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Finding the best savings account to grow your money is crucial. After all, saving money is a key part of your financial security and financial future. But with so many savings accounts out there, choosing the right one can feel overwhelming. 

We’re breaking down some of the best high-yield savings accounts so you can find the perfect place to grow your cash.

Save Smarter: Choose Your Best Savings Accounts

MoneyLion offers a convenient marketplace to compare high-yield savings accounts from our partners, that could help you grow your money for the future.

What is a savings account?

A savings account is a specialized bank account designed to store your money and allow it to grow over time. Unlike keeping cash at home, a savings account offers interest on your deposit. This interest acts as a small reward for keeping your money in the bank. 

Savings accounts have variable interest rates that fluctuate based on market conditions and your financial institution’s offerings. Savings accounts are meant for storing money for the short or long term, rather than frequent transactions like a checking account

Some banks may have minimum balance requirements or impose limitations on the number of withdrawals you can make per month. 

However, savings accounts are generally much more flexible than other longer-term options, such as certificates of deposit (CDs) or retirement accounts like 401(k)s, which restrict access to your money for a set period.

What to know about savings accounts

On the surface, savings accounts are simple. However, as you dig deeper and address some key questions, you’ll find that there’s a lot more you need to know.

What are the interest rates for a savings account?

Interest rates on savings accounts vary depending on the bank you choose and how rates in the broader market fluctuate. 

As of 2024, the national average interest rate for a savings account is around 0.46%. This translates to roughly $0.46 earned in interest for every $100 you save in a year.

Banks pay you a percentage of your savings balance, known as the interest rate. Some banks offer tiered rates, which means the interest you earn increases as your account balance grows. This policy can help incentivize saving more. 

Online banks are typically known for offering more competitive rates than traditional brick-and-mortar banks. And remember, interest compounds over time. This means the interest you earn also earns interest, accelerating your savings growth over the long term.

What are the fees associated with a savings account?

Savings accounts can come with fees, but you could avoid them in some instances by meeting certain criteria. Also, awareness of potential savings account fees upfront will allow you to avoid them. Here are some of the most common fees associated with savings accounts.

Access to funds

Savings accounts are designed for storing money rather than making frequent transactions, so there are some limits on access to your funds. That said, they tend to be less strict than retirement accounts.

Federal regulations previously limited the number of withdrawals you could make from a savings account each month. This rule, known as Regulation D, was relaxed in April 2020 by the Federal Reserve

Some banks may still have their own withdrawal limits in place. Withdrawal limits on savings accounts typically range from six to unlimited withdrawals per month.  Be sure to check with your bank to confirm its specific withdrawal policy.

FDIC insurance

FDIC insurance adds an important layer of security to your savings. It protects your deposited funds in case of a bank failure, which although uncommon, can still provide peace of mind. 

The Federal Deposit Insurance Corporation (FDIC) insures your savings up to $250,000 per depositor, per insured bank, for each ownership category

This means that if your bank were to experience financial difficulties and close its doors, the FDIC would reimburse you for the insured amount in your account. This safety net ensures your savings are readily available, even in unexpected circumstances. 

Remember, FDIC insurance applies per depositor, bank, and ownership category. So, for example, if you have a joint savings account with a spouse, the total insurance coverage would be $500,000.

4 different savings account types

Not all savings accounts are created equal. Understanding the different types of savings accounts will help you select the one that best suits your ultimate savings goals. Here’s a quick rundown of each.

1. Basic savings accounts

Basic savings accounts are the most common type of savings account. They offer a relatively straightforward way to store money securely while earning interest. While basic savings accounts may have lower interest rates, they may offer more withdrawal access and can be a good fit for every day savings or emergency funds.

2. High-yield savings accounts

High-yield savings accounts offer higher interest rates than traditional savings accounts, which can help your money grow faster. They are often found online and may have minimum balance requirements to qualify for the best rates. High-yield savings accounts are ideal for building an emergency fund, saving for goals like a down payment or vacation, or earning a better return on cash reserves that you want to access easily.

3. Money market accounts

Money market accounts can offer a combination of features from checking and savings accounts. They may have higher interest rates than traditional savings accounts and allow a limited number of withdrawals or check-writing privileges each month. However, they may come with minimum balance requirements or transaction fees. Money market accounts can be a good option for those who need check-writing capabilities while still earning interest on their savings.

4. Specialty savings accounts

Some banks offer specialized savings accounts designed for specific goals, such as vacations or saving for a child’s education. These accounts may offer higher interest rates or bonus features when you meet certain savings targets.

The best savings account for you depends on your individual needs and financial goals. Consider how often you need to access your funds, how much you plan to save, and what interest rate you’re looking for before making your choice.

Who should get a savings account?

A savings account can be beneficial for almost anyone looking to store money safely while earning a bit of interest. Here are some common scenarios where opening a savings account makes sense.

Anyone with an emergency fund need 

Many financial experts recommend having 3-6 months’ worth of living expenses readily available to cover unexpected costs like car repairs, medical bills, or job loss. A savings account is the perfect place to stash this emergency fund, thanks to its accessibility and FDIC insurance that protects your deposits up to $250,000 at Member FDIC institutions.

Parents or guardians saving for a child’s future

Planning for your child’s education or future needs starts with building a savings habit. Opening a savings account specifically for your child allows you to start saving early, whether it’s for college expenses, a first car, or any other goals they may have down the line.

People with upcoming large expenses

Do you have a major purchase on the horizon, like a down payment on a home, a dream vacation, or a significant renovation? A dedicated savings account can help you reach your goal faster. By setting aside a fixed amount regularly, you’ll be surprised at how quickly your savings accumulate.

Retirees and those living on fixed incomes

For retirees and those living on fixed incomes, a savings account provides a safe and liquid place to store cash reserves. Unlike the volatility of the stock market, savings accounts can offer greater peace of mind, knowing your money is readily available when you need it.

Risk-averse investors

If you have a low tolerance for risk and prioritize capital preservation, a savings account is an excellent option. While the interest rates may be modest, they guarantee your principal remains secure while generating some growth.

Individuals trying to develop a savings habit

Developing a consistent savings habit is crucial for financial stability. A savings account, even with a small initial deposit, can be a powerful tool to kickstart this habit. Watching your savings grow over time can be a motivator to keep putting money aside and build a secure financial future.

Pros and cons of savings accounts

Savings accounts offer benefits and potential drawbacks. Understanding the pros and cons allows you to make an informed decision as to what you should do with your money.

5 Pros of savings accounts

Savings accounts offer many advantages that can make them a cornerstone of smart financial management. Let’s delve into some of the key benefits.

  1. Earn interest: Savings accounts allow your money to grow over time through compound interest. 
  2. Liquidity: Savings accounts offer guaranteed returns but are also much more accessible than CDs or retirement accounts that may have restrictions on withdrawals. Easy access makes savings accounts ideal for emergency funds or short-term savings goals.
  3. FDIC-insured: The FDIC protects your deposits up to $250,000 per depositor, per insured bank, for each ownership category in the event of a bank failure. This safety net ensures your hard-earned money is secure, even in unforeseen circumstances.
  4. Separate savings pool: Having a dedicated savings account separate from your checking account can be a powerful tool for managing your finances.  It allows you to segregate funds for specific goals or emergencies, reducing the temptation to spend that money on everyday purchases. 
  5. Potential to automate savings: Many banks offer the convenience of automatic transfers from your checking account to your savings account. You could set up a consistent, automated savings plan without manual effort. 

3 Cons of savings accounts

While savings accounts offer a bunch of benefits, there are also some drawbacks to consider.

  1. Modest interest rates: Savings accounts offer security, but the trade-off is a lower potential return on your investment. They tend to feature lower interest rates compared to the possible gains you could earn with other investment options like bonds. 
  2. Withdrawal limits: There may be limits on the number of withdrawals/transfers you can make per month from a savings account. Going over this limit can result in fees.
  3. Minimum balance requirements: Some savings accounts have minimum balance requirements, often around $300 or more, to avoid monthly maintenance fees or qualify for the advertised Annual Percentage Yield (APY).

4 alternatives to savings accounts

There’s a good chance that a savings account is right for you, but you can’t make a final decision until you consider all your options. 

Here are four of the best alternatives to savings accounts.

1. Money market accounts

Money market accounts combine features of checking and savings accounts. They often offer slightly higher interest rates than traditional savings accounts, potentially boosting your earnings.

However, these accounts typically come with higher minimum balance requirements to qualify for higher rates. To access your funds, money market accounts may provide check-writing capabilities or debit card access, similar to checking accounts, while still allowing you to earn interest on your savings.

2. Certificates of deposit (CDs)

CDs are a type of savings account that offers a guaranteed fixed interest rate, typically higher than what you’d find in a regular savings account. This higher rate comes with a trade-off: you agree to lock your money away for a predetermined term, ranging from 6 months to several years. 

Early withdrawal penalties can significantly reduce your earnings if you need to access your funds before the CD matures. CDs can be a smart way to grow a specific savings goal over a set timeframe, but they may not be ideal for emergency funds or short-term needs.

3. High-yield savings accounts

High-yield savings accounts are a competitive alternative to traditional savings accounts. Often offered by online banks and credit unions, these accounts can potentially earn you a higher interest rate on your deposited funds. This benefit translates to faster growth for your savings compared to lower-rate accounts. 

4. Investment account

Investment accounts are designed for individuals with a longer time horizon and a higher tolerance for risk. Unlike savings accounts with guaranteed returns, investments carry the potential for both higher gains and potential losses. 

By building a diversified portfolio of assets like stocks, bonds, mutual funds, and exchange-traded funds (ETFs), you can aim to achieve greater returns over time compared to a traditional savings account. However, investment accounts may require ongoing management to navigate the stock market. They are best suited for long-term financial goals and individuals comfortable with the level of risk associated with the investment markets.

Comparing savings accounts

Shopping around and comparing savings accounts is one of the smartest financial moves you can make. With rates varying widely across banks and credit unions, you don’t want to settle for just any bank or interest rate. 

So how can you find some of the best savings accounts? Make sure to use MoneyLion for easy comparison when it comes to savings accounts.

As you compare savings accounts, consider APYs, monthly fees, withdrawal policies, minimum balance requirements, and overall liquidity of different offers. 

The right savings account can act as a powerful sidekick in helping you achieve your financial goals, whether stashing funds for an emergency fund, planning for an upcoming down payment, or supplementing your retirement savings. 

Take the time to explore the market and find an account that will let your money grow.

You work hard for your money, but is your money working hard for you? It may be time to move to a high-yield savings account where you could grow your savings at 10x-12x1 higher than the national average savings account. Choose from some of the top high-yield savings account offers from our trusted partners.

Frequently Asked Questions

What is a savings account?

A savings account is a financial account that is used to store cash while typically earning interest on the balance to help you grow your money. Traditional savings accounts typically pay out interest on the initial deposit, but the interest rates are usually lower than other savings products such as high-yield savings accounts.

The type of interest varies between different types of savings accounts: some have a tiered interest rate based on balance, and some offer daily interest, monthly interest, or compound interest. Some of the best savings accounts have high annual percentage yields or APYs, generally called High-Yield or High Interest Savings Accounts. The higher the APY, the more money you’ll earn over time. The APY includes compound interest, which is when you earn interest on the savings and on the interest itself.

How to choose the best savings account for you

With many different types of saving accounts available, choosing the right one for your needs can feel overwhelming.

These are a few important factors to consider when looking for your ideal savings account:

  • Monthly Maintenance Fees
    Make sure you’re comfortable with the fees charged by the bank if they have a monthly maintenance fee. Some banks or financial apps allow you to waive this fee if you satisfy the monthly minimum direct deposit amount.
  • Interest rates
  • Annual percentage yield (APY)
    The APY is the percentage reflecting the total interest paid on your account based on the interest rate and frequency of compounding in a year. The higher the interest rate is, the more money you could accrue from your savings balance.
  • Convenience
    MoneyLion offers a convenient marketplace to compare high-yield savings accounts that could help grow your money. Browse our savings account comparison table on this page to find accounts with the best high-yield savings account for you..
  • Online account opening
  • Minimum balances
  • FDIC or NCUA-insured
Can I open a savings account online?

Most financial apps or banks allow you to open savings accounts online.

Mobile financial apps let you access your finances at the click of a button. Some financial services companies tend to use mobile apps as their main platform and offer the benefits of being mobile-first like online and faster application process.

What do you need to open a savings account?

Various financial institutions have different savings account options and different requirements for opening an account. Make sure to do your due diligence before opening your account. In the U.S., most providers require a social security number or taxpayer identification number, and in some cases a physical residential address within the United States.

Does it cost money to have a savings account?

Fees may vary but all fees will be disclosed to you before opening the account. Be sure to read through all the fees and ask any questions before opening the account.

Some providers may charge a monthly service fee or monthly maintenance fee for having a savings account with them.

How much money should I keep in my savings account?

That’s totally up to you, but we recommend keeping the money you don’t need for daily spending in your savings account.

Some providers have a minimum balance requirement or a minimum monthly deposit requirement. If your savings account has a minimum balance rule in place, ensure you always have at least that amount in your savings account to avoid any penalty fees.

Can I lose money from a savings account?

Some financial institutions offer NCUA or FDIC-insured savings accounts, which means your deposits are protected by up to $250,000 per depositor in the unlikely event of a bank failure.

Also keep in mind that interest rates may change, so you may not always have the same rate throughout the lifetime of the account.

Can you withdraw money from a savings account?

Yes. You can withdraw if you need to tap into your savings account for emergency funds or cover unexpected expenses. There could be an early withdrawal fee or withdrawal penalty for such transactions.

The Federal Reserve limited the number of ATM card withdrawals or transactions you can make from a savings account to six per statement cycle.

Double-check your terms or call the bank to ensure you know of any fees or withdrawal restrictions.

Do savings accounts earn interest?

Yes, one of the attractive benefits of having a savings account is earning interest on your money! Different types of savings accounts and banks offer different interest rates. If you want to maximize your earning potential from your savings, look for accounts with a high annual percentage yield (APY).

The APY is the percentage reflecting the total interest paid on your savings account based on the interest rate and frequency of compounding over a year.

High-yield savings accounts have higher interest rates than traditional savings accounts.

Some savings accounts do not earn interest until you have a certain amount of money in the account.

If you decide to open a savings account, be sure to do your research and ask questions to your bank or financial institution.

What is the average interest rate on a savings account?

According to the FDIC1 data, the national average savings account rate is around 0.4% APY. But high yield savings accounts – generally offered by online banks or financial apps – can offer multiple times that.

Browse our savings account comparison table on this page to find accounts with the best rates.

Can you get into an overdraft with a savings account?

Yes, you can go into your overdraft with a savings account if you transfer or withdraw more funds than you have in the account. Ask your prospective banks about overdraft protections on their savings accounts.

What are some benefits of online high-yield savings accounts?

Online high-yield savings accounts are a safe and reliable way to store emergency funds and cash you may want to grow. Some of the other benefits include higher APYs than traditional savings accounts, which means you can earn more interest on your money and maximize your returns. You can also access your funds when you need them, meaning there are typically no lock periods, and you can easily make transfers and withdrawals.

Whether you want to earn interest on your idle cash or uninvested funds or save up for an emergency or your next vacation, online high-yield savings accounts can help you make your money work harder for you.

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