How do I know which savings account is best?
Some accounts may lure you in with bonus rates, so it's wise to scrutinize their duration and any strings attached, such as minimum regular savings. Interest might be fixed for a set term or variable as the market changes. Check if interest is paid monthly or annually to see what suits your needs best.
High-yield savings accounts are a type of savings account offering an APY that's much higher than that of a traditional savings account. In recent years, they've become increasingly popular as the Federal Reserve has raised rates several times in its attempt to lower inflation.
The best savings account for you will depend on your financial situation and your savings goals. It also depends how you want to access it. You can open an online savings account and manage it electronically, but if you'd prefer to do it in a branch you can choose a more traditional account.
- Interest rate and APY.
- Initial deposit.
- Minimum balance requirements.
- Account fees.
- Rate tiers.
- Accessibility and ease of use.
- Supplemental savings accounts.
- Regular savings account: earns interest and offers quick access to funds.
- Money market account: earns interest and may provide check-writing privileges and ATM access.
- Certificate of deposit, or CD: usually has the highest interest rate among savings accounts, but no access to funds.
Savings account benefits include safety for your savings, interest earnings and easy access to your money. However, savings accounts may have drawbacks, such as variable interest rates, minimum balance requirements and fees.
The safest places to save money include a savings account, certificate of deposit (CD) or government-backed securities. The best options may be those that provide higher earnings than traditional savings accounts but also provide a balance of liquidity and stability.
| Provider | Account name | Interest rate (AER) |
|---|---|---|
| This listing is sponsored by United Trust Bank | ||
| Beehive Money | 6 Month Bond | 5.17% |
| Hodge Bank | 1 Year Fixed Rate Bond (Online Only) | 5.16% |
| Shawbrook Bank | 1 Year Fixed Rate Bond Issue 101 | 5.16% |
As of writing, no U.S.-based banks are offering a 7.00% APY on a savings account. For high-yield savings accounts — top, competitive rates are more in the 5.00% APY range. However, Landmark Credit Union currently offers a Premium Checking account with a 7.50% APY on balances up to $500.
For savings, aim to keep three to six months' worth of expenses in a high-yield savings account, but note that any amount can be beneficial in a financial emergency. For checking, an ideal amount is generally one to two months' worth of living expenses plus a 30% buffer.
Is it better to keep money in checking or savings?
In the comparison above, you can see how checking accounts are the better choice for daily financial tasks since they offer debit card access and have no limit on withdrawals. Because of their withdrawal limits and interest earnings, savings accounts are a better fit for the money you're saving for financial goals.
FDIC and NCUA insurance limits
This insurance protects your money if the financial institution you bank with goes out of business or otherwise can't afford to let you withdraw your money. So, regardless of any other factors, you generally shouldn't keep more than $250,000 in any insured deposit account.
Money coach and certified financial planner Ohan Kayikchyan says it can make sense for a household to maintain four accounts: one checking account for monthly recurring bills and another for variable expenses, plus one savings account for emergency funds and a second for other savings goals.
A certificate of deposit, or CD, typically earns you interest at a higher rate than either a savings or checking account. The catch is that a CD has a specified term length. You cannot touch your money during that term. A term can range anywhere from three months to five years (60 months).
The most fundamental financial product that banks offer is a Savings Account. People can deposit their money and keep it secure with a financial institution by opening a savings account.
The FDIC insures nearly all banks up to $250,000 per depositor, per bank. Your savings could be at risk if your account is compromised, though federal law does offer you some protection. Amassing a lot of money in your account can also be risky, especially if you're trying to save for long-term goals.
Savings accounts may have monthly transaction limits per federal rule Regulation D, which stated that banks must penalize consumers for withdrawing from savings more than six times per month.
With few exceptions, you can't spend money directly out of your savings account. Instead, money in savings needs to be moved to another account. Even then, financial institutions often limit the number of withdrawals or transfers account holders can make from savings accounts during each statement period.
| Bank | Forbes Advisor Rating | Products |
|---|---|---|
| Chase Bank | 5.0 | Checking, Savings, CDs |
| Bank of America | 4.2 | Checking, Savings, CDs |
| Wells Fargo Bank | 4.0 | Savings, checking, money market accounts, CDs |
| Citi® | 4.0 | Checking, savings, CDs |
Reasons people keep cash at home include emergency preparedness, financial privacy concerns and mistrust of banks. It's a good idea to keep enough cash at home to cover two months' worth of basic necessities, some experts recommend.
Where is the best place to park your money?
High-yield savings accounts, CDs, and money market accounts are generally considered low-risk, as they are insured by the FDIC up to $250,000. Treasury securities are backed by the full faith and credit of the U.S. government, making them among the safest investments.
| Who Offers It? (Bank or Building Society) | Type or Name of Savings Account | Interest Rate |
|---|---|---|
| First Direct | Regular saver | 7.00% |
| Ford Money | Flexible saver | 4.60% |
| Goldman Sachs | Online savings account | 4.75% |
| Goldman Sachs | Cash ISA | 4.75% |
- Stocks.
- Real Estate.
- Private Credit.
- Junk Bonds.
- Index Funds.
- Buying a Business.
- High-End Art or Other Collectables.
No, Bank of America does not offer a high-yield savings account.
- Compare your options. The easiest way to open a high-yield savings account may be to open one where you have an existing bank account. ...
- Round up your documents. ...
- Fill out the application. ...
- Fund your account. ...
- Set up online features.
