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5% Interest Savings Account: Where Can I Get 5% on My Money?

  • It is possible to find a 5% interest savings account, especially if you’re willing to work with an online-only bank.
  • Some of the banks offering the highest APY on savings accounts do require minimum deposit amounts and minimum average balances to ensure those high interest earnings.
  • A high-yield savings account offers a secure, safe way to put money aside, especially if you work with an FDIC-insured bank.
  • Other savings options that can help you earn 5% or more on your funds include certificates of deposit, money market accounts and index funds.
  • See our selection of high-yield savings accounts: Western Alliance (5.22% APY), Barclays (4.35% APY), CIT Bank (5.00% APY).

A high-yield savings account isn’t a quick way to double your money or a fast investment scheme. However, if you’re patient, this type of account can help you save money over time to use on large purchases or provide some financial peace of mind.

Find out more about 5% interest savings account options in the full review of this type of account below.

You’ll learn:

  • Where you can find savings accounts with 5% APY
  • How to apply for these accounts
  • Whether a 5% interest savings account is worth it

Our top picks for savings accounts

What is a 5% interest savings account?

It’s a high-yield savings account that offers a 5% interest rate—which is more than 10 times the average interest rate on savings deposit accounts in the United States as of June 2024, according to the FDIC.

Traditional savings accounts at local banks and credit unions, for example, typically provide interest earnings of less than 1%—often it’s a fraction of a percent.

Depending on the policies of the particular financial institution, you may need to open the account with a minimum deposit, keep a minimum average balance or have a certain number of direct deposits hit the savings account to earn the high interest rate. Interest-earning accounts may earn based on simple or compound interest, and in the latter case, interest may be compounded daily or on another schedule. These details can slightly impact how much you earn over time, though the difference is typically negligible unless you carry a very high savings account balance.

To understand how much you can save with a 5% high-yield savings account, check out the hypothetical example below. This example demonstrates the type of earnings you might see if you put $3,000 in a savings account with interest that is compounded daily. It also assumes that you add another $300 per month to your account over the entire time that you save.

5% Interest Savings Account with $3K Initial Deposit & Additional Deposit of $300 per Month

Years saved Total Balance Total interest earned
1 $6,845.06 $245.06
3 $15,136.67 $1,336.67
5 $24,300.26 $3,300.26
7 $34,427.52 $6,227.52
10 $51,649.86 $12,649.86

The total amount you can earn with this type of savings account depends on:

To learn more about how much you could earn, try using our savings calculator.

How to choose a 5% interest savings account

Not all 5% interest savings accounts are the same, so it’s important to consider factors other than the interest rate before you open a savings account.

Some common factors differentiating high-yield savings accounts include:

How to apply for a 5% interest savings account

You have two options for applying for a 5% interest savings account once you find one that meets your needs.

1

Open an account at a local branch.

You simply need to go to the branch and let them know you want to open a high-yield account and that you’re interested in their option that pays 5%.

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2

Open an account with an online bank.

You will complete the application process online on the bank’s website. Most online banks make it easy by putting an “open an account” button on the page that describes their savings account.

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In either of the above cases, you’ll need to complete some paperwork. At a local branch, someone typically asks you questions and enters the information for you. When opening an account online, you type in the information yourself.

You generally need:

Get to know some of the following high-yield savings accounts:

Bank APY Monthly fee Minimum opening deposit Savings account
Western Alliance 5.22% $0 $1 Learn more
Barclays 4.35% $0 $0 Learn more
UFB Direct 5.25% $0 $0 Learn more
Synchrony 4.75% $0 $0 Learn more
Quontic Bank* 4.50% $0 $100 Learn more

Figures are correct as of June 2024. Although this table is updated regularly, the availability of the savings accounts listed through our partner may vary. In this case, check with the respective financial institution for the most up-to-date information.

*Limit of 6 withdrawals per statement cycle

Where can I get 5% interest on my money?

A variety of banks offer high-yield savings accounts. However, you’re most likely to find a 5% interest savings account with an online bank, and some banks may even provide a higher 7% interest rate savings account.

These online banks don’t have the expenses associated with operating branch locations, and they often pass those savings along to account holders via higher interest earnings.

Banks that have savings accounts with APYs of 5% or higher as of June 2024 include:

Banks that have savings accounts with APYs of 4% as of June 2024 include:

Savings account interest rates vary based on the market and other factors, so always do your own research before you choose an account. These are just some examples of the types of banks and accounts you can find.

Pros and cons of 5% interest savings accounts

It is important to understand the pros and cons of high-yield savings accounts to help you decide if a 5% interest savings account is right for you.

High-interest savings accounts offer a variety of perks, such as:

On the other hand, even a high-yield savings account may not provide the type of interest earnings you can get with less secure investment options. A savings account provides security rather than an opportunity to create fast wealth. If you choose to bank online, you may also give up access to branch locations and even ATMs, which means you’ll need to plan a few days in advance if you need access to the funds in your savings account.

Is a 5% interest savings account worth it?

Whether any savings account is worth it for you is a personal preference. However, if you’re building an emergency fund or saving for a large purchase like a house down payment, an account with a higher savings rate can help you get more from your money without taking a chance with riskier investments or locking your money up in CDs that have to mature.

Individuals who are paying down high-interest debt, however, may not find these accounts worth it. Even at a 5% savings rate, you won’t save more than you’d end up spending in interest on a high-balance credit card with an APR of 20% or more.

Alternatives to 5% interest savings accounts

Individuals looking for higher-yield savings might also consider these options.

Our top picks for savings accounts

FAQ: 5% interest savings accounts

What does 5.00% APY mean on a savings account?

A 5.00% APY on a savings account means your money will earn 5% interest annually. For example, if you deposit $100 into an account with this APY and it compounds annually, you’ll earn $5 in interest by the end of the year, giving you a total of $105. If the account compounds interest more frequently, such as monthly or daily, you will earn more than $5 due to the additional compounding.

Can I get 5% interest on my money?

Yes, there are savings accounts, CDs, and other investment options that provide a 5% return. Look for FDIC-insured savings accounts that offer an APY of 5% or higher.

How can I get 5% interest on my savings?

You can get 5% interest on your savings by depositing money into a savings account or CD that offers 5% APY or higher.

What is 5% interest on $10,000 in a savings account?

The exact answer depends on factors such as how long you leave the money in the account and how the interest compounds. If you put $10,000 in a savings account that compounds interest daily at 5% APY, and you leave it for a year, the interest earned is around $512.67.

What is 5% interest on $1,000?

The amount of interest earned on $1,000 in a savings account with a 5% interest rate depends on the length of time the money is in the account and how the interest compounds. If you deposit $1,000 into an account with a 5% APY that compounds daily and leave it for a year, you would earn approximately $51.27 in interest.

What is the highest APY for a savings account?

The highest APY you’re likely to find for a savings account is between 5% and 6%. However, most savings accounts that offer APYs around 6% come with considerable limitations, such as a cap on the amount of money that you can earn at this rate.

There is currently no savings account that pays 7% APY.

About the Author

Sarah Stasik
Sarah Stasik Personal Finance

Sarah Stasik is well versed in personal finance thanks to her previous role as a Revenue Cycle Manager for a Fortune 500 healthcare company. Using her inside knowledge and expertise, Sarah often covers topics ranging from insurance and the economics of private healthcare to personal finance and small business management.

With more than a dozen years of writing experience, Sarah has tackled niches that range from technical advances in fintech to personal budgeting challenges. She has covered topics such as insurance and the economics of private healthcare, small business management and accounting, and credit and savings. Her writing focuses on making complex or seemingly daunting financial topics more accessible and providing helpful and relevant resources for readers.

About the Reviewer

Blake Esken
Blake Esken Los Angeles Times

Blake Esken has over 15 years of experience in product management and has been a member of the Los Angeles Times staff for over five years.

As part of his role at the Los Angeles Times Commerce Team, Blake acts as the in-house reviewer and fact checker for LA Times Compare. He supervises all content for compliance and accuracy and puts to use skills he has honed through years of experience managing high-stakes projects for a range of industry-leading companies.

He has a strong background in data analysis, compliance, and communication, which allows him to support LA Times Compare through fact-checking in an effort to provide up-to-date and factual information across our content.

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