Whether you’re saving for a down payment for a home or just want to park some cash and earn some interest, a savings account could be the solution. Savings accounts safely store your money and pay interest at the same time.
Finding the perfect savings account when there are so many options can feel overwhelming, though. To help, we’ve narrowed down the list of options to the nine best savings accounts. We’ll also share tips on how to pick the best account for your personal finance situation and the key factors to look for.
Up to 5.00% APY and 10% Cash Back
- Earn cash back rewards - up to 10% - when you spend with your debit card
- Up to 5.00% APY interest (up to 83 times higher than Big Banks) 4
The best savings of October 2022
- Best for automated savings: High Yield Chime Savings Account
- Best for high interest on small balances: Varo Savings Account
- Best for building a savings habit: CIT Bank Savings Accounts
- Best for customer service: American Express High Yield Savings Account
- Best for ATM fees: TD Bank Savings Accounts
- Best for high APY on high balances: Axos Bank High-Yield Savings
- Best for global banking products: HSBC Savings Accounts
- Best traditional bank: Citi Accelerate High-Yield Savings
- Best for a savings bonus: BMO Harris Statement Savings Account
Best for automated savings: High Yield Chime Savings Account
If you don’t want to worry about managing your account activity and balances or you have a higher savings goal in mind, Chime 5 might be a smart solution.
The Chime High Yield Savings Account offers an annual percentage yield (APY) of 1.50% (as of Sept. 27, 2022) 2 with no fees 1 , no minimum account balance requirement, and no maximums on earning interest.
And with your Chime Spending Account, you can take advantage of some helpful automated savings features. You can save the change from every purchase you make with your Chime Visa Debit Card. 3 Or you can set up the account to automatically transfer money from every paycheck 3 into your savings.
Mobile banking is available for all Chime accounts via their iPhone or Android apps.
… Or read our Chime review.
Best for high interest on small balances: Varo Savings Account
Varo offers a savings account with a unique twist that allows you to earn a high interest rate well above the national average on certain balances. The account can even be managed through the iOS or Android mobile app.
Typically, the account comes with an APY of 2.00% (as of Sept. 27, 2022). However, you could bump that up to earn a 5.00% (as of Sept. 27, 2022) APY. To get the highest APY, you must receive total qualifying direct deposits of $1,000 or more each month.
The twist is you cannot allow your Varo saving account to exceed a daily balance of $5,000 any time during the calendar month to earn this interest rate. This limit may seem counterproductive to some people for a savings account, but if you’re just starting to save or you want an account for a specific goal, this could be a great fit and a simple way to earn a super competitive rate.
… Or read our Varo Savings account review.
Best for building a savings habit: CIT Bank Savings Accounts
CIT Bank offers a couple of savings accounts that proactively help you build a savings habit. For people looking for a bank with multiple account options, CIT also offers a checking account, certificates of deposit (CDs), and mortgage loans.
As far as savings accounts go, the CIT Bank Savings Builder account is excellent if you’re trying to save money consistently. The bank rewards you with a higher APY of 1.00% (as of Sept. 30, 2022) if you make at least one deposit of $100 or more each month. You can also earn the higher APY by maintaining a minimum balance of $25,000. Otherwise, you earn 0.40% APY, which still isn’t bad. (as of Sept. 27, 2022.)
CIT Bank also offers a Savings Connect account that pays a higher APY of 2.70% (as of Sept. 30, 2022). if you have a linked eChecking account and deposit $200 or more per month from an external account into that account. This also promotes saving for people trying to build a savings habit.
Either of these bank accounts can be managed using CIT Bank’s iOS or Android apps.
… Or read our CIT Bank Savings Builder Account review.
Best for customer service: American Express High Yield Savings Account
The American Express High Yield Savings Account stands out for its outstanding customer service. If you want to be able to contact your bank whenever you want, this account could be a smart choice. The American Express National Bank offers customer service by phone 24 hours per day, seven days per week, to answer questions or deal with issues you may have.
The account is competitive in other aspects, too. For example, it offers an APY of 2.00% (as of Sept. 29, 2022) with no minimum balances and no monthly fees.
American Express also offers CDs, IRAs, personal loans, and credit cards. They have apps for Android and iPhone devices to manage your credit cards. If you have a credit card and a high yield savings account, American Express is currently testing allowing account holders to manage their savings account via the app if they have signed up for one-click access.
Best for ATM fees: TD Bank Savings Accounts
If you’re looking for a savings account from a big bank that doesn’t charge ATM fees and offers a wide variety of account types, TD Bank may be worth considering.
TD Bank offers two savings accounts, including the TD Beyond Savings account and the TD Simple Savings account. They also offer their clients checking accounts, CDs, credit cards, mortgages, personal loans, IRAs, and many other services.
The TD Beyond Savings Account requires a $20,000 minimum balance to waive the monthly maintenance fees. But the TD Simple Savings account only requires a $300 minimum balance to waive those fees.
Neither account offers impressive APYs, but the TD Beyond Savings account provides free ATM transactions anywhere as long as you maintain a $2,500 minimum daily balance. They even reimburse other banks’ charges from non-TD ATMs. This gives you a lot of leeway when it comes to ATM access.
Like most TD Bank accounts, this account can be managed by using their Apple or Android app on your mobile device.
Best for high APY on high balances: Axos Bank High-Yield Savings
People who want to earn a high APY on a balance of more than $5,000 but less than $25,000 might like the Axos Bank High Yield Savings account. This account offers 0.61% (as of Sept. 27, 2022) APY on balances up to $25,000. If your balance rises above this amount, you earn a lower APY on the entire balance.
The account doesn’t charge any maintenance fees, offers a free ATM card if you request it, and has no monthly minimum balance requirements. You do have to have a $250 minimum balance to open an account, but you can withdraw this amount after you make the initial deposit.
Best for global banking products: HSBC Savings Accounts
HSBC offers three savings accounts designed for different needs: HSBC Everyday Savings, HSBC Advance Savings, and HSBC Premier Savings. They all offer varying APYs and features, and some require minimum balances.
As a US HSBC customer, you get access to their wide variety of account types and offerings, including credit cards, checking, savings, CDs, debit cards, international banking, global transfers, mortgages, personal loans, investment accounts, life insurance, and more.
Global travelers will be happy to learn that HSBC has locations in several countries around the world. All of this can help people who prefer to keep their savings at a bank that can service the vast majority of their financial needs and not just when they’re at home.
Best traditional bank: Citi Accelerate High-Yield Savings
If you prefer to bank with a national bank and still want a high APY, the Citi Accelerate High-Yield Savings account may be a smart fit for you. The account offers an APY of 2.20% (as of Sept. 27, 2022) and doesn’t limit the amount of interest you earn. You can even open an account with no minimum balance.
This account is online-based, which means you won’t hear about it in a Citi branch. The good news is you can manage this account and any other Citi accounts you have, such as a Citi Double Cash credit card, 24/7 through the Citi mobile app for iOS and Android devices.
Unfortunately, the Accelerate account is only available in select markets. But for those in the right locations, the Citi Accelerate could be a great fit.
Best for a savings bonus: BMO Harris Savings Builder Account
BMO Harris Bank provides a unique incentive to sign up for their Savings Builder Account. You can earn $5 in rewards for each month you save $200 or more. This means you have to make a new deposit each month to qualify for the reward, yet this makes for a great savings incentive.
Earning $5 on $200 in one month is the rough equivalent of earning a simple interest rate of 2.5%. These rewards are available for up to 12 months, meaning you could earn up to $60 just for doing what you were already planning on doing — saving.
The account doesn’t have a monthly maintenance fee, but it only provides a 0.01% (as of Sept. 27, 2022) APY. It requires a $25 minimum opening deposit to start an account. You can access this and other BMO Harris accounts with their Android or iOS apps. But if you’re looking for an incentive to save, the monthly bonus could be highly motivating.
What is a savings account?
A savings account is a type of bank account designed to allow you to put away money you don’t intend to spend in the near term. Savings accounts typically pay interest in the form of an annual percentage yield (APY), which can serve as an incentive for you to keep money in the account.
People use savings accounts for a variety of purposes. For example, you might use yours to save for a new computer, a future vacation, college costs for your kids, an emergency fund, to buy your next car, or any other goal.
Having multiple savings goals is among the reasons to have more than one savings account. Some banks allow you to open multiple savings accounts and create custom names for each. This could enable you to visualize your savings goals better.
Savings accounts at banks generally come with FDIC insurance. This covers you up to at least $250,000 in case the bank fails, and your funds go missing. Savings accounts don’t lose money due to market movements like an investment could. They have high liquidity, so they’ve historically been a reasonably stable place to stash any cash you want to have quick access to.
Traditionally, savings accounts have been subject to Regulation D, which limits deposit accounts to six withdrawals per month. However, the Federal Reserve suspended the enforcement of this rule in April 2020 due to the coronavirus pandemic. This is known as an interim final rule, which means it is not yet finalized but could become finalized in the future. Check with the savings account you’re considering to see if there are any withdrawal limits on the savings accounts you’re considering.
Types of savings accounts
Most of us probably think of a traditional savings account when someone says the words "savings account" to us. But there are actually a few different types of savings accounts:
- Regular savings accounts and high-yield savings accounts: These are the accounts most people are familiar with. They may be offered at a brick-and-mortar bank or by online financial institutions. Depending who offers the account, you may or may not have access to things like wire transfers or if it's an online only bank you may have to deposit your money via ACH as opposed to being able to deposit cash.
- Certificate of deposit accounts: Also known as CDs, these accounts often pay high returns on your money, but you may not be able to withdraw the money when you want to. You are typically committed to a specific term length before you have access to your money again.
- Money market account: The main advantage of these is that they often provide a higher interest rate. However, these accounts usually have a higher minimum balance requirement.
- Cash management account: These accounts combine checking and savings account features. You may also receive a higher interest rate than a standard checking account, though probably not as high as with a high-yield savings account.
How does compound interest work?
Compound interest is a powerful feature that the best savings accounts offer. To understand why this feature is so powerful, let’s go over how compound interest works:
- Your initial balance earns interest that gets calculated on a certain time basis, possibly daily or monthly.
- After your interest earnings are calculated, that newly earned money is automatically deposited into your account.
- Now the interest you earned can earn interest too.
Simply put, compound interest is the interest you earn on your interest. This means a small difference in APY can make a huge impact on your savings. This is why high-yield savings accounts are so valuable.
Here’s an example showing the difference the savings account rate can make when you factor in daily compounding interest. We’ll look at a traditional savings account at the current average APY of 0.17% (as of Sept. 29, 2022) versus a high-yield savings account like the one Axos offers.
|Traditional bank with 0.17% (as of Sept. 29, 2022) APY||High-yield savings account with 0.61% APY|
|Balance after one year||$10,017||$10,061|
|Balance after five years||$10,085.29||$10,308.74|
|Balance after 10 years||$10,171.31||$10,627.02|
APYs can vary widely from bank to bank, as can the timeframe the interest is compounded (the more often it compounds, the faster your money grows). Some banks require you to maintain a high balance in your account; some have no balance stipulations.
How to pick the right savings account for you
Figuring out how to choose a savings account can feel overwhelming, but it doesn’t have to. Here are a few factors to consider to help you find the perfect account for you:
- FDIC or NCUA coverage: Banks that are FDIC members and credit unions that are National Credit Union Administration (NCUA) members offer account holders up to $250,000 of insurance on qualifying account types. This gives you peace of mind that your money will be safe even if the bank or credit union fails.
- Interest rate or APY: Savings account interest rates and APYs are different ways of expressing the rate of the money you’ll earn by leaving your cash in your account. The higher your interest rate or APY, the more you’ll earn.
- Service fees: Ideally, you’d find a bank with no fees. However, some banks offer additional services that may be worth paying fees depending on your circumstances. Make sure you read the fine print to understand what fees you may be subject to before opening a new account.
- Minimum deposit requirements: Some accounts require you to deposit a certain amount just to open them. If you’ve already saved a lot, this initial deposit may not be an issue. But if you’re new to saving, you’ll want to take this into consideration and make sure you have this amount ready to deposit.
- Minimum balance requirements: You may have to pay monthly maintenance fees if you don’t meet monthly minimum balance requirements. Some banks do not have these requirements, which may be a factor you want to prioritize depending on your situation.
- Online bank versus physical branches: A high-yield online savings account may offer higher interest rates because the bank has lower overhead, which means the bank won’t have physical branches you can visit. Brick-and-mortar banks have higher expenses to stay open and therefore usually have lower interest rates, but they’ll provide in-branch services. Decide whether you prefer in-person or online banking before opening an account. Some banks may even offer a blend, providing paper statements and paper check-writing as well as mobile check deposit.
- Customer service: Check how and when you can contact customer service if you anticipate needing help with your account. Some banks offer in-person, phone, or online chat support.
Many financial institutions offer easy access to your account, with online and app options; some don’t. Some may offer a variety of financial services, while others may not have physical locations. Make sure you know which are the best banks for offering the things that are important to you.
In determining our list of the best accounts, we looked at eight popular financial institutions and evaluated them according to a set of criteria we consider critical to the consumer. We did not evaluate all banks or credit unions in the category. We used editorial judgment to determine what use or user each savings account would be best for.
FinanceBuzz evaluation criteria include:
- FDIC insured: All banks included on our list are insured by the Federal Deposit Insurance Corporation. You'll often see this indicated on a bank's website with the phrase "Member FDIC."
- APYs: We evaluated the APYs offered on the different accounts and the requirements to earn those APYs.
- Account features: We considered the features each savings account offered, including access to other financial products, ATM fees, the ability to set up automatic transfers, mobile app availability, and more.
- Minimum account opening balance: We included a variety of accounts in this regard as some accounts will be more available to newer savers, while others may have more savings and prioritize other bank account benefits.
- Fees: We considered any fees each account may have, including monthly maintenance fees, ATM fees, and more.
- Customer service: Customer service hours and contact options influenced what the accounts were classified as best for.
Can you lose money in a high-yield savings account?
It is extremely rare to lose money in a high-yield savings account. If you deposit money into an FDIC- or NCUA-insured bank, you have at least $250,000 of insurance to cover you if the institution fails. If your balance exceeds the insurance limits and the bank fails, then you may not recover your entire balance. You could also technically experience a decreasing balance if the bank where you hold the account charges you fees and you’re not making any additional deposits.
How much interest will I get on $1,000 a year in a savings account?
The amount of interest you’ll earn on $1,000 in a savings account depends on the APY your account earns and how often the interest compounds. For example, if your interest compounds daily and you earn a 1.00% APY, you’d earn $10.05 over 12 months. But if your financial institution offers just a 0.20% APY with daily compounding, then you’ll only earn $2.00 in interest during the same 12 month period.
How often do interest rates change?
Interest rates typically change as economic conditions change, so how often they change will vary. While not directly correlated, banks and credit unions might change rates shortly after the Federal Reserve makes changes to what is commonly known as the federal funds rate. Recently, the fed rate has been changing quite a lot. However, banks are not required to change rates based on the Federal Reserve’s actions.
Whether you’re looking for your first savings account or one that pays more interest, opening a new savings account doesn’t have to be difficult. First, decide which features are most important to you. Then, find a savings account that excels in that area.
If you’re looking for a savings account to help you work toward your financial goals, consider looking into the savings accounts listed above. And if you’re looking for a financial institution that offers more than just savings accounts, be sure to check out our list of the best banks. There you'll find banks that offer checking account, money market accounts, and more.
Disclaimer: All rates and fees are accurate as of Sept. 7, 2022.