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Savings Account Finder
Compare APYs, fees and minimums to maximize your savings growth.
Today’s leading savings accounts offer competitive interest rates, minimal fees, accessibility and protection to keep just about any balance safe and growing. We rolled up our sleeves to review and rate nearly 100 savings accounts to help you compare what’s out there.
- 1.30% APY
- No monthly fee
- No minimum balance
Editor's pick: American Express® Personal Savings High Yield Savings
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
- Around-the-clock online and phone support
- No fees to hassle with
- FDIC insured
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What is a savings account?
A savings account is a bank account where you can safely store your money. It earns interest and is federally insured up to $250,000, which means you’ll get your money back in the rare event your financial institution goes under. But they’re more restrictive than checking accounts. You typically don’t get an ATM card or checks and you can’t make more than six outgoing transactions a month due to federal regulation.
Do I need a savings account?
If you answer yes to any of these three questions, then it’s time to get a savings account:
- Are you saving up for a big purchase? If you’ve got your eyes set on an emergency fund, vacation fund, or any other big purchase, then a savings account is for you. You’ll earn interest on your deposits, which means you’ll reach your savings goals even faster.
- Do you want your money to be secured against theft or damage? Keeping money at home usually isn’t ideal because it can easily get lost or stolen. Savings accounts are federally insured, so you never have to worry about losing your money if your bank goes under.
- Will you be tempted to spend your savings if you keep it in a checking account? When you keep your money in a savings account, you’re less likely to spend it because it’s out of sight, out of mind. The distance between your saving and spending money makes it easier to reach your goals. Plus, you’ll earn more interest than you would with a checking account.
Pros and cons of savings accounts
Savings accounts can help you tackle your financial goals with unique features, but there are also some limitations to be aware of.
- Competitive APYs. Unlike most checking accounts, savings accounts pay you a competitive rate for keeping your money in the account. That means you can reach your savings goals even quicker when your money is working hard to make you even more money.
- Savings tools. Modern banks are known for offering automated savings tools and free budgeting templates that help you track, manage and automate your financial goals.
- Low account minimums. Most banks let you open a savings account with as little as $0 to $100 — making it easy to open an account today.
- Variable interest rates. If your account has a variable interest rate, your APY could drop in the future — but it could also rise. Interest rates on variable accounts are influence by the economy and the Federal Reserve rate.
- Withdrawal limitations. If you make more than six withdrawals per month, you could be charged fees. Due to the coronavirus, many banks are temporarily suspending this policy, so check with your institution to be sure.
- Watch out for introductory rates. Some accounts offer a higher interest rate for an introductory period. If you sign up for one of these accounts, check what your long-term interest rate will be.
For savings accounts, the interest rate is probably the most important factor in growing the money you’ve stashed away, and it’s usually expressed as a yearly rate called the annual percentage yield (APY). While many traditional banks and credit unions pay an interest rate somewhere around the national average of 0.09%, there are several others that pay around 2.00% or more. On a $5,000 balance, that’s a difference of $95 each year.
How do variable rates work for savings accounts?
If you open a savings account, the money you deposit will earn interest at a variable rate. This rate is regularly adjusted by your bank in line with fluctuations to the federal funds rate. In other words, the maximum variable rate of interest you can earn will go up and down over time. Over the past decade, inflation has fluctuated from a low of 0.1% in 2015 to a high of 3.2% in 2011.
In some cases, you may find that the interest earned on your account doesn’t match the advertised rate. There are a few reasons this can occur:
Introductory interest rates
There’s the introductory rate that a bank uses to get you in the door, and then there’s the long-term rate applied to your account. Some banks — particularly smaller ones — will temporarily raise their interest rates above the usual level. Then, in a few months, they drop back down.
When opening an account, look at the historical interest rates the bank has offered — major swings can be a red flag.
Karen opens a savings account with a small bank that offers an introductory rate of 3%, but after six months the rate drops down to 1.5%. Josie looks into the historical rates of her bank before opening an account to make sure her interest rate won’t vary too wildly, and her rate of 3% stays the same over the course of the year.
|Interest rate||3%||3% for the first six 6 months, 1.5% for the second 6 months|
As the table shows, even though Karen and Josie deposited the same amount of money, Karen earned $1,148.92 less because her interest rate changed.
The type of interest rate you have
Another important factor that affects the interest you can earn on your savings balance is whether your account pays simple interest or compound interest. Simple interest is only paid on the money you deposit into your account, but compound interest allows you to earn interest on the initial deposit and the interest payments you receive — in other words, you can earn interest on your interest.
How often interest is compounded
The interest on your account could be compounded daily, monthly, quarterly, biannually or annually, and the frequency with which it occurs can make a surprising difference to your balance. The more interest is compounded, the more chances you have to earn interest on your interest.
Adam is in his early 20s and wants to start saving for a house. He has an initial investment of $5,000 and plans to deposit $500 each month for the next five years. Assuming an interest rate of 5%, let’s look at how Adam’s balance differs based on whether interest is compounded daily, monthly or annually.
|Account A||Account B||Account C|
|Ongoing monthly deposit||$500||$500||$500|
|Investment term||5 years||5 years||5 years|
Adam can earn more interest by choosing an account that compounds interest daily. In fact, after five years, he ends up with an extra $143.53 compared to an account that compounds interest annually.
The rate of interest you earn on your savings is set by your bank, though interest rates generally fluctuate with the broader financial market and can be influenced by the rates set by the Federal Reserve Bank. Interest rates vary by bank and the type of savings account you choose.
Savings accounts typically accrue daily or monthly compound interest. With daily compound interest, your bank calculates interest on your balance each day using a specified rate. In effect, you end up earning interest on the interest you’ve already earned. Your bank then pays out the compounded interest monthly as a credit to your account.
Interest you earn on your savings account is taxed at the same rate as any earned income. And though you won’t pay taxes on savings below $10, you still have to report it to the IRS.
Why do banks offer interest rates?
Your money doesn’t sit in a savings account untouched. When you open an account, you give your bank access to lend your money out to others.
Banks reward you for that access with interest, even if those rates are slightly lower than the rate they charge borrowers. It’s how they stay in business.
And if the bank loses money on that loan, it doesn’t affect your account balance. Furthermore, the vast majority of banks and credit unions are insured by the government, so even if they go out of business, you’ll get up to $250,000 back.
How do I compare savings accounts?
When looking for a savings account, consider the following features:
- High or competitive interest rates. Your interest rate is your reward for allowing your bank to lend out your money. Make your money work hard with the highest interest rate you’re eligible for.
- Low or no fees. Most banks waive monthly fees on savings account as long as you maintain a minimum balance. If you’re paying a monthly fee with your account, it may be time to explore your options.
- Easy to access your money. Accessibility depends on your preferences and personal savings goals. A basic savings account allows you to take out money nearly instantly, while you’ll pay a penalty to withdraw a money from a CD that hasn’t yet matured.
- Rewards for consistent savings. If you find your savings balance building up but at a less-than-average rate, it could be time to switch to a high-yield or other account.
- Minimum and maximum account balances. Some accounts will penalize you if your balance is below or above a certain threshold. Make sure the account you choose is the right fit for the nest egg you’re tucking away.
- Account requirements. Some savings accounts will require a linked checking account. Credit union accounts can require you to work at a specific place, live in a specific area or meet other membership requirements.
Types of savings accounts
Savings accounts come in different shapes and sizes in order to meet the varying needs of savers across America. Check out each variant below and compare some of the best options for that type.
Best savings accounts
Based on our experience reviewing and rating more than 80 savings accounts, this is our curated list of the best overall picks.
Best high-interest savings accounts
When a great interest rate is at the top of your list, these are the accounts to pick from.
Best online savings accounts
Without the cost burden of brick-and-mortar branches, online savings accounts can offer higher interest rates without the fees.
Free savings accounts
Avoid the monthly fees that eat away at your savings by going with one that’s completely free.
Best money savings apps
Get a little help setting money aside with these innovative apps that automate saving.
Credit union savings
Put your money in the hands of a financial institution whose owners are its customers.
These are savings accounts that you generally can’t access until November. They generally don’t offer high interest rates, but can be a useful way to set money aside for the holidays.
Not saving for yourself?
Business savings accounts
Put your business on the path to meeting its financial goals with an account tailored to the business world.
Kids savings accounts
Help your kids learn the habit of saving early in life with an account fit for them.
Best student savings accounts
Graduate your student’s savings account to one that can handle high school and college.
How do I open an account online?
How you’ll apply for a savings account depends on the bank or financial institutions you’re interested in. Generally, you’ll follow a standard series of steps like this:
- Go to the financial institution’s official website to start the application process.
- Enter in your personal information, including your full name, contact information, Social Security number, date of birth and government-issued ID, like your driver’s license or passport.
- Agree to the terms and conditions and certify your tax status.
- Answer a few short questions to verify your identity.
- Transfer money from an external checking account to fund your new account .
How much should I save?
The amount of money you accumulate in your savings account will vary depending on your goals. Here are a few popular reasons for saving money and how much you might want to keep in your savings account.
- Vacation. You can avoid going into debt by saving up for a vacation ahead of time. As a rule of thumb, it’s not uncommon for Americans to spend about 10% of their annual income on vacation.
- Emergencies. Many financial experts recommend saving up to six months’ worth of regular living expenses in case you get sick or injured, lose your job, have a family crisis or experience a natural disaster.
- Retirement. Setting aside some of your earnings now is the first step to enjoying life in retirement later. After you’re in the habit and have some money to work with, consider delving deeper into retirement planning.
- Major purchases. If you’ve got your eye on a new TV, a new car, new home furnishings or even a new home, you can set the estimated cost or down payment as your savings goal.
Guides for specific savings goals
Next steps for savings
Beyond the variations of savings accounts available on the market, you have more complex options that can offer higher returns if you meet specified conditions.
Money market accounts
Not to be mistaken with a money market fund — an investment product that’s not insured by the FDIC — a money market account is a higher-yield savings account. A higher interest rate comes with a higher minimum balance — sometimes as high as $20,000. And there are a few additional privileges too. The funds in a money market account are easier to access because these accounts typically come with checks and a debit card.
Certificates of deposit
CDs can yield you the highest interest rates of all other options. But they aren’t the type of savings accounts that allow for withdrawals. With a CD, you agree to keep your money in a bank account for a specified term, often from a few months to several years. The longer the term, the stronger your interest rate. If you withdraw any bit of your money before the end of the term, when it’s considered “matured”, you pay a penalty fee. Unlike a savings account or money market account, a CD does not accrue interest over time. Rather, the interest is paid all at once when the CD matures.
After you’ve narrowed down the savings account that’s right for your needs and budget, get the most out of it with our easy tips.
- Keep transactions to a minimum. You’re typically limited to six withdrawals a month. If you need access to your money, avoid the limit by withdrawing at a branch or ATM.
- Set up automatic deposits. Many institutions allow you to make automatic deposits from other accounts, paychecks and more. Choose an amount that works for your finances, and adjust it as your budget and finances change.
- Consider other accounts. Basic savings accounts are a solid start to building a nest egg. But once you’ve got some money put aside, other options might better help you organize your money and reach your goals, like money market accounts or CDs.
- Keep an eye on interest and fees. Interest rates and fees change over time, which makes monitoring your account a must.
- Consider adding family to your account. Maximize your savings by adding a spouse, child or other family member to your account.
Savings accounts are one of many tools you can leverage to reach your financial goals. They include everyday savings accounts offering low fixed interest to high-interest money market accounts that offer limited checks. For each, the earlier you start saving, the more time your money has to grow.
Each type of savings account is designed to serve a different financial need. And with so many options at your disposal, weigh the benefits and drawbacks of each option to find the best fit for you. If you know what features you’re looking for, check out the top 10 lists we’ve put together in our guide to the best savings accounts.
Frequently asked questions
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