A savings account helps you grow your wealth safely while keeping your money close at hand. You can open one with most banks and credit unions, but the best online savings accounts are available through online banks. Here's a look at our picks for the top savings accounts, as well as some guidance on what to look for when choosing a savings account.
Rates as
of May 25, 2022
Rates as
of May 25, 2022
Barclays Online Savings
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
APY
0.70%
Min. To Earn APY
$0
- No minimum deposit or maintenance fees
- Great mobile app
- FDIC insured for at least $250K
The Barclays Online Savings account packs in the essentials we covet, including a high APY, no monthly maintenance fees, and no minimum balance to open an account.
Quontic High Yield Savings
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
APY
1.01%
Min. To Earn APY
$0
- $100 account minimum
- No monthly fees
- FDIC insured for at least $250K
- Innovative Bitcoin Rewards Checking account
- Excellent customer service
- No monthly maintenance fees
- Missing some common CD terms
- Checking accounts not ideal for infrequent debit card users
Quontic offers one of the highest APYs we see today. And to earn that APY, a minimum opening deposit of only $100 is required. Taking advantage of this rate can certainly help you hit your savings goals.
American Express National Bank
Rating image, 5.00 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 5.00/5
APY
0.65%
Min. To Earn APY
$1
- No minimum balance
- No monthly fees
- FDIC insured for at least $250K
- Fantastic APY
- No monthly fees
- Good customer service
- No minimum balance for CDs or savings accounts
- Ability to make up to nine savings account withdrawals per month
- No physical branches
- Does not offer a checking account
- Not able to access bank account through American Express app
- No checks, ATM cards, or other physical withdrawal options
You probably know American Express as a popular credit card issuer, but its savings account is garnering a lot of positive attention because of its low fees and high APY. It also allows customers to make up to nine withdrawals or transfers from their savings account every month without paying a fee, which is more than what most of its competitors offer.
CIT Savings Connect
Rating image, 4.00 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.00/5
APY
0.90%
Min. To Earn APY
N/A
- No fees
- FDIC insured for at least $250K
- $100 minimum deposit
- When opening this savings account, a linked eChecking account is opened automatically (also $100 minimum deposit)
- Easy online banking
- Debit card access
- No fees
- FDIC insured for at least $250K
- No branch access
- eChecking account opened automatically could be a negative for some
- Both savings and eChecking accounts require $100 minimum to open
A strong APY and no fees make this account stand out. When opening this savings account, eChecking account is also automatically opened. As long as you're ok with that, it's a top savings option, and the checking account earns a little bit of interest as well.
Discover Online Savings
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
APY
0.60%
Min. To Earn APY
$0
- No minimum balance
- No monthly fees
- FDIC insured for at least $250K
- Few account fees
- Competitive APYs
- Rare account types
- Great customer service
- Somewhat high minimum deposit on CDs
- No interest-bearing checking account
The Discover Online Savings account is a top choice for customers looking for a quality online savings account with a high APY. Discover takes the no-fee approach to the next level with none of the monthly fees or hidden fees that you might see with other banks. Discover offers a top-rated mobile app that lets customers stay connected to their savings from almost anywhere.
Axos High-Yield Savings
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
APY
Up to 0.61%
Min. To Earn APY
$0
- No maintenance fee
- $250 minimum to open account
- Free ATM card
- FDIC insured for at least $250K
- Variety of checking accounts
- Domestic ATM fee reimbursements on all checking and savings accounts
- Competitive APY on savings accounts
- No maintenance fees on any account
- Low APYs on CDs
- No branch locations
- Unimpressive customer satisfaction ratings
Axos High-Yield Savings packs in one of the highest current APYs for balances up to $25,000. Importantly, the account also doesn't charge monthly maintenance fees or have a minimum balance requirement. It also comes with a free debit card for those who request it, so you can quickly withdraw funds directly from your savings account.
Marcus by Goldman Sachs Online Savings Account
Rating image, 5.00 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 5.00/5
APY
0.70%
Min. To Earn APY
$0
- No minimum balance
- No maintenance fees
- U.S. based customer support
- FDIC insured for at least $250K
- Competitive APYs
- No monthly maintenance fees
- Same-day fund transfers to other banks
- Variety of CD terms
- No checking accounts
The Marcus by Goldman Sachs Online Savings Account is a newer entrant to the market, but it's already proven that it's here to stay with a competitive APY, low fees, and no minimum balance requirements.
LendingClub High-Yield Savings
Rating image, 4.00 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.00/5
APY
0.85%
Min. To Earn APY
N/A
- $100 opening deposit required
- No monthly fees
- FDIC insured for at least $250K
Features a very competitive APY and no monthly fees. $100 opening deposit required.
What is a savings account?
A savings account is a type of bank account designed to hold funds you don’t plan to spend immediately. It has an annual percentage yield (APY), which dictates how much interest you earn on the money you keep there. You can open one of these with any bank or credit union, and you can usually contribute as much as you’d like to the account.
How does a savings account work?
Banks use savings accounts to encourage people to keep money in the bank. You add your funds by direct deposit, electronic transfer, check, or some other method. In exchange, your bank pays you interest on your money, usually every month.
How much you earn depends in part on your savings account’s APY and on your balance. A higher APY leads to more money in your pocket, and a higher balance often does, too. Sometimes, banks use a tiered APY system where you qualify for a higher APY if you keep more money in the bank.
How do I access my money?
You're free to withdraw your money from a savings account at any time, but accessing your funds isn't always easy. Most savings accounts don't offer check-writing capabilities or a debit card, so you have to first transfer the funds to a checking account before you can use them.
Some banks also impose limits on the number of free monthly withdrawals you can make from your savings account. This used to be required by a federal law known as Regulation D, but the government lifted this early in the COVID-19 pandemic and has yet to reinstate it. You can check with your bank to find out if your savings account has this sort of limitation.
It's also a good idea to ask about monthly fees and balance requirements when deciding on a savings account. Some savings accounts require you to pay a monthly fee if you don't maintain a certain balance, and this can negate all the interest you've earned. Fortunately, many online banks these days offer savings accounts with no maintenance fees.
What does the bank do with my money?
Banks use your savings to fund loans for their customers. Borrowers then pay interest on the loan, and your bank sends some of that interest to your savings account. A larger balance or a higher savings account interest rate results in more interest.
Types of savings accounts
Here’s a look at the common types of savings accounts you’ll run into.
Traditional savings account
Traditional savings accounts are usually offered by brick-and-mortar banks. They are typically pretty easy to open and most let you directly withdraw cash through a nearby bank branch. You can manage your money online as well. But APYs tend to be pretty low, and most of these accounts carry maintenance fees if your balance falls below a certain threshold.
High-yield savings account
High-yield savings accounts are more common with online banks. These are similar to traditional savings accounts, but they offer much higher APYs and most don’t have monthly maintenance fees. This is the best choice for most people who are comfortable handling their basic banking needs online.
Money market account
Money market accounts offer the APYs of a savings account with the easier access of a checking account. Some include check-writing capabilities, a debit card, or both. However, these accounts usually have higher minimum balance requirements than typical savings accounts.
Certificate of deposit (CD) account
Certificates of deposit (CDs) usually offer higher APYs than any of the savings accounts discussed above. But you have to agree not to withdraw your funds for the full CD term. This can be anywhere from a few days to five years or more, depending on the type of CD you open. If you take your money out early, you can face penalties.
Cash management account
Cash management accounts are available through many online brokers. Money you keep in here earns some interest, and you can decide to invest it if you'd like to potentially earn even more later on. Many still give you access to the online banking features you're probably used to. Some of these are FDIC insured, like the bank accounts listed above -- this means you'll get some or all of your money back if the bank fails. But not all of them are. If you keep funds in a non-FDIC insured account and the company goes under, you could lose that money.
Specialty savings account
A specialty savings account is a savings account that's geared at a certain group of people. Kids' savings accounts are a great example. These are designed for minors who may not be able to open a savings account on their own right away.
Other types of specialty savings accounts include:
- Student savings accounts
- Health savings accounts (HSAs)
- Accounts for specific goals, like Christmas Club savings accounts
Pros and cons of savings accounts
There are advantages and disadvantages that come along with savings accounts. Before deciding if a savings account suits your needs, it's important to consider both.
Pros
- Earning interest
- Saving as much as you like
- Paying bills with automatic bill pay
- Knowing your money is insured with the FDIC
Cons
- Monthly maintenance fees (sometimes)
- No ATM card or checks (usually)
- Only six free withdrawals per month
- Fees for extra withdrawals after your first six withdrawals at some banks
What is a high-yield savings account?
A high-yield savings account earns more interest than most other savings accounts. This is known as a higher APY -- or annual percentage yield. The APY on the best high-yield savings accounts can be up to eight times higher than the national average (and sometimes even higher).
High-yield savings accounts are usually found at online banks. Without a large branch network to maintain, these banks are able to pass their savings on to you in the form of higher APYs and lower fees.
Most online savings accounts carry the same FDIC insurance as traditional banks do. But because these banks don't have branches, you often have fewer options for accessing your funds. This shouldn't pose a serious issue for most people, though, as these accounts are intended for saving, not frequent spending.
Learn more about savings account interest rates
Is a high-yield savings account worth it? What is a good interest rate, anyway? If you're asking these questions, you're not alone. Here are some FAQs we've answered about savings account interest rates:
What is the difference between an online savings account and a traditional savings account?
Traditional savings accounts are usually offered by brick-and-mortar banks. Online savings accounts don't have the overhead of running physical branches and so can offer higher interest rates. As such, the best online savings accounts are often high yield. Early on, many bank customers were concerned that hackers might gain access to their information. As a result, online banks attracted deposits by offering interest rates that brick-and-mortar banks couldn't match.
Now, the banking world has turned upside down. Many people prefer the convenience of online banking. Indeed, traditional brick-and-mortar banks have created online systems to give their customers the same online services.
Here are some of the key differences between savings accounts at online and brick-and-mortar banks:
- Interest rates: The best online banks still offer far better rates than their brick-and-mortar counterparts, especially on basic savings accounts. Many brick-and-mortar banks pay next to nothing in interest, relying on other features to bring customers in.
- Hours of operation: Online banks are more convenient for conducting regular business at any time (although hours can vary if you need to talk to a real person). You don't have to worry about branch location hours or what transactions your brick-and-mortar bank will let you do through an ATM.
- ATM networks: Unlike online banks, brick-and-mortar banks have extensive networks of proprietary ATMs. However, many online banks partner with a nationwide fee-free ATM network or offer ATM fee rebates.
- Customer service: Online banks typically have call centers that provide service on an extended schedule, and a few give their customers 24/7 support. Some also offer online chat assistance. However, no online bank can match the in-person relationships brick-and-mortar banks offer. These are their main competitive advantage over their internet-focused rivals.
- Account access: Most online bank transactions require customers to transfer funds electronically. This typically takes a couple of days to complete. Wire transfers are available for more time-critical needs, but you'll often pay an extra fee. When you need quick access to your money and an ATM won't cut it, brick-and-mortar banks let you immediately withdraw as much as you need at a branch.
The type of bank that's best for you depends on which features are most important to you. Unless you really need to be able to visit a branch and speak to a live person, an online bank should be able to satisfy your needs most of the time. Plus, you can earn a higher APY in the process.
The best savings accounts have a high APY, no monthly maintenance fees, and FDIC insurance. Keep those things in mind as you compare your savings account options.
Learn more: Online vs. Brick and Mortar Bank: Which Is Better?
TIP
Is an online savings account FDIC insured?
Every good savings account has to have deposit insurance from the FDIC. This protects covered deposits up to $250,000 against any problem your bank might have, up to and including the complete failure of the entire financial institution. Most online banks, including those that offer the best online savings accounts, are covered by the FDIC.
Savings account terminology
Here are a few key terms to know before you open a savings account. These are important terms for online savings accounts, traditional savings accounts, and high-yield savings accounts.
APY: This stands for "annual percentage yield." People often use this term interchangeably with interest rate, but the two aren't the same. APY takes into account the actual interest rate as well as how often that interest compounds. A higher APY means more interest for you.
Monthly maintenance fee: This is a fee your bank charges to maintain your savings account. Some banks, especially online banks, don't charge this fee, and others will waive it if you meet certain requirements.
Liquidity: Liquidity refers to how easy it is to turn your money into cash. Highly liquid accounts make this simple, while low-liquidity accounts make it a lot more challenging to get cash when you need it.
What should I look for in a savings account?
The best high-yield savings accounts, both online and traditional, will meet the following criteria:
- FDIC insurance: Most banks offer FDIC insurance. It's unlikely you'll ever use it, but it's risky not to have it. If your bank fails and your funds aren't insured, you lose your money.
- High APY: APYs fluctuate from bank to bank and over time, so there's no solid definition of a high APY. You don't need the highest rate on the market, but you should choose one that's close to the highest around. This will earn you more interest.
- Low fees: Fees can eat into your profits and possibly cost you more than you're earning in interest. Check your bank's fee schedule to learn about any costs associated with the account, and avoid a monthly maintenance fee if you can. Also, check to see if there's a minimum balance requirement on the account.
- Accessibility: Make sure you're comfortable with the ways you can deposit money into your savings account and withdraw it when necessary. You likely also want a bank with an online portal and mobile banking so you can manage your funds remotely.
TIP
How to get extra FDIC insurance
You can get FDIC coverage beyond the $250,000 limit if you spread your money between multiple accounts or multiple banks. For instance, you could get $750,000 in coverage at a single bank by putting money into a joint savings account using your and your spouse's names, and an individual certificate of deposit (CD) in just your name. That's because the $250,000 limit is per depositor, per account category. Spreading the funds across depositors and account categories increases coverage within a single bank.
What should I use a high-yield savings account for?
A savings account is a good place for money you don't need for everyday spending but aren't willing to risk on the stock market. It's a good idea to keep your emergency fund in a savings account, as well as money you're saving toward a large purchase in the next few years. (Tip: Use our emergency fund calculator to help determine how much you should have saved.)
Investing these funds is usually not a good idea. There's a chance you could earn a higher rate on your money, but there's also a risk your investments could lose money, particularly over the short term. You could be forced to sell your assets at a loss when you need money, and even then, it can take time to get the funds. With a savings account, your money's always right there when you need it.
Savings accounts aren't good places for cash you need to access on a day-to-day basis, because withdrawals in excess of six per month could bring fees. They're also not the best choice for money you don't plan to use for decades. That's because savings account interest rates are usually lower than the return you can get on the stock market.
Alternatives to consider
One of these other bank accounts might suit you better if our best savings accounts don't sound like a good fit.
CD accounts: A certificate of deposit (CD) is a special type of savings account that offers a higher interest rate than a high-yield savings account. But it doesn't allow you to access your deposit plus earnings for a set number of months or years (your CD term). If you withdraw your money before this deadline, you'll pay a withdrawal penalty.
Money market accounts: A money market account offers the high interest rate you find with savings accounts and CDs as well as some checking account features. Some offer ATM cards, checks, or both so you can withdraw funds directly from this account. Be aware, you're still limited to six penalty-free withdrawals per month.
Checking accounts: Checking accounts rarely earn interest, and when they do, their rates are usually lower than high-yield savings accounts. But these accounts have no withdrawal restrictions, and most include an ATM card, debit card, and checks for easy access.
Savings vs. checking vs. CDs: Which should you pick?
Choosing the right home for your money is essential if you want to minimize frustration and earn the most interest. This chart provides a quick overview of some of the key features of the best savings accounts, checking accounts, and CDs.
| Features | Savings accounts | Checking accounts | CD account |
|---|---|---|---|
| Interest rates | Offer higher APYs than most checking accounts and some CDs in exchange for restricted withdrawals | Typically offer a low interest rate, if any | May offer a better rate than savings or checking accounts in exchange for withdrawal restrictions (depending on the CD term and bank) |
| Variable or fixed interest rates? | Variable | Variable | Fixed for the CD term |
| Liquidity | Fairly high, but fewer withdrawal options and penalties for excessive withdrawals | High -- several deposit options, and no restrictions on withdrawals | Depends on the CD type, but typically low, with penalties for early withdrawals |
| ATM card? | Possible, but rare | Yes | No |
| Check-writing capabilities? | No | Yes | No |
How to open a savings account online or in person
To open a savings account, visit a branch (if your chosen bank has them), or fill out an online application form. You will need to provide some personal information, including:
- Your address
- Your Social Security number
- A government-issued ID, like a driver's license or a passport
If you are opening a joint savings account, both parties will need to provide this information.
Your bank may also require a minimum deposit to open the account. This may be different from the ongoing minimum balance required to avoid monthly maintenance fees. If you're transferring the funds from another bank account, you'll need to know its routing and account number.
Rates as
of May 25, 2022
FAQs
-
Savings accounts earn interest over time on money you don't plan to spend immediately. How much interest you earn depends on the balance in your savings account and the interest rate. In exchange for this interest, you agree to limit your monthly withdrawals from your savings account.
-
Yes. Savings account funds are FDIC insured up to $250,000 per person per bank, so there's no risk of losing money if your bank goes under. The risk of losing money with a savings account is pretty slim. It could be possible if you incur a lot of fees, your identity is stolen, or a hacker gains access to your bank account.
As long as you are aware of the fees your bank charges (and ways to avoid them) and you protect your personal and account information, your savings account should only make you money.
-
The best savings accounts have:
- High APY: The top savings accounts should include a high APY in range with our picks.
- No monthly maintenance fee: Most of the best savings accounts won't charge a monthly maintenance fee.
- FDIC insurance: Whether you're putting money aside to build an emergency fund or wanting to earn more interest, security is important.
-
A high-yield savings account is a savings account that offers a much higher APY than average. The national average savings account APY is currently 0.06%, but some high-yield savings accounts offer APYs that are eight times that rate (sometimes even more). This means your savings can grow more quickly.
-
In most banks, $1,000 won't earn much interest, even if you leave it alone for a whole year. For example:
- If the interest rate is 0.01%, you'll earn about $0.10
- If the interest rate is 0.05%, you'll earn about $0.50
Now compare those numbers with a high-yield savings account:
- If the interest rate is 0.60%, you'll earn about $6.02
That $6 may not seem like a lot of money, but when it comes to savings, it's a huge difference compared with $0.10. That's because of the magic of compound interest. If you leave your $1,000 in the bank for 30 years at 0.60%, you'll earn $197.16. But if you're only getting 0.01%, your earnings drop to $3. Yes, $3 after 30 years! It's not nothing, but it's awfully close.
Now imagine how these numbers will compare if you add a few hundred dollars to your balance each year.
Savings rates can -- and do -- go up and down. Rates are always up to the bank's discretion, and there's no guarantee your bank will raise rates when others do. Changing banks is easy, though, so keep your eye on top savings accounts and consider moving your money if your bank isn't keeping up.
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These types of accounts often earn more than traditional savings accounts:
- High-yield savings account
- Certificate of deposit account
- Money market account
Even among these types of accounts, you will find a wide range of interest rates offered. Generally, the highest interest rates are found at credit unions and online-only banks.
Some banks and credit unions offer tiered interest rates. For example, you might earn a relatively high rate on your first $1,000, and then a smaller rate on the amount above that. Or your bank might pay a modest rate on the first $25,000 and a higher rate on the amount above that. Beginner savers will definitely do better with the first type of account. Once you start building your savings, you can use an online savings calculator to figure out where you'll earn more.
-
Yes, a savings account (especially a high-yield savings account) is a great place for your emergency savings. Here's why:
Your emergency fund should be easily accessible to you. Keep your emergency savings in an account that allows you to transfer or withdraw money quickly. A certificate of deposit account is not recommended because no one can predict when financial emergencies are going to happen, and you might have to pay a penalty if you withdraw money from a CD before the maturity date.
Your emergency fund should be protected from losses. It's generally not advisable to put your emergency fund in the stock market or other account that could experience fluctuations, because you wouldn't want the value to be in a dip when you have a financial emergency.
Your emergency fund should grow. This is why you shouldn't keep your money under the mattress, even if you feel that it would be safe from theft. A high-yield savings account allows you to maximize your earnings. Stashing cash -- or leaving your money in a traditional savings account -- means you forego the opportunity to earn as much as possible in interest.
About the Author
Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what's almost a farm in northern Wisconsin with her husband and three dogs.
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