Savings accounts are essential -- while investment accounts (401(k)s, mutual funds, brokerage accounts, even crypto wallets) get all the attention, it should be savings accounts that we reach for first when we have a sudden need, such as a job transition or a car or home repair bill. So the most important factor in that kind of rainy-day fund is what economists call "liquidity": how easy it is to access my money and spend it when I need to. We always used to talk about how the most liquid source of savings is a pile of cash under the mattress, with the downside that you'd be sacrificing safety and sanity if you rely upon that option; but these days I'm not sure that cash is even all that useful, especially if you're used to paying your bills online, or rely on online banking rather than the neighborhood brick-and-mortar bank. Instead, it's probably easier to have a bank account that easily links to your checking account and main credit card. It's really hard to tell how fast you'll be able to access your money until you try it, so it's worth practicing on some non-emergency occasions to make sure you know how long the electronic transfers will take and whether there will be any delay in the availability of funds -- that way, when emergencies do pop up, you know exactly how long you have to make payments. Show
How can savers earn more interest on their money with a savings account? There are plenty of easily accessible online banks out there that will pay a higher interest rate but still leave your money liquid. But we're not talking about huge interest rates on saving accounts, even with the Fed raising rates more broadly. I suspect we won't see the kinds of interest rates that Boomers and Generation X are used to seeing for a while, because banks are still awash in cash from all the money we weren't spending during the pandemic. So the 0% you get in your checking account isn't so much worse than the 0.5% you might get from a savings account that takes a whole bunch more effort to set up, a bunch of extra steps to access, and maybe a few extra days to wait when you do need the money. How much money should people put into their savings accounts every month? The main thing is to have some easily accessible source of savings, no matter how big it is; every little bit helps! It can make a difference when facing even medium-sized car or home repair bills on short notice, without relying on high-interest credit or borrowing from family and friends. One's own risk level also matters: if you drive an old car, or know that your roof is getting up there in age, or work in a job with a lot of volatility in hours or susceptibility to layoff, then you'll need more emergency savings. (Unfortunately that means that the lowest-income households need the most emergency savings, even though they have the least ability to put that savings together. That inequity is why a public policy solution, such as "sidecar" accounts for 401(k)s that allow people to build up accessible savings well before their retirement years, are likely necessary.) Ideally you'd have savings that equals about about six months of consumption, but few people have anywhere near that amount, and it's important not to make that kind of goal seem so out of reach that you just give up and save nothing. So save what you can: even $500 can make a huge difference. While some simply serve as a place to store your funds separately from your checking, others go the extra mile by offering you extra interest on the money you save. This higher rate is key to building a nice cushion that can support you in the event of an emergency or help you meet a financial goal faster. There are dozens of high-yield savings accounts out there—and it can be hard to know how to choose the right one for your needs. To help you choose the right account that meets your needs, the Fortune Recommends editorial team put together a list of the top 10 high-yield savings accounts based on annual percentage yield (APY), account fees, minimum deposits and balances, and customer support options. (Read here for our full methodology.) The top 10 high-yield savings accountsThe high-yield savings account you choose can make a huge difference in how much you’re able to save in a given time and how quickly you’ll hit your bigger financial goals. (Note: APYs are up to date as of Nov. 3, 2022, but are subject to change.) 1. Current: For the saver who will trade in-person banking for a high APYAbout: Current is a neobank, meaning that its deposits are FDIC-insured through its partner bank, Choice Financial Group. Current offers a rewards debit card, plus a competitive APY on its savings accounts. Key numbers Why we picked it: Current took the top slot on our list for its stellar 4.00% APY. Savers can open an account for free and only need to maintain a penny in their account to earn this interest rate. The one major con that could be a turnoff for some customers is that Current primarily banks via mobile app and has limited customer service options. The mobile application does, however, have over four stars in both the Google Play app store and the Apple App store. 2. Salem Five Direct: For savers who prefer around-the-clock serviceAbout: Salem Five Direct is a subsidiary of Salem Five Bank, based in Salem, Mass., and has local branches across Boston. For online customers hoping to access their funds, Salem Five offers fee-free ATM access at 55,000 Allpoint ATMs worldwide. It offers checking accounts, savings accounts, money market accounts, and more. Key numbers Why we picked it: Salem Five’s high-yield savings account boasts a competitive APY at 3.50% and zero monthly fees. There is a minimum deposit of $10 required to open an account, but after that there is no minimum balance requirement to start benefiting from the high APY. While physical branches are limited, Salem Five offers a wide range of customer service options with 24/7 service. 3. Bask Bank: For the saver who prefers a human touchAbout: Bask Bank is an online-only division of Texas Capital Bank, an established FDIC-insured bank headquartered in Dallas. The bank does not provide savings account holders with an ATM card or debit card. To withdraw or move funds you’ll need to send money via ACH transfer to an external bank account. Bask Bank offers two types of savings accounts: One is a high-yield savings account; the other is a partnership with American Airlines that offers account holders the opportunity to earn Airlines AAdvantage® miles. Key numbers Why we picked it: The Bask Bank high-yield savings account offers a competitive rate at 3.60%—just over 17 times the national average. Despite its lack of ATMs and physical branches, customers can contact customer service representatives, even later than normal business hours and on weekends. Account holders are not required to pay any fees or meet minimum balance requirements, though they must fund their account within the first 15 days of opening their account. 4. UFB Direct: For the saver who wants all the customer support optionsAbout: UFB Direct is a division of Axos Bank. While it is an online bank, customers have access to free ATM withdrawals at approximately 91,000 locations across the nation. Account holders can also make unlimited external bank transfers. Key numbers Why we picked it: UFB Direct’s high-yield savings account earns a competitive APY of 3.16% with no fees or account minimums. This bank also offers expansive customer support features—beyond the traditional lines of communication, customers can use SMS messaging to access account features and information. 5. Ivy Bank: For savers who aren’t new to savingAbout: Ivy Bank is a digital banking division of Cambridge Savings Bank, which is a Massachusetts state-chartered bank and Member FDIC. It has mobile and online banking platforms. Ivy Bank does not offer ATM access; customers will need to make deposits virtually, and withdrawals must be done via eTransfer, domestic wire transfer, or treasurer’s check. Key numbers Why we picked it: Ivy Bank does have a higher opening deposit, but savers who already have some cash stashed away can stand to benefit from the high APY and zero monthly fees. Ivy Bank is a digital bank, but customers still have various customer service avenues available to them should they have any questions or concerns about their account. 6. Capital One: For the saver who needs to be held accountable to savings goalsAbout: Capital One is one of the largest banks in the country, headquartered in Virginia, with a strong online presence, as well as some physical branches across the country. Customers have access to a network of more than 70,000 ATMs nationwide. Key numbers Why we picked it: Capital One offers a competitive APY at just over 14 times the national average, although it isn’t the most lucrative account on the market. Customers aren’t required to make a minimum deposit to open an account, and there are no monthly fees or required minimum balance. Capital One also gives customers the option to create automatic savings plans to help them reach their goals. 7. SoFi: For the saver who also wants to easily invest their moneyAbout: SoFi is an online bank headquartered in San Francisco that offers checking, savings, investing products, and more. SoFi has three physical locations in the U.S., but customers have access to a network of over 55,000 ATMs nationwide. Key numbers Why we picked it: SoFi’s online bank account is a combo checking and savings account that boasts a 3.00% APY, which is just over 14 times the national average. Customers get to reap the benefits of a savings account with zero fees or balance requirements, and they have access to fee-free ATMs across the country. SoFi also offers a convenient mobile app where users can pay bills, find an ATM in their area, and make mobile deposits. You can even earn a bonus of up to $300 for setting up direct deposit. 8. Synchrony Bank: For the saver who makes regular ATM withdrawalsAbout: Synchrony Bank is an online-only, FDIC-insured bank offering a number of savings products. While it doesn’t have any traditional brick-and-mortar locations, customers still have access to a wide network of ATMs in the U.S. and abroad. Key numbers Why we picked it: Synchrony Bank’s high-yield savings account offers customers a high-interest, no-fee savings option that grants them access to their funds at a number of ATMs without paying a fee. This bank also reimburses customers for any out-of-network ATM withdrawals, up to $5 per month. Customers can also access and monitor their accounts via Synchrony’s mobile app. 9. TAB Bank: For the saver who cares more about a high APY than ATM feesAbout: TAB Bank is an online bank headquartered in Utah that offers a number of banking products, including savings, checking, money market, and certificates of deposit (CDs) accounts. TAB Bank doesn’t offer any free ATM access, and customers will have to pay a fee for using an out-of-network ATM if that’s how they choose to withdraw funds from their savings account. Key numbers Why we picked it: The TAB Bank high-yield savings account offers a higher APY than many other high-yield savings accounts without tacking on numerous fees. With no balance caps or minimums on how much of your money you can earn interest on, this is a decent option for big savers, as well as those who are just getting started. Interest on these accounts compounds daily, meaning that you’ll start earning interest on the first dollar you deposit—and the earnings will grow from there. 10. LendingClub: For savers looking for ATM access and a respectable APYAbout: LendingClub Bank, formerly known as Radius Bank, offers online and mobile banking. Customers have access to a network of over 37,000 MoneyPass® and SUMSM ATMs and the mobile app lets users manage their accounts and make deposits, payments, and transfers. Key numbers Why we picked it: LendingClub does offer a lower APY than some of the other accounts on our list, but still higher than most. The minimum opening deposit is in the medium range with only $100 needed to open an account. Customer service representatives have extended customer service hours via phone and chat, and for savers who like to have ATM access, LendingClub offers debit card privileges and thousands of fee-free ATMs across the nation. What is a high-yield savings account?High-yield savings accounts work in the same way as traditional savings accounts. It’s a deposit account at a credit union or bank that you can use for saving and earning interest on your money. The main difference between a high-yield savings account and a traditional savings account is that the high-yield savings account will offer a much higher yield—known as the annual percentage yield (APY)—on the money you keep in your account. The most recent rates from the Federal Deposit Insurance Corporation (FDIC) puts the national savings APY average at 0.21%, while most high-yield savings accounts offer 1.00% APY or higher. The APY on your account can and likely will fluctuate any time the Fed raises or decreases the federal funds rate. That’s the interest rate banks charge one another to borrow money, and your bank may be inclined to raise or lower rates on their financial products based on these changes. So how does a high-yield savings account actually work? Your money will grow thanks to the magic of compound interest. This means you’ll earn interest on the principal balance in your account, as well any interest you earned previously. For example, if you deposited $100 in your account and earned $10 in interest over the past few months, you will earn interest on the entire $110. The rate at which your interest compounds (daily, weekly, monthly, annually) will depend on the financial institution. How to choose the best high-yield savings accountEvery high-yield savings account comes with its own unique features and requirements necessary to open and maintain your account. When choosing the right account to help you meet your savings goals, you’ll first need to consider a few different factors.
Our methodologyTo bring you our top picks for the best high-yield savings accounts, the Fortune Recommends™ team compared 50 online savings accounts from a mix of traditional brick-and-mortar banks, online banks, and credit unions. All the accounts on our list are available to customers in the U.S. no matter where you’re located, subject to the terms of each account. The savings accounts featured on this list offer an APY at least 10 times the national average. We ranked each account in these five core categories:
The rates and fee structure of high-yield savings accounts are available for limited time periods, and APYs are subject to fluctuation, which could impact how much interest you earn. All the bank accounts and credit unions on this list are insured by the FDIC and NCUA respectively. To open an account, financial institutions, including banks and credit unions, require a deposit of new money, so you may not be able to transfer money you already had in an account at that bank. Which savings has highest APY?The top rate you can currently earn from a nationally available savings account is 4.10% annual percentage yield (APY), offered by Salem Five Direct. That's 17 times the FDIC's national average for savings accounts of 0.24% APY, and is just one of the top rates you can find in our rankings below.
Where can I get 5% interest on my money?Here are the best 5% interest savings accounts you can open today:. Varo: 5% up to $5,000.. Current: 4% up to $6,000.. Aspiration: 3-5% up to $10,000.. NetSpend: 5% up to $1,000.. Digital Federal Credit Union: 6.17% up to $1,000.. Blue Federal Credit Union: 5% up to $1,000.. Mango Money: 6% up to $2,500.. Which bank offers 7% interest on savings account?DCB Bank. Interest rates for savings accounts at DCB Bank are effective as of August 22, 2022. The bank is now giving an interest rate of 7.00% on account balances between 25 lakh and less than 2 crore. The resident, NRE, and NRO savings accounts are subject to the interest rates shown below.
Is 1% APY on a savings account good?What is a good APY? The national average savings rate is 0.24% APY, but you can find rates higher than that. Some of the best savings rates come from online banks and are around 2.00% or higher.
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What savings account has the highest apy
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