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As of the start of the third quarter of 2020, the market-leading savings rate in the U.S. is sitting at around 1.10% APY.
Savings rates have continued to drop ever since the Federal Reserve reduced the federal funds rate to 0% amid a looming economic crisis.
What does this mean for you?
As a saver, you're still maximizing the growth of your savings -- especially if you stick with a top-notch online savings account.
If growing your savings is your key motive for opening an account, then a high-interest savings account is what you’re looking for.
We analyzed more than 60 savings accounts from the top traditional banks, online banks, and credit unions to uncover the ones that deliver the highest and most consistent rates, money market, and low-fee savings accounts helping you grow your savings faster.
The savings accounts in the highest tier are quite similar in that they provide market-leading savings rates.
However, the slight differences may matter to you depending on your savings habits and preferences.
Read editor's savings accounts reviews from the top financial institutions:
Best Low-Fee Savings Account
Savings won’t mean much if you’re constantly losing it to high fees.
Whether the fee is for excessive withdrawals or monthly maintenance, we scoured banks to find out which keep fees at a minimum.
Our Pick: Marcus by Goldman Sachs Online Savings
Best Feature: No transaction fees
A competitive interest rate without worrying about fees
The Marcus by Goldman Sachs Online Savings account keeps it simple when it comes to saving.
In addition to one of the top interest rates, the account comes with no monthly fees and no transaction fees at all. So, you can just focus on growing your savings.
Marcus by Goldman Sachs Savings Account Pros & Cons
The BrioDirect High-Yield Saving account helps savers stay focused on building their deposit balance by rewarding them with one of the top interest rates with no minimum balance requirements.
Additionally, the account comes with no monthly fees and no transaction fees at all.
A high-interest rate is great, but not if you can’t count on it remaining at that level. That’s why we keep track of banks that offer the most consistent interest rates on savings accounts.
The winners are the banks that change their interest rates the least of all others in the industry, giving customers a reliable savings rate.
Our Pick: Discover Online Savings Account
Discover Bank is hyper-focused on helping customers build savings and its savings account is designed for that common financial goal.
Best Feature: Consistently high rates
Great mobile banking apps
No monthly maintenance fee
FDIC Insured
As one of the biggest online banks, it has kept savings rates competitive on a consistent basis -- so you don't have to keep switching banks in search of a high APY.
Moreover, the account comes with no monthly fee and the mobile banking apps allow you to access your account at any time from anywhere.
The HSBC Direct Savings account offers savings growth potential to match the market-leading savings rates available nationwide.
Furthermore, it carries no monthly fee and the minimum opening deposit is just $1.
Designed for online-only customers, the account offers convenient access with mobile check deposit, electronic statements, and simple online fund transfers.
The Capital One 360 Performance Savings account has long stood as a trusted online savings account that has consistently offered competitive savings rates for years.
The account has no monthly maintenance fee or any other account service fees. (Transactions that would typically incur a fee -- such as an excess withdrawal -- may simply be simply denied.)
Capital One a brick and mortar bank also has one of the best mobile banking apps with great design, easy navigation, mobile check deposit, Zelle payments, and more.
Capital One 360 Savings Account Pros & Cons
Pros
Cons
Subaccounts allowed
No monthly maintenance fee
No excess withdrawal fee
Mobile apps available
No ATM withdrawals (including from Capital One ATMs)
The American Express Personal Savings account is another popular option for a reliably competitive savings rate.
The account has no monthly fees or minimum balance requirement.
The biggest downside may be the lack of mobile-app access, but that may be a good thing if you want to avoid the temptation to move or spend the money too easily.
American Express Personal Savings Account Pros & Cons
How did we decide what makes a great savings account? We researched around 250 savings accounts from the top banks for this guide.
The Best Savings Account picks are based on the consistency of high-interest rates, fees, minimum balance requirements, and account features.
The overall rank for each institution within a specific category is dependant on how many days in the quarter that institution’s score was among the top 10.
On the surface, savings accounts seem simple, but there are a number of things you need to pay attention to when picking a savings account:
Interest Rates
The interest rate is one of the most important aspects of a savings account. It can be the difference between losing to inflation and keeping pace with it. It can also accelerate your progress towards long-term savings goals.
Compounding, or the ability to earn interest on interest, is what makes interest so powerful. Imagine you’re trying to save $15,000 for a down payment on a home. Learn more about how compound interest works.
Your plan is to put $100 a month into a savings account each month until you reach your goal.
If you’re earning no interest, it will take you 150 months, or 12.5 years to reach your goal. If you’re earning 5% interest, it will take you less ten years.
You’ll have contributed $12,000 and earned more than $3,000 in interest after 10 years. More than 20% of the money for your down payment will have come from interest.
Why high interest rates are important
After X Years...
Average Savings APY at Top National Banks: 0.026% APY
Average Savings APY at Top Online Banks: 2.00% APY
0
$10,000
$10,000
1
$10,003
$10,202
3
$10,008
$10,618
5
$10,013
$11,052
10
$10,026
$12,214
Total Interest Earned
$26
$2,214
Many online banks offer savings interest rates with higher APYs than national banks. Some credit unions may also offer higher rates on limited amounts if you meet balance and transaction requirements.
You might be willing to put up with the occasional fee if you have a big chunk of change in your savings account and that tasty interest rate makes it worth your while.
However, that interest rate you signed up for might not be the one you’re getting a year, six months, or even three months down the road. And then, your account choice might not look like as nearly a good of choice anymore.
This is commonly called a teaser rate or an introductory rate, and the difference between what you get going in and what it changes to can be drastic, with your interest payments at times being cut nearly in half.
To be sure, a lot of banks won’t be completely forthright about how much you’ll be charged for certain services. We read the fine print to ensure you’re getting the best and most consistent rates for your savings account.
Fees and Minimums
Fees and minimums are the other major aspect of savings accounts that you need to watch out for. The entire idea of a savings account is for it to be a safe place for your money.
You can hardly call a savings account "safe" if your bank will take the money from you with fees.
Unfortunately, many banks are now charging fees for even the most basic accounts.
Maintenance Fees
You may think that banks are happy simply to have your business, but the truth is many banks charge a fee for you to maintain an account with them.
The fees can range anywhere from $6 to $8, which may not sound all that much per month, but can actually add up to a hefty sum on a yearly basis.
If you're keeping only a few hundred dollars on the account, the sum would definitely be much less than the savings yield you're getting.
Bank of America, for example, has a $8 monthly fee on its basic savings account. Chase has the $5 fee for its Chase Savings account.
Since the interest rate at both banks is so low, those fees can easily outpace the interest you can earn.
There are usually ways to avoid fees on savings accounts. Bank of America will waive its savings account fee if you maintain a $500 minimum balance.
If you don’t hit the minimum balances, some institutions will charge you if you don’t have another account at the same bank, like a checking account. This can limit your options when it comes to diversifying your banking.
Overdraft Fees
Overdrafts these days cost at least $30, and that's for each occurrence of an overdraft check.
If you don't keep tabs on your check issuances you could easily run up more than a hundred dollars in total overdraft fees in a day, even if your account balance only dips a few dollars into the negative, because banks usually process checks with the largest amounts first.
Overdraft Protection
You could of course, always do away with overdraft charges when you sign up for overdraft protection where the bank effectively provides you with an "instant" loan when you issue an unfunded check.
This could cost you much less than a per check overdraft fee, with annual fees usually around $10 to $30.
But people who often need overdraft protection are those who maintain low balances on their accounts, and in that case, a $30 cost, on an account that maintains only a $300 balance, would still be a 10% negative interest.
ATM Fees
ATM fees may only cost you a buck or two per withdrawal, but these can also add up in a month if you don't watch your transactions.
If you use an ATM outside your bank's network, you could be slapped by fees both by your bank and the bank to which the ATM belongs to.
And take note of changes; the fees aren't getting any lower.
Paper Fees
Going green has perks that go way beyond the environmental benefits. Used or canceled checks are now saved as digital images and for many, this is fine.
However, when the time comes that you may need a copy of your check for tax purposes for instance, you'd have to pay for it.
The same holds true for bank statements and other paper documents.
The good news is, most banks only charge when you request a copy of an old check or statement.
If you request for your checks to be delivered with your paper statement on a monthly basis, you'll get both free of charge.
Returned Checks
Are you aware that you could still get charged through no fault of your own?
Yes, some banks do charge the depositor's account when a check deposited gets returned. The lesson here? Only accept check payments from persons or organizations that you trust.
Closing Account Fees
If your bank fees get really bad and you want out after only a few months, don't expect them to make it easy for you.
For the brief period they have served you, and for closing an account, whether it's less than 90 or 180 days, you may need to pay a small fee.
Recurring Transfers
The ability to set up recurring transfers is a very useful feature for a bank account to have.
Recurring transfers can be used to send money to an investment account, move it to a vacation account, or otherwise automate your financial life.
If you’re saving up for multiple financial goals at once, recurring transfers make it easy to do without having to spend hours entering transfer requests.
Setting up a recurring transfer should be a free feature at banks that offer it. Savings accounts are designed to make your financial life easier, and recurring transfers take that a step further.
Withdrawal Limits
You have the best of intentions to build larger savings, but we all know reality creeps in when you’re not expecting it.
There may be times when you'll have to access those funds for urgent matters. It could be once a month or several times a month.
What you might not have read in the fine print is that too many withdrawals in a month can cost you. It is federal law for banks to limit withdrawals to a maximum of six per month for savings accounts.
Some banks will start charging after three or four withdrawals per month.
If these excess withdrawals become frequent, the bank could automatically convert your savings account to a checking account or close your account entirely.
$5 after the first 6 withdrawals (fee waived for Chase Premier Savings accounts with a balance of $15,000 or greater, or $25,000 or greater in Chase Business Premier Savings accounts)
No charge, but if this happens on more than occasional basis, the bank reserves the right to close the account
Overdraft Protections
Overdraft fees are big business for banks. The banks, in turn, often offer a way for you to use your savings accounts to "protect" you from these fees. But the reality is they don't complete protect you, and only lessen the burn.
The way overdraft protection works by linking your savings account to your checking, and will automatically transfer funds to cover should you accidentally overdraft your checking.
Sounds like a nice enough feature, and it makes sense. After all, you had the money -- just not in the right account. Anything to avoid that pricey $38 overdraft fee.
The problem is, this service often isn’t free. You’re being protected from overdraft, to be sure, but you’re still paying something for the service.
Overdraft transfer fees cost about one-third of your typical overdraft fee.
So while you are paying less than normal, you're still being charged -- making this one important feature. This is one feature to inquire about when evaluating your top savings account options.
Other Important Features
There are some other features we look for in savings accounts that can enhance an account:
The Ability to Open and Nickname Sub-accounts
Some banks let you separate your savings account into multiple pools of cash. You can then add a nickname like “vacation fund” or “down payment” to those sub-accounts. That makes it easy to track multiple goals at once.
Debit Card Access
Savings accounts might also offer debit cards so that you can withdraw your cash more easily. If yours does, be sure to keep track of what ATM network the bank is part of so that you can avoid fees.
Mobile Banking
A high quality mobile banking app can also make or break the savings account experience. Being able to transfer money or check your balance in a pinch is a useful tool. Once you get used to it, it’s difficult to not have those options.
Automatic Savings Programs
Other features, like Bank of America’s Keep the Change program, can help you save in other ways. Knowing all of the miscellaneous features a savings account offers can help you decide on the right account for you.
The FDIC is backed by the full faith and credit of the U.S. government. That means you can don’t have to worry about the FDIC running out of money. Every dollar you put in a savings account is completely safe.
Why Online Savings Accounts Tops Our Picks?
Online banks don’t have to charge fees to stay afloat due to their low overhead costs. By avoiding the need to rent buildings and hire tellers for physical locations, online banks can centralize their operations.
This greatly reduces the cost of running the bank. Online banks also understand that it can be difficult not to have a physical location to visit when you need to withdraw or deposit cash.
That’s why most online banks refund ATM fees, within reason.
Online banks are also able to offer high-interest rates because of their lower costs. As a bonus, online banks tend to have great mobile and online apps, since they’re the main interface customers will use.
Credit unions can also offer low fees and high-interest rates, but for a different reason than online banks.
Credit unions are, in fact, owned by the people who open accounts with them.
That means that they will always be run to try to maximize the benefit of account holders. However, credit unions have eligibility requirements that must be met before you can become a member.
An online savings account can be a great way to stash away your cash and earn interest.
It’s certainly a better option than putting your extra money in a buried coffee can in the front yard or its bank equivalent, the interest-free checking account.
Many people do not realize that certain types of savings accounts can end up costing you money while earning a negligible interest rate.
The associated fees could more than cancel out the money that you’re going to earn. So, your balance could actually get smaller with each passing month. A coffee can isn’t looking too bad now.
When opening a savings account, there are several little tricks banks can use to keep you from noticing discrepancies.
This is a type of deposit account can be a virtually risk-free place to sock away cash until you figure out what else to do with it. But, you need to make sure you’re not going to get blindsided by hidden fees or other costs.
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