Varo Money Leads U.S. Savings Accounts With 5.00% APY

As of Aug. 19, 2025, the highest-yield savings account in the United States is offering a 5.00% annual percentage yield (APY), according to recent financial reporting from Fortune [1]. The offering is currently made by Varo Money, an institution monitored by Fortune and its partner, Curinos, a financial industry consulting firm [1]. This rate significantly outpaces the current national average savings rate, which is 0.39% [1].

The current environment reflects a broader trend following the Federal Reserve’s decisions in late 2024, when three consecutive rate cuts were implemented. These cuts led to a decline in savings account rates from historic highs seen in 2022 and 2023 [1]. While inflation has cooled slightly, the economic outlook remains uncertain, and additional rate cuts appear unlikely for now [1]. This suggests that savings account rates are likely to remain stable for the foreseeable future, although further reductions cannot be ruled out if inflationary pressures return [1].

High-yield savings accounts—though not a distinct product but rather a term for accounts with much higher than average APYs—continue to attract savers due to their competitive returns. Many of these accounts, typically offered by online banks, provide rates over 4%, often with no minimum balance requirements or monthly fees [1]. These accounts also offer FDIC insurance, the same protection provided by traditional banks, and are well-suited for emergency funds or short-term savings goals [1].

Financial institutions adjust their savings account APYs based on a range of factors, including competitive market conditions, customer acquisition strategies, and broader monetary policy [1]. Banks are known to make changes following key Federal Reserve meetings, which occur roughly eight times per year [1]. As the Fed’s benchmark rate continues to influence the banking sector, consumers are advised to remain vigilant about tracking rate changes and comparing current offers.

For those considering switching to a higher-yield account, it is important to weigh the benefits of a better rate against the potential inconvenience of moving accounts or meeting new requirements [1]. Additionally, while most high-yield savings accounts allow for easy access to funds, some may impose monthly withdrawal limits—commonly six per month—so users should be aware of such restrictions [1].

Despite the convenience and safety of high-yield savings accounts, users should still be mindful of the long-term effects of inflation, which can reduce the purchasing power of their savings over time [1]. However, unlike investments in volatile markets, these accounts do not carry the risk of principal loss, provided they are held with FDIC- or NCUA-insured institutions [1].

The article was compiled and updated by Glen Luke Flanagan, an editor for Evergreen Content at Fortune [1].

Source: [1] The best savings account is offering 5.00% APY. Check out our list of the top high-yield savings accounts today, Aug. 19, 2025. (https://fortune.com/article/best-savings-account-rates-8-19-2025/)