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banks with best saving interest rates


banks with best saving interest rates

banks with best saving interest rates

  • SmartyPig by Sallie Mae – 0.70% APY
  • Affirm – 0.65% APY
  • Bo – 0.65% APY
  • Axos Bank – 0.61% APY
banks with best saving interest rates are sometimes referred to as money market accounts by some banks.
Money market accounts usually allow check writing, whereas savings accounts do not.

The accounts you’ll find in our ranking below all operate like savings accounts and do not allow you to write checks, even if their names suggest otherwise.

Our partners offer some of the best savings account rates available, followed by our complete ranking of the best savings account rates nationwide.

The following table shows this week’s top rate savings accounts, sorted by annual percentage yield.

We ranked the accounts by the lowest minimum ongoing balance required, in cases where more than one institution has the same rate.

Sallie Mae, SmartyPig High Yield Savings Account – 0.70% APY

  • Minimum initial deposit: $0
  • Minimum ongoing balance: $0.01
  • Monthly fee: None
  • ATM card: No
  • Mobile check deposit: No
  • Checking accounts available: No
  • CDs available: No
  • Note: The advertised APY applies to the first $10,000 of your account balance, followed by a lower interest rate tier on amounts beyond that.

Affirm, Savings Account – 0.65% APY

  • Minimum initial deposit: Any amount
  • Minimum ongoing balance: Any amount
  • Monthly fee: None
  • ATM card: No
  • Mobile check deposit: No
  • Checking accounts available: No
  • CDs available: No
  • Note: Requires texting to access online or alternatively requires access through the Affirm mobile app.

Bo, Bo Savings – 0.65% APY

  • Minimum initial deposit: $250
  • Minimum ongoing balance: Any amount
  • Monthly fee: None
  • ATM card: No
  • Mobile check deposit: Yes
  • Checking accounts available: No
  • CDs available: No

Axos Bank, High Yield Savings – 0.61% APY

  • Minimum initial deposit: $250
  • Minimum ongoing balance: $0
  • Monthly fee: None
  • ATM card: Yes
  • Mobile check deposit: Yes
  • Checking accounts available: Yes
  • CDs available: Yes

What Are the banks with best saving interest rates?

When you open a savings account, you can maximize the interest you earn on your money at a bank or credit union.

The vast majority of checking accounts do not pay interest, although some do. The ones that pay interest are pitiful compared to the ones that don’t.

Those with excess cash in their bank accounts may want to move it into a savings account that pays a competitive interest rate.

You can also use a savings account to organize your money according to your needs and goals.

You can use your savings account to keep money in case you need to save up for a large financial goal, such as a home purchase or vacation. The savings account allows you to clearly distinguish between what you have available for day-to-day spending (your checking account balance) and what you have saved for emergencies or long-term goals.

The last thing you can do to limit spending is to open a savings account.

It is tempting to use checking account funds impulsively because they are easily accessible.

A savings account, on the other hand, will require at least one extra step to access, which might be enough of a mental and transactional obstacle to making you think twice about taking money out.

Key Takeaways

  • It is possible to earn more money when you have a savings account instead of a checking account, it is possible to separate daily expenses from long-term savings, and it is possible to minimize temptations to spend savings on frivolous or unplanned purchases.
  • There are dozens of high-yield savings accounts that pay 9 to 11 times the national average rate, with most of the best ones coming from online banks.
  • You can transfer money into and out of a savings account using electronic funds transfer, and some banks offer mobile check deposits and ATM access.
  • The FDIC insures each account up to $250,000, and the NCUA insures credit union accounts up to $250,000 each. Due to the COVID-19 pandemic, an interim rule has been put in place that allows more than six withdrawals per month.3 Furthermore, federal regulation had required all savings accounts to limit withdrawals to six per month.4

How Do Banks Make Money on Savings Accounts?


How Do Banks Make Money on Savings Accounts

Banks offer savings accounts primarily to make more money, rather than to help consumers. Since banks generate revenue by making loans to consumers and businesses and collecting the resulting interest payments, they need a source of funds to make those loans.

A bank’s checking, savings, money market, and certificate of deposit accounts are some of the ways it attracts capital for lending to other customers. The banks also use deposit accounts to increase their ability to make a profit, since the interest rates they pay on deposit accounts are lower than the interest rates they can collect on loans.

Despite this, most checking accounts don’t pay any interest, as we’ve explained.

The average savings account rate in the United States is just 0.06%.1 So when a bank can extend an auto loan for 6% or a credit card rate of 15% to 25%, they generate revenue on the difference, or spread, between the rates of interest paid and interest earned.

Can I Open a Savings Account Online?

Can I Open a Savings Account Online

Savings accounts are typically opened at the same bank where consumers hold their checking accounts.

This is still the case for many Americans. The advent of the Internet has resulted in an explosion of personal banking options, and now even the most lucrative savings accounts are available online.

In two ways, this is true. Currently, all traditional brick-and-mortar banks offer online banking services, and the majority of them allow online account opening.

You can generally open a savings account from the comfort of your home rather than having to visit a bank branch.

The second important trend is the rise of Internet-only banks.

The FDIC insures these institutions, which offer the same level of protection on your funds as a traditional physical bank.

However, all Internet banking transactions are initiated and carried out online, thus eliminating the need to build, staff, operate, or maintain physical branches.

Because online banks do not have to maintain a physical presence in one or more communities, they can offer higher rates on deposits than traditional banks can.

Which Bank Has the Highest Rate on a Savings Account?

Which Bank Has the Highest Rate on a Savings Account

As banks and credit unions can change their rate on savings accounts whenever they wish, the leading savings account rate can fluctuate at any time.

The current ranking of the top APYs reveals that many of the best rates are offered by online-only banks.

A few national credit unions and some online arms of traditional banks round out the top contenders.

Additionally, you may notice that the biggest banks are absent from the list.

Among the four largest banks by assets, Chase Bank, Bank of America, and Wells Fargo offer savings account rates well below the national average. Having a business model and size that enables them to secure adequate capital from other sources, they simply do not compete heavily for deposit funds.

Citibank is the only one of the “Big Four” banks to offer a competitive interest rate savings account.

But even here, Citibank does not cut since many smaller banks and credit unions offer more attractive rates.

Based on our rankings, you can rest assured that these are definitively the highest savings account rates offered in the country by institutions that are open to the public nationwide. Advertisement or sponsorship relationships are not considered, nor any other criterion other than an APY, nationwide availability, and a deposit of no more than $25,000.

How To Use a Savings Account

How To Use a Savings Account

Moving money between your checking and savings accounts will not be instantaneous if your savings account is at a different bank from your primary checking account.

Electronic funds transfers will be available so that you can transfer funds between the two accounts, which can sometimes take place in one day but may take up to four days, depending on the bank and the time of day when the transfer is initiated.

Therefore, you will need to plan whenever you need to withdraw funds from savings.

As well, federal regulation required that all savings accounts be limited to six withdrawals per month.

An interim rule was placed because of the COVID-19 pandemic that enables institutions to decide whether to allow more than six transactions per month5.

While this rule applies to all banks, the fees they impose for excessive withdrawals vary by institution.

It is therefore important for you to know the possible fees and the statement cycle of the account.

If you wish to deposit money into another bank’s savings account, you can also do so through electronic funds transfers.

Some banks will also offer a smartphone app to deposit checks or to deposit checks using an ATM card or a mail-in envelope.

All FDIC banks, whether they are brick-and-mortar or internet-only, and all NCUA credit unions offer deposit insurance up to $250,000 per individual and institution.67 Therefore, if your cash in the bank is under $250,000, you do not have to worry.

Nevertheless, if you hold more than that amount in the bank, you might want to consider splitting the deposits between multiple institutions and/or multiple individuals (such as your spouse) to make sure they’re all insured.

Can I Open Two Savings Accounts at the Same Bank?

Can I Open Two Savings Accounts at the Same Bank

Savings accounts can usually be opened in more than one bank. But why would you want to do this?

Imagine that you want to stash away $15,000 in an emergency fund. In addition, you are also saving money from your checking account for a big trip. You can keep these two different pools of money separate by opening two accounts, which will make it easier for you to see how much you’ve accumulated towards your vacation. In some banks, you can even give each account a unique nickname.

Additionally, you may want to maintain two different savings accounts. A savings account at the same bank as your primary checking account can be useful, for instance, so you have some excess funds on hand in case you need to make an immediate transfer to your checking account.

It can be a smart move, however, to send some of your money to an auxiliary savings account (after you’ve kept some safety at your primary bank) when you’re able to earn more and also reduce spending temptation.



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