Are Rewards Savings Accounts Better Than High Yield Savings Accounts?
Opening a savings account can put you on the path to reaching your financial goals. But, not all savings accounts are the same.
As you canvas traditional banks, online banks, and credit unions, you might have come across regular savings, high-yield savings and rewards savings.
High-yield savings and rewards savings can offer a great rate, but rewards savings go a little bit further to encourage you to save.
So, are these savings account better than regular or high-yield savings?
And how do you choose a rewards savings account if you think one is right for you?
MyBankTracker has researched rewards savings accounts for you. Read on for answers to all your pressing savings account questions.
What Are Rewards Savings Accounts?
In general, rewards savings accounts give you something besides just interest for saving money. These accounts encourage you to grow your savings (and stay loyal) by offering incentives like:
- Tiered rates, with higher balances earning premium rates
- Relationship rewards, such as ATM fee rebates, fee waivers on other banking products and rate discounts on loans
- Cash bonuses for opening a new savings account
- Annual savings bonuses
- Savings matches
- Discounts on safe deposit boxes
- Rewards on purchases when you link your savings account to a rewards checking account
In one sense, rewards savings accounts are similar to rewards checking accounts. With rewards checking, you can get the same types of perks.
The difference is that rewards checking accounts come with a debit card for spending. Rewards savings accounts typically don't.
Instead, they may come with an ATM card. With some rewards savings accounts, you can also get check-writing privileges.
Do Rewards Savings Accounts Have Special Requirements?
Rewards savings accounts give you more for saving -- but they can expect more too.
For instance, you might need a larger minimum deposit to open an account, versus a regular savings account. Or there might be a monthly minimum balance to earn interest or avoid a fee.
Rewards savings accounts that offer sign-up or annual cash bonuses might require you to save a certain amount to qualify or have a linked checking account. And some might expect you to set up an automatic savings plan.
Earning Interest With Rewards Savings
The big draw for high-yield savings account is the rate you can earn on deposits.
These accounts come with competitive rates. Rewards savings accounts tend to offer rates like the ones you can get with regular savings accounts.
The idea is that these accounts make up for low rates on savings with lots of extras.
What About Fees?
While low rates are a downside, rewards savings accounts are usually fee-friendly.
Some have a low monthly maintenance fee that you can avoid by maintaining a minimum balance or linking a checking account. Others have no monthly fee at all.
There is one fee that many rewards savings accounts have in common, however.
These accounts are subject Regulation D. This rule says that you can't make more than six withdrawals or transfers from a savings account each month.
If you go over that number, banks can charge an excess withdrawal fee for each additional transaction.
Savings Withdrawal Fees at Top U.S. Banks
|Bank||Savings Withdrawal Fee||Maximum # Of Fees Charged Monthly|
|Bank of America||$10 after the first 6 withdrawals (fee waived if you maintain $20,000 in account)||6|
|Chase||$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)||6|
|Citibank||Does not charge||No maximum|
|U.S. Bank||$15 after the first 6 withdrawals||6|
|PNC Bank||$15 after the first withdrawal||No maximum|
|Capital One||$10 after the 6 allowed||No maximum|
|TD Bank||$9 after the first 6 withdrawals for Money Market/Savings accounts (fee waived for Savings Overdraft Protection transfers)
$3 after the first 3 withdrawals for Club Accounts
|BB&T||$3 after the first 3 withdrawals for Regular Savings accounts
$15 after the first 6 withdrawals for MoneyRate Savings accounts
|SunTrust||$6 after the first 6 withdrawals for Select Savings, Personal Savings, and Essential Savings accounts
$15 after the first 6 withdrawals for Signature Money Market Savings accounts
|Ally Bank||$10 after the first 6 withdrawals||No maximum|
|Union Bank||$15 after the first 6 withdrawals||No maximum|
|Wells Fargo||$15 after the first 6 withdrawals||3|
|Regions Bank||$3 after the first 3 withdrawals||No maximum|
|Synchrony Bank||No excess withdrawal fee||No charge, but if this happens on more than occasional basis, the bank reserves the right to close the account for misuse|
|Santander Bank||$5 after the first 6 withdrawals||No maximum, plus if you repeatedly exceed these limits, Santander will convert your account to a non-interest bearing checking account|
|Discover Bank||No excess withdrawal fee||No charge, but if this happens on more than occasional basis, the bank reserves the right to close the account|
Which Banks Offer Rewards Savings Accounts?
There are several banks that offer rewards savings accounts. Some are available at bigger banks, others at smaller banks.
We've highlighted a few specific accounts that offer great rewards incentives for savers:
1. Bank of America Rewards Savings
- Minimum to open: $100
- Key feature: Preferred Rewards benefits
The Bank of America Rewards Savings Account offers Preferred Reward benefits when you link to an eligible BOA checking account.
Depending on your total combined balance, you could get benefits like a 20% rate boost on savings and unlimited no-fee ATM transactions.
Besides that, you also get Keep the Change, which automatically sweeps money into your savings account when you make a debit card purchase from checking. And BankAmeriDeals lets you earn up to 15% cash back you can add to savings when you spend with your debit card.
2. BBVA Build My Savings
- Minimum to open: $25
- Key feature: Matching bonus on savings
The BBVA Build My Savings Account is designed for reaching a specific savings goal.
To earn the match, you have to set up an automatic transfer from a BBVA checking account to savings. You choose a six- or 12-month plan for saving.
If you follow through on your plan, BBVA matches 1.0% of your total transfer amount, up to a maximum of $25 for six-month plans and $50 for 12-month plans.
3. Citi Savings
- Minimum to open: $0
- Key feature: Bonus Citi ThankYou Rewards
The Citibank Savings Account is a basic savings account, with a twist.
When you sign up for Citi ThankYou Rewards and link your account to a Citi checking account, you can earn an additional rewards bonus.
Rewards can be earned on top of any ThankYou points you might be getting with a Citi credit card. You do, however, have to complete one qualifying bill payment and one direct deposit each month to earn bonus points.
4. Commerce Bank myRewards Savings
- Minimum to open: $0
- Key feature: Annual savings bonus
The Commerce Bank myRewards Savings account is designed for goal-oriented savers. This account offers an annual savings bonus when you make a deposit for 11 consecutive months.
The deposit is worth up to $50, up to a maximum of $100 per household if you have multiple myRewards Savings Accounts. Other nice perks? No minimum to open and a low $3 monthly fee.
5. Regions Bank LifeGreen Savings
- Minimum to open: $50
- Key feature: Annual savings bonus
This savings account from Regions Bank gives you a reason to save in the form of an annual bonus. The bonus is worth up to $100. To qualify, all you have to do is automatically transfer $10 from your Regions checking account to savings for 12 consecutive months.
You need $50 and a Regions checking account to open a LifeGreen Savings Account. You can also open an account with $5 if you set up a regular automatic transfer from your Regions checking account to savings.
One-Time Reward Savings Account Offers
While some rewards savings accounts make you wait a year to get a bonus, others give it to you right up front.
These accounts offer a one-time cash bonus when you open a new savings account. Fidelity and Chase routinely feature these kinds of offers. But, you may have to meet certain conditions to qualify.
For example, you might have to open a checking account to go with your savings. Or, you might have to schedule a certain number of automatic transfers or direct deposits each month.
Some banks also offer cash rewards when you refer a friend and they open a new account. Capital One, for example, offers Refer-a-Friend savings bonuses when you refer someone for a 360 Savings or Money Market Account.
One thing to know about one-time cash rewards for new savings accounts: those bonuses are considered taxable interest income -- that means for every new bonus you earn, you'll have to pay a little of it back to Uncle Sam.
Goal-Specific Rewards Savings Accounts
Some rewards savings accounts are designed to help you reach a specific goal.
They entice you to work towards your goal through annual savings bonuses, cash incentives or both.
These accounts can be found at traditional and online banks, both big and small. Here's a quick snapshot of some popular goal-focused rewards savings accounts:
1. Citizens Bank CollegeSaver Savings Account
- Minimum to open: $25 for kids under 6; $500 for kids aged 6 to 12
- Key feature: $1,000 savings bonus
The CollegeSaver Account from Citizens Bank is just for college savings. You open an account for your child, then make a minimum monthly contribution. Once they turn 18, you can receive a $1,000 savings bonus, plus interest.
2. Fifth Third Goal Setter Savings
- Minimum to open: $0
- Key feature: One-time interest bonus when you reach your savings goal
The Goal Setter Savings Account from Fifth Third Bank is good for saving towards various goals, such as buying a home or just planning a vacation. You don't need anything to open this account and you get a one-time interest bonus when you hit your savings goal target.
Final Verdict: Are Rewards Savings Accounts Worth It?
Rewards savings accounts are worth a look but you have to do your research first.
With a lot of these accounts, the interest rate isn't always stellar. Chances are, you could get a better rate from an online savings account instead.
Online savings accounts also offer another advantage, in that they tend to have lower fees. And you may not need a checking account to earn a great rate with a high-yield savings account at an online bank.
Rewards savings accounts can give you a little something extra, if you're able to meet their requirements.
We recommend checking out some of our top online savings account picks for comparison to make sure you're getting the right one for your needs.