Best Compound High Interest Savings Account for January 2023

Earn over 4.00% APY on High Yield Savings Accounts, that's 17x more than Chase, Bank of America and Wells Fargo rates.
High-interest-online-savings-accounts
High-interest-online-savings-accounts

High-yield savings accounts offer a safe way to build wealth through compound interest. Investing in the stock market offers the potential for higher returns but also comes with a much higher degree of risk.

With compound high interest savings account you get stable and consistent growth through the power of compound interest.

Best Compound High Interest Savings Accounts

Our list of the best high-interest savings accounts you can open today:

1. UFB Elite Savings: 3.83% APY

2. Upgrade Banking: 3.50% APY

3. CIT Bank Savings Connect: 3.60% APY

4. Quontic Bank Savings Account: 3.20% APY

5. Current Banking: 4.00% APY only up to $6,000

If you’re tired of the slow growth and low-interest rates of your traditional savings account, you might consider moving your funds into a high-yield savings account. Reach your savings goals faster.

1. UFB Elite Savings

Features and Benefits

  • Earn 3.83% APY.
  • No monthly maintenance fees.
  • No minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • FDIC-Insured up to $250,000

Read More

2. Upgrade

Features and Benefits

  • Earn 3.50% APY.
  • No minimum balance, no monthly fees.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Must be paired with a Rewards Checking account
  • FDIC-Insured up to $250,000

Read More

3. CIT Connect

Features and Benefits

  • Earn 3.25% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Deposit checks remotely and make transfers with the CIT Bank mobile app.
  • FDIC-Insured up to $250,000

Read More

4. Quontic Bank

Features and Benefits

  • Earn 3.00% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Interest is compounded daily based on your posted account balance..
  • FDIC-Insured up to $250,000

Read More

5. Current

Features and Benefits

  • Earn 4.00% APY - up to $6,000
  • No monthly maintenance fees.
  • $10 minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Make cash deposits at more than 60,000 retailers, including participating CVS Pharmacy, 7-Eleven, Dollar General, and Family Dollar.
  • FDIC-Insured up to $250,000

Read More

1. UFB Direct Elite Savings – 4.11% APY

UFB Elite Savings is a competitive high-yield savings product offering 4.11% APY on your entire account balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest.

You can request a free ATM card to access your money at approximately 91,000 surcharge-free ATMs nationwide.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

2. Upgrade Savings Account – 3.75% APY

Upgrade High Yield Savings Account comes paired with a Rewards Checking account featuring 2% cash back on common everyday purchases like utilities, subscriptions and everyday expenses like groceries and 1% on everything else.

Upgrade customers will receive a debit card that gives you access to your savings account when needed. You will not pay ATM fees, account fees, or transfer fees with Upgrade banking. Upgrade will rebate ATM fees charged by another institution up to five times a month when you meet certain conditions.The cash back feature can put money in your pocket, for example:

Perks

  • Minimum Opening Deposit: $1,000
  • Debit Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0
  • Cashback: The average grocery bill for a family of four is $887 per month that means you could earn $17.74 back. So in one year, that’s equivalent to earning $212.88 in groceries alone.

3. CIT Savings Connect – 3.85% APY

CIT Savings Connect earns an impressive APY on your entire balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest. This straightforward online savings account has no monthly service or account opening fees.

If you combine with Savings Connect account with the CIT eChecking account, you'll receive a debit card for easy access to your money. CIT Bank does not charge ATM fees plus, customers get up to $30 in other bank’s ATM fees reimbursed per month. Transfer, pay and purchase via mobile with Zelle®, Bill Pay, Samsung Pay and Apple Pay.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: No, unless you open the CIT e-checking account that can be combined with the savings account.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

4. Quontic Banks High Yield Savings Connect – 3.50% APY

Quontic High Yield Savings account compounds interest daily based on your posted account balance. This can be a great perk because daily compounding gives a higher yield. Interest is credited to your account every month at the end of your statement cycle.

The online banking platform and dynamic mobile app lets you bank at your convenience. Managing your finances is easy with features like remote check deposit, bill pay, account transfers, the ability to send money through Zelle® and receipt tracking.

Perks

  • Minimum Opening Deposit: $100
  • ATM Card: Yes, customers can request an ATM Card.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

5. Current Banking – 4.00% APY

Current combines features of checking and savings account into one product that earns 4.00% APY. Current account holders can have a total of 3 savings pods – meaning that up to $6,000 of your savings will earn 4% interest rate.

Earn up to 15x the points when you use your debit card at one of 14,000+ participating merchants. Then, redeem them for cash to your Current account. Additional features include overdraft protection, early access to direct deposit, budgeting, and spending insights.

Perks

  • Minimum Opening Deposit: $10
  • Debit Card: Yes, because the Current account is a combined checking and savings account.
  • Compounding Frequency: Daily, which means you’ll see the interest paid out to your account every single day.
  • Minimum balance to earn interest: $0.01

How compound interest works with high-yield savings accounts

Compound interest grows upon itself. Think of it as the “snowball effect.” When a snowball rolls down a hill, it continuously picks up snow – the bigger the snowball gets, the more snow it packs on – it compounds during its travel down the hill.

A high-yield savings account can be looked at in the same way.

Interest is earned on money that previously earned interest. This cycle leads to increasing interest as balances get bigger and bigger.

High-yield savings accounts make you money

Compound interest is the key to how high-yield savings accounts make you money. Currently, the average annual percentage yield across all savings accounts is just 0.30% APY, according to the Federal Deposit Insurance Corp with some banks paying as low as 0.01%.

High-yield savings accounts currently earn around 16 times more than the national rate. That makes a big difference in what 0.30 percent will make you. For example:

  • Deposit $10,000 in a savings account that earns compound interest at 0.30% APY. Assuming interest compounds on a monthly basis, in one year you'll have made $21.00.
  • Deposit $10,000 in a savings account that earns compound interest at 3.50% percent per year (16x the national average.) Assuming interest compounds on a monthly basis, in one year you'll have made $356.

If you’re not earning that “interest-on-interest” (compound interest) in a high-yield savings account, you’re leaving money on the table.

How much high-yield savings accounts can earn

Check out how much an initial deposit of $1,000 with $100 monthly deposits will earn over 20 years with a 4.00% APY.

The figure above breaks down how much different savings accounts can yield using an initial deposit of $1,000 into an account with a 4.00% APY, plus adding $100 every month and never incurring any fees.

If you keep saving for 20 years, you'll have approximately $38,900 in your account (total contributions: $25,000) and you'll have made $13,900 in interest. That's a nice chunk of money earned in interest.

Restrictions on savings accounts

While savings accounts are the most reliable and safe investments, they do have a few restrictions. Many high-yield savings accounts have minimum balance requirements and penalize you with fees or lower APYs if you don't maintain that level of investment.

Plus, due to a Federal Reserve Board rule known as Regulation D, account holders are only allowed to withdraw or transfer money six times per month without paying a penalty. However, since the COVID-19 outbreak, the Feds removed this limitation; although some banks have chosen to maintain the 6 withdrawals per month limitation.

Some savings accounts don’t offer an ATM card. But if your goal is to build wealth and earn as much compound interest as possible, you don't want to make too many withdrawals anyway.

How to find a high-yield savings account that pays compound interest?

When opening a high-yield savings account, look for online high-yield savings accounts. Since online-only banks don’t have to worry about the costs of running a brick-and-mortar facility, they are more likely to offer higher interest on savings accounts.

Online banks are currently paying up to 20 times or more yearly interest (or what’s called APY: annual percentage yield) than a physical bank.

Features to look for when opening a high-yield savings account:

  • Free account. Avoid high-yield savings accounts that charge a monthly maintenance fee. You don’t want to dive into your compound interest earning by paying a monthly fee.
  • Free ATMs. Look for a bank that will not charge you for using out-of-network ATMs or banks that offer ATM reimbursement in case you use another bank’s ATM. Using ATMs that aren’t affiliated with your bank can lead to charges from the ATM provider and your bank.
  • Minimum balance to earn interest. Avoid banks that offer high-yield savings accounts that require a minimum balance to earn interest.
  • Minimum balance to avoid fees. Some banks charge a fee if you don't keep a certain amount of money in your account at all times.
  • Higher APYs: High-yield savings accounts generally offer significantly higher interest rates than traditional savings products. That means you can earn more on your money and meet your savings goals faster.

Consider Investing

Investing can be complicated but it's also one of the quickest and most effective ways to make your money grow. If you're new to investing take a little time to learn how to research and evaluate potential stock purchases, dividends, mutual funds, exchange-traded funds (ETFs) and other investment vehicles.

You can invest on your own but it's probably best to start with a broker. But remember that brokerage firms charge different amounts to use their services, and the fees may vary by how much you have in your accounts. Fees can eat up a big chunk of your savings, so be sure you shop around to find the fee schedule that costs you the least before high-risk investing.

It's important to keep in mind the risks that come with investing in stocks. Many people saw their investing portfolios lose half their value or more during the Great Recession, but those who held on saw their investments recover and then some within a few years.

Few investments come without risk unless it's a high-yield savings account. The ones with the greatest risk stand to bring the greatest gains, but also the greatest loses.

Final thoughts

Consistent investing in a savings account over a long period of time can be an effective strategy to accumulate wealth. Even small deposits to a high-yield savings account can add up over time.

Start your snowball now by earning compound interest in a high-yield savings account today. You’ll never regret it.

Once your high-yield savings account grows, the next step is to consider higher-risk investments. Savings accounts are best for:

  • Emergency funds.
  • Saving for a downpayment for home or car.
  • Unexpected expenses.
  • Quick access to money when life throws you a curveball.

High-yield savings accounts offer a safe way to build wealth through compound interest. Investing in the stock market offers the potential for higher returns but also comes with a much higher degree of risk.

With compound high interest savings account you get stable and consistent growth through the power of compound interest.

Best Compound High Interest Savings Accounts

Our list of the best high-interest savings accounts you can open today:

1. UFB Elite Savings: 3.83% APY

2. Upgrade Banking: 3.50% APY

3. CIT Bank Savings Connect: 3.60% APY

4. Quontic Bank Savings Account: 3.20% APY

5. Current Banking: 4.00% APY only up to $6,000

If you’re tired of the slow growth and low-interest rates of your traditional savings account, you might consider moving your funds into a high-yield savings account. Reach your savings goals faster.

1. UFB Elite Savings

Features and Benefits

  • Earn 3.83% APY.
  • No monthly maintenance fees.
  • No minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • FDIC-Insured up to $250,000

Read More

2. Upgrade

Features and Benefits

  • Earn 3.50% APY.
  • No minimum balance, no monthly fees.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Must be paired with a Rewards Checking account
  • FDIC-Insured up to $250,000

Read More

3. CIT Connect

Features and Benefits

  • Earn 3.25% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Deposit checks remotely and make transfers with the CIT Bank mobile app.
  • FDIC-Insured up to $250,000

Read More

4. Quontic Bank

Features and Benefits

  • Earn 3.00% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Interest is compounded daily based on your posted account balance..
  • FDIC-Insured up to $250,000

Read More

5. Current

Features and Benefits

  • Earn 4.00% APY – up to $6,000
  • No monthly maintenance fees.
  • $10 minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Make cash deposits at more than 60,000 retailers, including participating CVS Pharmacy, 7-Eleven, Dollar General, and Family Dollar.
  • FDIC-Insured up to $250,000

Read More

1. UFB Direct Elite Savings – 4.11% APY

UFB Elite Savings is a competitive high-yield savings product offering 4.11% APY on your entire account balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest.

You can request a free ATM card to access your money at approximately 91,000 surcharge-free ATMs nationwide.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

2. Upgrade Savings Account – 3.75% APY

Upgrade High Yield Savings Account comes paired with a Rewards Checking account featuring 2% cash back on common everyday purchases like utilities, subscriptions and everyday expenses like groceries and 1% on everything else.

Upgrade customers will receive a debit card that gives you access to your savings account when needed. You will not pay ATM fees, account fees, or transfer fees with Upgrade banking. Upgrade will rebate ATM fees charged by another institution up to five times a month when you meet certain conditions.The cash back feature can put money in your pocket, for example:

Perks

  • Minimum Opening Deposit: $1,000
  • Debit Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0
  • Cashback: The average grocery bill for a family of four is $887 per month that means you could earn $17.74 back. So in one year, that’s equivalent to earning $212.88 in groceries alone.

3. CIT Savings Connect – 3.85% APY

CIT Savings Connect earns an impressive APY on your entire balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest. This straightforward online savings account has no monthly service or account opening fees.

If you combine with Savings Connect account with the CIT eChecking account, you'll receive a debit card for easy access to your money. CIT Bank does not charge ATM fees plus, customers get up to $30 in other bank’s ATM fees reimbursed per month. Transfer, pay and purchase via mobile with Zelle®, Bill Pay, Samsung Pay and Apple Pay.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: No, unless you open the CIT e-checking account that can be combined with the savings account.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

4. Quontic Banks High Yield Savings Connect – 3.50% APY

Quontic High Yield Savings account compounds interest daily based on your posted account balance. This can be a great perk because daily compounding gives a higher yield. Interest is credited to your account every month at the end of your statement cycle.

The online banking platform and dynamic mobile app lets you bank at your convenience. Managing your finances is easy with features like remote check deposit, bill pay, account transfers, the ability to send money through Zelle® and receipt tracking.

Perks

  • Minimum Opening Deposit: $100
  • ATM Card: Yes, customers can request an ATM Card.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

5. Current Banking – 4.00% APY

Current combines features of checking and savings account into one product that earns 4.00% APY. Current account holders can have a total of 3 savings pods – meaning that up to $6,000 of your savings will earn 4% interest rate.

Earn up to 15x the points when you use your debit card at one of 14,000+ participating merchants. Then, redeem them for cash to your Current account. Additional features include overdraft protection, early access to direct deposit, budgeting, and spending insights.

Perks

  • Minimum Opening Deposit: $10
  • Debit Card: Yes, because the Current account is a combined checking and savings account.
  • Compounding Frequency: Daily, which means you’ll see the interest paid out to your account every single day.
  • Minimum balance to earn interest: $0.01

How compound interest works with high-yield savings accounts

Compound interest grows upon itself. Think of it as the “snowball effect.” When a snowball rolls down a hill, it continuously picks up snow – the bigger the snowball gets, the more snow it packs on – it compounds during its travel down the hill.

A high-yield savings account can be looked at in the same way.

Interest is earned on money that previously earned interest. This cycle leads to increasing interest as balances get bigger and bigger.

High-yield savings accounts make you money

Compound interest is the key to how high-yield savings accounts make you money. Currently, the average annual percentage yield across all savings accounts is just 0.30% APY, according to the Federal Deposit Insurance Corp with some banks paying as low as 0.01%.

High-yield savings accounts currently earn around 16 times more than the national rate. That makes a big difference in what 0.30 percent will make you. For example:

  • Deposit $10,000 in a savings account that earns compound interest at 0.30% APY. Assuming interest compounds on a monthly basis, in one year you'll have made $21.00.
  • Deposit $10,000 in a savings account that earns compound interest at 3.50% percent per year (16x the national average.) Assuming interest compounds on a monthly basis, in one year you'll have made $356.

If you’re not earning that “interest-on-interest” (compound interest) in a high-yield savings account, you’re leaving money on the table.

How much high-yield savings accounts can earn

Check out how much an initial deposit of $1,000 with $100 monthly deposits will earn over 20 years with a 4.00% APY.

The figure above breaks down how much different savings accounts can yield using an initial deposit of $1,000 into an account with a 4.00% APY, plus adding $100 every month and never incurring any fees.

If you keep saving for 20 years, you'll have approximately $38,900 in your account (total contributions: $25,000) and you'll have made $13,900 in interest. That's a nice chunk of money earned in interest.

Restrictions on savings accounts

While savings accounts are the most reliable and safe investments, they do have a few restrictions. Many high-yield savings accounts have minimum balance requirements and penalize you with fees or lower APYs if you don't maintain that level of investment.

Plus, due to a Federal Reserve Board rule known as Regulation D, account holders are only allowed to withdraw or transfer money six times per month without paying a penalty. However, since the COVID-19 outbreak, the Feds removed this limitation; although some banks have chosen to maintain the 6 withdrawals per month limitation.

Some savings accounts don’t offer an ATM card. But if your goal is to build wealth and earn as much compound interest as possible, you don't want to make too many withdrawals anyway.

How to find a high-yield savings account that pays compound interest?

When opening a high-yield savings account, look for online high-yield savings accounts. Since online-only banks don’t have to worry about the costs of running a brick-and-mortar facility, they are more likely to offer higher interest on savings accounts.

Online banks are currently paying up to 20 times or more yearly interest (or what’s called APY: annual percentage yield) than a physical bank.

Features to look for when opening a high-yield savings account:

  • Free account. Avoid high-yield savings accounts that charge a monthly maintenance fee. You don’t want to dive into your compound interest earning by paying a monthly fee.
  • Free ATMs. Look for a bank that will not charge you for using out-of-network ATMs or banks that offer ATM reimbursement in case you use another bank’s ATM. Using ATMs that aren’t affiliated with your bank can lead to charges from the ATM provider and your bank.
  • Minimum balance to earn interest. Avoid banks that offer high-yield savings accounts that require a minimum balance to earn interest.
  • Minimum balance to avoid fees. Some banks charge a fee if you don't keep a certain amount of money in your account at all times.
  • Higher APYs: High-yield savings accounts generally offer significantly higher interest rates than traditional savings products. That means you can earn more on your money and meet your savings goals faster.

Consider Investing

Investing can be complicated but it's also one of the quickest and most effective ways to make your money grow. If you're new to investing take a little time to learn how to research and evaluate potential stock purchases, dividends, mutual funds, exchange-traded funds (ETFs) and other investment vehicles.

You can invest on your own but it's probably best to start with a broker. But remember that brokerage firms charge different amounts to use their services, and the fees may vary by how much you have in your accounts. Fees can eat up a big chunk of your savings, so be sure you shop around to find the fee schedule that costs you the least before high-risk investing.

It's important to keep in mind the risks that come with investing in stocks. Many people saw their investing portfolios lose half their value or more during the Great Recession, but those who held on saw their investments recover and then some within a few years.

Few investments come without risk unless it's a high-yield savings account. The ones with the greatest risk stand to bring the greatest gains, but also the greatest loses.

Final thoughts

Consistent investing in a savings account over a long period of time can be an effective strategy to accumulate wealth. Even small deposits to a high-yield savings account can add up over time.

Start your snowball now by earning compound interest in a high-yield savings account today. You’ll never regret it.

Once your high-yield savings account grows, the next step is to consider higher-risk investments. Savings accounts are best for:

  • Emergency funds.
  • Saving for a downpayment for home or car.
  • Unexpected expenses.
  • Quick access to money when life throws you a curveball.

High-yield savings accounts offer a safe way to build wealth through compound interest. Investing in the stock market offers the potential for higher returns but also comes with a much higher degree of risk.

With compound high interest savings account you get stable and consistent growth through the power of compound interest.

Best Compound High Interest Savings Accounts

Our list of the best high-interest savings accounts you can open today:

1. UFB Elite Savings: 3.83% APY

2. Upgrade Banking: 3.50% APY

3. CIT Bank Savings Connect: 3.60% APY

4. Quontic Bank Savings Account: 3.20% APY

5. Current Banking: 4.00% APY only up to $6,000

If you’re tired of the slow growth and low-interest rates of your traditional savings account, you might consider moving your funds into a high-yield savings account. Reach your savings goals faster.

1. UFB Elite Savings

Features and Benefits

  • Earn 3.83% APY.
  • No monthly maintenance fees.
  • No minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • FDIC-Insured up to $250,000

Read More

2. Upgrade

Features and Benefits

  • Earn 3.50% APY.
  • No minimum balance, no monthly fees.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Must be paired with a Rewards Checking account
  • FDIC-Insured up to $250,000

Read More

3. CIT Connect

Features and Benefits

  • Earn 3.25% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Deposit checks remotely and make transfers with the CIT Bank mobile app.
  • FDIC-Insured up to $250,000

Read More

4. Quontic Bank

Features and Benefits

  • Earn 3.00% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Interest is compounded daily based on your posted account balance..
  • FDIC-Insured up to $250,000

Read More

5. Current

Features and Benefits

  • Earn 4.00% APY – up to $6,000
  • No monthly maintenance fees.
  • $10 minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Make cash deposits at more than 60,000 retailers, including participating CVS Pharmacy, 7-Eleven, Dollar General, and Family Dollar.
  • FDIC-Insured up to $250,000

Read More

1. UFB Direct Elite Savings – 4.11% APY

UFB Elite Savings is a competitive high-yield savings product offering 4.11% APY on your entire account balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest.

You can request a free ATM card to access your money at approximately 91,000 surcharge-free ATMs nationwide.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

2. Upgrade Savings Account – 3.75% APY

Upgrade High Yield Savings Account comes paired with a Rewards Checking account featuring 2% cash back on common everyday purchases like utilities, subscriptions and everyday expenses like groceries and 1% on everything else.

Upgrade customers will receive a debit card that gives you access to your savings account when needed. You will not pay ATM fees, account fees, or transfer fees with Upgrade banking. Upgrade will rebate ATM fees charged by another institution up to five times a month when you meet certain conditions.The cash back feature can put money in your pocket, for example:

Perks

  • Minimum Opening Deposit: $1,000
  • Debit Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0
  • Cashback: The average grocery bill for a family of four is $887 per month that means you could earn $17.74 back. So in one year, that’s equivalent to earning $212.88 in groceries alone.

3. CIT Savings Connect – 3.85% APY

CIT Savings Connect earns an impressive APY on your entire balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest. This straightforward online savings account has no monthly service or account opening fees.

If you combine with Savings Connect account with the CIT eChecking account, you'll receive a debit card for easy access to your money. CIT Bank does not charge ATM fees plus, customers get up to $30 in other bank’s ATM fees reimbursed per month. Transfer, pay and purchase via mobile with Zelle®, Bill Pay, Samsung Pay and Apple Pay.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: No, unless you open the CIT e-checking account that can be combined with the savings account.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

4. Quontic Banks High Yield Savings Connect – 3.50% APY

Quontic High Yield Savings account compounds interest daily based on your posted account balance. This can be a great perk because daily compounding gives a higher yield. Interest is credited to your account every month at the end of your statement cycle.

The online banking platform and dynamic mobile app lets you bank at your convenience. Managing your finances is easy with features like remote check deposit, bill pay, account transfers, the ability to send money through Zelle® and receipt tracking.

Perks

  • Minimum Opening Deposit: $100
  • ATM Card: Yes, customers can request an ATM Card.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

5. Current Banking – 4.00% APY

Current combines features of checking and savings account into one product that earns 4.00% APY. Current account holders can have a total of 3 savings pods – meaning that up to $6,000 of your savings will earn 4% interest rate.

Earn up to 15x the points when you use your debit card at one of 14,000+ participating merchants. Then, redeem them for cash to your Current account. Additional features include overdraft protection, early access to direct deposit, budgeting, and spending insights.

Perks

  • Minimum Opening Deposit: $10
  • Debit Card: Yes, because the Current account is a combined checking and savings account.
  • Compounding Frequency: Daily, which means you’ll see the interest paid out to your account every single day.
  • Minimum balance to earn interest: $0.01

How compound interest works with high-yield savings accounts

Compound interest grows upon itself. Think of it as the “snowball effect.” When a snowball rolls down a hill, it continuously picks up snow – the bigger the snowball gets, the more snow it packs on – it compounds during its travel down the hill.

A high-yield savings account can be looked at in the same way.

Interest is earned on money that previously earned interest. This cycle leads to increasing interest as balances get bigger and bigger.

High-yield savings accounts make you money

Compound interest is the key to how high-yield savings accounts make you money. Currently, the average annual percentage yield across all savings accounts is just 0.30% APY, according to the Federal Deposit Insurance Corp with some banks paying as low as 0.01%.

High-yield savings accounts currently earn around 16 times more than the national rate. That makes a big difference in what 0.30 percent will make you. For example:

  • Deposit $10,000 in a savings account that earns compound interest at 0.30% APY. Assuming interest compounds on a monthly basis, in one year you'll have made $21.00.
  • Deposit $10,000 in a savings account that earns compound interest at 3.50% percent per year (16x the national average.) Assuming interest compounds on a monthly basis, in one year you'll have made $356.

If you’re not earning that “interest-on-interest” (compound interest) in a high-yield savings account, you’re leaving money on the table.

How much high-yield savings accounts can earn

Check out how much an initial deposit of $1,000 with $100 monthly deposits will earn over 20 years with a 4.00% APY.

The figure above breaks down how much different savings accounts can yield using an initial deposit of $1,000 into an account with a 4.00% APY, plus adding $100 every month and never incurring any fees.

If you keep saving for 20 years, you'll have approximately $38,900 in your account (total contributions: $25,000) and you'll have made $13,900 in interest. That's a nice chunk of money earned in interest.

Restrictions on savings accounts

While savings accounts are the most reliable and safe investments, they do have a few restrictions. Many high-yield savings accounts have minimum balance requirements and penalize you with fees or lower APYs if you don't maintain that level of investment.

Plus, due to a Federal Reserve Board rule known as Regulation D, account holders are only allowed to withdraw or transfer money six times per month without paying a penalty. However, since the COVID-19 outbreak, the Feds removed this limitation; although some banks have chosen to maintain the 6 withdrawals per month limitation.

Some savings accounts don’t offer an ATM card. But if your goal is to build wealth and earn as much compound interest as possible, you don't want to make too many withdrawals anyway.

How to find a high-yield savings account that pays compound interest?

When opening a high-yield savings account, look for online high-yield savings accounts. Since online-only banks don’t have to worry about the costs of running a brick-and-mortar facility, they are more likely to offer higher interest on savings accounts.

Online banks are currently paying up to 20 times or more yearly interest (or what’s called APY: annual percentage yield) than a physical bank.

Features to look for when opening a high-yield savings account:

  • Free account. Avoid high-yield savings accounts that charge a monthly maintenance fee. You don’t want to dive into your compound interest earning by paying a monthly fee.
  • Free ATMs. Look for a bank that will not charge you for using out-of-network ATMs or banks that offer ATM reimbursement in case you use another bank’s ATM. Using ATMs that aren’t affiliated with your bank can lead to charges from the ATM provider and your bank.
  • Minimum balance to earn interest. Avoid banks that offer high-yield savings accounts that require a minimum balance to earn interest.
  • Minimum balance to avoid fees. Some banks charge a fee if you don't keep a certain amount of money in your account at all times.
  • Higher APYs: High-yield savings accounts generally offer significantly higher interest rates than traditional savings products. That means you can earn more on your money and meet your savings goals faster.

Consider Investing

Investing can be complicated but it's also one of the quickest and most effective ways to make your money grow. If you're new to investing take a little time to learn how to research and evaluate potential stock purchases, dividends, mutual funds, exchange-traded funds (ETFs) and other investment vehicles.

You can invest on your own but it's probably best to start with a broker. But remember that brokerage firms charge different amounts to use their services, and the fees may vary by how much you have in your accounts. Fees can eat up a big chunk of your savings, so be sure you shop around to find the fee schedule that costs you the least before high-risk investing.

It's important to keep in mind the risks that come with investing in stocks. Many people saw their investing portfolios lose half their value or more during the Great Recession, but those who held on saw their investments recover and then some within a few years.

Few investments come without risk unless it's a high-yield savings account. The ones with the greatest risk stand to bring the greatest gains, but also the greatest loses.

Final thoughts

Consistent investing in a savings account over a long period of time can be an effective strategy to accumulate wealth. Even small deposits to a high-yield savings account can add up over time.

Start your snowball now by earning compound interest in a high-yield savings account today. You’ll never regret it.

Once your high-yield savings account grows, the next step is to consider higher-risk investments. Savings accounts are best for:

  • Emergency funds.
  • Saving for a downpayment for home or car.
  • Unexpected expenses.
  • Quick access to money when life throws you a curveball.

High-yield savings accounts offer a safe way to build wealth through compound interest. Investing in the stock market offers the potential for higher returns but also comes with a much higher degree of risk.

With compound high interest savings account you get stable and consistent growth through the power of compound interest.

Best Compound High Interest Savings Accounts

Our list of the best high-interest savings accounts you can open today:

1. UFB Elite Savings: 3.83% APY

2. Upgrade Banking: 3.50% APY

3. CIT Bank Savings Connect: 3.60% APY

4. Quontic Bank Savings Account: 3.20% APY

5. Current Banking: 4.00% APY only up to $6,000

If you’re tired of the slow growth and low-interest rates of your traditional savings account, you might consider moving your funds into a high-yield savings account. Reach your savings goals faster.

1. UFB Elite Savings

Features and Benefits

  • Earn 3.83% APY.
  • No monthly maintenance fees.
  • No minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • FDIC-Insured up to $250,000

Read More

2. Upgrade

Features and Benefits

  • Earn 3.50% APY.
  • No minimum balance, no monthly fees.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Must be paired with a Rewards Checking account
  • FDIC-Insured up to $250,000

Read More

3. CIT Connect

Features and Benefits

  • Earn 3.25% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Deposit checks remotely and make transfers with the CIT Bank mobile app.
  • FDIC-Insured up to $250,000

Read More

4. Quontic Bank

Features and Benefits

  • Earn 3.00% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Interest is compounded daily based on your posted account balance..
  • FDIC-Insured up to $250,000

Read More

5. Current

Features and Benefits

  • Earn 4.00% APY – up to $6,000
  • No monthly maintenance fees.
  • $10 minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Make cash deposits at more than 60,000 retailers, including participating CVS Pharmacy, 7-Eleven, Dollar General, and Family Dollar.
  • FDIC-Insured up to $250,000

Read More

1. UFB Direct Elite Savings – 4.11% APY

UFB Elite Savings is a competitive high-yield savings product offering 4.11% APY on your entire account balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest.

You can request a free ATM card to access your money at approximately 91,000 surcharge-free ATMs nationwide.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

2. Upgrade Savings Account – 3.75% APY

Upgrade High Yield Savings Account comes paired with a Rewards Checking account featuring 2% cash back on common everyday purchases like utilities, subscriptions and everyday expenses like groceries and 1% on everything else.

Upgrade customers will receive a debit card that gives you access to your savings account when needed. You will not pay ATM fees, account fees, or transfer fees with Upgrade banking. Upgrade will rebate ATM fees charged by another institution up to five times a month when you meet certain conditions.The cash back feature can put money in your pocket, for example:

Perks

  • Minimum Opening Deposit: $1,000
  • Debit Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0
  • Cashback: The average grocery bill for a family of four is $887 per month that means you could earn $17.74 back. So in one year, that’s equivalent to earning $212.88 in groceries alone.

3. CIT Savings Connect – 3.85% APY

CIT Savings Connect earns an impressive APY on your entire balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest. This straightforward online savings account has no monthly service or account opening fees.

If you combine with Savings Connect account with the CIT eChecking account, you'll receive a debit card for easy access to your money. CIT Bank does not charge ATM fees plus, customers get up to $30 in other bank’s ATM fees reimbursed per month. Transfer, pay and purchase via mobile with Zelle®, Bill Pay, Samsung Pay and Apple Pay.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: No, unless you open the CIT e-checking account that can be combined with the savings account.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

4. Quontic Banks High Yield Savings Connect – 3.50% APY

Quontic High Yield Savings account compounds interest daily based on your posted account balance. This can be a great perk because daily compounding gives a higher yield. Interest is credited to your account every month at the end of your statement cycle.

The online banking platform and dynamic mobile app lets you bank at your convenience. Managing your finances is easy with features like remote check deposit, bill pay, account transfers, the ability to send money through Zelle® and receipt tracking.

Perks

  • Minimum Opening Deposit: $100
  • ATM Card: Yes, customers can request an ATM Card.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

5. Current Banking – 4.00% APY

Current combines features of checking and savings account into one product that earns 4.00% APY. Current account holders can have a total of 3 savings pods – meaning that up to $6,000 of your savings will earn 4% interest rate.

Earn up to 15x the points when you use your debit card at one of 14,000+ participating merchants. Then, redeem them for cash to your Current account. Additional features include overdraft protection, early access to direct deposit, budgeting, and spending insights.

Perks

  • Minimum Opening Deposit: $10
  • Debit Card: Yes, because the Current account is a combined checking and savings account.
  • Compounding Frequency: Daily, which means you’ll see the interest paid out to your account every single day.
  • Minimum balance to earn interest: $0.01

How compound interest works with high-yield savings accounts

Compound interest grows upon itself. Think of it as the “snowball effect.” When a snowball rolls down a hill, it continuously picks up snow – the bigger the snowball gets, the more snow it packs on – it compounds during its travel down the hill.

A high-yield savings account can be looked at in the same way.

Interest is earned on money that previously earned interest. This cycle leads to increasing interest as balances get bigger and bigger.

High-yield savings accounts make you money

Compound interest is the key to how high-yield savings accounts make you money. Currently, the average annual percentage yield across all savings accounts is just 0.30% APY, according to the Federal Deposit Insurance Corp with some banks paying as low as 0.01%.

High-yield savings accounts currently earn around 16 times more than the national rate. That makes a big difference in what 0.30 percent will make you. For example:

  • Deposit $10,000 in a savings account that earns compound interest at 0.30% APY. Assuming interest compounds on a monthly basis, in one year you'll have made $21.00.
  • Deposit $10,000 in a savings account that earns compound interest at 3.50% percent per year (16x the national average.) Assuming interest compounds on a monthly basis, in one year you'll have made $356.

If you’re not earning that “interest-on-interest” (compound interest) in a high-yield savings account, you’re leaving money on the table.

How much high-yield savings accounts can earn

Check out how much an initial deposit of $1,000 with $100 monthly deposits will earn over 20 years with a 4.00% APY.

The figure above breaks down how much different savings accounts can yield using an initial deposit of $1,000 into an account with a 4.00% APY, plus adding $100 every month and never incurring any fees.

If you keep saving for 20 years, you'll have approximately $38,900 in your account (total contributions: $25,000) and you'll have made $13,900 in interest. That's a nice chunk of money earned in interest.

Restrictions on savings accounts

While savings accounts are the most reliable and safe investments, they do have a few restrictions. Many high-yield savings accounts have minimum balance requirements and penalize you with fees or lower APYs if you don't maintain that level of investment.

Plus, due to a Federal Reserve Board rule known as Regulation D, account holders are only allowed to withdraw or transfer money six times per month without paying a penalty. However, since the COVID-19 outbreak, the Feds removed this limitation; although some banks have chosen to maintain the 6 withdrawals per month limitation.

Some savings accounts don’t offer an ATM card. But if your goal is to build wealth and earn as much compound interest as possible, you don't want to make too many withdrawals anyway.

How to find a high-yield savings account that pays compound interest?

When opening a high-yield savings account, look for online high-yield savings accounts. Since online-only banks don’t have to worry about the costs of running a brick-and-mortar facility, they are more likely to offer higher interest on savings accounts.

Online banks are currently paying up to 20 times or more yearly interest (or what’s called APY: annual percentage yield) than a physical bank.

Features to look for when opening a high-yield savings account:

  • Free account. Avoid high-yield savings accounts that charge a monthly maintenance fee. You don’t want to dive into your compound interest earning by paying a monthly fee.
  • Free ATMs. Look for a bank that will not charge you for using out-of-network ATMs or banks that offer ATM reimbursement in case you use another bank’s ATM. Using ATMs that aren’t affiliated with your bank can lead to charges from the ATM provider and your bank.
  • Minimum balance to earn interest. Avoid banks that offer high-yield savings accounts that require a minimum balance to earn interest.
  • Minimum balance to avoid fees. Some banks charge a fee if you don't keep a certain amount of money in your account at all times.
  • Higher APYs: High-yield savings accounts generally offer significantly higher interest rates than traditional savings products. That means you can earn more on your money and meet your savings goals faster.

Consider Investing

Investing can be complicated but it's also one of the quickest and most effective ways to make your money grow. If you're new to investing take a little time to learn how to research and evaluate potential stock purchases, dividends, mutual funds, exchange-traded funds (ETFs) and other investment vehicles.

You can invest on your own but it's probably best to start with a broker. But remember that brokerage firms charge different amounts to use their services, and the fees may vary by how much you have in your accounts. Fees can eat up a big chunk of your savings, so be sure you shop around to find the fee schedule that costs you the least before high-risk investing.

It's important to keep in mind the risks that come with investing in stocks. Many people saw their investing portfolios lose half their value or more during the Great Recession, but those who held on saw their investments recover and then some within a few years.

Few investments come without risk unless it's a high-yield savings account. The ones with the greatest risk stand to bring the greatest gains, but also the greatest loses.

Final thoughts

Consistent investing in a savings account over a long period of time can be an effective strategy to accumulate wealth. Even small deposits to a high-yield savings account can add up over time.

Start your snowball now by earning compound interest in a high-yield savings account today. You’ll never regret it.

Once your high-yield savings account grows, the next step is to consider higher-risk investments. Savings accounts are best for:

  • Emergency funds.
  • Saving for a downpayment for home or car.
  • Unexpected expenses.
  • Quick access to money when life throws you a curveball.

High-yield savings accounts offer a safe way to build wealth through compound interest. Investing in the stock market offers the potential for higher returns but also comes with a much higher degree of risk.

With compound high interest savings account you get stable and consistent growth through the power of compound interest.

Best Compound High Interest Savings Accounts

Our list of the best high-interest savings accounts you can open today:

1. UFB Elite Savings: 3.83% APY

2. Upgrade Banking: 3.50% APY

3. CIT Bank Savings Connect: 3.60% APY

4. Quontic Bank Savings Account: 3.20% APY

5. Current Banking: 4.00% APY only up to $6,000

If you’re tired of the slow growth and low-interest rates of your traditional savings account, you might consider moving your funds into a high-yield savings account. Reach your savings goals faster.

1. UFB Elite Savings

Features and Benefits

  • Earn 3.83% APY.
  • No monthly maintenance fees.
  • No minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • FDIC-Insured up to $250,000

Read More

2. Upgrade

Features and Benefits

  • Earn 3.50% APY.
  • No minimum balance, no monthly fees.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Must be paired with a Rewards Checking account
  • FDIC-Insured up to $250,000

Read More

3. CIT Connect

Features and Benefits

  • Earn 3.25% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Deposit checks remotely and make transfers with the CIT Bank mobile app.
  • FDIC-Insured up to $250,000

Read More

4. Quontic Bank

Features and Benefits

  • Earn 3.00% APY.
  • No monthly maintenance fees.
  • $100 minimum opening deposit.
  • Digital convenience with online banking and the mobile app.
  • Interest is compounded daily based on your posted account balance..
  • FDIC-Insured up to $250,000

Read More

5. Current

Features and Benefits

  • Earn 4.00% APY – up to $6,000
  • No monthly maintenance fees.
  • $10 minimum deposit required to open an account.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Make cash deposits at more than 60,000 retailers, including participating CVS Pharmacy, 7-Eleven, Dollar General, and Family Dollar.
  • FDIC-Insured up to $250,000

Read More

1. UFB Direct Elite Savings – 4.11% APY

UFB Elite Savings is a competitive high-yield savings product offering 4.11% APY on your entire account balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest.

You can request a free ATM card to access your money at approximately 91,000 surcharge-free ATMs nationwide.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

2. Upgrade Savings Account – 3.75% APY

Upgrade High Yield Savings Account comes paired with a Rewards Checking account featuring 2% cash back on common everyday purchases like utilities, subscriptions and everyday expenses like groceries and 1% on everything else.

Upgrade customers will receive a debit card that gives you access to your savings account when needed. You will not pay ATM fees, account fees, or transfer fees with Upgrade banking. Upgrade will rebate ATM fees charged by another institution up to five times a month when you meet certain conditions.The cash back feature can put money in your pocket, for example:

Perks

  • Minimum Opening Deposit: $1,000
  • Debit Card: Yes, which isn’t a common offering for savings accounts.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0
  • Cashback: The average grocery bill for a family of four is $887 per month that means you could earn $17.74 back. So in one year, that’s equivalent to earning $212.88 in groceries alone.

3. CIT Savings Connect – 3.85% APY

CIT Savings Connect earns an impressive APY on your entire balance. This is a great perk unlike some high-interest savings accounts that place a limit on your balance that can earn high-interest. This straightforward online savings account has no monthly service or account opening fees.

If you combine with Savings Connect account with the CIT eChecking account, you'll receive a debit card for easy access to your money. CIT Bank does not charge ATM fees plus, customers get up to $30 in other bank’s ATM fees reimbursed per month. Transfer, pay and purchase via mobile with Zelle®, Bill Pay, Samsung Pay and Apple Pay.

Perks

  • Minimum Opening Deposit: $0
  • ATM Card: No, unless you open the CIT e-checking account that can be combined with the savings account.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

4. Quontic Banks High Yield Savings Connect – 3.50% APY

Quontic High Yield Savings account compounds interest daily based on your posted account balance. This can be a great perk because daily compounding gives a higher yield. Interest is credited to your account every month at the end of your statement cycle.

The online banking platform and dynamic mobile app lets you bank at your convenience. Managing your finances is easy with features like remote check deposit, bill pay, account transfers, the ability to send money through Zelle® and receipt tracking.

Perks

  • Minimum Opening Deposit: $100
  • ATM Card: Yes, customers can request an ATM Card.
  • Compounding Frequency: Daily, which means your cash works harder for you.
  • Minimum balance to earn interest: $0

5. Current Banking – 4.00% APY

Current combines features of checking and savings account into one product that earns 4.00% APY. Current account holders can have a total of 3 savings pods – meaning that up to $6,000 of your savings will earn 4% interest rate.

Earn up to 15x the points when you use your debit card at one of 14,000+ participating merchants. Then, redeem them for cash to your Current account. Additional features include overdraft protection, early access to direct deposit, budgeting, and spending insights.

Perks

  • Minimum Opening Deposit: $10
  • Debit Card: Yes, because the Current account is a combined checking and savings account.
  • Compounding Frequency: Daily, which means you’ll see the interest paid out to your account every single day.
  • Minimum balance to earn interest: $0.01

How compound interest works with high-yield savings accounts

Compound interest grows upon itself. Think of it as the “snowball effect.” When a snowball rolls down a hill, it continuously picks up snow – the bigger the snowball gets, the more snow it packs on – it compounds during its travel down the hill.

A high-yield savings account can be looked at in the same way.

Interest is earned on money that previously earned interest. This cycle leads to increasing interest as balances get bigger and bigger.

High-yield savings accounts make you money

Compound interest is the key to how high-yield savings accounts make you money. Currently, the average annual percentage yield across all savings accounts is just 0.30% APY, according to the Federal Deposit Insurance Corp with some banks paying as low as 0.01%.

High-yield savings accounts currently earn around 16 times more than the national rate. That makes a big difference in what 0.30 percent will make you. For example:

  • Deposit $10,000 in a savings account that earns compound interest at 0.30% APY. Assuming interest compounds on a monthly basis, in one year you'll have made $21.00.
  • Deposit $10,000 in a savings account that earns compound interest at 3.50% percent per year (16x the national average.) Assuming interest compounds on a monthly basis, in one year you'll have made $356.

If you’re not earning that “interest-on-interest” (compound interest) in a high-yield savings account, you’re leaving money on the table.

How much high-yield savings accounts can earn

Check out how much an initial deposit of $1,000 with $100 monthly deposits will earn over 20 years with a 4.00% APY.

The figure above breaks down how much different savings accounts can yield using an initial deposit of $1,000 into an account with a 4.00% APY, plus adding $100 every month and never incurring any fees.

If you keep saving for 20 years, you'll have approximately $38,900 in your account (total contributions: $25,000) and you'll have made $13,900 in interest. That's a nice chunk of money earned in interest.

Restrictions on savings accounts

While savings accounts are the most reliable and safe investments, they do have a few restrictions. Many high-yield savings accounts have minimum balance requirements and penalize you with fees or lower APYs if you don't maintain that level of investment.

Plus, due to a Federal Reserve Board rule known as Regulation D, account holders are only allowed to withdraw or transfer money six times per month without paying a penalty. However, since the COVID-19 outbreak, the Feds removed this limitation; although some banks have chosen to maintain the 6 withdrawals per month limitation.

Some savings accounts don’t offer an ATM card. But if your goal is to build wealth and earn as much compound interest as possible, you don't want to make too many withdrawals anyway.

How to find a high-yield savings account that pays compound interest?

When opening a high-yield savings account, look for online high-yield savings accounts. Since online-only banks don’t have to worry about the costs of running a brick-and-mortar facility, they are more likely to offer higher interest on savings accounts.

Online banks are currently paying up to 20 times or more yearly interest (or what’s called APY: annual percentage yield) than a physical bank.

Features to look for when opening a high-yield savings account:

  • Free account. Avoid high-yield savings accounts that charge a monthly maintenance fee. You don’t want to dive into your compound interest earning by paying a monthly fee.
  • Free ATMs. Look for a bank that will not charge you for using out-of-network ATMs or banks that offer ATM reimbursement in case you use another bank’s ATM. Using ATMs that aren’t affiliated with your bank can lead to charges from the ATM provider and your bank.
  • Minimum balance to earn interest. Avoid banks that offer high-yield savings accounts that require a minimum balance to earn interest.
  • Minimum balance to avoid fees. Some banks charge a fee if you don't keep a certain amount of money in your account at all times.
  • Higher APYs: High-yield savings accounts generally offer significantly higher interest rates than traditional savings products. That means you can earn more on your money and meet your savings goals faster.

Consider Investing

Investing can be complicated but it's also one of the quickest and most effective ways to make your money grow. If you're new to investing take a little time to learn how to research and evaluate potential stock purchases, dividends, mutual funds, exchange-traded funds (ETFs) and other investment vehicles.

You can invest on your own but it's probably best to start with a broker. But remember that brokerage firms charge different amounts to use their services, and the fees may vary by how much you have in your accounts. Fees can eat up a big chunk of your savings, so be sure you shop around to find the fee schedule that costs you the least before high-risk investing.

It's important to keep in mind the risks that come with investing in stocks. Many people saw their investing portfolios lose half their value or more during the Great Recession, but those who held on saw their investments recover and then some within a few years.

Few investments come without risk unless it's a high-yield savings account. The ones with the greatest risk stand to bring the greatest gains, but also the greatest loses.

Final thoughts

Consistent investing in a savings account over a long period of time can be an effective strategy to accumulate wealth. Even small deposits to a high-yield savings account can add up over time.

Start your snowball now by earning compound interest in a high-yield savings account today. You’ll never regret it.

Once your high-yield savings account grows, the next step is to consider higher-risk investments. Savings accounts are best for:

  • Emergency funds.
  • Saving for a downpayment for home or car.
  • Unexpected expenses.
  • Quick access to money when life throws you a curveball.

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