Top 5 Best High-Yield Savings Accounts with Buckets

Are you looking for High-Yield Savings Accounts with Buckets? If Yes, You are at the right place.

Bucketing is an excellent way to save money. You can achieve your savings goals quickly and easily with bucket accounts with saving buckets, whether you are saving for a house or college.

Survey results from SecureSave indicate that 63% of American workers could not cover a $500 expense from their savings account if they had to find the money in their budget to save. Living costs have been continuously rising, but wages have not kept up.

Many people have difficulty setting money aside — but using savings tools could make it easier. When choosing a bank, you can give yourself a head start on saving, for example, by using savings buckets.

Based on our research of hundreds of banks, credit unions, and accounts, this guide brings you the best high-yield savings accounts with buckets. These accounts offer high interest rates, and you can save for a specific goal while earning interest.

What is a High-Yield Saving Account?

As its name suggests, a high-yield savings account earns significant interest at a higher rate than a traditional savings account. Traditional savings accounts usually have lower interest rates than high-yield savings accounts, and the APYs of high-yield savings accounts can be ten times higher. 

A high-yield account offers a higher rate of return than a conventional savings account, which is one of the main reasons many choose it. High-yield savings accounts are a good choice for bolstering your financial goals if you want to “park” your extra cash in an area that can grow safely and remain readily accessible.

What Makes the Best High-Yield Savings Accounts?

There are various high-yield savings accounts, but most offer higher interest rates than a typical one. Therefore, your money will grow faster, allowing you to reach your financial goals faster. 

The question is, how do you choose the best high-yield account? Here are some other features to consider:

1. Competitive APY: Savings accounts with high yields are attractive because of the rate at which money is earned annually. A higher APY means faster growth for your money.
2. Accessibility: It would help if you chose a bank that offers convenient ways to access your cash, such as in-network ATMs and quick fund transfers.
3. Low Fees: There is nothing that kills your earnings faster than fees. There are no hidden fees or monthly maintenance fees on the best accounts.
4. Dependable Customer Service: You should be able to contact an agent at times convenient for you. Ensure excellent customer service via chat, email, and phone.
5. Low or No Minimum Balance: Several accounts on our list don’t require a minimum balance, but make sure to check them carefully before signing up.
6. Transparency: If you have to examine a bank’s terms and conditions in depth to determine what you’re getting, it might be a good idea to look elsewhere or ask many questions.
7. Stellar Reputation: Choosing a bank with a reputable brand name is a good idea. The best way to protect your savings is to put them with a company that has been around for a long time and has earned the people’s trust.
8. Long Track Record: If the account’s APY has a robust and above-average history, you can expect it to remain attractive.  If you’re switching bank accounts, you should ensure you’re not getting fooled by teaser rates and that your account’s rate of return will not dip.

Why You Should Get a High-Yield Savings Account

There are a variety of customers who can benefit from high-yield savings accounts, but those with a specific goal may benefit most:

• Invest Your Money in a Way that Maximizes Return: There is a high degree of uncertainty in the short-term returns of long-term investments (such as stocks). Generally speaking, savings accounts offer less total return than checking accounts but carry substantially lower risk (if insured by FDIC or NCUA).  Savings accounts protect against principal loss if you need access to the funds quickly.  
• Create an Emergency Fund to Prepare for the Unexpected: If your car breaks down or you have a medical emergency, you can easily access your fund and earn competitive returns on your savings account.
• Avoid Forfeiting Interest or Fees on Certificates of Deposit: Savings accounts with high yields can help you achieve goals such as buying a new home or getting married. These accounts offer higher APYs than traditional savings accounts. Unlike typical CDs, you can withdraw money whenever you wish, which may impose stiff penalties for early withdrawals.

What is a savings bucket?

A savings bucket is a separate account within a checking or savings account. Your bank may offer savings buckets so that you can save for different goals within one account instead of juggling multiple ones.

Your money will grow even faster if you choose a high-yield savings account, which offers a higher interest rate than the average savings account.

The following are some reasons to save:

• Expenses for emergencies
• Repairs and maintenance for cars
• Bills for medical care
• The upcoming vacation of a year
• The purchase of a home within three years

Saving buckets allow you to establish a separate bucket (or vault, pocket, or jar) for each goal, decide how much you want to save, set a savings deadline, and distribute your savings across these goals. Your bank’s mobile app or website lets you add more money over time and keep track of your progress.

How does a high-yield savings account work?

A high-yield savings account will grow your savings through the magic of compound interest. Therefore, the principal balance in your account and any interest you’ve earned will earn interest. A deposit of $100 in your account earned ten percent interest over the past few months, so your entire deposit of $100 will earn interest.

Benefits of Using a Savings Account with Buckets

You can boost your savings using buckets when saving for specific goals. The following are some of the most significant benefits of prioritizing your savings account:

• Focus: Your financial goals can be clearly defined and prioritized with savings buckets, from saving for a down payment to investing for retirement. Your progress can be seen in real-time when you have a visual representation of your goals.
• Better Budgeting: You will be more likely to budget effectively if you divide your savings into distinct buckets. A savings plan that allows you to allocate specific amounts to each bucket based on your priorities makes it easier to stick to your budget and avoid overspending.
• Flexibility: There is no limit on the number of buckets you can create, but some banks limit the number. Savings buckets are highly customizable, so you can create as many or as few as you need to align with your financial goals.
• Automated Savings: Savings buckets can be automatically transferred from checking to savings accounts by arranging automatic transfers through banks and financial institutions.
• Reduced Temptation: Since each bucket is isolated, using savings buckets prevents you from tapping into funds you’ve set aside for specific goals.
• Easy Tracking: Visual representations of savings buckets clearly indicate how far you have come towards each goal. With the tool, you can quickly see how much you’ve saved and how much more you need to save to reach your target. This can be a powerful incentive to keep saving.

What Savings Goals Should I Create Buckets for?

There is no one-size-fits-all approach to financial situations. Your final goal should be to create savings buckets for your prioritized goals.

Following are some commonly used savings buckets that you may want to consider adding to your savings account:

• Emergency Fund: Personal finance goals such as emergency funds should be a priority for everyone. This is a safety net that should cover at least 3-6 months’ expenses in the event of the unexpected.
• Retirement Savings: The goal of retirement savings is to ensure your financial security in retirement. Consider an individual retirement account rather than only relying on your savings account.
• Down Payment: Most people begin saving for a down payment on a house by creating a bucket.
• Education Expenses: The goal of saving for education expenses such as college tuition, room and board, or student loan repayments is common among parents and students.
• Travel: It is important to save money for vacations, trips, or bucket-list adventures to spend that money on these experiences without impacting your other financial obligations.
• New Car: Another common goal is setting up a new or used vehicle savings bucket.
• Home Improvements: Homeowners often use The savings buckets to save for major home renovations, repairs, or upgrades.
• Special Events: Your savings bucket helps prepare for a wedding, a milestone birthday celebration, or other important events.

High-Yield Savings Accounts with Buckets

Here are the Top 5 High-Yield Savings Accounts with Buckets…

SoFi Checking and Savings

The SoFi checking and savings accounts offer the best of both worlds, offering a hybrid checking and savings account. This account offers a competitive annual percentage yield on your savings balance, and you can round up your debit card purchases to save even more.

SoFi calls its buckets “vaults.” Once you’ve created one for a specific savings goal, money will be automatically transferred to that vault from roundups on debit card purchases. Setting and forgetting your savings goals is a great way to accomplish both.

Pros:

• The APY is a competitive
• There are no monthly fees.
• Offers regular bonuses to banks

Cons:

• There are no branches
• The fee for depositing cash

Milli Savings Account

Milli is a legitimate online savings account provider with a less recognizable name than some banks on this list. The Milli Savings Account has no fees or minimum balance requirements.

Milli allows you to create up to five savings jars instead of buckets. You need to choose a name for the jar, set a goal amount, and choose an end date. You will receive a notification when you have reached your savings goal and recommendations on how much you need to save.

Pros:

• APY is high
• There are no monthly fees or minimums
• Notifies users of their savings goals

Cons:

• There are no branches
• There are no deposits in cash

Ally Savings Account

A high-yield savings account is one of Ally Bank’s best products and one of the most popular online banks. It’s also known for its buckets and boosters, like recurring transfers and roundups, that make saving easy. Additionally, it pays a competitive yield with no fees or account minimums.

The Ally savings app offers various popular savings categories, like vacation or emergency funds, that you can customize. You can also customize the buckets from scratch. Ally then breaks down your savings into categories so you can see how they are distributed.

Pros:

• The APY is a competitive
• Buckets for customized savings
• Boost your savings

Cons:

• There are no branches
• There are no deposits in cash

Wealthfront Cash Account

The Wealthfront cash account can help you meet your savings goals and is another investing platform with a competitive cash account. You can get up to $8 million of FDIC insurance through Wealthfront’s partner banks, which offer industry-leading savings rates.

The hybrid checking account makes it easy to divide up savings into buckets for short—and medium-term goals and allocate funds to your investment account for long-term goals.

Pros:

• Transfers are unlimited
• The ability to send and deposit checks
• APY is great

Cons:

• There are no branches
• There are no physical checks

Capital One 360 Performance Savings

The 360 Performance Savings Account from Capital One offers a consistently competitive APY and no account minimums or fees. The Capital One app also lets you view your progress and save more toward your specific goals.

The company notes that even though they are not called buckets, you can create multiple Performance Savings accounts to help you meet your individual financial goals. You can also set up a savings plan that will automatically transfer funds.

Pros:

• The app has a high rating
• Deposits via mobile phones
• Interest in competitive issues

Cons:

• A limited number of branches
• Customer reviews are mixed.

Choosing the Right High-Interest Savings Account

Many financial institutions offer high-interest savings accounts. It’s essential to compare different options when looking for an option with terms that best meet your personal finance needs. Here are some things to keep in mind:

• Fees
• Minimum balance requirements
• Overall APY
• Withdrawal limits
• Customer reviews
• The ease of use (e.g., the steps required to deposit, transfer, and withdraw funds)
• Deposits and credit unions are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).

When comparing institutions and their HYSA options, read all the fine print. Ensure the promoted interest rate is not promotional or only applicable to balances up to a certain amount.

Best uses for a high-yield savings account

The right kind of high-yield savings account can be a powerful tool for saving money for various goals. High-yield savings accounts are commonly used for:

• Emergency Savings: An emergency savings account is an excellent tool for when you need cash. A high-yield savings account has the advantage of being liquid so that you can access your funds quickly.
• Significant Purchase Savings: Imagine you are saving for a down payment on a new vehicle you plan to purchase within a few months, or you want to buy a new appliance for your home. When it comes time to make your purchase, a high-yield savings account can help you earn interest on your savings.
• A Short-Term Financial Goal: High-yield savings accounts provide a great place to stash cash for specific goals, such as family vacations and home renovations.

Alternatives to a High-Interest Savings Account

A high-interest savings account can be a good investment, but other financial products should be considered. 

CDs

The APY for a certificate of deposit (CD) is typically better than that of a high-interest savings account, but CDs differ in several ways. An interest-bearing CD is an investment that requires you to commit to a specific term length (up to 10 years). 

CD rates are fixed and do not change before the end of the term. Savings accounts with high interest rates have variable rates, which means the bank can raise or lower them at any time. 

If you don’t have a CD with no penalties, early withdrawals are penalized, which means you’re less flexible.

Money Market Accounts

The money market account is a deposit account with a bank or credit union, like a high-interest savings account. Generally, they provide higher interest rates than checking or traditional savings accounts but also have perks that cannot be found with high-interest savings accounts.

A money market account might not have a greater APY than a savings account with a high interest rate. However, with fewer withdrawal restrictions, check-writing capabilities, and a debit card, these may be a better option for those who prefer that over a bank account.

How to Open a High-Interest Savings Account

You can open a high-yield savings account by following these steps:

1. You can compare HYSA options at several institutions to find the right one.
2. Prepare all the required documentation: your photo identification document (e.g., driver’s license or passport), your address (and your previous addresses if you just moved into your current address), your social security number, your phone number, and your email address.
3. Choose the method of funding the account. There is the possibility of depositing cash if you work with a brick-and-mortar bank. A routing and account number are required to open an online savings account because you’ll probably need to move money from another bank account.
4. The application must be completed (online or in person). Depending on your location, the activation process can take a few minutes to a few days, 
5. Use the method you chose earlier to make your initial deposit.
6. Ensure that the account is set up with any final preferences or features. The money can be transferred monthly from your checking account to your new HYSA, for instance, by setting up a recurring transfer. You may also be able to select if you want paper or digital statements. 

FAQs

How much interest can I earn on $10,000 in a high-yield savings account for a year?

A high-yield savings account’s APY and interest compounding frequency determine how much interest you can earn on $10,000. For example, an annual APY of 5.25% and compounded interest of $525 means earning about $525.

Are high-yield savings accounts taxable?

High-yield saving accounts come with tax implications, so you should know them. Taxable interest is the interest earned on the money in your account, as determined by the IRS. When you earn interest over $10, your financial institution typically sends you a 1099-INT statement, which lets you know how much you owe based on how much interest has been earned.

What features should I consider when choosing a high-yield savings account?

When opening a bank account, it is essential to consider the characteristics of each type. If you are considering opening an HYSA, consider the APY, the minimum deposit or balance requirement, the fees, and the withdrawal limits.

What is the best high-yield savings rate right now?

These best high-yield savings accounts offer more than 5% APY. Online banks and credit unions provide most.

Are there risks associated with high-yield savings accounts?

High-yield savings accounts don’t pose risks, especially when opened at an FDIC- or NCUA-insured bank. Almost all traditional and online banks are covered by FDIC insurance. Credit unions are covered by NCUA insurance. Regardless of the type of insurance you choose, your deposits will be protected up to $250,000.