7 Best Savings Accounts

For years, online banks have been reputed to offer significantly higher rates of return than traditional brick-and-mortar institutions. Nowadays, however, traditional banks and credit unions are also offering competitive rates that can help your savings grow faster.

What’s more, pretty much every bank offers a mobile banking app to help you to keep track of your savings and manage your account on the go.

The best savings accounts offer high annual percentage yields (APYs), have low minimum balance requirements and charge little to no fees. We found the best savings accounts available today, comparing APYs, minimum deposit requirements and other account features, to help you find the right one for you.

Read on to learn more about Money’s picks for best savings accounts.

Our Top Picks for Best Savings Accounts

• Bread - Best no-frills savings account
• Barclays - Runner-up for best no-frills savings account
• Ally - Best digital savings tools
• PenFed - Best credit union
• Synchrony Bank - Best for ATM withdrawals
• CIT Bank - Best for account variety
• Discover Bank - Best for no fees
• SaveBetter - Best savings account marketplace

Best Savings Accounts Reviews

Why we chose it: Bread Savings’ online savings account offers the essential features you need and features a high 4.50% APY.

Bread Financial offers a high-yield savings account with an APY of 4.50% — the highest on our list. The account has no monthly maintenance fee and you can make unlimited transfers and mobile check deposits.

Bread’s other savings products — certificates of deposit — also offer the highest APYs among the companies on our list. The 1-year CD starts out at 5.05% APY, which is already as high as many of the highest APY CDs.

Bread’s high APYs come with a tradeoff: there’s no checking account available. This means that you must transfer the funds to another bank to withdraw the cash. Additionally, its mobile app is somewhat barebones, only offering basic account-management tools, such as the ability to check your balances and make transfers.

Barclays offers a no-frills online savings account with a competitive APY of 3.60%. Its CD offering is similarly attractive, with a rate of 4.30% on a 60-month CD. On the other hand, it doesn’t offer any additional savings products such as IRAs or money market accounts.

Barclays savings has its own dedicated mobile app from which you can track your balances, make mobile deposits and transfer funds to a different bank account.

Why we chose it: Ally Bank’s “buckets” and “boosters” features on its mobile app helps customers budget effectively.

Ally Bank’s online savings products feature competitive APYs, but what really sets it apart is its smart saving tools called “buckets” and “boosters” that help you organize and analyze your money.

Saving buckets work as digital envelopes that you can use to divide your savings into different categories without the need for multiple bank accounts — you can create up to 10 savings buckets within one account.

Boosters are optional automated savings tools that help grow your savings in different ways. There are three different boosters:

• Recurring transfers - You can set up recurring transfers from your checking account on a schedule that makes sense for you.

• Round-ups - Ally will automatically round up eligible transactions to the nearest dollar up to $5. Once $5 or more has been rounded up, Ally automatically transfers the amount to your savings account.

• Surprise savings - Each month, Ally analyzes your checking account for amounts that are considered "safe to save" and automatically transfers them to your savings account.

Ally also offers IRA accounts with rates that match its more traditional savings products. The APYs on its other accounts (savings, money market, CDs) are only 0.10% - 0.30% lower than other comparable banks.

Why we chose it: Competitive APYs and a wide variety of savings products make PenFed our choice for best credit union for savings accounts.

PenFed Credit Union is open to residents of all 50 U.S. states, the District of Columbia, Guam, Puerto Rico and Okinawa. PenFed stands out for offering a wide range of savings products and having some of the most competitive APYs among credit unions.

PenFed’s premium online savings account has an APY of 2.70%, which is among the lowest of our top picks, but its money market certificates (the credit union equivalent of a certificate of deposit) offer a competitive 3.90% APY for a five-year term.

Other savings products include a regular savings account, IRAs and money market accounts. Though the regular savings account has the lowest APY at 0.05%, it does allow you to withdraw your money at an ATM — unlike the online savings account.

The best part about membership with PenFed are the associated discounts on several services, such as car and home insurance and car rentals.

Why we chose it: Synchrony’s high-yield online savings account is the only one on our list that allows you to withdraw funds at an ATM, making it our pick for the best savings account for ATM withdrawals.

Synchrony Bank offers several online savings products, including a high-yield savings account, money market account, certificates of deposit and IRAs. Its savings account stands out for its associated ATM card, which allows you to withdraw funds at any ATM.

The online savings account’s 4.00% APY is among the highest on our list, and offers 4.50% for a one-year CD, which is significantly higher than many competitors. Its money market accounts could offer a 2.25% APY, which is good, although not outstanding.

There is a limit of $1,000 in ATM withdrawals per day and $500 in point-of-sale (POS) transactions. You also only get up to $5 in ATM fees refunded per month unless you achieve diamond status with Synchrony’s rewards program.

Why we chose it: CIT’s combination of high APYs and several different savings products — from savings accounts to certificates of deposit — make it our choice for the best bank for savings account variety.

CIT Bank stands out for its wide variety of savings products, mainly its four different kinds of certificates of deposit. It also offers custodial accounts to build savings for minors.

CIT’s online savings account, “Savings Connect,” features a 4.20% APY, which is among the highest on our list. Its money market account APY is 1.55% — a fairly competitive rate, if not the highest.

Lastly, its CD rates can go as high as 4.65%, though the highest rate only applies to the 13-month CD and requires a minimum $1,000 deposit.

Why we chose it: Discover’s lack of fees, from maintenance fees to excessive transaction fees — and even official check fees — makes it our pick for the best savings account for no fees.

Discover offers online savings products that feature almost no fees across the board, even administrative ones that other accounts usually include (such as official check fees and insufficient fund fees). In fact, the only fee Discover charges is a $30 fee for outgoing wire transfers.

Beyond its notable lack of fees, Discover’s online savings account offers a competitive 3.60% APY. Similarly, its money market accounts feature a 3.50% APY for balances under $100,000.

Its certificates of deposit offer terms up to 10 years in length with APYs up to 4.10%. Discover also offers IRA CDs with rates of up to 4.50%.

Last but not least, Discover offers 24/7 phone customer service, which is uncommon.

Why we chose it: The fact that SaveBetter partners with ten different financial institutions to offer a variety of savings products — including money market accounts and certificates of deposit — makes it our choice for best savings account marketplace.

SaveBetter is an online marketplace that partners with ten different banks and credit unions so that customers can comparison shop for different savings products. You can comparison shop for regular savings accounts, high-yield savings accounts, money market deposit accounts and certificates of deposit.

All accounts are federally insured with competitive interest rates, low or no fees, deposit insurance coverage and no withdrawal limits.

SaveBetter’s partner banks each have different savings products that can adapt to the needs of individuals. Whether you prefer to have ATM access to your funds or a no-frills saving account that only allows electronic transfers, there is something for everyone.

Other savings accounts we considered

Some savings accounts offer competitive APYs but can have a monthly service fee or high minimum balance requirement, which kept them out of our main picks. However, they might still be worth looking into for many customers.

American Express

American Express offers several savings products with competitive APYs, such as a high-yield savings account with a 3.75% APY and certificates of deposit with up to 4.50% APY for a 1-year term. It also offers IRAs with similar rates, depending on whether you choose the HYSA IRA or CD IRA.

American Express is one of the few banks we reviewed that offers 24/7 customer service either through its mobile app or on the phone. You should note that mobile app access to your savings account is currently only available if you also have an American Express credit card account.

Capital One

Capital One’s 360 Performance Savings account currently offers an APY of 3.40%, making it one of the better online savings accounts right now, especially if you already do most of your banking through Capital One. Likewise, its 5-year CD has an APY of 4.10%, which is on par with other top-performing CDs.

Although Capital One does not offer savings products such as money market accounts and IRAs, they do offer a children’s savings account. The Capital One mobile app allows you to manage your accounts from your phone and even request customer support 24/7, although this only applies to automated customer service.

Chime

Chime’s online savings account offers some tools to help you save consistently. For example, it will round up change from everyday purchases and automatically deposit them. Note that you’ll need to have a checking account with Chime in order to open a savings account with them. However, that also offers an advantage — Chime can automatically reroute a designated percentage of your direct deposits into savings.

Although Chime offers a comparatively low APY — 2.00% — its basic savings tools make it a worthwhile alternative.

Citibank

Citibank offers nearly every type of savings product from online savings accounts to IRAs. Although it doesn’t offer standalone money market accounts, they are available as part of its IRA offering. Citibank’s saving APY is currently around 3.25% (depending on your location), and its CD rates can go as high as 4.15% for a 12-month term.

While Citibank’s rates are middle-of-the-road, its savings products are a good choice for current customers who don’t want to shop around for a different bank. Likewise, individuals who prefer in-person service can visit one of Citibank’s physical branches across the U.S.

It should be pointed out that Citibank’s requirements to waive its maintenance fees can be stricter than other banks. For instance, if your savings account is linked to a checking account, you must maintain a total balance of $1,500 on your combined accounts in order for the fee to be waived; if you don’t have a checking account at the bank, the savings account must have $500 at all times.

Marcus by Goldman Sachs

Marcus by Goldman Sachs focuses on offering savings and investment products, loans and credit cards. The APYs of their savings account and their 12-month certificates of deposit are competitive — 3.75% and up to 4.50%, respectively.

Marcus’ 13-month no-penalty CD (meaning you won’t have to pay a fee for withdrawing your funds early) stands out for its 3.85% APY, which is higher than similar products at other banks. Marcus is also notable for its 24/7 customer service both online and over the phone.

Sallie Mae Bank

Sallie Mae Bank has several savings products that fit a variety of needs, including high-yield savings accounts, money market accounts and certificates of deposit. However, it does not offer IRA products.

Its most notable product is its “SmartyPig” savings account, which has savings tracker tools to help you keep an eye on your savings goals. It also offers referral bonuses of $10 for each person you convince to sign up for the same account.

Varo Bank

Varo Bank lets you earn up to 5.00% APY, one of the highest rates in the market. However, there are some caveats — you must set up a recurring direct deposit of $1,000 or more and the APY only applies to the first $5,000 in your account. After that amount, you’ll earn 3.00%.

While this is not the lowest APY on an online savings account out there, it is a very noticeable downgrade from its highest rate.

Savings Accounts Guide

A savings account with a good rate of return is an excellent way to make your money grow — whether you’re building an emergency fund, saving for that dream vacation, or making sure you have a good financial cushion for the future. However, there are more savings products than just a traditional savings account, and these can be useful for different goals.

Read on to learn more about savings accounts and how they compare to the other types of account options.

What is a savings account?

A savings account is a type of bank account that generates interest on the funds that you deposit. Unlike interest-bearing checking accounts, the interest rates on savings accounts are typically considerably higher — a checking account may have a 0.0003% interest rate while a basic savings account has an average rate of 0.08%.

While a basic or traditional savings account has a relatively low interest rate overall, there are different types of savings account with higher interest rates for different savings goals.

What is a high-yield savings account?

A high-yield savings account is a savings account that offers higher annual percentage yields (APYs) than other types of savings accounts. While these high APYs fluctuate depending on the interest rate set by the Federal Reserve, these interest rates are consistently the highest on the market.

These accounts are a popular alternative for people who have big savings goals in mind. Like with a regular savings account, you can access your money at any time. However, these accounts have guardrails (such as no ATM access, limited monthly withdrawals and withdrawal fees) that limit your access and help you save.

How does a savings account work?

Unlike a checking account, funds deposited into a savings account are not meant for everyday use. This means that access to funds you deposit in a savings account is restricted to avoid unnecessary spending.

Normally, you have a limited amount of withdrawals per month (up to six), though many banks allow you to make ATM withdrawals that don't count against this limit. However, this only applies to traditional savings accounts and other types of savings accounts (such as high-yield accounts) may be stricter in limiting access to your funds.

The money that is deposited into your savings account generates interest, which can be calculated daily, weekly or monthly. At the end of your statement cycle, the bank then deposits the accumulated interest into your savings account, helping it grow faster.

Why have a savings account?

Savings accounts are a great way of setting money aside and have it grow faster thanks to compound interest. Depending on the type of savings account, you could use it as an emergency fund or even for larger savings goals such as a down payment on a car or home loan.

Like any other financial product, traditional savings accounts come with their own benefits and limitations:

Savings account pros and cons

How to choose a savings account

Since the main purpose of a savings account is to help build your savings, the most important factor when choosing a savings account should be a high interest rate or APY. This ensures that your savings get a small monthly boost.

But there are also other factors to consider, including:

• Minimal (or no) maintenance fees
• No additional fees (such as ATM fees, overdraft fees or ACH fees)
• No minimum balance requirements
• 24/7 customer service
• Mobile app availability

Choosing an account with few or no fees means that you maximize the gains you make from a high interest rate. Likewise, the lack of minimum balance requirements means that you avoid fees if you ever have to withdraw most of your savings in an emergency.

As far as the 24/7 customer service and the mobile app are concerned, it’s always helpful to be able to contact support at any moment if you run into any technical issues while managing your account.

Lastly, mobile banking — being able to view your account balances and access other financial services on the go — is a convenience that could save you valuable time and keep you motivated to save even more.

How to open a savings account?

Opening a savings account is as simple as either applying in person at a local branch or completing the process online.

Regardless of which option you choose, you should first:

• Decide which type of savings account is best for your savings goals.
• Compare banks to find highest interest rates and lowest fees to help your money grow faster.
• Gather your information and documents
• Apply
• Make an initial deposit

What do you need to open a savings account?

To open a savings account — or any type of bank account — you’ll generally need most or all of the following:

• A valid government-issued ID such as your driver’s license or passport
• Your Social Security number or individual taxpayer identification number
• Other personal information such as your date of birth, address and phone number
• An initial deposit to fund your new account (either cash or another account’s information that you can transfer funds from)

How to open a savings account for a child

Opening a savings account for a child is as simple as opening one for an adult — in addition to requirements listed above, the only additional information you'll need to provide is your child's. While the process is the same, the benefits children get from these accounts can be far more than monetary.

Many financial experts suggest that involving children in your finances can provide them with valuable lessons in how to manage their money later on. A savings account might be a great teaching tool to help your children learn great financial habits and start setting saving goals early.

What are the different types of savings accounts?

The words “savings accounts” normally refer to what is considered a traditional savings account, with comparatively low interest rates but greater flexibility in how you can access your money.

However, most banks offer different types of savings accounts that can suit different needs.

Traditional savings account

This is the most common type of savings account which is offered by banks and credit unions. These accounts will have a higher interest rate than a checking account but are limited in the amount of withdrawals you can make in a month (six is the standard). This type of account has a generally low interest rate overall — typically between 0.04% and 0.15%.

Many banks will often allow you to withdraw money from your savings account through an ATM, which doesn’t count against your six total withdrawals for the month. Unfortunately,

A traditional savings account is a good place to put away cash you may not need right away, but could be used for unexpected emergencies. They’re particularly useful if you open them at the same institution as your checking account, which makes transfers quicker and easier.

High-yield savings account

This is one of the more popular alternatives to a traditional savings account. High-yield savings accounts (HYSAs) work like a traditional savings account, but feature interest rates up to 20 times higher (sometimes even more).

Unlike traditional savings accounts, HYSAs are mostly online-only products that aren’t offered at local branches. They also offer fewer ways to access your funds, which might make it easier to build your savings. Note that the APYs on these accounts fluctuate depending on the rates set by the Federal Reserve.Money market accounts

Money market accounts

Money market accounts (MMAs) offer interest rates almost as high as a high-yield savings account while allowing you to use debit cards and giving you check-writing capabilities.

While they offer greater flexibility in how to access your funds, MMAs have certain limitations and requirements that other savings accounts don’t have. For example, almost all MMAs have a minimum balance requirement that requires you to pay fees if it is not met.

Like other savings accounts, withdrawals are limited to six per month, not counting ATM transactions. Much like high-yield savings accounts, the interest rate on MMAs is variable and may change at any moment without notice.

Certificates of deposit (CDs)

Certificates of deposit (CDs) are a type of savings account that allows you to store your money for a fixed period of time, offering higher interest rates the longer you choose to deposit your money for.

CDs can have terms as short as three months or as long as several years, though rarely more than 10 years. While you are allowed to withdraw your funds before the specified term, you’ll have to pay a predetermined penalty if you do. (Note that some banks and credit unions offer no-penalty CDs.)

Unlike other types of savings accounts, CDs have fixed interest rates. This can be helpful during periods of time when interest rates are declining, but it can also mean that you won't be able to take advantage of higher interest rates later on.

Check out our list of Best CD Rates to learn more about this product and the options available.

Specialty savings accounts

There are several other savings accounts that can be set up for specific savings goals. For example, some can be used as a savings fund for a dependent while others can be set up specifically to save for healthcare expenses.

Specialty savings account include:

• Children’s savings
• Health savings account (HSA)
• College funds (529 plans)
• Individual retirement accounts (traditional and Roth IRAs)
• Custodial accounts

Many of these accounts have tax benefits associated which allow you to save even more money in the long run. For example, a Roth IRA allows you to withdraw your savings tax-free, provided you meet the requirements, while an HSA lets you contribute money on a pre-tax basis for healthcare expenses.

Note that in the case of the HSA, you can only have this type of account if you have what is known as a high-deductible health plan.

Traditional savings account vs. high-yield savings account

Traditional savings accounts and high-yield savings accounts are very similar in their general purpose and features, but they do have some notable differences:

Traditional savings account	High-yield savings account
APY is close to the national average as reported by the FDIC	APY is considerably higher than the national average, often from 8 to 20 times higher
Can be opened by visiting a local branch	Is almost always an online-only product
May allow you to withdraw funds from an ATM	Rarely allows for ATM withdrawals, instead relies on electronic transfers
Unlimited ATM withdrawals, may be limited to six “standard” withdrawals per month	Limited to six withdrawals per month (this restriction is currently lifted until further notice from the federal government)

In summary, a high-yield savings account is preferable if you want more restricted access to your funds and have a short-term savings goal like a down payment for a car or home loan.

What's the difference between a savings account, a money market account, and a certificate of deposit (CD)?

Although all three of these accounts are designed with savings in mind, there are some very notable differences between a savings account, a money market account and a certificate of deposit:

Traditional savings accounts	Money market accounts	Certificates of deposit
Low initial deposits ($0-$50)	Slightly larger initial deposits ($25-$100)	Largest initial deposits (can be as high as $1,500)
May not require a minimum balance	Minimum deposit may be required (~$1,000)	No minimum balance or deposit required
Flexible interest rates that can go up or down over time	Tiered interest rates depending on your account balance	Fixed interest rates over set period of time (with some exceptions)
Low interest rates (under 0.20%)	High interest rates (over 0.90%)	Highest interest rates, based on term length (up to 3.00%)

How much money should you have in your savings account?

Conventional wisdom suggests that you should keep at least three to six months’ worth of expenses put away for an emergency. However, this is not necessarily a realistic goal for everyone.

A good starting goal would be to put away a portion of your paycheck each month so you at least have enough to cover unexpected emergencies like car or home repairs.

As long as you don’t find yourself in a position where you’re forced to dip into those funds, you’ll eventually save up enough that you’ll be able to take advantage of the effects of compound interest (a.k.a. interest on your interest).

How to calculate interest on savings account

When it comes to savings accounts there are two types of interest: simple and compound. Simple interest is the amount you earn from the principal balance on your account — this is the amount you deposit. In contrast, compound interest is what you earn from your principal balance and the interest you have accumulated.

For example, if you deposit $5,000 into an account with 3% simple interest and don't touch the account for five years, in the end you will have $5,750. Those same $5,000 in an account for five years with 3% compounded interest will earn you $5,808.

This $58 dollar difference happens because, with compound interest, the bank calculates how much interest to pay you on a monthly (or daily) basis using the total account balance.

How many savings accounts should you have?

The number of savings accounts you should have will depend on the funds you have available. Since these accounts are either NCUA- and FDIC-insured up to the first $250,000, having a single savings account is fine as long as your funds stay under that number.

However, having more than one savings account can be a smart move if you’re working towards different savings goals at the same time. For example, you can have a traditional savings account meant to stash money away for unexpected emergencies like car or home repairs and keep a separate high-yield online savings option dedicated to saving up for a down payment on a home.

Savings Account Glossary

Savings accounts (and financial products in general) have some frequently used terms that are not always clearly explained to consumers. Here are some of the most common ones:

Term	Definition
Annual percentage yield (APY)	The APY is the amount you’ll earn from the account after your money has been deposited for a year. It is different from simple interest because it takes into account the effects of compound interest (aka “interest on your interest”).
Interest	Interest is the fee that the bank pays you. Some banks calculate interest on your daily balance, while others calculate it based on your balance at the end of a month. Most bank accounts will pay out interest at the start of a new month or statement cycle.
Interest rate	This is the amount of interest that the bank pays you. It is normally expressed as a percentage
Compound interest	Compound interest is the interest you earn on the principal amount and interest in an account. Say for example that you deposited $1,000 dollars and you make $10 in interest in a month. The next time your interest rate is applied, it will be to the total amount of $1,010, which includes the interest accumulated over the previous month.
Maintenance fee	Some banks charge their customers an account maintenance or service fee. While not all banks charge account maintenance fees, the ones that do may offer different ways to have them waived.
Liquidity	Liquidity is a term used to describe how easily financial assets or securities can be turned into ready cash. In the context of your savings account, a bank’s liquidity affects your ability to withdraw cash from any one of your bank accounts.

Latest News in Savings Accounts

A mix of savings, debt, summer jobs and student loans, that’s what families are doing to come up with the money to pay for college.

Inflation is driving up interest rates, including interest rates for high-yield sayings accounts with Ally Bank’s online savings accounts interest rates hitting an all time high.

The Series I Savings Bonds (I bonds), hailed by financial experts as one of the safest investments for middle class families, hit a 9.62% interest rate, but it won't last long.

How We Chose the Best Savings Account

Because savings accounts largely have the same features across the board, our picks for the best savings account were mostly based on who could offer the best terms. These days, if a savings account can’t offer things such as zero fees (or easy options to waive them), mobile apps, and small to no minimum balance fees, they would have a hard time staying competitive.

Similarly, financial institutions that are not FDIC insured — or NCUA insured — are not a good choice, since your money is not protected in cases of bankruptcy or insolvency.

We also looked at:

Rates and maintenance fees

A high interest rate on your savings account is fairly self-explanatory: you always want your money to grow at the fastest rate possible. However, it’s also important to make sure that your savings account isn’t charging you monthly maintenance fees that will cut into your interest earnings.

Minimum balance requirements

While it is not always the case, some bank accounts require either a minimum opening deposit or a minimum recurring balance so that you are not charged any additional fees. Where possible, we picked accounts that lacked these requirements to ensure you’re able to maximize your savings.

Federal backing and consumer complaints

When looking for a good savings account, it’s important to consider whether the bank is insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). Both of these entities insure your deposits up to $250,000 per bank (or credit union) across all of your accounts.

Because federal insurance should be a given for any reputable financial institution, we also looked for consumer complaints, to make sure that the savings accounts we recommend had mostly positive reviews.

App availability and customer support

We favored savings accounts that offered a companion app which allows you to check your balances, as well as make transfers and deposits on the go. We also chose companies that offered flexible customer support hours, in the event that app support is unavailable.

Summary of Money’s Best Savings Accounts

• Bread - Best no-frills savings account
• Ally - Best digital savings tools
• PenFed - Best credit union
• Synchrony Bank - Best for ATM withdrawals
• CIT Bank - Best for account variety
• Discover Bank - Best for no fees
• SaveBetter - Best savings account marketplace