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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.
We teamed up with QuinStreet to bring you the savings account offers in the following table. Below, you'll find our editors' picks for best banks for savings accounts.
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 rates, keep fees low, and provide FDIC insurance on your deposits.
Best Banks for Savings Accounts of December 2019
- Discover Bank: Best for All-in-One Banking
- TAB Bank: Best for High Rates
- Alliant Credit Union: Best for Teens & Kids
- Simple: Best for Managing Your Finances
- Ally Bank: Best for Customer Service
- Prime Alliance Bank: Best for Business Accounts
Discover Bank offers a wide variety of accounts, including an Online Savings Account that pays 1.70% 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.
While you can potentially earn more elsewhere, higher rates 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 has a lot 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 good rates, too. Discover also offers credit cards, free FICO credit scores, home equity loans, personal loans, and other financial services.
TAB Bank pays an attractive 2.10% APY, and there’s no minimum balance required to open an account. As a result, it’s a great place to build up savings, and there are no monthly fees that cause you to lose ground on reaching your savings goals. To keep tabs on your growing savings, you can set up text and email alerts that notify you of any deposits, withdrawals, and more.
In addition to a high-yield savings account, TAB Bank offers checking accounts, CDs, and accounts for businesses.
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 quite good at 1.65% APY, though there may be higher rates out there. These accounts require $5 to get started, $100 to earn interest, and there are no monthly fees.
Alliant also has a teen checking account, which earns 0.45% APY—pretty good when you consider 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 accountholders of minor accounts must also 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.
Simple lives up to its name by providing the essential features you need to manage your money on a day-to-day basis. Simple is not strictly a savings account, but you can earn 2.02% APY on money you set aside for your goals, and there’s no minimum balance required to earn that rate. If you keep a balance of $10,000 or more, you earn 2.15% APY.
What makes Simple stand out is the built-in money management tools. This account is designed to help you manage spending and reach specific goals. After you create spending categories and financial goals, you allocate a set amount each month to each category. Also known as zero-sum budgeting, this approach ensures that every dollar in your budget has a job and that you treat saving like a required expense.
There’s nothing worse than dealing with bank errors and trying to get access to cash when you need it. Ally Bank scores high in the J.D. Power 2019 Direct Banking Satisfaction Study, and the bank has competitive rates, as well. Ally Bank pays 1.70% APY with no minimum balance requirement and no monthly fees. Customer service is available by phone 24/7, and Ally displays an estimated wait time online so you know what to expect. You can also use Ally for online checking, CDs, and more.
It can be hard to find an affordable business bank account, and earning interest only raises the bar. But Prime Alliance Bank pays your business 1.25% APY on balances as low as $1, and rates increase with larger balances. There are no monthly service charges, and you can deposit checks into your account with the mobile app. As you might imagine, Prime Alliance also offers business checking accounts, and they’re probably hoping you’ll use other business services, as well.
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 also 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, but it’s 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 federally-insured credit unions.
- 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 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. Also, keeping track of numerous accounts can cause confusion, but there’s nothing wrong with having a manageable number of savings accounts.
What's the Difference Between 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 pay more and offer check-writing and debit card options. You can see what these kind of accounts have to offer on our round-up of the best money market accounts and rates.
Savings accounts and money market accounts also differ in the ways banks and credit unions use your deposit. Money market deposits can be used to invest in certificates of deposit (CDs), while savings account deposits can only be used to make loans.
CDs offer higher rates than savings accounts if you can keep your savings in the bank for six months or longer. 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 1.2% annual interest rate, you would receive 0.1% 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. Learn more about APY.
Excess withdrawals: Savings accounts are designed to hold your funds for extended periods. You can withdraw money occasionally, but frequent withdrawals are problematic. Federal law limits certain types of withdrawals to no more than 6 per month, and banks can set even lower limits. 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.
Discover. "Online Savings Account." Accessed Dec. 13, 2019.
TAB Bank. "High Yield Savings." Accessed Dec. 13, 2019.
Alliant Credit Union. "High-Rate Savings." Accessed Dec. 13, 2019.
Alliant Credit Union. "Kids Savings Accounts." Accessed Dec. 13, 2019.
Alliant Credit Union. "Teen Checking." Accessed Dec. 13, 2019.
Alliant Credit Union. "Credit Union Benefits, Join Us." Accessed Dec. 13, 2019.
Simple. "Bank, Budget, and Earn Up to 2.15% APY." Accessed Dec. 13, 2019.
J.D. Power. "In Direct Bank Gold Rush, Top Performers Find Different Paths to Success, J.D. Power Finds." Accessed Dec. 13, 2019.
Ally Bank. "Online Savings Account." Accessed Dec. 13, 2019.
Prime Alliance Bank. "Business Savings Account." Accessed Dec. 13, 2019.