How much should you put in a savings account?

It depends on what you're saving for. The Motley Fool recommends you have three to six months' worth of income in a savings account to properly prepare for emergencies. This type of stash, typically called an emergency fund, is an account you can withdraw from to pay off surprise expenses.

What is a good interest rate?

It depends on the market. As of August 2023, a very good rate hovers around 4% or so. According to the FDIC, that's about 10 times the average national rate.

How to Choose a Savings Account

Savings accounts are one of the most common types of bank accounts -- and potentially one of the most valuable. Why? Because they let you earn interest on your savings just for leaving your money in the account. But choosing the best one for you is tough because there are so many options.

Consider opening a savings account if you're looking to build an emergency fund or save up for a big purchase in the next year or so. This guide will walk you through the types of accounts and how to choose a savings account that's right for you.

How to pick a savings account:

Pick a type of savings account.
Determine if you want an online-only account.
Evaluate the account fees.
Consider annual percentage yield (APY).
Look at the other accounts offered.

Let's take a detailed look at each step.

1. Pick a type of savings account

Saving accounts come in more than one flavor. Here are five common account types you can choose from.

Basic

Your standard account. This account type tends to have no minimum daily balance requirements. It's common, and offered by just about every brick-and-mortar bank or credit union. But the annual percentage yield (APY) a basic account offers usually isn't as high as that offered by other account types.

High interest

A wealth-building, high-yield savings account. It offers an APY that beats a basic savings account's rate. High-interest accounts grow savings more quickly. The highest-yielding saving accounts are most commonly offered by online banks, though some brick-and-mortar banks offer them to customers who meet minimum balance requirements.

Jumbo

The triple scoop of savings accounts, the jumbo account is a big account designed for a person with high net worth. It usually requires a minimum deposit of at least $100,000 and offers higher APYs than most types of savings accounts.

Money market account

A money market account is a hybrid between a savings and a checking account. They often get lumped in with savings accounts because they offer similar features, but a money market account is technically a separate thing. Money market accounts offer a similar APY as savings accounts, but like checking accounts, they give you more ways to withdraw cash. This might include a debit card to swipe, and at some banks, the ability to write checks.

Compare savings rates

Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.

Account	APY	Promotion	Next Steps
Open Account for SoFi Checking and Savings On SoFi's Secure Website. Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 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.	up to 4.50%² Rate info Min. to earn: $0	New customers can earn up to a $300 bonus with qualifying direct deposits!¹	Open Account for SoFi Checking and Savings On SoFi's Secure Website.
Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 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.	4.25% Rate info Min. to earn: $0	N/A	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Open Account for CIT Platinum Savings On CIT's Secure Website. Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 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.	4.85% APY for balances of $5,000 or more Rate info Min. to earn: $100 to open account, $5,000 for max APY	N/A	Open Account for CIT Platinum Savings On CIT's Secure Website.

2. Determine if you want an online-only account

The online savings account comes in one of the above flavors, but it happens to be available on desktop or mobile only. It warrants its own section because sometimes, it's offered by an online bank with zero physical branches. This type of bank has low operating costs and can therefore charge you fewer fees and offer you higher APYs. These attractive features make an online savings account worth considering.

3. Evaluate the account fees

Check if the account has a monthly maintenance fee. If it does, see if you can get it waived. Get a copy of the account's fee schedule (a list of fees the account charges) and look at what the bank could charge you. Make sure you're comfortable with these amounts before applying for the account.

4. Consider annual percentage yield (APY)

A high interest rate means more money for you. But don't get too hung up on which account offers the best rate. Banks can change their rates at any time, so the account with the best APY right now could end up in the middle of the pack in a couple of months. Choose a rate that's close to the best available, but don't sweat tiny differences.

5. Look at the other accounts offered

Look into what other bank accounts your favorite financial institution offers. Does it offer checking accounts? Loans? Credit cards? You may be able to do all your banking in one place.

Some banks give additional benefits to customers who open multiple accounts. If you're on the fence, these perks could sway your decision.

Get the best savings account for you

Opening a savings account is a useful way to grow your wealth while keeping your money easily accessible. It's safe, too -- most accounts are protected by the FDIC. You can find savings accounts offered by the safest banks in the U.S.

Safe and easily accessible are ingredients necessary to build an emergency fund, which helps you cover unexpected expenses. The best savings accounts earn you income and support you during bad times. Pick an affordable account that meets your needs to secure your long-term financial future.

The Ascent's best savings accounts

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. The Ascent's top savings account picks can earn you more than 10x the national average savings account rate.

Best Savings Accounts

FAQs

It depends on what you're saving for. The Motley Fool recommends you have three to six months' worth of income in a savings account to properly prepare for emergencies. This type of stash, typically called an emergency fund, is an account you can withdraw from to pay off surprise expenses.
It depends on the market. As of August 2023, a very good rate hovers around 4% or so. According to the FDIC, that's about 10 times the average national rate.

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