A high-yield savings account (HYSA) is a financial tool for people looking to maximize their savings. Whether you’re building an emergency fund or saving for another purpose, such as a vacation or a down payment for a home, a high-yield savings account can help you reach your financial goals faster.

The great news is that with online banking, you don’t even have to leave your home to open this account and enjoy its benefits. Here’s a step-by-step guide on how to open a high-yield savings account online.

How Does a High Yield Savings Account Work?

A high-yield savings account functions similarly to a traditional one but offers significantly higher interest rates. HYSAs provide rates that are up to 10 to 15 times higher than those of standard savings accounts.

To put this into perspective, the current national average annual percentage yield (APY) on a standard savings account is 0.46%, according to the Federal Deposit Insurance Corporation (FDIC). On the other hand, HYSAs offer APYs of up to 5% or more. This makes HYSAs an attractive option for people looking to boost their savings more efficiently.

Online-only banks and financial technology (fintech) companies typically offer HYSAs. Such entities have lower overhead costs than traditional brick-and-mortar institutions since they don’t have to operate or maintain physical branches. This cost-efficiency enables them to extend higher APYs and additional financial benefits to customers, such as no monthly service fees and low minimum balance requirements.

That said, some traditional banks and credit unions do offer high-yield savings accounts. But you’ll typically find better rates at online-only banks.

HYSAs offer a balance between good returns and accessibility. Unlike some other high-earning savings products, such as certificates of deposit (CDs), HYSAs don’t require lengthy lock-in periods and can be accessed relatively easily without significant penalties. This makes them ideal for short-term savings goals.

How to Open an Online High-Yield Savings Account

Follow these five steps to open a high-yield savings account online:

1. Compare high-yield savings account options

Start by identifying a range of banks and financial institutions that offer online high-yield savings accounts. Financial comparison platforms can help you narrow your choices from dozens of options to a few reliable providers.

To do this, navigate the comparison platform and search for “best high-yield savings accounts.” Then, compare the top names, focusing on the following features:

• Annual percentage rate (APY). Good high-yield savings accounts offer rates of 5% or more, so any provider whose rates hover around or above this figure is worth considering. Remember that these rates are subject to change at any time, however.
• Minimum opening deposit and balance requirements. Some providers require you to deposit a minimum amount when opening an account, while others do not. Similarly, some require you to maintain a minimum balance to enjoy a particular APY or to benefit from fee-free banking.
• Fees. Most online providers don’t charge monthly fees for HYSAs, though it’s important to verify this since some providers may. Watch out for other common charges, too, including overdraft, inactivity, and ATM fees.
• Insurance. Confirm that the high-yield savings account is insured by the Federal Deposit Insurance Corporation if the provider is a bank or by the National Credit Union Administration (NCUA) if it’s a credit union.

Once you’ve identified an option you feel best meets your needs, do some further research. For example, check out online customer reviews for both the product and the provider. Are they mostly positive? If not, what’s the primary complaint?

Good customer support is also essential. If possible, you can try contacting the provider through the means listed on its website—such as phone or online chat—to see how responsive the support team is.

2. Gather your documents

To open a high-yield savings account online, you’ll typically need to provide the following information and documents:

• Your name, home address, phone number, and email
• A valid driver’s license, passport, or any other government-issued ID document
• Your Social Security number (or Taxpayer Identification Number)

If your bank requires an opening deposit, you’ll also need your bank account number, routing information, or debit card information.

Each financial institution might have different requirements. Check its website for details on the information and documents you must provide.

Having all necessary information ready and organized can ensure a faster, smoother application process.

3. Complete the application online

Proceed to the website of the bank or financial institution where you’ve chosen to open your account. Look for the savings account section and select the high-yield savings account option. There should be a prompt to apply for or open an account. Click on this to start the application process. Fill in all the required fields with the necessary information.

Usually, the initial steps will involve providing personal information, including your name, home address, phone number, email address, and Social Security number. Double-check your entries for any errors, as even minor mistakes or discrepancies can lead to delays in the approval process or even cause the provider to reject your application.

Next, you’ll be required to upload digital copies of the documents you gathered earlier. Ensure these are clear and legible to avoid unnecessary delays.

The application process might also include setting up security questions and answers, choosing a username and password for online banking, and other security measures. Take these steps seriously, as they protect your account and personal information.

The whole process should take 10-15 minutes (or even less). After submission, you’ll receive an acknowledgment email or message from the financial institution confirming that it has received your application.

How long the institution takes to approve your application can vary. Some might offer instant approval, while others could take a few business days. During this time, the institution might reach out if it needs additional information or clarification.

4. Fund account

Once the provider approves your high-yield savings account application, the next step is to fund it.

Most financial institutions offer a variety of options for funding your account. The most common method is an electronic funds transfer (EFT) from an existing bank account. Other methods include wire transfers, mailing a check, or depositing one via the institution’s mobile banking app.

Depending on the deposit method, the financial institution can take several days to credit funds into your account. You should receive a confirmation when that happens. You can also verify the deposit by checking your account balance online or through the provider's mobile app.

5. Set up other account features

With your account active and funded, the final step is to explore and set up additional features the account offers to enhance your overall banking experience.

For example, many high-yield savings accounts provide automation tools to make saving effortless. These include tools such as:

• Automatic transfers. This feature allows you to make recurring transfers from a linked checking account to your HYSA. Choose a frequency and amount that you’re comfortable with, or that aligns with your financial goals.
• Direct deposit. With this feature, you can arrange with your employer to divide your paycheck and allocate a specific amount to your high-yield savings account. This ensures that a particular portion of your income is automatically saved before it gets to your checking account.
• Round-ups. This feature links to your checking account and rounds up everyday transactions to the nearest dollar. The difference is then automatically transferred to your savings account. For example, if you spend $3.50 on a coffee, the tool will round up the transaction to $4 and transfer $0.50 to your savings account.

Another feature you can take advantage of is alerts and notifications. Most financial institutions allow you to set up custom alerts and notifications on their app — including ones for deposits, withdrawals, low balances, and logins from unfamiliar devices. These help you stay informed about your account status and quickly detect unauthorized activity.

There might be other features, too, depending on your provider. Explore these features, and take advantage of any that align with your financial strategy or goals.

What’s Next?

Your financial situation and goals may change with time. So, regularly review your HYSA to ensure it still meets your needs and take relevant action if needed.

This could mean adjusting your automatic savings amount, shopping around again for an account with better terms if the market has changed, or even exploring alternative ways of investing your money.

Conclusion

A high-yield savings account offers a valuable opportunity to make your money work harder for you. With its superior rates of return, it can help you reach your financial goals faster.

Before opening an HYSA, compare providers to find the best rates and terms. Next, check your chosen provider’s website to find out what documents you need to open an account and have them ready. Then, carefully fill out the online application form.

Once your application is approved, fund your new account. Finally, set up any additional features the account offers, such as automatic transfers, to maximize its potential and benefits.