Can you earn 6% on your savings account? Yes — but here’s the catch

Interest rates on savings accounts are rising, but they’re still low. Indeed, the national average interest rate on a savings account is just 0.07%, though you can find plenty of online banks paying around 1% (you can see some of the savings accounts paying the highest rates here). And even though those rates may not stop you in your tracks, that doesn’t mean you shouldn’t save — experts say you’ll need 6-9 months’ worth of expenses in savings. But it does mean you’re probably wondering: Where can I earn more? 

A number of banks are now advertising higher rates on savings, but, of course, you need to understand the fine print (and often you’re better off just opting for one of the higher yield accounts paying about 1%). Digital Federal Credit Union offers 6.17%, Blue Federal Credit Union offers 5.00%, Landmark Credit Union offers 7.50%, online bank Mango Money offers 6.00% and Consumers Credit Union and online bank T-Mobile Money, both offer 4.00%. “It’s not that these advertised high-yield accounts are illegitimate, but they definitely are not as impressive as they appear,” says Lauren Anastasio, director of financial advice at Stash. Adds Greg McBride, chief financial analyst at Bankrate: “Most accounts paying 4% to 7% only do so up to a limit,” and there are often other requirements outlined in the fine print for you to get the high APY too, like joining the credit union, for example. 

Indeed, here’s some of the fine print on these offers: Landmark requires direct deposit to earn the 7.50% APY, and you only get that percentage on up to $500. Mango Money requires at least $1,500 in signature purchases a month with the Mango prepaid card to qualify for 6.00% APY and that’s only on up to $2,500. Consumers Credit Union Rewards Checking requires $1,000 in monthly credit card purchases in addition to other requirements to qualify for 4.09% APY on up to $10,000. 

If you do the math, based on the fine print, what you’d actually be earning may not be worth the headache of moving accounts, pros say. Anastasio gives this hypothetical example: “If you were to deposit $500 into an account that pays 6% annually, compounded monthly, at the end of the year you will have earned a little over $30. With rates as low as  0.10% on your remaining balance, the $30 really may not be enough for the time and energy it would take to open and fund a new account,” says Anastasio. That means to get the most value for your money you might need “to open multiple accounts at different banks or just find one that pays a competitive return on your entire balance,” says McBride. (You can see some of the savings accounts paying the highest rates here.)

You might opt for the latter: “There are online savings accounts at federally-insured financial institutions that are available to consumers in all 50 states with no minimum deposit that are paying as much as 1.25% and rising. These accounts are literally available to everyone, and the yield is earned on your entire balance, representing an immediate 10-fold or more improvement over your current interest earnings,” says McBride.

No matter what you decide to do, if you see a savings offer now or in the future, read the fine print, research the financial institution and the offer, and verify it through trusted sources, says Chanelle Bessette, banking specialist at Nerdwallet. “Always make sure you’re depositing money directly with a regulated and federally-insured financial institution,” says McBride. Adds Bessette: “They should be insured via the FDIC or NCUA or work directly with a bank or credit union that is. Another way to see if a financial institution is legitimate is to look up any formal complaints or disciplinary actions that have been filed through sources like the Better Business Bureau or the Consumer Financial Protection Bureau,” says Bessette.