This Free Tool Helps You Confidently Open a 5.00% APY Bank Account

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Want to make sure that 5.00% APY savings account is from a “real” bank? See how to use a free tool from the FDIC to make sure your new bank is legit. [[{“value”:”

If you still have money sitting in a bank account earning near-zero interest, there’s never been a better time to move your cash. Some of the best savings accounts and money market accounts are now paying 5.00% APY (or higher).

But not everyone feels instantly comfortable with the idea of opening a new savings account. Many of the highest-APY savings accounts are from online banks, fintech apps that work with bank partners, or innovative brokerages. These banks might not have a local branch network in your state (or any branches at all).

Some people might feel nervous about opening a new savings account with an online bank that they’ve not heard of before. How do you know if any bank, especially one with no branches or no presence in your state, is legitimate and safe? One of the best ways is to make sure that your bank is a member of the FDIC.

Good news: there’s an easy-to-use tool from the FDIC called BankFind Suite that you can use for free. Let’s see how the FDIC website can help you make sure your new savings account is with a trustworthy bank.

Why FDIC membership matters for your savings account

The Federal Deposit Insurance Corporation (FDIC) is a federal program that helps inspect and regulate banks — and it insures the deposits of everyday people like you, up to $250,000 per qualifying account and ownership category. The FDIC was founded in response to the early days of the Great Depression when there was a wave of bank runs and bank failures. And back then, a bank failure would cause bank customers to lose most (or all) of their money in the bank.

Being a bank customer shouldn’t be so risky. Ever since the establishment of the FDIC in 1934, no American bank customer has lost a dollar of insured deposits due to bank failure. The FDIC is often taken for granted, but it’s an essential safety backstop for everyday financial life. Even when bank failures happen, you can feel confident that every dollar you put into your savings account (or other FDIC-insured accounts) will be there when you need it.

FDIC BankFind Suite: Finding FDIC-insured banks

BankFind Suite is a free tool from the FDIC that lets you look up banks by name, location, or website URL, and confirm if each bank is a member of the FDIC. You can also see the bank’s history of FDIC documents and other information — like branch locations, previous name changes, past acquisitions of other banks, and more.

This FDIC search tool is the fastest, easiest way to see for yourself that a bank is “legit” in the form of being a member of the FDIC (and being covered by FDIC insurance). Knowing that a given bank is FDIC insured can give you the confidence to take that next step and open a high-yield savings account.

All the banks listed among The Ascent’s picks for best savings accounts and best money market accounts are FDIC insured. But in case you want to see for yourself, or look up other banks that aren’t on our list, the FDIC BankFind Suite is a great resource.

Bottom line

Keeping your savings with an FDIC-insured bank is always a good move. Even in the worst-case scenario of a bank failure, your insured deposits will be safe. Along with savings accounts, some other types of bank accounts are also covered by FDIC insurance at FDIC member banks, such as checking accounts, money market accounts, and CDs.

If you see a tempting offer to sign up for a 5.00% APY (or higher) savings account, check to make sure the bank is “legit” in the eyes of the FDIC. Even if it’s a newly established bank, a smaller community bank, a fintech company that provides banking services through bank partners, or an online-only bank or brokerage, FDIC BankFind Suite can help you make sure that your new savings account is FDIC insured. Knowing that the federal government has your back can help you feel better about opening that new bank account. Go get the interest that your money deserves.

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