What is a 12% interest savings account?
A 12% interest savings account offers an interest rate considerably higher than a traditional savings account. According to the FDIC, the current national average interest rate for savings accounts is 0.46%, making a 12% interest rate significantly more impressive than even some of the best high-yield savings accounts.
While there are some 12% interest savings accounts available, they are hard to find and usually not FDIC-insured. Instead, 5% interest savings accounts that are FDIC-insured are much more common, especially among online banks.
Let’s take a look at how much interest you can earn by saving $5,000 in a 12% interest savings account.
| Amount of time |
12% basic interest |
12% interest compounded monthly |
| 1 year |
$600.00 |
$634.13 |
| 2 years |
$1,272.00 |
$1,348.67 |
| 3 years |
$2,024.64 |
$2,153.84 |
| 4 years |
$2,867.60 |
$3,061.13 |
| 5 years |
$3,811.71 |
$4,083.48 |
The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.
Where can I get 12% interest on my money?
A 12% interest rate is rare, but you can get 12% interest on your money through foreign banks and cryptocurrency savings accounts. However, the financial institutions offering a 12% yield are not insured by the FDIC, which means that your funds are at risk in these accounts.
In addition to foreign banks and crypto savings accounts, some kid’s savings accounts offer a higher interest rate. You may also find a high-yield checking account with a higher-than-average interest rate. However, finding one of these bank accounts offering more than 7% is challenging.
Our top picks for high-yield savings accounts compared
Let’s take a look at some of our top high-yield savings accounts:
Is a 12% interest savings account right for me?
Before deciding if a 12% interest savings account is suitable for you, let’s take a closer look at the pros and cons.
Pros explained
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High interest rates: Even the top high-yield savings accounts offer an average APY of 5%. This means a savings account with a 12% interest rate is considerably higher.
Cons explained
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Hard to come by: Many financial institutions offer high-yield savings accounts, with the best ones currently offering 5.10% APY. However, traditional banks in the U.S. do not offer 12% interest savings accounts, making them much more challenging to find.
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Not FDIC-insured: The FDIC insures depositors’ funds in savings accounts, checking accounts, CDs, and money market deposit accounts. However, there are no FDIC-insured savings accounts offering 12% interest.
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Higher account fees: Account fees erode your account’s net yield, and these fees may be higher with 12% interest savings accounts.
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Compounded infrequently: While many high-yield savings accounts compound interest daily, this is not the case with savings accounts offering 12% interest. Because interest is compounded less frequently, funds grow more slowly.
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Riskier than other savings options: The 12% interest rate offered in cryptocurrency and foreign savings accounts comes with risks. These are not regulated or heavily regulated in many cases, which exposes you to potential scams and loss.
Alternatives to 12% interest savings accounts
While a 12% interest savings account has a higher yield, it has significant downsides. For those who prefer lower fees or lower exposure to risk, other options are available.
Other interest rates
Some of the best high-yield savings accounts available through U.S. banks currently offer APYs between 4% and 5%, including RBMAX, Western Alliance and Cloudbank24/7, which are all offered through the Raisin platform. They are also FDIC-insured accounts ensuring the security of your funds.
Checking accounts
In addition to these high-yield savings accounts, you can also find high-yield checking accounts offering 7% interest or more. These include the OnPath Federal Credit Union checking account and Landmark Credit Union Premium Checking. However, you will need to be a member of these credit unions to open an account.
CDs
Certificates of deposits require you to tie up your funds for a period of time. Generally, this ranges from one month to five years. While you may withdraw your funds during that time, you could be charged an early withdrawal fee if you do. Therefore, CDs are best if you already have an established emergency fund and can put extra money aside for a period of time.
Money market accounts
A money market account, or MMA, is an FDIC-insured account that offers features of both savings and checking accounts. For example, you can typically write checks and make debit card purchases with an MMA. Rates are also comparable to high-yield savings accounts. For example, a Quontic MMA has a 5.00% APY, and an America First MMA has a 4.75% APY.
Index funds
An index fund is either an exchange-traded fund or a mutual fund that corresponds to a specific financial index. For example, an S&P 500 ETF will invest your funds across the S&P 500. Every stock will be invested in, and this will be in proportion to the size of the company. Index funds are purchased through a brokerage account, so your investment is not insured by the FDIC.
The value of your index fund investment will fluctuate with the market, and a financial loss is possible. However, the annual return for the S&P 500 is close to 10%. You can also find funds for large-cap, mid-cap and small-cap stocks.
Because an index fund allows you to easily invest in the total market rather than in one or a handful of stocks, it may be less risky overall than buying individual stocks. These funds may also be professionally managed.
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