Our pick for digital banking: American Express® Personal Savings High Yield Savings
- 1% APY
- No monthly fee
- No minimum balance
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When you’re saving up for a goal, you don’t want to end up losing any money to fees. Most banks offer free savings accounts — but you have to know how to find them. Here’s what to look for when shopping around for and how to compare free savings account.
When weighing the benefits of a free savings account, look at such factors beyond the monthly fee:
Compare free savings accounts by sorting the table by APY and minimum deposit. View your favorites side-by-side by clicking the “Compare” box next to each one.
Free savings accounts can be found at two types of financial institutions:
Savings accounts are designed to help you save money, but you won’t be able to avoid all fees. Depending on your bank, you could face:
Your bank may require you to link your free savings account to a checking account, which could have monthly fees. When comparing savings accounts, make sure you understand the fees that may come with the checking account you link it to:
Interest counts as taxable income, which means you’ll need to file a 1099-INT with your annual tax returns. You won’t pay tax on the balance in your account — only on the interest you earned in that year. For example, if your income is taxed at 25% and you earn $200 in interest, you’ll pay $50 in taxes.
Free savings accounts are a solid option for growing your money. You’ll likely find the highest rates and lowest fees at online banks — but that doesn’t mean you should avoid brick-and-mortar institutions. They may have the accessibility you’re looking for. As always, compare savings accounts until you find one that has features you need to keep on saving.
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