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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 — from the nation’s megabanks to competitive regional institutions, growing credit unions and savvy fintech startups — to bring you the best of what’s out there, whether you’re on the lookout for the strongest rates, fed up with fees or simply want a bank you can trust.
- Competitive interest rate
- No monthly fees
- No minimum balances to open
Editor's pick: Barclays Online Savings Account
Earn 20x the national savings account average with no fees or minimums.
- Tools to help you save
- Secure, 24/7 online access to your funds
Compare savings accounts
Some of the top savings account providers we compare
Interest rates and costs
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 0.10%, there are several others that pay around 2.00% or more. On a $5,000 balance, that’s a difference of $95 each year.
Also, keep in mind that if the interest rate you earn is less than the rate of inflation, your savings are actually declining in purchasing power. Over the past decade, inflation has fluctuated from a low of 0.1% in 2015 to a high of 3.2% in 2011.
The primary cost of a savings account is often the monthly fee – if the account has one. Many financial institutions now offer free savings accounts, while others are willing to waive the monthly fee if you maintain at least a minimum balance. Watch out, though, because a monthly fee can quickly and easily wipe out the benefits of interest earned. For example, even with 2.00% interest, you’d need to keep at least $3,000 in your account just to break even on a mere $5 monthly fee.
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?
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.
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.
When a great interest rate is at the top of your list, these are the accounts to pick from.
Without the cost burden of brick-and-mortar branches, online savings accounts can offer higher interest rates without the fees.
Avoid the monthly fees that eat away at your savings by going with one that’s completely free.
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.
Not saving for yourself?
Put your business on the path to meeting its financial goals with an account tailored to the business world.
Help your kids learn the habit of saving early in life with an account fit for them.
Graduate your student’s savings account to one that can handle high school and college.
How to 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.
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