5% Interest Savings Account [2024 Best Vs. Worst to Avoid]

The federal interest rate rose from a measly 0.05% to a whopping 5% in less than a year and a half. 

That might be bad for economic growth, but it’s great news for Americans focused on growing their savings.  

So if you’ve got money set aside, you’re in a fantastic position. You could even take advantage of something that would have been unimaginable a few years ago: a 5% interest savings account. 

Yes, there are now places where your money can earn 5% APY– just for sitting there! 

But what are your options? And how can you choose between them? 

I’ll explain all of that below. 

Best 5% Interest Savings Accounts

The financial world is full of savings accounts, each with its own rates and requirements.

I recommend trying one of these high-yield accounts since they’re the ones that will help you make the most of your savings. Keep reading to learn which savings account will earn you the most money.

1 – Varo Savings Account

APY: 5% (up to $5,000, then 3%)

Minimum Deposit: None

Monthly Fee: None

The Varo Savings Account offers up to 5% APY – but you’re not guaranteed to get that rate. 

Here’s how it works:

• When you open your Varo Savings Account, you’ll earn 3% APY for the first month.
• You’ll earn 5% APY in the second month if you meet two requirements:
  • (1) You receive at least $1,000 in direct deposits, and 
  • (2) you maintain a positive balance.
• The 5% APY will apply only to balances up to $5,000. Anything beyond $5,000 will earn only 3% APY.

And to continue earning 5% APY on the first $5,000, you’ll have to meet those requirements every month. 

So ask yourself these two questions:

1. Will you receive $1,000 or more each month through direct deposit?
2. Are you satisfied with the 3% APY you’ll earn on anything above $5,000?

If the answer to those questions is “yes,” then the Varo Savings Account is for you!

2 – Western Alliance Bank

APY: 5.05%

Minimum Deposit: $1.00

Monthly Fee: None

If you’re looking for a 5% interest savings account without annoying restrictions, then Western Alliance Bank is the answer. The bank’s High-Yield Savings account will earn you 5.05% APY,  no matter how much you have in your account.

That means no hectic calculating and no moving money around to maximize your rate. Just put your money into the account and watch it earn 5.05% each year.

And the minimum deposit is a single dollar – so I think you can manage it! 

One thing to note: Western Alliance Bank operates through SaveBetter, an independent online platform. That means you’ll go to the SaveBetter website to open and manage your account. 

But don’t worry. There’s nothing sketchy going on here. Western Alliance Bank is FDIC-insured and just uses the outside service to optimize the digital side of its business.

3 – GreenState Credit Union Savings Account

APY: 5.01%

Minimum Deposit: $1.00

Monthly Fee: None

The GreenState Credit Union savings account is another 5% interest savings account with no fees. The minimum deposit is only $1, and you’ll earn 5.01% APY on balances of any size.

You’ve got to love that kind of simplicity. Goodbye, number-crunching, and goodbye headaches! 

GreenState Credit Union is one of the country’s largest financial cooperatives, and it’s been around since 1938.

Like Western Alliance Bank, GreenState Credit Union partners with the SaveBetter platform to enhance the online banking experience. That means you’ll open and manage your account through SaveBetter. 

And if you’re at all sketched out, don’t worry. Not only is GreenState Credit Union totally legit, but their accounts are also backed by insurance from the National Credit Union Administration (NCUA). That means you can put up to $250,000 in your account with practically no fear of losing it. 

4 – Mango Savings

APY: 6.00% (up to $2,500, then 0.10%)

Minimum Deposit: $25 

Monthly Fee: $5.00 (Reimbursed if you load $500+ onto your prepaid card in a calendar month)

The Mango Savings account offers a higher interest rate than most banks or credit unions, but there are some strict rules in place. 

First of all, you need to understand what Mango Savings is all about. 

The Mango Savings account is attached to the Mango Prepaid Mastercard. In order to get the savings account, you need to get a Mango Prepaid Mastercard first. 

Once your prepaid card is activated, you can open a Mango Savings account with an initial deposit of at least $25. 

And about that interest rate – will it automatically be set at 6.00% APY?

Sadly, no. To earn 6.00% APY, you must:

• Make at least $1,500 in qualifying “signature purchases”
• Have a balance of at least $25 at the end of the month
• Enroll in Direct Deposit

If you meet those requirements, you’ll earn 6.00% APY on the first $2,500 in your account. 

And if you don’t quite meet that signature purchase requirement? 

You could still earn 2.00% APY on your first $2,500 as long as you make at least $750 in signature purchases and end the month with at least a $25 average daily balance.

But remember, all these interest rates apply only to the first $2,500. Anything beyond that amount in your balance will earn 0.10% APY (practically nothing).

Whew! That’s a lot of fine print! So at the end of the day, is the Mango Savings account worth it? 

Maybe, if you:

1. Are you interested in a prepaid debit card anyway
2. Consistently spend $1,500 each month and would be willing to make those purchases with a prepaid debit card
3. Only plan to keep a few thousand dollars in your savings account

But if you don’t want a prepaid debit card or you plan to deposit significantly more than $2,500, you’re better off with a more flexible savings account – even if the highest-possible APY is a little lower.   

5 – Digital Federal Credit Union Primary Savings Account

APY: 6.17%

Minimum Deposit: $5.00

Monthly Fee: None

The Primary Savings Account from the Digital Federal Credit Union (DCU) has its limits, but at least those limits are straightforward.

Basically, there’s one major catch: You’re only guaranteed to earn 6.17% APY on the first $1,000 in your account. Any money beyond that could earn as little as 0.16% APY. 

The other thing to consider is that you need to keep a balance of at least $5.00 for your account to stay open.

DCU is a legitimate entity with over 20 branches in Massachusetts and New Hampshire, so you don’t have to worry about fraud or anything like that. And your money will be totally safe since the accounts are insured by the National Credit Union Administration (NCUA).

So if you plan to keep less than $1,000 in your savings account, the DCU Primary Savings Account is a solid high-yield option. 

But if you’re planning on depositing significantly more? Then you’d be better off with an account that offers a higher yield on larger balances. 

How to Choose a 5% Interest Savings Account

With so many options, how can you choose the 5% interest savings account that’s right for you? 

Here are some factors to consider:

• Annual percentage yield (APY). This is the big one. It’s the number that determines how much you’ll earn each year. The higher, the better!

• Requirements to earn the highest APY. Break out your magnifying glass because you’ll need to read the small print for this one. Some accounts lure you in with a high APY, then present hoops you’ll have to jump through to get the highest rate.

• Minimum deposit. Some financial institutions require you to deposit a certain amount to open an account. 

• Minimum balance. You might have to maintain a certain balance to keep your account from getting closed.

• Monthly fees. Some institutions charge a monthly fee, but you can often get it waived by keeping a certain amount of money in your account.

• FDIC or NCUA Insurance. Most balances up to $250,000 are insured by the government – but make sure you double-check. 

• Access to your funds. Some accounts give you an ATM card, allow for online payments, and generally make it easy to access your funds. Others make it a little harder, with the expectation that your savings will remain, well, savings!

Worst Savings Accounts to Avoid

In general, the savings accounts to avoid are the ones with especially low-interest rates.

Take, for example, the Wells Fargo Way2Save account. The APY is only 0.15%! Since you could get a 5% interest savings account somewhere else, there’s no need to settle for an account that earns so little. 

There are other savings accounts you might want to avoid depending on your personal circumstances. 

Let’s say you’re planning to deposit thousands and thousands of dollars. In that case, you don’t want to open an account where you’ll only earn the highest APY on the first $500.

Or imagine you only plan to keep a few hundred dollars in your account. You wouldn’t want an account that charges a monthly fee for low balances, right? 

That’s why it’s so important to consider how you’ll handle your savings beforehand, then look for an account that meets your expectations. 

Alternatives to a 5% Interest Savings Account 

A 5% interest savings account isn’t the only way to make money from your savings. It’s certainly a low-risk option, but there are other possibilities that could turn out to be more lucrative. 

Here are some other financial moves to consider:

• Money-market accounts. These accounts offer interest rates based on the current money markets, and they often earn more than standard savings accounts.

• Treasury bonds. When you buy treasury bonds, you’re essentially lending money to the government and earning interest in return. 

• High-yield CDs. With certificates of deposit (CDs), you agree to deposit your money for an agreed-upon amount of time. You lose access to your money until the deal is over, but you’ll often get rewarded with high returns.

• Index funds. With an index fund, you’re buying a bunch of stocks all at once. Being invested in the stock market is riskier than keeping your money in a 5% interest savings account, but the returns could be much higher.

• 401(k). If you’ve already got a 401(k), you could further grow your wealth by adding to it. This is a great way to make sure you’re saving for retirement. 

Commonly Asked Questions About 5% Interest Savings Account 

Where Can I Get 5% Interest on a Savings Account? 

There are a few financial institutions offering a 5% interest savings account, including:

• Varo Bank
• Western Alliance Bank
• GreenState Credit Union
• Mango Financial
• Digital Federal Credit Union

Where Can I Get 5% Interest on My Money?

You can get a 5% interest savings account from several financial institutions, including Varo Bank and GreenState Credit Union. You could also get a 5% rate from some money-market accounts and high-yield CDs.

Which Bank Gives 7% Interest on Savings Account? 

There is only one institution that offers 7% interest on an account. It’s Landmark Credit Union. But watch out. There are so many requirements that you might end up with minor returns – and a major headache. An alternative to consider would be Varo Bank.

And if you’re looking for a bank that helps you boost your balance fast, check out these banks with immediate sign-up bonus.

Best High-Interest Savings Account? 

The best high-interest savings account is Varo Bank’s Savings Account. The 5% APY is super solid, and there’s no minimum deposit required. 

5% APY Savings Account? 

There are a few 5% APY savings accounts to consider – which is great news for savers! Consider a high-yield account from: 

• Varo Bank
• Western Alliance Bank
• GreenState Credit Union
• Mango Financial
• Digital Federal Credit Union