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What Is a Good APY for a Savings Account?

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Brooklyn Sprunger
Author: Brooklyn Sprunger
Brooklyn Sprunger
Brooklyn Sprunger

Brooklyn leads the content team behind product reviews and ratings at Motley Fool Money, ensuring readers get well-researched, expert-backed insights to make smarter financial decisions. With nearly seven years working full-time in financial content -- four of them at The Motley Fool -- she has developed a deep passion for personal finance, from investing strategies to everyday money management. Her financial goals include buying a house and planning as many trips as her budget allows. In her free time, you’ll likely find her listening to a pop culture podcast or telling anyone who will listen to get a high-yield savings account.

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Nathan Alderman
Fact Checked: Nathan Alderman
Nathan Alderman
Nathan Alderman
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Nathan Alderman has been a full-time Motley Fool employee since 2005, making errors his arch-enemies in a variety of roles including a six-year stint as the dedicated fact-checker for The Motley Fool's premium newsletter services. As Motley Fool Money's Compliance Lead, he makes sure that all the site's information is accurate and up to date, which ensures we always steer readers right and keeps various financial partners happy. A graduate of Northwestern University's Medill School of Journalism, Nathan spends his spare time volunteering for civic causes, writing and podcasting for fun, adoring his wife, and wrangling his two very large young children.

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Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures that our product ratings are not influenced by compensation. APY = Annual Percentage Yield.

When it comes to saving money, you've probably heard the term "APY" tossed around a few times. But what does it actually mean? With all the financial jargon out there, it's easy to feel like you need a degree in economics just to understand how your money is growing.

I'm here to simplify things for you. After working with Motley Fool Money's savings account picks for years, plus my own high-yield savings account journey, I've learned a lot about making your money work harder.

In this guide, I'll break down what APY is, how it affects your savings, and how to find the best APY for your money. Ready to make your savings work harder for you? Let's dive in.

What is APY?

Annual percentage yield (APY) is the rate at which your savings will grow over the course of a year. It's a key number to understand when choosing a savings account because it tells you how much interest you'll earn on your balance over time.

APY isn't directly tied to the federal funds rate, but it typically moves in sync with it, which means it's influenced by the broader economy and inflation. Since APYs can change anytime based on these factors, it's a good idea to keep an eye on the rate your bank is offering.

What is considered a "good" APY?

Because APYs fluctuate with the economy, what counts as a "good" APY also changes.

In spring 2024, high-yield savings accounts (HYSAs) were offering up to 5.00%. By spring 2025, with the Fed finally lowering the federal funds rate, a solid HYSA APY is closer to 3.70%-4.00%. For traditional savings accounts, a good APY is typically around 1.00%.

I've seen this firsthand with my own account. When I opened my LendingClub high-yield savings account in 2022, my starting APY was 4.00%. Over time, it climbed to 4.65% before settling currently at 4.40% APY with $250+ in monthly deposits. It's a perfect example of how APYs constantly shift and why what's considered a "good" rate depends on when you're looking.

Compare savings rates

Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.

Account APY Promotion Next Steps
up to 3.80%²
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn: $0
New customers can earn up to a $300 bonus with qualifying direct deposits!¹
4.10% APY for balances of $5,000 or more
Rate info Circle with letter I in it. 4.10% APY for balances of $5,000 or more; otherwise, 0.25% APY
Min. to earn: $100 to open account, $5,000+ for max APY
Earn a bonus of at least $225 after a one-time deposit of $25,000+. Circle with letter I in it. Transfer a one-time deposit of $25,000-$49,999.99 for a bonus of $225. Transfer a one-time deposit of $50,000+ for a bonus of $300. Account must be opened with code PS2025 while this promotion lasts, and funded within 30 days. Bonus will be fulfilled within 60 days from the funding date. There is no period of time where the customer will be required to maintain the funds. Account must be open when bonus is credited. One bonus per account and primary customer. Bonus will be credited into the Platinum Savings Account that fulfills the funding requirement. Funding can be deposited all at once or incrementally.
3.70%
Rate info Circle with letter I in it. 3.70% annual percentage yield as of April 6, 2025. Terms apply.
Min. to earn: $0
N/A
Open Account for American Express® High Yield Savings

On American Express's Secure Website.

Disclaimers



SoFi disclosure:

¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/26. See full bonus and annual percentage yield (APY) terms at sofi.com/banking#1.

² SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. See the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

³ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.

⁴ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations.

Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.

⁵ We’ve partnered with Allpoint to provide you with ATM access at any of the 55,000+ ATMs within the Allpoint network. You will not be charged a fee when using an in-network ATM, however, third-party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.

⁶ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

⁷ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the“30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage.

How do high-yield savings accounts compare?

A high-yield savings account will always offer higher APYs than a traditional savings account. In fact, most of the time, you'll see an HYSA offering up to 10 times the APY of a traditional savings account. Yes, you read that right -- 10 times higher!

Traditional savings accounts are generally best for those who frequently transfer money in and out for day-to-day expenses. But if you're looking to park emergency savings, a down payment, or a vacation fund somewhere safe and let it grow, a high-yield savings account is exactly what you need. Think of it as a more long-term, hands-off place for your money to work harder for you.

Why APY matters more in a high-yield savings account

When you're comparing the APYs of traditional savings accounts, say 0.01% vs. 0.05%, the difference is so small it's almost irrelevant. But when it comes to a high-yield savings account, APY becomes a big deal.

The reason you're putting your money into a HYSA is to let it grow over time. And the higher the APY, the more it's going to grow. So, when you're choosing a HYSA, you want to maximize that growth potential. That means finding the highest APY possible for your money.

How to choose the best high-yield savings account

Now that we know APY is important, let's talk about how to choose a high-yield savings account. Yes, the APY is a major factor, but it's not the only one. What good is a sky-high APY if the bank isn't reliable or the fees eat up all your hard-earned interest?

Here are a few more things to consider when shopping for an HYSA:

  • Bank reputation and safety: Make sure your bank is FDIC insured, which means your money is protected up to $250,000 per depositor, per account ownership category. Then check out the bank's reputation -- go with one that has a solid track record and a reliable history. Bonus points if it's a bank you already bank with, because opening an account is a lot easier that way.
  • Account fees: Fees can kill your earnings. Look for accounts with low or no fees -- especially those pesky maintenance fees, account opening fees, and anything else that might sneak up on you. The fewer fees, the more of your money stays where it belongs: in your account.
  • Minimum balances or deposits: Some accounts require a minimum balance to earn the highest APY, or a minimum deposit to open the account. These aren't dealbreakers, and often these restrictions come with the best APYs. But make sure you can keep up with the minimums or you'll want to consider an account that doesn't have them.
  • Withdrawal limits: Some HYSAs limit the number of withdrawals you can make each month, or they may place limits on the amount or location where you can access your money. It's important to make sure the account's limits fit your needs. If you're comfortable leaving your money alone and letting it grow, these limits won't be an issue. But if you plan on tapping into your savings more often, make sure those rules align with how you want to access your funds.

Find the right high APY account for you

Now that you've got a solid understanding of what makes a good APY, it's time to put that knowledge to work. With your baseline for a good APY, you're ready to start comparing different high-yield savings accounts and find the one that's right for you. Remember, it's all about getting the most out of your money while keeping it safe.

Take a look at our list of the best high-yield savings accounts. We've handpicked options with no fees, high APYs, and great reputations. Start shopping today -- you've got this!

FAQs

  • APYs are influenced by the federal funds rate, inflation, and overall economic conditions. When interest rates rise, banks usually offer higher APYs, and when rates drop, APYs tend to follow.

  • APY accounts for compound interest, meaning it reflects how much your money will grow over a year, including interest on your interest. A basic interest rate doesn't include compounding.

  • There's no set schedule -- banks adjust their rates based on market conditions. Some change monthly, while others adjust more frequently in response to Federal Reserve decisions.

  • Yes, banks can lower APYs at any time, especially if interest rates in the broader economy fall. That's why it's smart to check your rate regularly and compare other options.