Every time you deposit money into a bank, you are helping the bank profit.
Yes, you are literally providing them with funds, but they are then taking those funds, lending them to others, and earning interest on them. The bank does not store all of its account holders’ money as always available cash reserves.
Because of this, the Federal Deposit Insurance Corporation (FDIC) insures $250,000 per depositor, per insured bank, for each account ownership category (you can read what those categories are here).
This FDIC insurance provides protection for the worst case scenario of a “bank run” in which a large portion of a bank’s depositors withdraw their money at the same time. If this happens, the bank’s customer withdrawals exceed the amount the bank is holding in its cash reserves, so it can’t provide the money and will likely collapse à la Silicon Valley Bank.
None of this sounds great in terms of feeling secure about the entities safekeeping your hard-earned money, but it is not meant to make you store cash in a mattress. Instead, it’s to ensure that you are aware of the bank operations made possible by you.
It doesn’t matter if you deposit a check into an account earning .01% interest or 4% interest, banks are profiting off of all of it. Because of this, think of a bank account’s interest rate as compensation for your essential contribution to their ability to function. A high annual percentage yield (APY) isn’t simply a perk, but something you’re due.
With this, here are four accounts that provide 4.50% APY or more (as of September 29, 2024) and give you a fairer cut of the banking business pie.
Please note that there are links on this page that I may earn a referral reward from should you open an account using them.
Wealthfront Cash Account
Wealthfront did unfortunately lower their APY in response to the Federal Open Market Committee’s overnight rate cut (aka federal funds rate cut), however, the Wealthfront cash account is still a frontrunner. It has 4.50% APY with a 0.50% APY boost for the first 3 months if you are a first-time client and open an account via a referral link (i.e. the link here).
- 4.50% APY (5.00% APY for the first 3 months if you are a first-time client and open an account via a referral)
- No minimum balance requirement
- No monthly maintenance fees
Fierce High-Yield Checking Account
Fierce’s high-yield checking account is another one whose interest rate recently lowered due to the FOMC decision (when they go low, banks tend to do the same), but its APY is still competitive at 4.75%.
- 4.75% APY
- No minimum balance requirement
- No monthly maintenance fees
Laurel Road High Yield Savings Account
The Laurel Road high yield savings account has an APY of 4.80%. They also currently have an opening bonus of $50 to $200 via referral that you can read more about here, but the fund requirements are a bit ridiculous in comparison to the reward amount. Note that you get 4.80% APY whether or not you earn the opening bonus.
- 4.80% APY
- No minimum balance requirement (but you must deposit a minimum of $1 within the first 20 days of account opening)
- No monthly maintenance fees
EverBank Performance Savings
At 5.05% APY, the EverBank performance savings account is the highest of the bunch.
- 5.05% APY
- No minimum balance requirement
- No monthly maintenance fees
A large part of building wealth is guaranteeing that your money generates income wherever it’s at. Banks follow this principle by making your money work for them, so you might as well make sure it’s working for you too.
If you’re looking for a more in-depth list of bank accounts and their current APYs, you can visit Bankrate.
