debt. But you can also expect to earn less interest on bank deposits and some investments. In other words, now is a good time to reevaluate where you keep your savings and look for ways to maximize your interest earnings.

Interest rate reductions have several implications when it comes to banking and borrowing money. Here's what you can expect after a rate cut from the Fed:

Loans: If you have a fixed-rate loan, nothing will change. However, if you want to take out a new mortgage or car loan, for example, or refinance an existing loan, the interest rates offered by lenders will be lower. As a result, it's more affordable to borrow money since you’ll accrue less interest — and monthly loan payments may be lower, too.

Bank accounts: The annual percentage yield (APY), or interest you earn on bank deposits, decreases. As a result, you'll earn less on the cash you keep in your checking and savings accounts.

Low-risk investing: If you already have an investment account that gives you guaranteed returns, such as a certificate of deposit (CD) or Treasury bill, your rate will stay the same. However, the rates offered on new accounts will begin dropping.

The upcoming Fed rate cut is expected to be conservative, so you may only see gradual changes to your interest rates in the short term. However, more cuts are likely to come, so now is a great time to lock in high rates and prepare your next steps.

For your day-to-day cash and emergency savings, it's best to keep the money in the bank, since you need to maintain easy, penalty-free access to your funds.

But as banks reduce the interest rates offered on deposit accounts (which they can do at any time), your balances will earn less. As a result, you'll want to check the APY on your bank accounts and shop around to see if you can earn a higher rate elsewhere. Here are some bank accounts that might earn more than your regular checking or savings:

High-yield checking

High-yield savings

Online bank accounts

Read more: How do banks set their savings account interest rates?

When it comes to money you don't plan to use within the next few months, consider moving it out of your savings account and into a CD right away. By doing so, you could lock in around 4% APY or higher before rates take another hit.

In addition to comparing rates, look for CD accounts with longer terms, since the goal is to retain your high rate long past any future rate cuts.

This strategy is particularly useful for anyone who's been saving for a down payment on a home. By moving your savings into a CD, you can lock in a high APY while waiting for mortgage rates to drop. If you're not exactly sure when you'll need your money, you might also consider CD laddering, or opening up multiple CDs with staggered maturity dates.

Like CDs, Treasury bills are a good choice if you're saving up for a future expense and you want to lock in high rates before they start falling. At present, you can still get above 4% on several T-bill terms. However, the Fed's rate cut means these rates won't stay for long.

Before you buy a T-bill, compare the rates and terms with available CDs to see where you can maximize your earnings. And keep in mind that you don't have to pay state or local taxes on T-bill earnings.

Read more: CDs vs. Treasury bills: Maximizing your savings

As rates fall, you'll have to increase your risk in order to maintain or beat what you've been earning on cash deposits and fixed-income assets. That means that when your current CDs, T-bills, and bonds mature, you may want to move the money to your stock portfolio.

While rate cuts tend to be good for the stock market, it's too soon to tell how it will respond over the coming months. In other words, some patience is required. But while you're waiting to see how the market stabilizes, some experts suggest investing in stocks that are more sensitive to rate cuts, such as real estate investment trusts (REITs) and small caps.

Read more: High-yield savings account vs. investing: Which is right for you?

You may not think much about the federal funds rate day to day, but this key number impacts many areas of your financial life and the economy as a whole.

The Federal Reserve — the country’s central bank — periodically adjusts its target rate to keep the economy running smoothly and consumer prices in check. When the federal funds rate moves up or down, so do the interest rates on bank accounts and loans. In other words, changes in the Fed’s rate impact how much your savings can grow and how much you pay to borrow money.

Read more: Consumers catch a break as inflation continues to cool

So how does today’s federal funds rate compare to past years? Here’s a look at historical Fed interest rates so you can better understand how your bottom line is affected.

The federal funds rate is set by the Federal Reserve and dictates what a bank can charge another bank for ultra-short-term loans (usually overnight) in order to meet reserve requirements. It's expressed as a range, and financial institutions can negotiate a specific rate between each other within that range.

The Fed’s target rate also impacts the interest rates individual financial institutions set for financial products such as deposit accounts, bonds, loans, and credit cards.

In September 2024, the Fed lowered its target range by 50 basis points to 4.75%-5.00%. Then following its November meeting, the Fed once again decided to cut the federal funds rate by an additional 25 bps points, and another 25 bps in December. The target range is presently 4.25%-4.50%.

“The committee judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Fed said in a statement explaining the decision.

Prior to the recent cuts, the Fed had not adjusted the federal funds rate since July 2023. But this rate has fluctuated quite a bit in the past few decades in response to major economic and world events.

Here’s a look at the federal funds rate since 1970:

The federal funds rate soared in the early 1980s when inflation hit more than 13%, the highest level recorded. This marked the end of a macroeconomic period known as the “Great Inflation,” which economists believe was brought on by Federal Reserve policies that led to an overgrowth in the supply of money.

In response, the Fed raised interest rates, and the federal funds rate reached more than 19%.

In the late 1990s and into the early 2000s, there was another major economic shift when the Fed began bringing the federal funds rate down. This move was fueled by the dot-com bubble burst — a period of economic instability when investors poured capital into internet-based companies, which led to an overvaluation of many of these start-ups. Unfortunately, not all of these companies were profitable, and the fallout of this bubble burst led to many bankruptcies and a recession.

Then, following the terrorist attacks of Sept. 11, 2001, the Fed cut rates further due to widespread uncertainty and a slowdown in economic activity.

In 2007, the housing market crash prompted the Fed to once again lower its target rate to 2%. A series of rate cuts followed, eventually bringing the target range down to a range of 0%-0.25% — effectively zero — by December 2008.

As the economy recovered from the Great Recession, the Fed began slowly increasing rates again. But in 2020, the COVID-19 pandemic rocked the U.S. economy and brought about challenges such as supply-chain issues, reduced economic activity, and high unemployment. In March 2020, the Fed once again slashed rates to a range of 0%-0.25%.

Read more: How to recession-proof your savings

Begining in March 2022, the Fed increased its rate by 0.25 basis point increments to combat skyrocketing inflation, with a total of 11 hikes through July 2023.

However, as the inflation rate slowed and neared the Fed’s desired 2% target in September 2024, it decided it was time to begin cutting its target rate. The Fed cut rates a total of three times in 2024.

The next Fed meeting is slated for June 17-18, 2025 when the Federal Open Market Committee (FOMC) will decide whether or not to further adjust the federal funds rate. In its last meeting, the Fed announced that it would hold its target range at 4.25%-4.50%.

Though it's impossible to predict whether additional rate cuts are on the horizon, many economists expect the Fed to implement more rate cuts in 2025 and potentially in 2026 as well.

Read more: Should you open a savings account or CD before the Fed’s next meeting?

If you’re earning a low interest rate on your savings balance, consider putting it in a high-yield savings account (HYSA). Our team compared today's high-yield savings accounts offered by federally insured financial institutions and identified the 10 best based on interest rate, fees, account features, customer service, and more (see our methodology here). Find out which banks have the best high-yield savings accounts today.

ACCOUNT NAME

APY

SoFi High-Yield Savings Account

Up to 3.8%

Barclays High-Yield Savings Account

3.7%

Bask Interest Savings Account

4.2%

Synchrony Bank Online High-Yield Savings Account

3.8%

UFB Portfolio Savings

4.01%

Ally Savings Account

3.5%

American Express High-Yield Savings Account

3.6%

EverBank Performance Savings

4.3%

TAB Bank Save Account

4.15%

Capital One 360 Performance Savings

3.5%

Interest rates, fees, and requirements are accurate as of the publish date. Please verify account details directly with the financial institution.

APY: Up to 3.8%

Minimum opening deposit: $0

Monthly fee: $0

SoFi’s online bank account — a combination checking and high-yield savings account — made our list for its competitive APY, lack of fees, and bundled approach to saving and spending.

It currently offers up to 3.8% APY on savings balances and 0.5% APY on checking account balances. There are no monthly maintenance fees, minimum balance requirements, or minimum deposit requirements to open an account.

The online bank account from SoFi comes with several additional perks, such as purchase round-ups that are deposited into your savings account and multiple savings vaults to help you stay organized and save for different goals. Right now, new customers can also earn up to a $300 bonus when they meet certain requirements.

Read our full review of SoFi

APY: 3.7%

Minimum opening deposit: $0

Monthly fee: $0

The Barclays Online Savings Account offers 3.7% APY with no monthly maintenance fees and no minimum balance required to open. Barclays also offers a free savings assistant tool to help customers figure out how much they need to save each month to reach their goals.

Read our full review of Barclays Bank

APY: 4.2%

Minimum opening deposit: $0

Monthly fee: $0

At 4.2% APY, the Interest Savings Account from Bask Bank pays more than 10 times the national average. With no minimum opening deposit or monthly fees, this account could be a great option for savers who want to keep their banking costs low.

Bask operates as an online-only bank, meaning there are no physical branches. However, if you need assistance with your account, Bask Bank provides generous phone customer support hours, including Saturdays.

Read our full review of Bask Bank

APY: 3.8%

Minimum opening deposit: $0

Monthly fee: $0

The Online High Yield Savings Account from Synchrony Bank offers a competitive 3.8% APY — which is nearly 10 times the national average for traditional savings accounts.

This account is free to open and doesn’t charge any monthly fees. Interest is compounded daily and credited monthly. Synchrony also offers an optional ATM card for savings account holders; the bank refunds customers up to $5 per statement cycle for any domestic ATM fees they have incurred.

Read our full review of Synchrony Bank

APY: 4.01%

Minimum opening deposit: $0

Monthly fee: $0

UFB Direct’s Portfolio Savings Account offers a competitive 4.01% APY, which applies to all balances. UFB customers also receive a complimentary ATM card for easy access to their funds and a host of digital tools to make banking easier, including mobile deposits and SMS banking.

This account also stands out due to UFB’s highly rated mobile app. Customers can use the app to check account balances, view transaction history, transfer funds between eligible accounts, and contact a customer service representative.

Read our full review of UFB Direct

APY: 3.5%

Minimum opening deposit: $0

Monthly fee: $0

The Ally Bank Savings Account is a high-yield savings option with no minimum deposit required to open and zero monthly fees. At 3.5% APY, this account’s interest rate is more than eight times the national average.

Account holders can maximize their savings potential through round-ups, recurring transfers to their savings account, and surprise savings through tools that analyze your checking account spending and transfer “safe-to-save” money to your savings account.

Read our full review of Ally Bank

Account details:

APY: 3.6%

Minimum opening deposit: $0

Monthly fee: $0

The American Express High-Yield Savings Account made our top 10 list thanks to its competitive 3.6% APY and lack of minimum opening deposit or minimum balance requirements. Interest on your account balance is compounded daily and deposited into your account on a monthly basis.

One drawback: This account does not provide account holders with an ATM card, debit card, or checks. In order to access your money, you’ll need to transfer your funds electronically. That’s why this account may be better for those who plan to keep their funds on deposit for the long-term and don’t anticipate needing immediate access.

Read our full review of American Express National Bank

APY: 4.3%

Minimum opening deposit: $0

Monthly fee: $0

EverBank’s Performance Savings Account gives account holders the opportunity to earn 4.3% APY on their savings balance with no minimum opening deposit, minimum balance requirements, or monthly maintenance fee. Interest is also compounded daily.

Note that while EverBank does have extended customer service hours, the only way to reach a representative is by telephone — there is no live chat or email option.

Read our full review of EverBank

Account details:

APY: 4.15%

Minimum opening deposit: $0

Monthly fee: $0

The TAB Save account made our top 10 list thanks to its impressive 4.15% APY. This account is free to open and has no minimum opening deposit or monthly fee. Interest is compounded daily and credited to your account monthly.

Despite its high APY, TAB ranked lower on our list due to its average mobile app rating and lack of extra account perks or savings tools to help customers maximize their savings.

Read our full review of TAB Bank

Account details:

APY: 3.5%

Minimum opening deposit: $0

Monthly fee: $0

The Capital One 360 Performance Savings account took the final spot on our list for its competitive interest rate, lack of fees, and highly rated mobile app. Account holders earn 3.5% APY regardless of their balance. However, unlike the other accounts on our list, interest compounds monthly rather than daily.

Capital One’s mobile app stood out in particular. Savers can use it to move money between linked Capital One accounts and external bank accounts, create multiple Performance Savings accounts for each of their financial goals, deposit checks with their mobile devices, and create savings plans.

Read our full review of Capital One

Why should I open a savings account?

What is a high-yield savings account?

What is APY?

What is a good savings account rate?

Do you pay taxes on high-yield savings accounts?

Pros and cons of high-yield savings accounts

Alternatives to high-yield savings accounts

Overview of today's high-yield savings account rates

Tips for finding the best high-yield savings account

How to open a high-yield savings account

HYSA frequently asked questions (FAQs)

Opening a savings account is a smart financial move. For one, these accounts provide a safe place to store your money while earning interest, helping your savings grow over time. Plus, unlike keeping cash on hand or in a checking account, a savings account encourages financial discipline by separating money meant for future goals from everyday spending. And as long as you open an account with a reputable, federally insured bank or credit union, your deposits are protected in case the financial institution fails — up to $250,000 per depositor, per institution, per ownership category.

Learn more: 6 benefits of opening a savings account you shouldn't overlook

A high-yield savings account functions similarly to a traditional savings account. The main difference is that HYSAs offer much higher interest rates. In fact, some of the best HYSAs offer annual percentage yields (APYs) 10 times higher than the national average savings account rate.

Keep in mind that some banks may require you to maintain a minimum balance to earn interest or avoid a monthly service charge. However, there are plenty of accounts that offer the same rate regardless of your balance and do not charge monthly fees. When shopping around for an HYSA, it's important to compare multiple offers and select an account that fits your needs.

Learn more: High-yield savings account vs. traditional savings account: Which one is better?

A high-yield savings account’s interest rate represents how much you’ll earn in simple interest. On the other hand, the annual percentage yield (APY) is the rate of return including compound interest, which is the interest you earn on both the principal balance and interest you've accrued previously. Most savings accounts compound interest daily or monthly. The more often interest compounds, the faster your money will grow.

HYSAs come with variable interest rates. That means your bank or credit union can change your APY at any time. Generally, APYs increase when the economy is doing well, and the Federal Reserve raises its benchmark rate. Conversely, rates can drop when the economy weakens, and the Fed lowers rates.

Learn more: What is compound interest, and how is it calculated?

Because savings account rates fluctuate, what is considered a "good" rate can change over time. Generally, a savings account that earns more than the national average is considered good. Today, the national average rate is just 0.38%, while the top high-yield savings accounts offer around 3% to 4% APY.

Learn more: What is a good savings account interest rate?

Yes, the interest earned in an HYSA is taxable income. You should receive a Form 1099-INT from your bank if you earn more than $10 in interest during the year, which you need to report on your tax return. However, even if you don't receive this form, you are responsible for reporting all interest income to the IRS.

Learn more: How to avoid taxes on savings account interest

There are many benefits of opening a high-yield savings account, particularly the opportunity to earn a competitive rate on your balance. However, there are some drawbacks to consider as well. Let’s take a closer look at the pros and cons of high-yield savings accounts:

Higher interest rates: You’ll generally earn more interest than you would with a traditional savings account.

Compound interest: Compounding interest helps your balance grow more quickly. Interest in an HYSA may compound daily or monthly.

Accessibility: These accounts are a great place to stash money you may need to access quickly, such as your emergency fund. Other types of accounts, such as certificates of deposit (CDs), offer high rates but impose penalties if you withdraw money prior to the maturity date.

Minimal or no fees: Fees with high-yield savings accounts are rare, so you won’t need to worry about these costs eating into your balance.

Low-risk: High-yield savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA). Plus, unlike investments, account performance isn’t tied to the stock market and you can’t lose money, making HYSAs a low-risk option for your money.

Variable rates: Your savings account’s APY can increase or decrease over time. While individual banks set rates at their discretion, these rates are loosely tied to the federal funds rate. Banks may choose to increase or decrease savings rates when the Fed adjusts its target rate.

Minimum balance requirement: Some accounts may have a high minimum opening deposit.

Tiered APYs: Some banks may have tiered APYs depending on the deposit amount. For instance, you may earn a higher rate if you deposit $5,000 vs. $100. So, while a $5,000 deposit isn’t necessarily required, it could result in a better APY.

Better for short-term savings: High-yield savings accounts aren’t the best choice for long-term savings goals, like retirement. Investment accounts tend to offer higher long-term returns.

Withdrawal limits may apply: Depending on your bank, you may have a limit on monthly withdrawals.

An HYSA can be a smart place to store your savings, but it's not your only option. Here's a look at some of the alternatives you may want to consider.

Money market accounts and high-yield savings accounts both offer higher interest rates compared to traditional savings accounts. However, these accounts come with different features. For instance, MMAs typically offer check-writing abilities and debit cards, though they might require higher minimum balances to earn the top interest rates. High-yield savings accounts, on the other hand, are designed to store your savings longer-term with fewer withdrawal options.

Learn more about money market accounts vs. high-yield savings accounts.

Like high-yield savings accounts, CDs can provide a safe place to store your savings while earning a competitive return. The big difference is that CDs require you to lock in your money for a set period, known as the term, which can range from a few months to several years. For this reason, CDs are a better option for people who don't need immediate access to their funds.

Learn more about high-yield savings accounts vs. CDs.

High-yield savings accounts and investing serve vastly different financial goals and risk profiles. HYSAs provide stable, low-risk returns with interest rates higher than traditional savings accounts. They're best for short-term financial goals or emergency funds due to their liquidity and FDIC insurance. Investing in bonds, stocks, mutual funds, and other securities typically involves higher risk — but also the potential for higher returns over the long run. Investing your money makes more sense for long-term financial goals like retirement since the returns generally outpace inflation and help grow wealth over time.

Learn more about high-yield savings accounts vs. investing.

Today, savings accounts offer competitive rates by historical standards. Even though the national average rate for traditional savings accounts is just 0.41%, the best high-yield savings accounts still pay upwards of 4% APY.

Over the past decade, savings account interest rates have experienced significant fluctuations. In the mid-2010s, rates were considerably low — below 1% — thanks to the Federal Reserve's efforts to stimulate economic growth following the 2008 financial crisis. As the economy recovered, the Fed incrementally increased the federal funds rate between 2015 and 2018, leading to a gradual rise in savings account rates. However, the onset of the COVID-19 pandemic in 2020 prompted a return to near-zero interest rates to support economic activity, resulting in a decline in savings yields.

However, this led to a period of rising inflation, so the Fed implemented several rate hikes, contributing to the current higher yields on savings accounts. Even so, rates are now back on a downward trend as the Fed began cutting its target rate again in late 2024.

Competitive rates are great, but considering other factors besides APY can help you find an account that best meets your needs.

New account offers: Look at high-yield savings account offers for new depositors with high APYs, low to no account fees, and are free to open. High savings account rates will earn you more interest, but the financial institution offering those rates might not necessarily be the best option for your finances, so do your research before opening an account.

Required deposits: Research applicable deposit requirements. Is there a minimum initial deposit requirement? Do any other deposit requirements apply? Are there tiered APYs depending on your deposit amount?

Fees: Some accounts may have monthly maintenance fees or other fees. Look into which fees may apply before opening a new account.

Accessibility: Understand how you can access your money before opening a new account. For example, can you log into an online dashboard? Does your bank have a mobile app? Is it connected to an ATM network?

Deposit options: Review available deposit options. Are mobile check deposits via a mobile banking app an option? Can you make direct deposits via an ATM?

Account linking: Look into whether you can link your new account to an existing checking account at another bank. Make sure there are no restrictions or waiting periods when it comes to accessing your money.

Learn more: How to choose the right high-yield savings account for you.

Once you’ve determined the best high-yield savings account for you, opening one is simple and can be done in person or online. You’ll generally need to provide your personal information, proof of identity, and address to open a new account. Make sure you have your driver’s license, Social Security number, and copies of a recent mortgage statement or utility bill.

Depending on the account, a minimum deposit amount could apply when you open your HYSA account. If that’s the case, you’ll also need to be ready to transfer money from an existing account to meet the deposit requirement.

Learn more: How to open a high-yield savings account

As long as your account is held by an FDIC- or NCUA-insured institution, your money is federally insured up to the $250,000 limit.

Savings account rates are subject to change at your bank’s discretion. To get the most recent rate information for the accounts you’re considering, you’ll need to visit those institutions’ websites or call them directly to learn more.

Yes, you can withdraw money from a high-yield savings account. However, these accounts may have rules in place regarding the maximum number of withdrawals you can make within a given month or statement period without incurring a fee.

Among our list of the 10 best high-yield savings accounts, the highest rate available is 4.3% APY, offered by EverBank.

High-yield savings accounts are one of the best places to keep extra cash, whether for your emergency fund or short-term savings. The best rates currently hover between 3% and 4% APY.

Learn more: Are high-yield savings accounts worth it?

Interest rates on savings accounts can change at any time. They're influenced by several factors, including the federal funds rate, general economic conditions, and individual bank policies.

Learn more: How do banks set their savings account interest rates?

Typically, high-yield savings accounts, CDs, and money market accounts offer higher interest rates compared to standard checking or savings accounts.

In most cases, you won't lose money in a high-yield savings account as long as the financial institution is insured by the FDIC or NCUA, which cover up to $250,000 per depositor, per institution, per ownership category. However, there are certain instances when your HYSA could lose money.

Our grading system, collected and carefully reviewed by our personal finance experts, comprised nearly 300 data points for approximately 30 federally insured savings accounts to develop our list of the top 10 high-yield savings accounts. We considered accounts with yields higher than the national average for traditional savings accounts.

We evaluated these accounts according to several key metrics, including annual percentage yield, minimum opening deposit, minimum balance requirement, monthly fees, compounding frequency, and more.

The accounts on our list could earn a maximum of 45 points across all metrics. Here’s a closer look at the categories we considered:

Annual percentage yield (APY): Accounts with higher APYs were rewarded with more points than those with lower APYs. Note that rates on our list are current at the time of publishing but are subject to change at any time.

Minimum balance to earn interest: Some banks and credit unions require a minimum balance to earn the advertised rate. We favored accounts that had no or low minimum balance requirements.

Minimum opening deposit: Many high-yield savings accounts require a minimum deposit to open an account. High-yield savings accounts with no or low minimum deposit requirements were given preference in our rankings.

Monthly fees: It’s not uncommon for high-yield accounts to charge a monthly maintenance or service fee. We rewarded accounts with no monthly fees.

Compounding frequency: Compounding can happen daily, monthly, or even annually. We awarded more points to accounts that compound interest frequently.

Account bonus: Accounts with a current bonus promotion earned extra points.

Maximum bonus amount: We awarded more points to the accounts with higher welcome bonuses.

Customer service contact methods: Our team awarded one point for every contact method available to customers (phone, email, chat).

Mobile app rating: High-yield savings accounts at banks with a higher average mobile app rating on the Apple and Google storefronts scored more points than those with lower user ratings.

If you’re looking to improve your finances, saving money is a great place to start. Many financial experts recommend creating an emergency savings fund with at least six months’ worth of living expenses. And it’s wise to save money toward other financial goals, such as college or retirement, as well.

If you can’t afford to sock away thousands of dollars right now, that doesn’t mean you should ignore the need to put away money for the future. Even $1,000 could make a meaningful difference in your financial well-being.

Here are eight smart ways you can put $1,000 in savings to work for you.

Although your ultimate plan for an emergency fund might be to tuck away six months’ or more worth of living expenses, it’s OK to aim smaller at first. Many financial experts agree that saving $1,000 is an excellent initial goal when you first begin your journey to build an emergency fund.

If you’re trying to kickstart your first emergency fund, consider participating in a $1,000 savings challenge. This idea could be a great way to build momentum if you’re facing a tight budget or even if you just need to get back in the habit of saving money each month.

Whether you decide to save $1,000 for emergencies or some other purpose, it’s wise to make sure your money earns as much interest as possible. So, instead of merely depositing your $1,000 into a regular checking account or a traditional savings account, consider opening a high-yield savings account (HYSA) instead.

The best high-yield savings accounts often come from online banks that tend to offer higher annual percentage yields (APYs) compared to traditional banks, which could help you grow your savings at a faster rate. Plus, keeping your savings in a separate account might reduce the temptation to spend it.

A certificate of deposit (CD) is another type of deposit account you can use to store your $1,000 in savings — especially if you prefer to avoid risk when it comes to your cash. CDs aren’t a perfect fit for everyone, but they might work for you depending on your savings goals.

With CDs, you agree not to withdraw the money you deposit for a specified period, known as the CD’s term. If you take money out of your account early, you’ll have to pay a penalty. However, in exchange for this arrangement, the best CD rates tend to be competitive and remain fixed (aka they don’t change) until your CD matures. That can be particularly helpful when deposit rates are falling.

You might want to consider a CD if you’re looking for a safe place to save your money for short-term or medium-term goals. But if you want access to your cash sooner rather than later, a high-yield savings account or money market account might be a better fit.

Some financial institutions may offer a bank account bonus to customers who open a new checking account, savings account, or other type of eligible deposit account. So, if you have an extra $1,000 to save, you might be able to use those funds to open a new bank account and qualify for a one-time cash bonus of a few hundred dollars.

Of course, it’s important to read the fine print of any bank account bonus offer to make sure you qualify. To receive a bonus, you might need to maintain a minimum balance in your new account for a certain number of days. Other offers might require you to make a specific number of qualifying transactions before you become eligible for your bonus.

You should also review the details of the bank account you’re opening to make sure it meets your financial needs. Some accounts that offer new customer bonuses may come with bank fees as well, though there may be ways to get certain fees waived. It’s important to confirm you’re comfortable with any monthly costs a financial institution will charge you, or at least be sure you understand how to close an account without jeopardizing your new customer bonus.

Another potential way to put $1,000 of extra money to work for you is to invest the cash in an index fund. For example, an index fund that tracks the S&P 500 (Standard & Poor’s 500) is diversified to include a collection of stocks from the 500 largest companies in the United States.

With the S&P 500 index in particular, the fund has a historical average return of around 10%. This type of index fund might be a good pick if you’re new to investing.

Index funds tend to be less volatile than individual stocks. But anytime you invest — even in an index fund — it’s important to understand that there is some level of risk involved.

Depending on the amount of debt you owe, $1,000 may not be enough to wipe out your credit card balances completely. As of 2024, the average credit card balance is $6,699 according to the credit bureau Experian.

Still, paying $1,000 toward your credit card debt can make a difference in your credit score and your budget. Depending on your situation, you could apply any extra cash you have toward paying down credit card debt in one of the following ways.

Debt snowball: Pay down credit card balances with the lowest balances first.

Debt avalanche: Pay down credit card debt with the highest interest rates first.

In either scenario above, you could start to build positive momentum toward reducing your debt. If you’re able to take other positive steps like cutting expenses or increasing your income, you may be able to find more money in your budget to pay down your credit card debt as well.

Read more: The best ways to pay off credit card debt

Another smart use of extra savings could be to add it to a retirement account. In particular, it’s wise to take full advantage of any matching funds your employer makes available. Otherwise, you could essentially be passing up on the chance to receive free money. And when you deposit your savings in a 401(k), your money has the potential to grow tax-free and compound until you withdraw it.

If you don’t have access to an employer-sponsored retirement plan, however, the good news is there are alternatives available. For instance, you can open an individual retirement account (IRA) on your own and contribute your extra savings there. For 2024, you can contribute up to $7,000 per year into an IRA, or $8,000 per year if you’re 50 or older.

As a parent, another option you could consider if you have an extra $1,000 is to put those funds away for your child’s college education. One popular way parents save money for college is by using a 529 plan.

A 529 plan is a tax-advantaged savings plan that could make it more affordable for parents to pay for their child’s college education. When you use a 529 plan for eligible expenses, your contributions can grow tax-deferred, and any withdrawals you make may be tax-free (as long as you use them for qualified education expenses). Plus, after 15 years, you can roll any unused money from a 529 plan into a Roth IRA for the beneficiary (up to $35,000).

You don’t need to have thousands of dollars available before you create an emergency fund or start saving money for retirement. Even a small amount of money ($1,000 or less) could start you down a better financial path.

What’s important is to review your budget and create a habit of spending less than you earn. As you begin to consistently save money each month and avoid overspending, you should put yourself in a better position to pay down debt, save money, and create an overall more secure financial future.

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