Savings
Best High-Yield Savings Account Rates in 2026: Earn Up to 5.00% APY
Top HYSA rates reach 5.00% APY in May 2026—over 10x the 0.38% national average. Here are the best accounts, what conditions apply, and how much you earn.
Disclaimer: Tax figures reflect estimated 2026 projections based on IRS Publication 15-T. Tax law changes frequently. Verify with a CPA or the IRS Tax Withholding Estimator. Calcwyse.com is not a tax advisor.
The best high-yield savings accounts pay up to 5.00% APY right now. The FDIC national average is 0.38%. On a $25,000 balance, that gap is worth $1,060 a year — no risk, no lock-up, just a different bank. For more on this topic, see our guide: Best High-Yield Savings Accounts of 2026: Earn Up to 5.00% APY Today.
Most people with cash at Chase or Wells Fargo don’t realize they’re leaving four figures on the table annually. Every account below is FDIC-insured and fully liquid.
Where Does Your Savings Interest Actually Go?
The headline rate isn’t what you keep. HYSA interest is ordinary income. At the 22% federal bracket, every $1,000 in interest costs you $220 in federal tax. Your state takes another cut on top.
Here’s the full picture on a $25,000 balance at Marcus (4.25% APY, no conditions):
📊 $25,000 HYSA at 4.25% APY — Estimated 2026 Interest Snapshot
Annual Monthly Bi-weekly Gross interest $1,062 $89 $41 Federal tax (22% bracket) –$234 –$20 –$9 FICA (not applicable) $0 $0 $0 State income tax (varies) –$0 to –$99 –$0 to –$8 –$0 to –$4 Net interest kept $763–$828 $64–$69 $29–$32 Estimated · 2026 IRS brackets · Single filer · Standard deduction · IRS Pub 15-T
Quick math: $25,000 at 4.25% → $1,062/year gross — $89/month or $41 bi-weekly before tax. Estimated · 2026 IRS brackets · single filer · standard deduction.
FICA doesn’t apply to passive interest income. No Social Security or Medicare withholding. Your after-tax return still beats a big-bank savings account by $820+ per year.
Best HYSA Rates Right Now — May 2026
📊 Top High-Yield Savings Account Rates — May 29, 2026
Bank APY Min. Balance Conditions FDIC Varo Bank 5.00% $0 $1,000+/mo direct deposit; rate applies to first $5,000 only ✅ SoFi 4.50% $0 Direct deposit required (any amount) ✅ Marcus by Goldman Sachs 4.25% $0 None ✅ American Express HYSA 4.25% $0 None ✅ Discover Online Savings 4.25% $0 None ✅ Axos Bank 4.21% $0 None ✅ Ally Bank 4.20% $0 None ✅ Vio Bank 4.03% $100 None ✅ Rates variable. Sources: NerdWallet, Fortune/Curinos — May 2026. Verify directly before opening.
The Fed held its benchmark rate at 3.50%–3.75% at its April 29, 2026 meeting. Third pause of the year. Rates have drifted down from the 5%+ highs of 2023–2024, but the environment still favors savers meaningfully over the historical norm.
How Much You Actually Earn: $10k, $25k, $50k
🏙️ Annual Interest by Balance — Top HYSA Rates · May 2026
Bank APY $10,000 $25,000 $50,000 Source Big bank (e.g., Chase) 0.01% $1 $2 $5 FDIC avg, May 2026 Vio Bank 4.03% $403 $1,008 $2,015 Vio Bank, May 2026 Ally 4.20% $420 $1,050 $2,100 Ally Bank, May 2026 Marcus / Amex / Discover 4.25% $425 $1,062 $2,125 Bank sites, May 2026 Axos 4.21% $421 $1,052 $2,105 Axos Bank, May 2026 SoFi (with direct deposit) 4.50% $450 $1,125 $2,250 SoFi, May 2026 Simple annual interest. Actual earnings slightly higher with daily compounding. Interest is taxable ordinary income.
Switching from Chase to Marcus on $25,000 earns an extra $1,060 per year. Zero risk added.
What You Keep After State Tax: 6 States Compared
Your state taxes HYSA interest as ordinary income. The gap between a no-tax state and California on $25,000 at 4.25% APY is $98 per year. Real money. Not the deciding factor, but worth knowing.
Estimated after-tax interest on $25,000 at 4.25% APY — 6 states (2026):
- 🟢 Texas — $828 after tax (no state income tax)
- 🟢 Florida — $828 after tax (no state income tax)
- 🟢 Washington — $828 after tax (no state income tax)
- 🟡 Colorado — $782 after tax (4.4% flat rate)
- 🟡 Virginia — $768 after tax (top bracket 5.75%)
- 🔴 California — $730 after tax (bracket ~9.3%)
Assumes 22% federal bracket, standard deduction, single filer. Source: IRS Publication 15-T + state revenue departments.
California savers aren’t wrong to use HYSAs. The $730 net still dwarfs the $2 you’d earn at Chase. The $98 gap versus Texas is just extra incentive to max an HSA first.
Quick Answers About High-Yield Savings Accounts in 2026
What’s the highest HYSA rate available right now? 5.00% APY at Varo Bank — only on balances up to $5,000 with a $1,000/month direct deposit requirement. The best no-condition rate is 4.25% at Marcus, Amex, and Discover.
Are HYSA rates going up or down? The Fed paused at its April 29, 2026 meeting, holding at 3.50%–3.75%. Rates have been stable for several months. A cut later in 2026 would pull HYSA rates down within days.
Is my money safe in a high-yield savings account? Yes. Every account on this list is FDIC-insured up to $250,000 per depositor, per institution. Above $250,000, split balances across two or more banks.
Does HYSA interest get taxed? Yes. Banks send a 1099-INT after year-end. At the 22% bracket, $1,062 in Marcus interest costs about $234 in federal tax. Net gain: $828 versus $2 at a big bank. Per Bureau of Labor Statistics consumer expenditure data, the average household holds $5,000–$10,000 in liquid savings. Rate shopping on that balance is worth the 10 minutes.
What’s the actual catch with Varo’s 5.00%? The $5,000 balance cap. On a $30,000 balance, Varo’s 5.00% works on $5,000 only. The remaining $25,000 earns a lower rate. Marcus at 4.25% on the full $30,000 earns $1,275 gross — more than Varo’s blended ~$1,150. Bigger balances favor the no-condition accounts.
Three Moves That Add Real Dollars to Your Returns
1. Meet the SoFi direct deposit requirement. SoFi pays 4.50% vs. 4.25% at Marcus. On $25,000, that’s a $63 annual difference. Route even a small paycheck portion to SoFi as direct deposit. Net cost: zero.
2. Max your HSA before adding cash to a taxable HYSA. HSA contributions ($4,300 individual / $8,550 family for 2026, per IRS Rev. Proc. 2025-19) are triple-tax-advantaged. Every dollar there beats a dollar in a taxable HYSA. Fill it first, then direct overflow to your savings account.
3. Ladder longer-term cash into a CD. Keep 3–6 months of expenses liquid in an HYSA. For savings beyond that, top 12-month CD rates were around 4.18% APY as of early 2026 — check live rates before committing. If the Fed cuts later this year, your CD holds. Your HYSA won’t.
💡 Estimated Annual After-Tax Returns — $25,000 Balance, 22% Federal Bracket
Scenario Gross interest After federal tax vs. Big bank Big bank (0.01%) $2 $2 — Ally — no conditions (4.20%) $1,050 $819 +$817 Marcus / Amex / Discover (4.25%) $1,062 $829 +$827 SoFi — with direct deposit (4.50%) $1,125 $878 +$876 Varo $5k (5.00%) + SoFi $20k (4.50%) $1,150 $897 +$895 Estimated · IRS Notice 2024-80 · IRS Rev. Proc. 2025-19
FAQ
Is a 4.25% HYSA worth opening a new account for? Yes — if you have any meaningful cash sitting idle. On $15,000 at Chase (0.01%), switching to Marcus at 4.25% adds $637 per year — $3,185 over five years. Opening the account takes about 10 minutes online.
Do I have to pay taxes on HYSA interest? Yes. The bank sends a 1099-INT after year-end. Interest is taxed as ordinary income at your marginal rate. In a standard taxable account, there’s no workaround. An HSA (for healthcare spending) is the first tax-sheltered option — contributions reduce taxable income dollar for dollar.
What happens to my HYSA rate if the Fed cuts rates? It drops, usually within days of a Fed announcement. HYSA rates are variable by design. That’s why laddering some savings into a CD makes sense if you have a 6–12 month horizon. A CD locks in today’s rate. An HYSA doesn’t.
Should I use side-hustle income to fund an HYSA? Side-hustle income is subject to self-employment tax — roughly 14.13% on net earnings — before federal income tax. That changes your real take-home on every dollar you deposit. Use our self-employment tax calculator to see what you’re actually netting, then size your savings contributions accordingly.
Is Varo Bank actually safe? Yes. Varo is a federally chartered bank — not a fintech riding a partner bank’s charter — and is FDIC-insured up to $250,000. The 5.00% rate is real. The conditions are real too: direct deposit plus a hard $5,000 cap on the top rate. Above that balance, run the math against Marcus or SoFi to see which nets more total interest.
Run Your Own Numbers
Run the numbers before you open anything.
- Savings Goal Calculator — model a specific target at today’s rates
- Emergency Fund Calculator — figure out how much to keep fully liquid
- Compound Interest Calculator — see what 4.25% APY compounds to over 5 or 10 years
Methodology
Sources & Methodology
Rates and limits reflect 2026 IRS publications, SSA wage bases, and official federal guidance. Calculators use progressive federal brackets and standard deductions unless noted.