One of the most popular posts I’ve written on this blog is a post I wrote some time ago about how I’m able to put away as much as $50,000 in FDIC-insured savings accounts that earn a guaranteed 5% interest. It’s by far my most commented-on blog post, garnering well over 500 comments over its lifetime. The reception to this post demonstrates that there are a lot of people out there looking for ways to get much more than the standard 0.5% to 1% that your typical high-yield savings accounts pay.
If you’re unfamiliar with how these 5% interest accounts work, it’s basically a little financial hack. One company in particular – Netspend – offers prepaid debit cards that come with FDIC-insured savings accounts that earn 5% interest. They take some work to set up, but once you go through the process, the accounts run themselves.
Over the last several years, I’ve stored almost all of my excess cash in these super high-yield savings accounts, allowing me to yield a good rate of return on my cash savings. Hundreds of other people have done the same – at least based on the comments and emails I get about these accounts.
Getting a good rate of return on your cash is advantageous. While most people are earning 0.5% or less on the money they keep in the bank, I’m able to earn a rate of return that far exceeds that – indeed, at the moment, I have an emergency fund of over $42,000 earning 3-6% interest in FDIC-insured savings accounts. Here are some of the many ways to get 5% interest savings accounts.
- Take Advantage of Netspend’s 5% Interest Savings Accounts
- Set Up A 6.17% Interest Account With Digital Federal Credit Union (DCU)
- Open a 5% Interest Savings Account With Service Credit Union
- Open An H-E-B Debit Card Account For 6% Interest On Up To $2,000
- Open A Current Account For 4% Interest On Up To $2,000
- Open A Workers Credit Union SaveUp Savings Account For 3.56% Interest On Up To $1,000
- Consider Looking At Other Super High-Yield Savings Accounts
- Buy Series I Savings Bonds (I Bonds)
- Use Your Cash For Bank Account Bonuses
- My 5% Interest Savings Account Strategy
Take Advantage of Netspend’s 5% Interest Savings Accounts
The natural move for most people is to take advantage of the 5% interest savings accounts that are still available with Netspend. I’ve written about Netspend extensively in this post (Netspend Account: 5% Interest Savings and $20 Signup Bonus), so be sure to check that out if you want an in-depth guide on how to set up your 5% interest savings accounts with Netspend. In that post, I walk you through everything you need to know about Netspend in painstaking detail.
As a plus, Netspend also offers a $20 signup bonus when you open your first Netspend account. It’s not a huge deal by any means, but it is a free $20 while also gaining access to a 5% interest account. That’s a win-win in my book.
The limitation with Netspend is that each Netspend savings account is limited to earning 5% on the first $1,000. You can open up five Netspend accounts per person, however, which means that each person can put away up to $5,000 earning 5% guaranteed interest. If you’re a two-person household, that means you’ll be able to put away $10,000 total. That’s a solid emergency fund that will earn you $500 of guaranteed interest every year and allow your emergency cash to keep up with or beat inflation.
Don’t be scared away by the $1,000 per account limit either. Once you’ve set up your first Netspend account and understand the process, it should only take you about 10 or 15 minutes to set up the remaining accounts. Instead of thinking of each account as an individual account, think of your Netspend accounts as one big pool of money. These accounts are just for your cash to sit anyway, so it’s not like you’re going to have to look at multiple accounts all the time. Plus, once you’ve automated the accounts, you’re not really doing anything with them anyway except collecting the interest. There’s really no other super high-yield savings account that is this easy to manage.
If you’re looking to get 5% interest, Netspend is your best bet, so be sure to check out my step-by-step guide on how to set up your Netspend accounts.
Set Up A 6.17% Interest Account With Digital Federal Credit Union (DCU)
After setting up your Netspend accounts, my next recommendation would be to set up a savings account with Digital Federal Credit Union (DCU). DCU is an online credit union with a savings account that gives you 6.17% interest on your first $1,000. If you have a two-person household, you can have $2,000 earning over 6% interest. My understanding is that you can also open custodial accounts for children in your household, which adds another $1,000 per child earning high rates of interest (I haven’t done this yet, but I need to try).
As for safety, DCU is a credit union that is federally insured by the NCUA (that’s the FDIC equivalent for credit unions). This means your money is safe and has no risk of loss (the same as money in a bank account). DCU is also a normal bank and doesn’t require any specialized setup. The savings account has no fees, so this is an easy account to park $1,000 per person and let it sit.
When you sign up for this account, make sure to save your Member ID number somewhere, as you’ll need that to set up online access. Otherwise, opening this account is fairly straightforward.
One thing to note is that you need to be a member of a participating organization to open an account with DCU. The cheapest organization you can join is Reach Out For Schools, which requires a one-time $10 donation. In the application, there will be a section where you can make your donation and become a participating member, which then makes you eligible to open a DCU account. Paying $10 to join this organization is well worth it. You’ll get your money back from the interest alone, plus you’re donating to a non-profit that raises money for schools.
DCU also offers a signup bonus of $20 if you open a free checking account. This is probably worth doing if you’re already going to open a savings account too. To earn the bonus, you have to open a free DCU checking account using a referral link, then either have a direct deposit or do five debit card transactions in the same month.
If you’re interested in the signup bonus, contact me and I can send you an email with the referral link for the $20 bonus. I also wrote a step-by-step guide that details exactly how to earn your $20 DCU referral bonus. (Note: DCU has temporarily paused their referral program. It’s unclear when it’ll return).
Open a 5% Interest Savings Account With Service Credit Union
Service Credit Union is another credit union that has a savings account that offers 5% interest. It only earns 5% interest on the first $500 in your account, so keep that in mind. Still, if you and a partner open an account, you’ll have another $1,000 safely earning 5% interest.
Interest in this savings account is paid monthly and there are no fees or account minimums to worry about. Also, because this is a credit union, all of your funds are insured by the National Credit Union Administration, so your funds are safe. My own experience with Service Credit Union has been very positive and this is an account I can recommend even as a primary checking account.
Here’s how to open your account:
- First, you need to join the American Consumer Council (ACC). Go to the ACC membership website to get your membership. Enter the code “consumer” in the membership code section for a free membership (if “consumer” doesn’t work, then try entering the code “service”). You’ll then get an email with your membership certificate.
- After getting your ACC membership, go to the Service Credit Union website, click the “Open Now” box, and then click “New Member Account.”
- Under “Select Your Eligibility,” click the box that says you are a member of the American Consumer Council. Then enter your ACC membership number found on the membership certificate that was emailed to you.
- Under required products, choose Primary Savings. You should also open the Holiday Club Account, which offers 3% interest on up to $3,000.
- On the final application page, you can upload documents before submitting your application. The documents you’ll want to upload are (1) your ACC membership certificate, (2) a picture of the front and back of your driver’s license, and (3) something to verify your address, such as a utility bill or home insurance policy. You don’t have to do all of this at this point in the application, but if you don’t, you will receive an email from someone at Service Credit Union asking you to send them this information before your account can be approved.
- Even if you upload all of the required documents, you may still get an email from the membership department asking you to send them these documents. Just keep an eye out for this email and send any documents as requested.
- Once approved, you’ll get a welcome email with your member number. To set up online access, go back to the main Service Credit Union website and sign up for online banking. To sign up, you’ll need your member number and your “Call 24” pin. Your PIN is the last four digits of your SSN. Once you enter this info, you’ll be able to set up your username and password to access online banking.
If you open the 5% interest savings account plus the 3% interest Holiday Club Account, you’ll have $500 earning 5% interest, plus an additional $3,000 earning 3% interest. Obviously, if you have a spouse or partner, you can open accounts for them as well, adding an additional $500 and $3,000 of high-yield savings. I have both of these accounts maxed out for me and my wife.
Open An H-E-B Debit Card Account For 6% Interest On Up To $2,000
The H-E-B Debit account offers 6% interest on your first $2,000. What’s important is that the H-E-B Debit account is considered a separate product from the H-E-B Prepaid account that you can get through Netspend. That means you can open all five Netspend accounts and the H-E-B Debit account too.
The H-E-B Debit account is a bit weird. The first time I opened it, they closed it immediately. I assumed it was because I already had five Netspend accounts, so I couldn’t open the H-E-B Debit account.
I resigned myself to the fact that I couldn’t get the H-E-B Debit account, but a few months later, I got an email from H-E-B telling me that my account had been closed in error and was now reopened. I have no idea why that happened, but I’m not complaining. Getting access to this account means I get another $2,000 of mega high-yield savings for me and another $2,000 for my wife. That’s $4,000 earning 6% interest!
The H-E-B Debit account works the same way as the Netspend accounts, so definitely check out my Netspend guide to get a better understanding of how to use this account. The short of it is you open the H-E-B Debit account, get your card in the mail and activate it, then transfer $2,000 onto the debit card. You should then be able to open the savings account and move the money into it.
I’ve also written an in-depth post specifically about the H-E-B Debit Account that’s worth checking out: The H-E-B Debit Card 6% Interest Savings Account.
Open A Current Account For 4% Interest On Up To $6,000
Current is a fintech banking app similar to Chime, Lili, Novo, and other fintech banks or neobanks. These banking apps are primarily mobile-first – in some cases, they only have an app. What makes Current interesting is that they recently opened a savings account feature that offers 4% interest on up to $6,000. This was previously limited to only select customers, but now that it’s open to everyone, I recommend opening a Current account to take advantage of the 4% interest.
Current charges no fees and has no minimum balance requirement, so that makes Current an easy bank account to open and fund with $6,000. To be able to put away that $6,000 earning 4% interest, you have to sign up for the premium plan. The good thing is that while it used to charge a monthly fee, the premium plan is now free.
Current calls their savings account a “savings pod.” If you’re on the free plan, you’re limited to one savings pod earning 4% interest on up to $2,000. If you sign up for the premium plan, however, you can open two more savings pods. Since the premium plan is free now, it makes sense to sign up for it, then open three savings pods and put $2,000 in each one.
Current is an easy account to open and unlike many of these other accounts, should only take you a few minutes to get your account open and active.
For a detailed guide to Current and how it works, check out my post: Current Bank App – 4% Interest Savings Account On Up To $6,000.
If you want to learn how to earn a referral bonus from Current, check out this post: Current Bank $50 Referral Bonus – Step by Step Guide.
Open A Workers Credit Union SaveUp Savings Account For 3.56% Interest On Up To $1,000
Workers Credit Union is a federal credit union based in Massachusetts, but that is available nationwide. Their SaveUp Savings Account offers 3.56% interest on up to $1,000.
Opening the account isn’t difficult. I applied for the account online, then received a phone call the next day to verify some information. I then had to send them some verifying documents via email. It’s a bit weird having to do that since it seems like they could have gotten that information during the application process, but I’m fine with it.
Workers Credit Union does have a fee schedule that is a bit weird, but so long as you do it right, the fees should never apply to you. The first fee to worry about is an inactivity fee, which is charged if you have no debits or credits within 365 days. This shouldn’t be a problem for most people since you’re probably going to be withdrawing the interest you earn in this savings account. So long as you withdraw your interest at least once per year, you shouldn’t have any issues.
The second, more annoying fees are related to ACH transfers. If you initiate an ACH transfer from the Workers Credit Union website, you’ll get charged an ACH transaction fee. To avoid this fee, make sure to initiate all of your ACH pushes and withdrawals from an external bank account. For example, I have my Ally bank account linked to Workers Credit Union and I do all my ACH transfers from the Ally website. By doing this, I’m able to deposit and withdraw money from Workers Credit Union without incurring any fees.
Consider Looking At Other Super High-Yield Savings Accounts
Besides Netspend, DCU, and Service Credit Union, there are a few other options for super high-yield savings accounts. I personally haven’t used these accounts, so I can’t speak to how well they work, but here’s a list of some that you could consider in no particular order (but again, I have not personally used these options, so I can’t speak to how good they are):
- Blue Federal Credit Union (5% Interest on up to $1,000). As I understand it, this account is a soft pull, but they are Chex System sensitive, which means that if you open a lot of bank accounts as I do, you might not qualify for an account. Many readers have also reported that this account is too much hassle to maintain, so take that for what you will.
- T-Mobile Money T-Mobile Money still has a 4% interest savings account, but it requires you to have 10 debit card transactions each month. This makes it similar to a high-yield checking account. It can still be worthwhile, but it requires more work now to meet the requirement, which makes it less useful.
- Porte (3% Interest on up to $15,000). Porte is another fintech bank that offers a 3% interest savings account on your first $15,000. Unfortunately, Porte recently changed their terms to require users to receive $3,000 in direct deposits and complete 15 debit card transactions each month. So, while it’s still possible to earn 3% interest, for most, people, Porte is basically worthless now. With that being said, here’s a quick guide I wrote if you’re interested in setting up a Porte account.
- HMBradley (3% Interest on up to $100,000). HMBradley is an account that can let you store a lot of cash earning 3% interest. This used to be a go-to account of mine, but in 2022, they updated their terms to require that you get the HMBradley credit card, spend $100 per month on the credit card, and have a real direct deposit of $1,500 per month. Some people may still find this useful, especially since HMBradley pays 3% interest on such a high amount. For me. I don’t find it worthwhile anymore, so I’ve pulled my money out of HMBradley and am shifting some of that money into I Bonds (which are discussed in the next section).
There are also a decent number of banks out there that will give you 3% or more interest if you meet certain requirements. Typically, the requirements will be things like using your debit card 10 or more times per month or having a certain number of transactions in your account each month. I’m not a huge fan of these types of accounts because they require too much maintenance for my taste, but they are an option if you’re a little more motivated than I am. I have not included those banks here.
For the most part, this section doesn’t apply to me but check your situation to see if any other bank options make sense for you.
Buy Series I Savings Bonds (I Bonds)
I Bonds are an interesting option for folks looking for a safe place for cash that offers higher returns than a traditional bank account. An I Bond is formally called a Series I Savings Bond and is issued directly by the US Treasury Department. When you buy an I Bond, you’re loaning money to the US Government, with the promise that you’ll get your money back plus interest. While I Bonds technically carry some risk, in practical terms, they’re guaranteed because the bonds are backed by the full faith and credit of the US Government.
The I Bond rate is tied to inflation and is adjusted every 6 months. When you purchase an I Bond, you’re locked into that rate for 6 months and your rate gets adjusted every 6 months. You can think of I Bonds as similar to a variable rate CD.
There are some important limitations with I Bonds that you should know. You must hold your I Bonds for at least one year, which means if you buy I Bonds, you cannot withdraw that money for one year. If you withdraw the I Bond before 5 years, you forfeit your last three months of interest. In most cases, forfeiting three months of interest is still better than keeping your money in a regular savings account, so this limitation isn’t too big of a deal. Finally, you’re limited to buying $10,000 of I Bonds per year. This is on an individual basis, which means a two-person household can buy a minimum of $20,000 of I Bonds each year.
With HMBradley nerfing their account, I’ve gone ahead and shifted the money I had in HMBradley towards I Bonds. For more information on I Bonds and how I’m incorporating them into my savings strategy, check out this post: Buying I Bonds As Part Of My Emergency Fund Strategy.
Use Your Cash For Bank Account Bonuses
One of the most underrated things you can do to get a better return on your cash is to use your excess cash to qualify for bank account bonuses. As a brief introduction, there are a ton of banks out there that will offer you signup bonuses if you open a bank account with them and meet certain requirements. These requirements typically include some sort of direct deposit requirement, a minimum balance requirement, and/or a debit card transaction requirement. It is work to do all of this stuff – but it’s a great way to use your idle cash in a way that gets you way more than you can get from just keeping your money in a normal savings account.
As an example of the kind of return you can make from bank account bonuses, in 2018, my wife and I made $4,100 from bank account bonuses. In 2019, we made over $7,000 from bank account bonuses. And in 2020, we made over $10,000 from bank account bonuses. As a point of comparison, you’d need to put away $200,000 to $600,000 in normal high-yield savings accounts to earn a similar amount of interest.
It definitely takes some work to get bank account bonuses, but if you’re the type of person that likes figuring things out, this is a good way to earn more money on your idle cash. I wrote a huge 7,000 + word guide on how bank account bonuses work.
Make sure to check it out here if you want to understand how you can incorporate bank account bonuses into your financial system: The Ultimate Guide to Bank Account Bonuses. A few of the easier bank bonuses to start with include:
- Chime Bank Referral Bonus: Step By Step Guide
- SoFi Money Referral Bonus: Step By Step Guide
- Webull Referral Bonus: Step-By-Step Guide
- M1 Finance Referral Bonus – Step-By-Step Guide
- Lili Referral Bonus – Step By Step Guide
- Nearside Business Checking Referral Bonus – Step By Step Guide
My 5% Interest Savings Account Strategy
I’ve pretty much explained my new strategy to get the maximum return on my cash but thought I’d recap it below for convenience’s sake. Basically, I’ll be doing a multi-prong strategy when it comes to my idle cash where I use these super-high-yield savings accounts and keep money on the side for bank bonuses. Here’s what I’m doing:
- Utilize Netspend for the 5% Interest Accounts. I’ll continue to keep $10,000 in my Netspend accounts ($5,000 in my five Netspend accounts and $5,000 in my wife’s five Netspend accounts). I’ve already been utilizing Netspend for over four years, and with Insight gone, I think Netspend becomes even more important to use since there’s pretty much no other way to earn 5% interest without jumping through a ton of hoops. If you’re willing to put in the upfront time to set up your Netspend accounts, they will pay dividends for you (and seriously, it’s not as hard as it looks to set up). As mentioned above, be sure to read my guide to Netspend if you want to earn 5% interest in an FDIC insured savings account (and collect a free $20 signup bonus too).
- Use DCU for the 6.17% Interest Accounts. These accounts require no work to set up or maintain – they’re just regular bank accounts with no fees. I keep $1,000 in my 6% DCU savings account and another $1,000 in my wife’s 6% DCU savings account.
- Use Service Credit Union for the 5% Interest Accounts. Like DCU, Service Credit Union is an easy way to get more 5% interest savings on up to $500 per person. I keep $500 in my account and $500 in my wife’s account. I also used my referral code to open my account and used my referral code for my wife’s account, which got us some easy bank signup bonuses.
- Use the H-E-B Debit account for 6% Interest. H-E-B Debit is a separate product from the H-E-B Prepaid account from Netspend. This one lets you get 6% interest on up to $2,000. I have a weird history with this account. When I first opened it, they closed it immediately but then reopened my account months later for no apparent reason. I’m not complaining though – I now have $2,000 for me and my wife in these accounts earning 6% interest.
- Use Current for 4% Interest. Current is an easy fintech banking app to open. After opening the account, I activated my savings pod, then put $2,000 into it. I’ll do the same for my wife also, so that’ll give us $4,000 earning 4% interest. Be sure to check Swagbucks to see if they have a good signup bonus with Current.
- Use the Workers Credit Union SaveUp Savings Account For 3.56% Interest. Workers Credit Union seems like a solid savings account, paying 3.56% interest on up to $1,000. I’ve opened an account for myself and plan to do so for my wife too.
- Use the Service Credit Union Holiday Club Account For More 3% Interest Space. The Holiday Club Account from Service Credit Union lets you get 3% interest on up to $3,000. This is a hassle-free savings account, so it’s worth putting $3,000 in here and letting it sit.
- Buy $10,000 of I Bonds Per Year. Given the current I Bond rates, I’m planning to purchase $10,000 of I Bonds each year, with the idea of creating an I Bond ladder. I’ll try to do the same for my wife too, giving us $20,000 per year of I Bonds.
- Take Advantage of Bank Bonuses. I’ll likely try to keep $20,000 or so in normal high-yield savings accounts, which I can then deploy for various bank account bonuses. Over the past three years, I’ve consistently been able to earn at least $1,000 from bank account bonuses. I’ll keep the money in a normal high-yield savings account when it’s not being used for bank account bonuses, and look to use the money whenever I find a good bonus somewhere. If you’re looking for a list of current bank account bonuses, Doctor of Credit keeps the definitive list here. And make sure to read my Ultimate Guide to Bank Account Bonuses if you’re new to the world of bank account bonuses.
The super high-yield savings account landscape isn’t as good as it was now that Insight is gone. However, there are still ways to get a good return on a significant amount of cash.
I currently have $10,000 in Netspend accounts between me and my wife. We then have $2,000 in DCU, $4,000 in H-E-B Debit, and $1,000 in Service Credit Union. That gives us $17,000 earning 5% or more interest.
After that, we have $6,000 total in Service Credit Union’s Holiday Club Account earning 3% interest. We also will have $2,000 in the Workers Credit Union SaveUp Savings, which gives us $8,000 earning 3% or more interest. I’m in the process of opening my Current accounts too, giving us an additional $2,000 each earning 4% interest. In total, that gives us a $29,000 emergency fund earning 3-6% interest.
To replace HMBradley, we’re planning to start putting $10,000 to $20,000 per year into I Bonds. These come with some restrictions, but they seem to be a good spot to store cash that I don’t need for at least a year.
The rest of the cash we have gets used for bank account bonuses, which is enough to earn us several thousand dollars per year in bank bonuses. When combined, we’re earning thousands of dollars per year on our emergency cash. That is not bad at all.