A savings account is a deposit account offered by a bank, credit union or fintech company.
Customers can put their money into savings accounts for safekeeping, and savings accounts get deposit insurance with the government. And on top of that, the bank pays you money for keeping your funds in the account.
Savings accounts earn interest on your balance, and your interest earnings are a percentage of that balance. The higher your balance and the higher your savings interest rate, the more money you can earn over time.
Banks need customers to deposit money into their accounts, because banks use that money to lend money to other people, make investments and more.
To get people to use their products and services, they pay customers interest on their savings balances in exchange.
Your balance and your interest rate drastically change how much your savings can earn over time.
For example, the average interest rate on a savings account in the US is 0.39%.(1) If you had $1,000 in a savings account with a 0.39% annual percentage yield (APY), you would earn around $4 in one year.
You might think that $4 isn’t much, and you’d be right. Let’s kick it up a notch.
If you have a savings account with a 5% APY and a $10,000 balance, the interest earnings would total around $500 after one year.
The more you deposit and the better rates you find, the more you will earn over time.
The timing depends on the bank. It may deposit your interest earnings daily, monthly or yearly.
When comparing savings accounts, you likely see phrases like “interest compounds daily” or “earnings compound daily, deposited monthly.” These phrases tell you how your interest compounds and when the bank deposits it into your account.
For the fastest and most efficient earnings, look for savings accounts that compound and deposit daily. Daily compounding and depositing means that your savings earn interest every day, and the bank deposits those earnings every single day.
Results are estimates. Compounded at the selected interest frequency.
Yes, you can definitely find a free savings account. There are plenty of savings accounts without monthly fees.
Some bank accounts charge monthly maintenance fees, which are basically fees to keep the account open and support the bank. However, many online banks like SoFi® or Ally don’t charge these fees, since these banks don’t have physical branches they need to maintain.
SoFi Checking and Savings
With SoFi Checking and Savings get paid up to two days early. Set up direct deposit to automatically get your paycheck up to two days early every time you get paid
You need to be at least 18 in most states to open a bank account. When opening a savings account, you’ll need some basic information about yourself, including:
If you’re a minor, you’ll need an adult to open a savings account with you.
Narrow down top savings accounts by monthly fees, interest rates and perks. Tick the Compare box on multiple accounts to view them side by side.
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How we picked theseThe Finder Score crunches over 250 savings accounts from hundreds of financial institutions. It takes into account the product's interest rate, fees, opening deposit and features - this gives you a simple score out of 10.
To provide a Score, Finder’s banking experts analyze hundreds of savings accounts against FDIC-reported national averages as a baseline. Accounts with rates well over the national average are scored the highest, while accounts with rates well below are scored low.
Savings accounts are places you can store money for safekeeping. They are federally insured, typically up to $250,000, and they earn interest. How much you earn on your savings balance depends on how much you deposit and the account’s interest rate.
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The $500 Axos Bank bonus is now expired, but you can still earn $50 per qualifying referral.
Axos ONE is a new hybrid savings and checking account with no monthly fee, early direct deposit set up and a high APY. See pros and cons.
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Tracking the Fed funds rate from 1954 to now.
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