I bonds -- secure government-backed investments sold directly to the public -- offer a considerably more appealing interest rate of 6.89%. This is a good option if you won't need access to your funds for five years. You can't draw on your funds for the first year at all, and if you withdraw before the five-year holding period is up, you'll face a three-month interest penalty for withdrawing early. After five years, you can take out the money from your I bond without penalty.
A certificate of deposit is another high interest alternative to savings accounts. A CD is similar to a savings account, but it's a one-time investment rather than an account you continue pouring money into. With a CD, you make one lump-sum deposit at a fixed interest rate for a specified period, which could range from a month all the way up to 10 years. Since CD APYs are directly tied to the federal funds rate, CD interest rates are currently rising, reaching over 4% at some banks.