When it comes to savings accounts, where do you even begin?
Do a quick search, and you’ll find many savings accounts with different options with varying percentages, monthly fees and minimum requirements. Not to mention the many types of financial institutions themselves — online-only, banks and credit unions — and it can get overwhelming fast.
Keeping this in mind, we’ve rounded up the best savings accounts — including ones at online banks and traditional brick and mortar — of 2021. We’ve included top information you need to know before opening or switching an account.
And before we move on, yes, we recommend that Penny Hoarders have a savings account — keeping your cash in a box under your bed is not a solid, or safe, financial plan. We want you to feel empowered so you can get the best proverbial bang for your buck.
We’ve ranked the very best savings accounts available today to help get you started.
Our Picks for the Best Savings Accounts
| Account | Minimum Balance | APY | ||||
|---|---|---|---|---|---|---|
Synchrony Bank High-Yield Savings Account |
None |
0.50% |
GET DETAILS | |||
CIT Savings Builder Account |
$100 |
$100 |
GET DETAILS | |||
Ally Online Savings Account |
None |
0.50% |
GET DETAILS | |||
Alliant High-Rate Savings Account |
$5 |
0.55% |
GET DETAILS | |||
Discover Savings Account |
None |
0.40% |
GET DETAILS | |||
Capital One 360 Savings Account |
None |
0.40% |
GET DETAILS | |||
Barclays Online Savings Account |
None |
0.40% |
GET DETAILS | |||
American Express High-Yield Savings |
$1 |
0.40% |
GET DETAILS | |||
Marcus Online Savings Account |
None |
0.50% |
GET DETAILS |
Best Savings Accounts of December 2021
So, what makes a savings account one of the *bests* of December 2021? That depends on what you value most.
In determining our top nine, we reviewed more than 20 popular savings accounts and considered what elements seem to be most universally important:
- Best savings rates
- Stellar mobile app and/or web experience
- Convenience of transfers (easy access to funds)
We considered only savings accounts that were FDIC-insured or NCUA-insured and had no monthly fees. And we kept in mind its availability of products; for instance, high-yield savings accounts, small-business resources and money market accounts.
Because physical branch access is becoming increasingly less important, all accounts on our list are online or hybrid (online with some brick-and-mortar bank locations).
Savings-Account Criteria We Didn’t Weigh Heavily
So what didn’t we consider when making our list that you might also want to look for?
Bonuses: Because banks regularly add, remove or replace their bonuses, we did not include them in our criteria. If you’re stuck between two or three comparable savings accounts, see which one offers the best sign-on bonus. We highly recommend checking out our current bank promotions list to help earn bonus cash or incentives when signing up for a new savings account.
Customer service: Quality of customer service is subjective. Read reviews and ask friends and family about their experiences when considering banks.
To truly determine how you feel about the level and quality of customer service, give the bank a call and ask some questions about the account. From that interaction, you should be able to feel out how much each bank values customers and prospects.
Synchrony High-Yield Savings Account
- 0.50% APY on all balances
- No monthly fees
- Highly rated mobile app
With Synchrony, you can access your money through an ATM, electronic transfer to an external account, wire transfer or a paper check in the mail (remember, it’s an online-only institution). And if you’re interested in similar accounts, check out our list of the overall best high yield savings accounts.
CIT Savings Builder Account
- No monthly fees
- Earn up to 0.40% APY
- Low minimum required balance
With CIT bank, you can get your money via electronic transfer, wire transfer (free if you have $25,000 or more in the account) or paper check. Bonus: You can get reimbursed up to $30 a month for using other bank’s ATMs. CIT Bank’s mobile app also has a solid rating; at the time of writing, the app has a 4.6 rating on the App Store and 4.2 on Google Play.
Ally Online Savings Account
- Highly rated mobile app
- Up to 0.50% APY
- Free tools to help you save more money
To earn up to 0.50% APY from Ally, here’s what you need to know: Ally’s three online savings account balance tiers are less than $5,000, between $5K and $24,999.99, and $25K or more. Ally will pay the particular APY based on the tier your end-of-day balance falls in. You can transfer money via direct deposit, electronic transfer, wire transfer or paper check.
Alliant High-Rate Savings Account
- 0.55% APY
- Low minimum balance required
- Free ATM card
Joining Alliant requires some effort. You need to fulfill one of these four requirements:
- Be a current or retired employee of a business that is partnered with Alliant.
- Have an immediate family member or domestic partner who banks with Alliant.
- Be a member of an Alliant-related organization/association.
- Become a member of Foster Care to Success, Alliant’s partner charity.
Once you join, you’re eligible to open a high-yield savings account for $5 (which Alliant will reimburse you for!).
Discover Savings Account
- Debit card offering cash back
- 0.40% APY
- Highly rated mobile app
While Discover doesn’t offer an ATM card for its FDIC-insured savings account, you can sign up for Discover Cashback Debit (it’s free!), which earns up to 1% cash back on up to $3,000 a month. The linked debit account provides an easy way to transfer funds; otherwise, you can rely on electronic transfers, wire transfers and paper checks.
Capital One 360 Performance Savings
- Highly rated mobile app
- 0.40% APY on all balances
- No monthly fees
If you don’t open a linked checking account for easy ATM access with Capital One, you can still get your funds via the traditional (but slower) means.The Capital One Performance Savings Account is a good option for people who prefer to bank with a well-known entity.
Barclays Online Savings Account
- 0.40% APY
- No minimum balance required
- Secure, 24/7 online access to funds
With this Barclays savings account, users can deposit and withdraw funds in a number of ways, through direct deposit, an electronic transfer, paper check and more. If you’re looking for additional savings options, Barclays offers online CDs as well.
American Express High-Yield Savings
- No minimum balance requirements
- Up to nine withdrawals allowed
- 0.40% APY
With American Express high-yield savings, electronic transfer, wire transfer and paper check are the only ways to access your money. On the plus side, you can make up to nine withdrawals or transfers during a monthly statement cycle. This is higher than the six withdrawals or transfers that many high-yield accounts typically offer.
Marcus Online Savings Account
- 0.50% APY
- Popular app
- No minimum balance requirement
Marcus by Goldman Sachs withdrawals are limited to electronic transfer and wire transfer. You also cannot deposit checks via the app. If you’re looking for an account you can set-and-forget while earning higher interest, this could be an attractive option for you with a well-known company.
What is a Savings Account?
A savings account is a bank account where you store your money. Typically, you keep it here for long-term goals instead of using it for everyday expenses. To see a detailed explanation of how it differs from a traditional checking account, visit our checking vs. savings account comparison.
The best savings accounts are secured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. That means if you store your money with a bank and it goes under, you won’t lose your money.
Savings accounts are perfect for achieving your savings goals — for a car, a house, a wedding, vacations, you name it. More importantly, they are the best tool to build your emergency fund.
Most experts agree your emergency savings should total six months’ worth of necessary expenses in the case of job loss or another unpredictable emergency. Necessary expenses might include rent/mortgage, car payments, insurance, medical bills, utilities and groceries.
However, don’t sweat it if you don’t have six months’ worth saved up. It takes time to build up your savings. Even if you can consistently deposit $50 a month, that’s a good start.
One thing a savings account is not is an investment account. Savings accounts have historically low interest rates — or annual percentage yield (APY) — but they are inherently low risk.
After you have padded your savings account with enough cash to cover emergency expenses and your other savings goals, you'd be better off opening an IRA or 401(k) or investing in stocks.
Common alternatives to savings accounts include certificates of deposit (CDs), where you store your money for a fixed term for a slightly higher interest rate, and money market accounts, which typically offer a higher APY but have significantly higher minimum balance requirements.
So just how much interest will you earn in a savings account? That depends on the amount you’ve saved and your APY.
Online Banks vs. Brick-and-Mortar Banks
Before the advent of the internet, brick-and-mortar banks (and credit unions) were the only place to store your money, if not in your duffel bag.
But over the last couple decades, online banks have transformed the way we think of safely storing our money, and because of their low overhead (fewer staff and few or no physical locations), they can offer much better interest rates on savings accounts.
Pros of Online Savings Accounts
When online savings accounts first surfaced, bank customers were hesitant to store their money with companies they had never heard of and were fearful of internet security issues.
Today, many of these same customers now see far more pros to online savings accounts than their traditional physical banks.
Higher Interest Rates
This is easily the most important distinction between brick-and-mortar banks and online banks. The national average APY for a savings account is 0.06%, according to the FDIC. But many brick-and-mortar banks offer less than that. Online banks, on the other hand, tend to offer savings rates that are better — sometimes a lot better
Availability
Online banks are always open. The most competitive online banks offer around-the-clock service over the phone or online, and typically have more user-friendly apps and websites.
Some national banks and credit unions may offer 24/7 service, but their physical locations are typically limited to the 9-to-5 business hours.
Pros of Brick-and-Mortar Savings Accounts
There are advantages to brick-and-mortar banks. However, if these benefits do not hold massive weight for you, we highly recommend an online savings account.
Easy Access to Account Funds
Emergencies wait for no one. If you have an unexpected need for $10,000, it would be nice to be able to immediately access that.
Many online savings accounts take several days to get you your funds via ACH deposit or a written check, though wait times for ACH deposits have dramatically decreased in recent years.
(You can also speed up the process by opening a checking account with your online bank or choosing an online savings account with ATM benefits. Prioritize online banks that offer free checking accounts or ATM convenience cards.)
Brick-and-mortar banks, however, can allow major withdrawals at any of their locations. No waiting necessary.
In-Person Support
Some people prefer to resolve their issues over the phone or online, but many others find comfort in face-to-face communication. By opening a savings account with a bank that offers physical locations, you’ll be able to get in-person help from financial experts during regular business hours.
… And a Toss-Up
When it comes to access to ATMs, there is no clear winner. Obviously, brick-and-mortar banks and credit unions offer ATMs at all their locations, where you can easily withdraw your money.
Many online banks, however, offer fee-free withdrawals at select ATMs, and the best online banks will reimburse you for fees incurred out of network.
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6 Tips for Choosing a Savings Account
You should be aware that banks can change interest rates, develop better apps and update their bonuses, so it is important to understand how to determine the best savings account for yourself.
Here are a few tips:
1. Consider Your Needs
We prioritized high savings rates, ease of funds transfer and mobile apps in our rankings, but maybe for you, two-factor authentication and customer service are top considerations.
Build your own ranking system based on your top two or three criteria. You won’t find a perfect bank that offers everything, but at the very least, you’ll find banks that can meet all of your top needs.
2. Stick With Online
Put your money in an online savings account, unless you have a good reason not to, such as a high interest savings account at a brick-and-mortar credit union or a regular need to get in-person help.
3. Save Only With Insured Banks
Do not put your money into any bank that is not insured by the FDIC. Or, if you go the credit union route, make sure it is insured by the NCUA. We did not include any banks on our list that were not insured.
4. Don’t Be Tempted by Sign-on Bonuses Alone
Earning cash for starting an account with a bank feels awesome, but don’t let the appeal of $100 now prevent you from putting your savings into an account that will earn you $500 over a couple years.
5. Find a No-fee Account
Be wary of accounts with monthly maintenance fees, statement fees or any other miscellaneous charges. You’re more likely to find these fees with a brick-and-mortar bank.
Ideally, find a bank that has an associated free checking account for easy and fast funds transfers.
6. Read the Fine Print
Know what you are signing before you sign it.
If an APY sounds too good to be true, it’s possible there are strings attached — or that the rate is only temporary.
Ask questions and do research when you are confused by any of the terms and conditions, and don’t deposit your savings until you are satisfied with the agreement.
Frequently Asked Questions (FAQs) About Savings Accounts
Here’s a round-up of common questions — and answers — when it comes to savings accounts.
This post on TessMore Finance was also published on The Penny Hoarder.
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