Best Place to Save Money and Earn Interest

Did you know some online banks are offering up to 5% APY on savings accounts in 2025? Understanding the differences between flexible high-yield accounts and higher-rate CDs can help you boost your returns while managing access to your money—here’s what you need to know to make the smartest choice.

Understanding High-Yield Savings Accounts and CDs

High-Yield Savings Accounts typically offer interest rates higher than regular savings accounts available at many brick-and-mortar banks. These accounts generally allow access to funds with certain limits on the number of withdrawals per month.
Certificates of Deposit (CDs) are accounts where funds are held for a fixed term—ranging from a few months to several years—in exchange for a fixed interest rate, often higher than savings accounts. Early withdrawals may result in penalties as specified by the account terms.

Interest Rates and Providers for High-Yield Savings Accounts in 2025

Some online banks, such as Varo Bank and Fitness Bank, offer savings account APYs up to 5.00%.
Other providers with competitive rates include American Express, Bask Bank, Forbright Bank, and Live Oak Bank.
Typically, these institutions operate primarily online, which can help reduce overhead and support higher interest rates.
Many accounts have low or no minimum deposit requirements, making them accessible to a wide range of savers.

Considerations When Choosing a High-Yield Savings Account

Funds are generally accessible without penalties, subject to withdrawal limits regulated federally.
Deposits are federally insured by the FDIC or NCUA up to applicable limits, typically $250,000 per depositor.
Suitable for emergency funds or short-term savings needs.
Interest rates are subject to change and can fluctuate in response to Federal Reserve policies.

Features to Review

Minimum balance requirements to earn advertised APYs vary.
Account fees and whether they are waived under certain conditions.
Availability of online and mobile banking features.
Withdrawal limits, commonly six per month according to regulations.
Geographic availability and membership eligibility, which may differ by institution.

CD Rates and Terms Available in 2025

Current Rates and Financial Institutions

As of May 2025, CommunityWide Federal Credit Union offers a six-month CD at approximately 4.50% APY.
Other notable CD options include:
- Synchrony Bank: 3.80% APY on an 18-month CD with no minimum deposit.
- Connexus Credit Union: Up to 4.25% APY on jumbo CDs requiring a minimum $100,000 deposit.
- First National Bank of America: Up to 4.16% APY on five-year CDs with a $1,000 minimum deposit.
- Marcus by Goldman Sachs: Around 4.10% APY for two-year CDs.
- Bread Savings: Approximately 4.10% APY on one-year CDs.

Overview of CD Options

Terms generally range from 3 months to 10 years.
Jumbo CDs may offer higher rates but require larger deposits.
Interest typically compounds daily or monthly, depending on the institution.
CDs usually renew automatically at maturity unless the depositor withdraws during a grace period as outlined by the institution.

Pros and Cons of CDs

Pros: Fixed interest rates and principal protection during the term.
Cons: Reduced liquidity due to penalties for early withdrawal.
CDs are suitable for funds that can be set aside without requiring immediate access.

Factors to Consider When Choosing Between a High-Yield Savings Account and a CD

High-yield savings accounts offer flexibility and easy access to funds.
CDs provide fixed rates for a set time period, which may be preferable if committing funds is an option.
A CD ladder, involving multiple CDs with staggered maturity dates, might provide a balance between liquidity and potentially higher rates.
It’s important to compare minimum deposits, fees, compounding methods, and withdrawal penalties before deciding.

Eligibility, Access, and Account Security

Most top savings accounts and CDs require U.S. residency but typically do not impose regional restrictions.
Some credit unions or banks have membership requirements; these are often straightforward to fulfill.
All recommended institutions in this overview are insured by the FDIC or NCUA, protecting deposits up to $250,000 per depositor.
Online banks may not have physical branches; thus, comfort with digital banking and transfer processes is important. Transfers between accounts usually take 1 to 3 business days.

Impact of Federal Reserve Policies on Savings and CD Rates in 2025

Interest rates on savings accounts and CDs generally respond to changes in the Federal Reserve’s federal funds rate.
Since early 2025, rates have stabilized following several rate reductions.
Future Federal Reserve decisions can influence these yields, potentially resulting in increases or decreases.
Monitoring Federal Reserve announcements may help savers anticipate changes in interest rates.

Approaches to Finding Current Competitive Rates

High-yield savings and CD rates can change frequently based on market conditions.
Financial resource websites such as Investopedia, Bankrate, and Forbes Advisor provide regularly updated information on a wide range of financial institutions.
Using these resources can assist in identifying current offerings nationwide beyond local options.
Many online banks serve customers throughout the U.S., supporting broader access to competitive rates.

Summary of Savings Opportunities in 2025

Some high-yield savings accounts offer APYs near 5.00%, for example at banks like Varo Bank and Fitness Bank.
Competitive CDs can reach up to around 4.50% APY, such as those from CommunityWide Federal Credit Union.
High-yield savings accounts prioritize easy access and flexibility, whereas CDs typically offer fixed rates with funds locked for set terms.
It is advisable to consider one’s financial goals, liquidity needs, and deposit capabilities before selecting an option.
Ensuring the institution is federally insured and reviewing minimum deposit requirements and fees is important.
Utilizing updated, trustworthy comparison tools helps identify current rates suitable for individual needs.

By considering the features and rates of high-yield savings accounts and CDs, individuals can make informed decisions to manage their savings in 2025 with attention to safety and potential yield within their personal financial context.

Sources

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