Simple but mighty, savings accounts are basic and essential banking products. They’re typically low maintenance, affordable and very useful. You’d be hard-pressed to find a bank or credit union that doesn’t offer savings accounts, meaning you could go to just about any bank to open one to store your cash and watch it grow.
A savings account is a type of deposit account that earns interest on your balance. The main benefit of a savings account is that you can put money aside so it can grow passively — whether for emergencies, short-term goals or just to keep your cash separate from your daily spending. Most banks and credit unions offer savings accounts, making them a safe, accessible and very useful way to save money.
You can also have multiple savings accounts for separate uses, including one for your sinking funds, emergency fund, saving for college or saving for a large purchase like a home or vacation.
Savings accounts are very useful and come with various benefits.
1. Earn money passively
Savings accounts reward you for keeping your funds with the institution in the form of interest, expressed as a percentage. In short, banks pay you to keep your money in a savings account. The average rate on savings accounts is
0.38%, but you can find rates well above 4% with high-yield savings options.(1)
For example, if you kept $10,000 in a 4% APY savings account for one year, you could earn $400 in interest.
2. Low maintenance and flexible
Plenty of savings accounts have no monthly fees and no opening deposit requirements. And unlike certificates of deposit, savings accounts don’t lock your funds for a set time. You can switch savings accounts as often as you want, since most don’t charge closure fees or early withdrawal penalties.
3. Offered nearly everywhere
Savings accounts are an essential product for banks and credit unions. In most cases, if a bank or credit union offers any deposit accounts, two of them are nearly guaranteed to be a checking account and a savings account.
4. Set up an automatic savings plan
Most modern banks let you automatically direct deposit a portion of your deposits into your savings. For example, you can have 10% of your paycheck deposited into your savings account for seamless building.
5. Overdraft protection
If you have a checking and savings account at the same bank, you may be able to link them. For example, you can link them together for overdraft protection. If there isn’t enough money in your checking account to complete a transaction, the funds could be transferred automatically from your savings to your checking so the transaction goes through.
6. Deposit insurance
Banks are known for their well-protected vaults, and if your financial institution goes bust, the FDIC or NCUA will guarantee your savings account balance up to $250,000. Since they’re deposit accounts, savings accounts have complementary FDIC or NCUA deposit insurance, meaning your funds are protected federally up to $250,000 per depositor, per FDIC-insured bank, per ownership category.
Narrow down top savings accounts by monthly fees, APYs and features. For a closer comparison, tick the Compare box on multiple accounts to see their benefits 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 one of the most useful types of bank accounts out there. The biggest benefit of a savings account is the ability to earn interest, but you can also craft savings plans, access your accounts via mobile banking for easy management, link to your checking for overdraft protection and more. Savings accounts are federally insured, so even if a bank goes under, your funds are protected up to at least $250,000. They’re simple accounts that are not designed for spending — they’re meant to safeguard your funds and help them passively grow thanks to their interest rates.
However, savings accounts have variable interest rates, which means your interest earnings aren’t guaranteed. If you want something with guaranteed interest rates, consider a CD instead, since those lock your rate for the term.
The short answer is that banks and credit unions want you to keep your funds in their deposit accounts, so they limit how often and how much you can withdraw within certain time frames. Most traditional banks and credit unions limit your savings account withdrawals to six times per statement period.
The long answer is that banks and credit unions are required to have a certain amount of money in consumer deposit accounts (minimum reserve ratio against their liabilities). To stop their customers from withdrawing money from their accounts too frequently and keep their deposit amounts at a certain level, banks and credit unions restrict how often you can withdraw funds and may limit how much money you can withdraw daily, weekly or monthly.
Yes, many savings accounts let you open them with your partner to help you save faster together, or you and your kiddo could open one together to save for their future.
Anyone. Most savings accounts are available to almost everyone, from children to adults, and people from abroad to lifelong US residents. Some accounts are designed for specific people, like children’s savings accounts, student savings accounts, retirement savings accounts and more.
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A free savings account that earns a strong APY once you meet the $100 opening deposit requirement.
Smartypig may have a silly name, but this goal-tracking savings account has a competitive APY and no monthly fees.
A look at the TAB Bank high-yield savings account and what customers say about it.
Earn up to 6% with Greenlight, 5% with Varo and just under 5% with Barclays, Western Alliance, Uphold, Wealthfront and more.
These international banks offer accounts with 12% APYs or higher, but watch out for risks.
The Ponce Bank high-yield money market account offers up to 0.20% APY, but earning even that rate requires a high balance. Look elsewhere.
The Affinity SmartStart Savings account earns up to 2.65% APY, depending on your balance. But you’ll need to join the credit union first.
The Varo savings account is a no-fee savings account with up to 3.75% APY, but you need the Varo checking account to get it.