Savings accounts are an essential part of your finances, but the best banks for savings accounts allow you to do more than park your money somewhere safe. They also allow you to earn a decent amount of interest on your balance. Choosing the right account helps you grow your savings and avoid fees, maximizing the amount you have for spending.
So, where should you open an account? Lots of banks have excellent savings accounts, and we’ve highlighted some of the best offerings below. The banks on this list pay competitive annual percentage yields (APYs), keep fees low, and provide FDIC insurance on your deposits.
We partnered with the following banks to bring you the savings account offers in the table below. Under that, you'll find additional details on our editors' picks for the best savings accounts and why we chose them. All of the banks and credit unions listed are insured by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA). We also included some money market accounts if they act like savings accounts—in other words, if they pay a high yield and don't allow you to write checks.
|Bank||Why We Picked It||APY||Minimum Initial Deposit to Open|
|Affirm||Best for High Rates||0.65%||$0|
|SmartyPig||Runner-Up for High Rates||0.70% for the first $10,000||$0|
|Live Oak Bank||Best for Business Accounts||0.50%||$0|
|Ally||Best for Customer Service||0.50%||$0|
|Discover||Best for All-in-One Banking||0.40%||$0|
|Alliant Credit Union||Best for Kids and Teens||0.55%||$5|
Best for All-in-One Banking: Discover Bank
Discover Bank offers a wide variety of accounts, including an Online Savings Account that pays 0.40% APY. There’s no minimum deposit required, and you pay no monthly fees with that account. In fact, the only fee you should pay is an outgoing wire fee, if you choose to wire money. Official checks, returned deposits, and excess withdrawals are all fee-free, too.
While you can potentially earn more elsewhere, higher rates really only matter when you have a substantial account balance. If you don’t keep a large amount in your savings account, you might prefer having access to a robust set of features.
Discover offers more than a good savings account. Its Cashback Debit account provides a rare opportunity to earn rewards on debit card spending, and its money market and CD accounts have competitive rates, too. Discover also offers credit cards, free FICO credit scores, home equity loans, personal loans, and other financial services.
Best for High Rates: Affirm
The Affirm savings account is a mobile-first banking service designed to work on your smartphone. The account pays a remarkably high rate, and there are no monthly maintenance charges. There’s no cap on the amount you can earn, and there’s no minimum initial or ongoing account balance requirement. Affirm uses Cross River Bank to provide banking services and FDIC insurance on your deposits.
Runner-Up for High Rates: SmartyPig
SmartyPig has just one product: an online savings account offered through Sallie Mae Bank. The innovative account lets you create and track savings goals and requires no minimum deposit or ongoing balance. Competitive interest rates help you grow your money even more quickly. You’ll earn the highest interest rate on deposits up to $10,000, but rates go down as you deposit more—something to keep in mind if your nest egg is growing. Interest is compounded daily and credited monthly.
Best for Business Accounts: Live Oak Bank
Live Oak Bank pays your business 0.50% APY in an easy-to-understand online bank account. There are no monthly fees, and there’s no minimum balance requirement to open an account or keep an ongoing relationship with Live Oak Bank. You cannot deposit cash, but you can fund your account with electronic transfers, paper checks, and deposits with your mobile device. Live Oak Bank, founded in 2008, also offers personal savings accounts, CDs, and other banking services.
Best for Kids & Teens: Alliant Credit Union
Alliant Credit Union caters to young people of all ages, and those aged 13 years or older can use a standard Alliance savings account. Rates are good at 0.55% APY, though there may be higher rates out there. These accounts require $5 to get started (though Alliant will pay it for kids 12 and younger), $100 to earn the stated APY, and there are no monthly fees.
Alliant also has a teen checking account, which earns 0.25% APY—pretty good when you consider that most banks don't offer interest checking. The account has no minimum balance or monthly service fee, and the credit union reimburses up to $20 of out-of-network ATM fees per month. To be eligible for these accounts, you may need to join Foster Care to Success, and Alliant pays the membership fee for you. Parents who are joint account holders of minor accounts also must be Alliant members.
This is an excellent way to teach children about money. They can see how interest helps their account grow, and they can practice saving for specific goals while watching their progress.
Best for Customer Service: Ally Bank
There’s nothing worse than dealing with bank errors or struggling to get access to cash when you need it. Ally Bank ranked in the top five of the J.D. Power 2020 Direct Banking Satisfaction Study, and the bank has competitive rates, as well. Ally Bank pays 0.50% APY, with no minimum balance requirement and no monthly fees. Schwab Bank and E*TRADE Bank earned higher scores from J.D. Power, but they pay substantially less than Ally Bank.
Customer service at Ally is available by phone 24/7, and the bank displays an estimated wait time online so you know what to expect. You also can use Ally for online checking, CDs, and more.
Frequently Asked Questions
What Is a Savings Account?
Savings accounts give customers the flexibility to deposit money, earn interest, and withdraw funds as needed. They also keep money safe—savings accounts are federally insured, which means that the government covers up to $250,000 if your bank fails.
Should You Get an Online Savings Account?
Online savings accounts provide flexibility and security, with additional advantages over traditional brick-and-mortar banks and credit unions. For starters, customers can manage money via smartphone or computer without depending on local branch hours and tellers. But most notably, they tend to offer higher rates and lower fees.
Are Online Banks Safe?
Online bank accounts can be as safe as brick-and-mortar accounts. That’s true for deposit insurance and other forms of security. The most popular banks (including those listed here) benefit from FDIC insurance (for banks) or NCUSIF coverage (for credit unions) up to $250,000 per depositor, per account. When banking online, you might face unique risks associated with cybersecurity—but your brick-and-mortar accounts are probably online as well.
Here’s how to reduce risk:
- Keep your browser and mobile apps up-to-date.
- Use caution when clicking on links—or avoid clicking any links in email altogether.
- Use a strong, unique password, and store your passwords securely.
- Never respond to email, phone, or text message requests for your personal information or password.
- Use two-factor authentication to make it harder for thieves to log into your accounts.
If you notice any signs of fraud, contact your bank immediately. You may be protected from fraud and errors in your account, but you need to act quickly for the highest levels of protection. Banks also monitor your accounts and employ sophisticated analytics to help detect fraud, regardless of whether you bank online or in a branch.
What Makes a Good Savings Account?
- The interest rate: A competitive rate is helpful, and if you're intent on getting the best interest rate, check out our list of the best savings account rates. But for many people, rate is not necessarily the most important thing. The interest you earn becomes increasingly important as your account balance grows. But if you keep a relatively small amount in savings, it’s potentially more important to select accounts that do not charge fees and make it easy to add to your savings.
- No monthly fees: This is crucial, especially as you’re getting started. Monthly fees can wipe out any interest you earn and even cause your account balance to fall each month.
- Deposit insurance: Verify that your funds are protected from bank failures. FDIC insurance and NCUSIF coverage are equally safe, so don’t be afraid to work with a federally insured credit union.
- Electronic transfers: The best accounts make it easy to move money in and out of savings. Setting up direct deposit from your employer helps to automate your savings and avoid temptation. Quick, free transfers by automated clearinghouse (ACH) help you keep your money in savings and earn interest for as long as possible before you need to take withdrawals.
- Mobile deposit: If you receive paper checks, be sure your bank allows you to deposit checks with your mobile device. Doing so saves you time, as you can avoid trips to a branch and time preparing a deposit by mail. Plus, you can speed up deposits and start earning interest as soon as possible.
Can I Have More Than One Savings Account?
Yes, you can open as many savings accounts as you want. Multiple savings accounts can help you separate money for certain goals, stay below deposit insurance limits, or move your money where it serves you best. However, it might not make sense to keep multiple accounts if you have to pay fees for each account. Keeping track of numerous accounts can cause confusion, but there’s nothing wrong with having a manageable number of savings accounts.
What Are the Differences Among Savings Accounts, Money Market Account, and CDs?
Money market accounts and CDs are similar to savings accounts, but there are some important differences.
While money market accounts pay interest like savings accounts, they typically offer check-writing and debit card options. You can see what these kinds of accounts have to offer in our round-up of the best money market accounts and rates.
CDs offer higher rates than savings accounts, but require you to keep your savings in the bank for months or years. Time commitments vary, but you might have to pay a penalty if you take out your money early.
Key Terms To Know
Interest: The amount your bank pays you based on your account balance. This is typically expressed as an annual rate, but may be paid monthly. For example, if your bank pays a 1.20% annual interest rate, you would receive 0.10% per month. On a balance of $100, that translates to $1.20 per year, although the amount could be higher due to compounding.
Compounding: When you earn interest in a savings account, you might leave those interest earnings in the account. Your bank adds money to your account, and that new money generates additional interest earnings. In other words, you earn interest on the interest you previously earned. That process, known as compounding (or earning compound interest), helps your account balance grow at an increasing rate.
Annual percentage yield (APY): APY is the amount you earn on your savings when you take compounding into account. If your bank pays interest more often than yearly (banks often calculate interest daily), you earn more than the stated annual interest rate. That higher amount, known as the APY, is a more accurate way of understanding how much banks pay.
Excess withdrawals: Savings accounts are designed to hold your funds for extended periods. You can withdraw money occasionally, but frequent withdrawals may be problematic. Financial institutions usually limit certain types of withdrawals to no more than six per month. When your withdrawals exceed those maximums, you may have to pay fees, and your bank might close your account if you make a habit of it.
Minimum balance: As you compare accounts, note any minimums. (Some banks do not set minimum balance requirements.) You may see several different types:
- Minimum initial deposit: The amount you need to deposit to open an account. Unless you meet that requirement, you can’t open an account.
- Minimum to earn interest: Banks may pay different rates at different levels. Pay attention to how much you need to keep in your account to earn the highest rates.
- Minimum to avoid fees: You may be able to prevent monthly fees in your account by keeping your balance above a certain level.