When it comes to managing your finances, one of the smartest moves you can make is to find the best savings accounts to help your money grow.
In this article, we’ve done the hard work for you by comparing various options and narrowing down the top 5 savings accounts.
These accounts offer high annual percentage yields (APYs) and low fees, making it easy for your money to grow at a steady rate. If you’re eager to learn which accounts made the cut, keep reading.
Before we reveal the top savings accounts, let’s understand the benchmark. According to the Federal Deposit Insurance Corporation (FDIC), the national average rate on savings accounts stood at a meager 0.46% as of November, 2023.
But the good news is that there are savings accounts that can offer you far more than this. We’ve scoured the market to find the top performers, and they all surpass the national average by a significant margin.
What you'll learn:
➤ Best Savings Accounts
Here are the top savings accounts we’ve analyzed, starting with the highest APY:
| Savings Account | Annual Percentage Yield (APY) |
|---|---|
| Varo Savings Account | 3.00% to 5.00% |
| Bask Interest Savings Account | 5.10% |
| USAlliance Financial High Dividend Savings | 4.65% |
| Affirm Savings | 4.35% |
| Capital One 360 Performance Savings Account | 4.30% |
These accounts stand out not just because of their competitive rates but also because they provide tools to help you save and offer attractive banking perks.
While they may not have the absolute highest interest rates on the market, they certainly deliver the most overall value.
1️⃣ Varo Savings Account
- Annual Percentage Yield: 3.00% to 5.00%
- Minimum Deposit Requirement: $0.01
- Monthly Maintenance Fee: $0
Varo is a fintech company that made history in 2020 by becoming the first U.S. fintech company to be awarded its own banking charter. Varo’s savings account is a standout with a 3.00% APY and the potential to reach up to 5.00% APY by meeting specific requirements each month.
The account charges no monthly fees and has no minimum deposit requirement. Varo Bank’s savings account also features two tools to help you save more money, which are detailed in the article.
Varo Pros & Cons
- 5.00% APY on balances up to $5,000
- Automatic savings tools
- No fees or minimum balance requirements
- 5.00% APY only applies to the first $5,000 in your account
- Must open a Varo checking account first
- No 24/7 customer service
2️⃣ USAlliance Financial High Dividend Savings
- Annual Percentage Yield: 4.65%
- Minimum Deposit Requirement: $1
- Monthly Maintenance Fee: $0
USAlliance Financial High Dividend Savings offers impressive rates with no monthly fee. Account balances of $500 or more earn dividends, which are compounded daily for maximum earnings.
This account is particularly appealing for those who prefer banking with a credit union. USAlliance branches may be limited, but customers have access to over 5,000 shared credit union branches nationwide.
USAlliance Financial High Dividend Savings Pros & Cons
- No monthly fees
- Competitive APY
- Branch banking access
- Highly rated mobile app
- High minimum balance requirement to earn interest
- Membership required to open an account
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3️⃣ Affirm Savings
- Annual Percentage Yield: 4.35%
- Minimum Deposit Requirement: $0
- Monthly Maintenance Fee: $0
You might know Affirm as a buy now, pay later service, but it also offers one of the best savings options available today. The Affirm Savings account has no monthly fees or minimum balance requirement.
What’s even more appealing is that you earn a competitive 4.35% APY on your entire balance, regardless of its size. Affirm Savings is a tech-forward savings account worth considering.
Affirm Pros & Cons
- No monthly fees
- Competitive APY on all balances
- Mobile app features tools for saving
- No minimum deposit requirement
- No ATM access or check writing
- Limited support hours
4️⃣ Bask Interest Savings Account
- Annual Percentage Yield: 5.10%
- Minimum Deposit Requirement: $1,000
- Monthly Maintenance Fee: $0
Bask Bank offers an impressive 5.10% APY on balances up to $50,000 and has no monthly fees. To open this account, you’ll need a minimum deposit of $1,000.
What sets Bask Bank apart is that it focuses on providing travel rewards, allowing you to earn American Airlines AAdvantage miles while saving money. For travelers, this account can be an exciting choice.
Bask Pros & Cons
- Competitive 5.10% APY
- No monthly fees
- AAdvantage miles rewards
- Minimum balance requirement to earn the highest APY
- Limited to $50,000 balance for the highest rate
5️⃣ Capital One 360 Performance Savings Account
- Annual Percentage Yield: 4.30%
- Minimum Deposit Requirement: $0.01
- Monthly Maintenance Fee: $0
Capital One 360 Performance Savings is a solid choice with a 4.30% APY, no monthly fees, and a minimal deposit requirement of just $0.01.
It’s an ideal account for those who already bank with Capital One, as it provides easy access to your accounts and allows for seamless transfers. The account is also known for its user-friendly online and mobile banking services.
Capital One 360 Performance Savings Account Pros & Cons
- Competitive 4.30% APY
- No monthly fees
- Easy online and mobile access
- No minimum balance requirement
- APY is not the highest available
- Limited branch access
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➤ How to Select the Best Savings Account
Earning a solid return on your savings is essential, but there’s more to consider when choosing the right savings account for your financial goals. To make an informed decision, here are some key factors to keep in mind:
Examine the Fees
Banks can impose various fees, which may be associated with different types of transactions or act as penalties.
Some common fees include monthly service fees, charges for exceeding a certain number of transactions, and fees for wire transfers. It’s crucial to be aware of these fees and how they might impact your savings.
Read App Reviews
In today’s digital age, banking often relies on mobile apps. Not all apps are created equal, and some may offer better features and user-friendliness.
Reading app reviews can provide insights into how easy it would be to manage your savings account using a particular app and the features you’d have access to.
Accessibility Matters
Consider how you plan to access your funds. For some people, having easy access to ATMs and physical bank branches is a must. Others may prefer the convenience of online banking and avoid visiting branches altogether.
It’s essential to explore the funding, transfer, and withdrawal options offered by the bank to align with your preferences.
Evaluate Customer Service
When it comes to your money, reliable customer service is vital. Think about your preferred methods of communication and check which channels the bank provides for assistance.
Common communication methods include phone, email, and live chat. Service hours are also a factor to consider.
Keep an Eye on Bank Bonuses
Some banks offer limited-time bonuses and promotions to attract new customers. If you’re deciding between a few similar savings accounts, opt for the one that combines favorable interest rates and useful features with a bonus. It’s an extra incentive to kick-start your savings journey.
While a fee-free savings account is the ideal choice, don’t immediately rule out accounts with fees. Many banks may waive these fees if you maintain a minimum balance or set up direct deposits, making it relatively painless to avoid fees.
Selecting the right savings account goes beyond just the interest rate. By considering fees, app functionality, accessibility, customer service, and potential bonuses, you can ensure your savings account aligns with your financial needs and goals.
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➤ Pros and Cons of Savings Accounts
| Advantages | Disadvantages |
|---|---|
| 1. Deposits Insured (up to $250,000) | 1. Low Interest |
| 2. Easy Access | 2. Monthly Fees |
| 3. Competitive Interest | 3. Withdrawal Limits |
| 4. Financial Organization | 4. Inflation Risk |
| 5. Short-Term Goals | 5. Limited for Long-Term Growth |
➤ Savings Accounts Alternatives
| Features | Savings Accounts | Checking Accounts | Money Market Accounts (MMAs) |
|---|---|---|---|
| Function | Ideal for short and medium-term savings, including emergency funds | Designed for everyday spending | Suitable for short and medium-term savings with some spending capability |
| Interest | Earn interest on your balance | May earn interest, but not guaranteed | Interest-bearing; requirements may apply for earning interest |
| Withdrawals | Limited monthly withdrawals (typically up to six) | No restrictions on withdrawals | Limited monthly withdrawals (typically up to six) |
| Fees | Monthly maintenance fees, excessive withdrawal fees, inactivity fees, wire transfer fees, stop payment fees, and paper statement fees may apply | Possible fees include monthly maintenance fees, ATM usage fees, overdraft fees, insufficient funds fees, wire transfer fees, stop payment fees, returned payment fees, foreign transaction fees, paper check fees, and paper statement fees | Fees may include monthly maintenance fees, ATM usage fees, overdraft fees, insufficient funds fees, wire transfer fees, stop payment fees, returned payment fees, foreign transaction fees, paper check fees, paper statement fees, and fees for excessive withdrawals |
| Common Features | Accessible online and through mobile apps | Debit or ATM card, check-writing privileges, and online/mobile access | Debit or ATM card, check-writing privileges, and online/mobile access |
➤ What’s a Savings Account?
A savings account is a bank account tailored for storing money that you don’t need immediately. It typically accumulates interest, which is compounded daily and deposited monthly.
You can find excellent savings accounts at online banks, traditional brick-and-mortar institutions, and credit unions. These accounts are often utilized to safeguard emergency funds and save for short-term objectives, such as a house down payment or a vacation.
Savings accounts are FDIC-insured (or NCUA-insured at credit unions) and generally yield a higher interest rate compared to standard checking accounts.
Traditionally, savings accounts had a limit of six monthly withdrawals, as per the Federal Reserve’s Regulation D. However, this limit was suspended in April 2020 during the pandemic, although some banks still uphold the restriction.
➤ How Do Savings Accounts Work?
Banks, credit unions, and fintech companies offer various types of savings accounts, but they all operate on similar principles.
Interest: Savings accounts generate interest or dividends based on your account balance, the duration of your deposits, the institution’s interest rate, and compounding frequency. These accounts have variable interest rates that can change with market conditions.
Transaction Limits: The Federal Reserve used to enforce a limit of six monthly transactions for savings accounts under Regulation D. Although this restriction was lifted in April 2020, some banks may still impose withdrawal limits, fees, or transaction rejection.
Deposits: Standard savings accounts allow you to make deposits without significant restrictions, aside from daily or monthly funding limits.
Transfers and Withdrawals: Most savings accounts facilitate various transfer methods, including ACH transfers, direct deposits, wire transfers, check and cash deposits, internal transfers, external transfers, and peer-to-peer transfers. To withdraw funds, you can either transfer them to another account or visit a branch or ATM.
➤ Savings Accounts Uses
Savings accounts are designed to help you save money securely while earning interest. They are commonly used for:
- Emergency funds
- Vacation savings
- Down payments on cars
- Home improvement or furniture purchases
- Wedding expenses
- Educational costs
- Teaching children about money
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➤ Types of Savings Accounts
There are six primary types of savings accounts:
Traditional savings accounts: These are standard savings accounts offered by most banks and credit unions, with variable or fixed interest rates.
High-yield savings accounts (HYSAs): HYSAs typically offer interest rates higher than national averages and traditional savings accounts.
Money market accounts (MMAs): MMAs often provide more withdrawal options and competitive interest rates, similar to or better than HYSAs.
Certificates of deposit (CDs): CDs are time deposit accounts that offer fixed rates for a specified period, with penalties for early withdrawal.
Cash management accounts: These accounts are available through brokerages, offering interest and functioning like checking accounts.
Specialty savings accounts: Designed for specific demographics or goals, such as kids’ savings accounts or vacation savings accounts.
The best choice depends on your individual needs and financial goals.
➤ Final Thoughts
As you can see, there are several options to help your money grow in savings accounts. The key is to find one that suits your needs, whether it’s Varo’s high APY, Bask Bank’s travel rewards, or USAlliance’s credit union appeal.
These top 5 best savings accounts offer competitive rates and various features to enhance your financial journey. Make sure to choose an account that aligns with your savings goals, and start growing your money today.
Remember that the sooner you start, the more your money can grow.
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