Strategies to Earn 5% Interest on Your Savings Account

Achieving a 5% interest rate on a savings account may seem unlikely, but certain banks and financial institutions do offer such high yields. One effective approach is choosing a savings account linked with a prepaid card, which is often a requirement for accessing this lucrative rate. Initially, opening such an account required a minimum deposit of $5,000; however, since July 2016, some providers have reduced this minimum to $1,000.

Here are some notable companies offering authentic 5% interest savings accounts with prepaid card options:

Additionally, providers like Momentum, Vision, Purpose, Insight, and Mango also feature 5% interest rates. Each card's terms and conditions may vary. When signing up, you'll receive a prepaid card, which is essential for progressing with the account setup. Importantly, opening these accounts involves no credit checks—only personal details such as name, address, date of birth, and social security number are required.

While multiple 5% interest savings accounts are possible, it's advisable to complete one process at a time, as some accounts might be monitored by the same company under different names. Activation isn’t immediate; a premium fee—often up to $500—is usually required, paid via direct deposit. Post-activation, funds deposited initially go to the prepaid card before being transferred to the high-yield account. Withdrawals are permitted but involve transferring funds back to the prepaid card first before moving to your main bank account.

This process may be a bit lengthy, making such accounts suitable for short-term savings goals. Be aware of possible inactivity fees depending on the provider, so regular use is recommended for avoiding penalties.