People have more options than ever before regarding how they bank. There are financial services that will meet your needs, from local credit unions to national (or even international) chains to online-only banks. Even though these needs vary from person to person, most people need the same thing: a savings account.
“But I already have a checking account,” you say. You should have a checking account and a place to save money for big purchases, like a car or a house. But before you go to a bank and open an account, you should think about what you want to do with your money.
Interest is the first thing you should consider when looking for the best savings account. We’ll start by saying that even a high-interest savings account will give you little back. Since the government backs a certificate of deposit or CD, it may have a reasonable interest rate and low risk. But it usually locks up your money for a certain amount of time. This might help you reach your savings goal, but if you want to be able to use your savings in an emergency, it won’t help. You could put your money in stocks or a mutual fund, but those are riskier. The best things about a savings account are how easy it is to get to your money and how low the risk is.
But what about savings accounts that give you much money back? Still, they will only make a little money. The highest interest rate on a high-yield savings account is about 1%. The Federal Reserve sets this rate, but not in a direct way. If you put $100,000 in your savings account for a year, you would earn around $1,000 in interest. Even with interest in appeal, that’s a little.
Still, a savings account is helpful because it gives you easy access to your money and protects it with up to $250,000 in federal deposit insurance. Also, getting one is easy, and there are only a few rules about who can get one. A child can open an account if they have the minimum deposit and a parent or guardian co-signs the account.
Most people have one of two main kinds of savings accounts. Some can only be bought online. Most new banks that don’t have stores offer this kind. Since there are no branches to maintain or tellers to pay, online banking provides a higher annual percentage yield, or APY, which means you get more interest over time. These accounts with a high APY are often called “high yield” accounts.
On the other hand, most larger institutions, regional banks, and local credit unions with physical branches have a way to make deposits or withdrawals and talk to a person. Again, those things are false about online banks. You do all of your business online or at another bank’s ATM. If you need help, you can only use online chat, email, or the phone. People who already know how to use mobile banking and direct deposit and are looking for a high APY will be OK with this. But online banking might not be for you if you want to talk to a natural person.
A third possibility is that some banks only have branches in certain states, and people who don’t live in those states may only be able to open a high-yield online-only deposit account. Ken Tumin, who started and runs DepositAccounts.com, says that these older banks see these high-yield accounts as a way to get more deposits without building a physical branch.
Best savings accounts, compared
| Best online savings account | Highest interest rate | Best for in-person banking | Another good choice | Another good choice | |
| Bank/Institution | High Yield Chime Savings Account | Sallie Mae SmartyPig | Citi Accelerate | PNC High Yield Savings Account | Vio Bank Online High Yield Savings Account |
| APY | 0.5% | Up to 0.7% | 0.5% | 0.4% | 0.57% |
| Minimum deposit | $0 | $0 | $0 | $0 | $100 |
| Estimated annual earnings on $1,000 deposit | $5 | Up to $8 | $5 | $5.00 | $5.70 |
| Branch access | No | No | Yes | No | No |
| Monthly fee | $0 | $0 | $4.50 when your balance falls under $500 | $0 | $5 when you choose to receive paper statements |
We looked at more than a dozen savings accounts from national and local banks to see which ones were the best. Even though we didn’t include local banks and financial institutions that serve a limited range of customers in the US, you may want to look closely at your local bank and credit union options as you build your savings plan. You want to find an account with a high-interest rate, no matter how much money is in it daily. The annual percentage yields (APYs) on savings accounts can change daily. The account should also have low or no fees, a low or no minimum balance, FDIC insurance, and easy ways to withdraw and deposit money (direct deposit is critical).
We also looked at mobile banking, minimum deposit requirements, how easy it is to check your account balance if there is a fee for using an ATM, if the bank charges a monthly maintenance fee if there is a minimum balance requirement, and a lot more.
If you want to open your first savings account or put your money elsewhere, you’ve come to the right place. We’ve already said that we’ve looked at many savings accounts, and our list of the best accounts, updated often, can help you find the right bank for your needs.
- Interest rate: 0.5% APY
- Availability: All 50 states
- Minimum deposit: $0
- Monthly fees: $0
Let’s say you are comfortable using a bank only available online. Then, Chime’s high-yield account has the best features for a personal savings account: no fees, easy ways to move money in and out, a nice app, and one of the highest interest rates with a.5% APY savings account rate. You also get a free checking account with Chime, which is the main way to add and remove money from your account. They go together like twins who are joined at the hip.
With the modern and useful Chime app, you can deposit checks from anywhere, and the Visa debit card that comes with it can be used at more than 38,000 MoneyPass and Visa Plus Alliance ATMs. (You can also put cash in your account at any Green Dot store, like Walgreens, CVS, or Family Dollar.) There is no minimum balance, and Chime lets you round up purchases to the nearest dollar and put the difference into your savings account (similar to Acorns, the micro-investing service).
- Interest rate: Up to 0.7% APY
- Availability: All 50 states
- Minimum deposit: $0
- Monthly fees: $0
Sallie Mae is best known for giving out student loans, but they also have a goal-based savings account with the highest APY and no minimum deposit. The company says its SmartyPig account is “a free online piggy bank where people can save money for things like holiday gifts, vacations, and even retirement.” But there are better ways to save for retirement than this bank account, mainly because Sallie Mae’s interest rates are strange and go backward: they start at 0.7% higher APY on balances under $2,500 and go down to 0.55% on credits over $50,000.
This account is best for people who are just starting to save, who want to build up or keep balances under $10,000, and who might be better off in the long run if they can’t get to their money as quickly. This is because the SmartyPig account doesn’t come with an ATM card, Sallie Mae doesn’t have branches where you can make deposits or withdrawals, and there needs to be an app for easy transfers. SmartyPig is worth a look if you want to save a small amount for a specific purpose and get the most out of your interest rate simultaneously. You can transfer or withdraw cash anytime through the bank’s website, but customers are encouraged to set up automatic deposits from their paychecks or other accounts.
- Interest rate: 0.5% APY
- Availability: Throughout the US except California; Connecticut; Illinois; Maryland; Nevada; New Jersey; New York; Virginia; parts of Florida; Washington, DC; and Puerto Rico
- Minimum deposit: $0
- Monthly fees: $4.50 when your balance falls under $500
Citi’s Accelerate account has a good APY and all the benefits of a national chain with branches in 42 US states if you want to work with a big bank. When you link a Citi checking account to a Citi savings account, you get free access to more than 60,000 Citi ATMs and other surcharge-free ATMs, customer service available 24/7, and other benefits. Even though there is no minimum deposit to open this account, Citi will charge you $4.50 monthly if your checking account balance drops below $500.
Citibank is one of the largest banks in the world, but you should know that it’s only in some states. Suppose access to branches is important to you. In that case, you should choose different personal savings to account if you live in California, Connecticut, Illinois, Maryland, Nevada, New Jersey, New York, Virginia, Washington, DC, Puerto Rico, or some parts of Florida.
- Interest rate: 0.4% APY
- Availability: Accessible in the 19 states that don’t have a PNC branch
- Minimum deposit: $0
- Monthly fees: $0
Only available to people in New York, Delaware, Maryland, Virginia, North Carolina, South Carolina, Georgia, Alabama, Florida, Ohio, West Virginia, Kentucky, Illinois, Michigan, Indiana, Missouri, Wisconsin, and Washington, DC.
PNC’s high-yield savings account is only available online and has a reasonable interest rate, no minimum initial deposit, no minimum balance, and no monthly maintenance fee or other fees.
- Interest rate: 0.57% APY
- Availability: All 50 states
- Minimum deposit: $100
- Monthly fees: $5 when you choose to receive paper statements
MidFirst Bank, the biggest privately owned bank in the US, has a division called Vio Bank. Vio Bank is only available online. So, you’ll have to do all your banking online, either through the bank’s website or app. Even though Vio’s annual percentage yield isn’t as high as other banks offer, it’s always competitive. So, if you want to open an account, you’ll have to put down at least $100, and this online bank will charge you $5 per month if you want paper statements. Aside from that, the fees are about the same as those at other banks.
What are the major differences between checking and savings accounts?
Most checking accounts are made to help you make purchases and payments, whether you use a debit card, a mobile app like Apple Pay, or a paper check. Most checking accounts don’t pay interest and the ones that do usually pay a very low rate of 0.1% or less.
The interest rates on savings accounts are much higher, and online-only banks usually have the best yields. These accounts give you a safe place to keep money that you can still get to. Until recently, most people with savings accounts could only make six transactions per month.
How many withdrawals can I make from a savings account?
In normal times, account holders can only take out a maximum of six dollars per month from their accounts (to preserve liquidity for financial institutions). In response to the pandemic, the Federal Reserve changed Regulation D so that people could get as much money as they wanted without having to pay a monthly fee.
What is a high-yield savings account?
A high-yield savings account gives you more interest than a regular savings account. There might be a minimum deposit or a fee every month, or these accounts might only be available in certain states.
The interest rates for regular savings account at a bank range from 0.05% to 0.1%, while the rates for high-yield savings can go as high as 1%.
Who sets interest rates? How often do they change? And why are rates so low right now?
The Federal Reserve sets a target rate range, which affects how individual banks choose their interest rates. Rates can change over time, usually after every five to eight weeks when the Board of Governors meets. Since the Great Recession lasted from 2007 to 2009, the Fed kept rates low, which is why savings account interest rates are low. Right now, the average interest rate on a savings account is 0.05%.
So, many banks will offer a higher savings rate to attract new customers. High-yield savings accounts are very popular, and there is much competition for them. Some banks provide especially high rates for the first few months; because of this, banks and credit unions often change the interest rates they offer.
Do you have to pay taxes on the interest earned from a savings account?
Yes. When your savings account earns more than $10 in interest in a year, your bank will send you a 1099-INT form.
Savings narrativesresearched
- Ally Online Savings Account
- PNC High Yield Savings
- Vio Bank High Yield Online Savings Account
- Marcus High Yield Savings
- Discover Online Savings Account
- American Express High Yield Savings Account
- Citi Accelerate
- Nationwide My Savings
- Citizens Online Savings Account
- Sallie Mae SmartyPig
- Affirm Savings
- Chime Savings Account
- Synchrony High Yield Savings
- Popular Direct Select Savings
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