The Best Savings Accounts
How We Found the Best Savings Accounts
28 savings accounts evaluated
9 factors considered
5 top picks
The Best Savings Accounts
To find the best savings accounts, we focused on online banks. Our top picks stand out for high interest rates, convenience — you don’t have to live in a particular part of the country to have access to them — and great customer support features for when you have a question about your account or want to learn more about banking. Whether you’re looking for an introductory savings account or are trying to maximize interest rates, online banks offer great savings accounts that outcompete their brick-and-mortar competitors.
The 5 Best Savings Accounts
- Ally Bank -
- Discover Bank -
Best Mobile Experience
- DCU Credit Union -
Best APY for Low Balances
- Capital One -
Best for Kids
- Varo -
Best for Early Direct Deposit
The Best Savings Accounts: Summed Up
As of October 2019. Interest rates change regularly, so please refer to the company sites for the most up-to-date rates.
Ally Bank — Best Overall
Why we chose it
High interest rate
Ally Bank's online savings account has a 1.80% APY rate — which is 20 times the national average. Although APY can fluctuate frequently, Ally Bank has a strong track record of staying competitive. It has consistently outperformed our other top picks over the past few years: Four years ago, Ally Bank’s APY rate was 1%, compared to Discover Bank’s 0.95%, American Express’ 0.85%, and Bank of Internet USA’s rate of 0.61%.
Great customer service
Ally Bank won first place in our customer service test, offering the most resources and most friendly representatives. If you need to get in touch, its lines are open (with a live representative) 24/7, and it has a phone line option to select if you have impaired hearing. If you’d like to skip the phone, you can also contact Ally Bank through its live chat, email support, or social media pages (like Facebook and Twitter).
Solid mobile app
Ally Bank’s mobile app has a 4.8-star rating in the Apple App Store and a 4.3 rating on Google Play, with customers referencing its usable and clean design. If you do a lot of on-the-go banking, Ally lets you manage fund transfers — whether they’re one-time or recurring — and deposit checks. If you have a checking account through Ally Bank, you can also pay bills through the app.
Note: You still need to use Ally’s website to locate ATMs (a consideration only if you hold a checking account, as you won’t be able to have a debit card directly attached to your savings account).
Points to consider
Like all of our top picks, Ally Bank doesn’t charge a maintenance fee or require a minimum balance, and it doesn’t charge an inactivity or dormant fee. That said, you will need to put some funds into your savings account within 30 days of opening it or Ally will close the account. Ally Bank also charges a $10 fee for excessive transactions and warns that if you’re consistently treating your savings account more like a checking account, it will close your savings account or convert it into a checking account.
Wire transfer restrictions
You won’t be able to make international wire transfers with Ally Bank. Ally charges $20 for each domestic outgoing wire transfer, but incoming transfers and cashier’s checks are free.
Discover — Best Mobile Experience
Why we chose it
Reliable mobile app
We liked Discover Bank’s mobile app, which lets you check your account balances or submit a deposit while on the go. You’ll also be able to locate the nearest ATM, and the app will let you know ahead of time if it’s in-network and fee-free or not. Like Ally, you won’t be issued an ATM card if you only sign up for Discover Bank’s savings account, so this last feature is only a consideration if you also hold a checking account through Discover. We also appreciated its security features; for example, you can freeze and unfreeze your credit if your card is stolen or lost or notify your credit card issuer when you are traveling.
Additionally, Discover’s mobile app is well-received by most of its users, with a 4.8 out of five rating in the Apple App Store and a 4.7 out of five on Google Play. Users like the app’s blend of high functionality with a clean, easy-to-use design that gives digestible updates on your account.
Bonus offer for minimum deposits
With most banks, there’s a trade-off — high yields or high bonus. But with Discover, there’s room for a little of both. On top of 1.80% APY (a highly competitive rate as it is), you can also earn a bonus of $150 if you deposit $15,000 into your first Discover online savings account, or $200 if you deposit $25,000. This offer currently has an expiration date of November 18, 2019. If you are transferring large sums of money into a new savings account and thinking of doing it soon, Discover is a great option.
International wire transfers
Discover Bank's main leg up is the option to make an international wire transfer from your savings account — Ally only allows you to make domestic transfers. This is especially beneficial for those who work with international banks frequently.
Points to consider
Customer service options
Discover Bank did well in our customer support evaluation, although it didn’t impress us as much as Ally. Like Ally Bank, Discover Bank has 24/7 customer support, and you can contact it via phone or social media. However, Discover doesn’t offer a live chat or email option — for an immediate response, you’ll need to hop on the phone.
DCU Credit Union — Best APY for Low Balances
Why we chose it
High APY for low balances
As a credit union with restricted membership, the Digital Federal Credit Union (DCU) looks different than our other picks, many of which are household names. But its National Credit Union Administration-insured savings account has an ace up its sleeve — 6.17% APY. These are astronomical returns compared to traditional brick-and-mortars like Bank of America and other online banks like Ally and Discover. It’s important to note, though, that this APY only applies to the first $1,000 in your savings account. After $1,000, your remaining balance will accumulate returns at a 0.25% APY, so as your balance increases, you will experience diminishing returns.
For example: If you have a $1,000 balance, you would make around $45 more in interest over the course of a year with DCU’s 6.17% APY than you would with Ally’s 1.80% APY. However, if you have a $5,000 balance, Ally would be a better choice, garnering $90 in interest over the course of a year, compared to just over $70 with DCU's tiered interest rates. So before signing up with DCU, we recommend doing the math and figuring out what kind of deposit account — whether it’s a DCU savings account, a savings account with another institution, or even a money market account — would garner the most earnings.
No monthly fees or minimum balance
Many banks will charge exorbitant monthly management fees or require you to maintain a high account balance in order to keep your savings account open. DCU doesn’t have either of these policies, thankfully. It requires only $5 as a minimum deposit to open a savings account.
Points to consider
Poor BBB rating
Despite being in business for 40 years, DCU is not accredited by the Better Business Bureau. In fact, it’s not very well-rated. BBB gives the credit union a “C” for “failure to respond to four complaints filed against [the] business.” It also received a 1.5 out of five rating generated from customer reviews on the site; though, for what it’s worth, many of the complaints seem related to its loan practice.
As a credit union, DCU is a nonprofit owned and operated by its members. To open a savings account, you have to work for or be a member of one of DCU’s participating organizations. If you’re not currently affiliated with any of these, you can make a donation to one of the organizations (like education nonprofit Reach Out for Schools, for example) and become eligible for DCU membership. It’s a bit of a roundabout way to get in — and definitely not as simple as our other choices — but the returns could be worth it for you.
Capital One — Best for Kids
Why we chose it
Kids-specific savings account
Although Capital One has a high-yield savings account that’s strong in its own right, we like that it offers a savings account that tailors its functionality to children who aren’t old enough to have their own independent bank account but are eager to learn adult concepts like money management. With this savings account, kids can log on to deposit mobile checks, check their balances, and watch their savings grow. Parents and kids share dual access to his savings account, but the product also comes with parental controls and oversight (for example, kids will need their parents to approve transfers in and out accounts). Rather than sitting in a piggy bank, their savings from lemonade stands, allowances, and babysitting can accumulate returns at 1.00% APY.
Convenient online tools
Through the kids saving account, your child can watch their savings grow in real time. If they have specific goals in mind, they can set up and track their savings using a calculator tool. Parents can also set up automatic transfers that send their allowance to the account on a regular schedule.
No fees or minimum balance
Capital One’s kids saving account doesn’t require a minimum account balance or monthly management fees, allowing your kids to reap all the rewards of their diligent saving.
Points to consider
APY low for online banks
Capital One’s 1.00% APY is strong compared to other traditional brick-and-mortar banks like Bank of America and Wells Fargo, whose returns rarely exceed 0.05%. However, it is on the lower end of the spectrum compared to our other picks in this review, whose APYs are closer to 2.00%. This type of account geared toward kids is rare, though, so if giving your child bank access is important, Capital One is still at the top of the list.
Varo — Best for Early Direct Deposit
Why we chose it
Early direct deposit
Varo offers an early direct deposit feature that allows you to receive your paycheck up to two days before traditional banks — unlike most competitors, Varo deposits the cash into your bank account as soon it receives the direct deposit notification from the Federal Reserve. This means that you could receive your paycheck and pay your bills on Wednesday instead of Friday. Since this applies to all direct deposits, you could also receive your tax refund from the IRS two days earlier than expected.
Varo’s base APY for its savings account is 2.02% — higher than most leading online banks now — but it can go as high as 2.80% if you meet its (admittedly stringent) qualifications. The requirements for a 2.80% APY include:
- Making at least five Varo Visa Debit Card purchases in each calendar month
- Receiving total direct deposits of $1,000 or more in the same calendar month
- Keeping a savings account balance of up to $50,000
Otherwise, your APY is 2.02%, which is still a win in our book.
No fees or minimum account balance
Fortunately, Varo doesn’t require a minimum opening deposit or a minimum account balance to keep the account open. It also doesn’t charge monthly fees for the management of the account.
Points to consider
Maximum account balance
To receive the highest APY tier of 2.80%, you can’t keep a balance that exceeds $50,000 (in addition to other requirements). It’s an odd rule, as other banks either don’t have maximum account balances or set them at much higher amounts. Once the account balance exceeds $50,000, the APY would revert back to 2.02%, the base APY that doesn’t have balance requirements.
How We Chose the Best Savings Accounts
To find the best savings accounts, we started with a list of all online banks that offer savings accounts and backing from either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). This means that if your bank fails, the government will typically reimburse you up to $250,000. All 28 of our initial contenders — from big names like Ally Bank to lesser-known options like Live Oak Bank and DollarSavingsDirect — are federally insured through the FDIC or NCUA.
High interest rates
Online banks tend to offer much higher interest rates for their savings accounts than brick-and-mortar contenders. Most of the banks on our list offer annual percentage yields (APY) of 1.2% or higher (frequently climbing up to 1.80% and above), which is a stark contrast to the national average of 0.09%. For example, if you made a single $1,000 deposit with a 0.09% APY, at the end of the year, you’d have $1,000.90. The same deposit in an account with 1.45% APY would give you $1,014.50 — 14 times more income than the lower APY account.
To find the savings accounts with the best interest rates, our next step was to directly compare APYs. Our 28 contenders offered APY anywhere from 0.01% (Chime) to 1.80% (Ally), with an average (mean) APY of 1.44%. To ensure competitive rates, we cut any banks that fell below the national average of 0.09% APY for savings accounts.
Good customer service
We then evaluated the customer service of our 18 finalists, following methodology similar to the one we used when we reviewed the best banks. Here are the things we looked for:
- Customer support: We gave points to banks which offered 24/7 live customer support. No one wants to wait for “business hours” when they need answers to time-sensitive questions.
- Modes of communication: Every bank gave us a phone number to call, but we gave extra points to banks that went above and beyond by offering live chat, email support, or customer service through a social media platform — like answering questions and complaints on Twitter or Facebook. As far as we’re concerned, the easier it is to get ahold of a representative, the better.
- Easy-to-locate fee schedules: We were impressed with Ally Bank and Discover Bank for transparently displaying their fee schedule front and center on their savings account main pages. On the other hand, UFB Direct buried its account details in a 30-plus-page PDF document that made us hunt through the fine print to learn whether we could be charged an overdraft fee. We wanted banks that made it easy for us to compare our options and make informed decisions.
To find our top picks, we took a closer look at each bank’s fee schedules and disclosures to make sure we wouldn’t need to pay excessive charges just to have an account. Some of the most common fees include:
- Minimum balance fees: a charge for not maintaining a certain level of money in your savings account
- Monthly maintenance fees: a charge to offset costs of maintaining your account with this bank
- Dormancy or inactivity fees: a charge usually levied if there has been no account activity (transfers, withdrawals, or deposits) for a prolonged period of time
- Excessive withdrawal fees: a charge if you exceed the FDIC's six-withdrawal-per-month limit (not including ATM withdrawals)
None of our top picks have a minimum balance fee, but there is one fee none of our finalists could avoid: a charge for excessive withdrawals. While excessive transaction policies vary, most banks charge a fine (around $10 to $20 per transaction). And some banks will refuse the transaction, convert your account to a non-interest-earning account, or close it entirely.
How to Find the Right Savings Account for You
Decide how much you want to save
If you want to maximize your earnings and potential wealth, looking into a savings account with the highest interest rate possible is definitely worthwhile. However, you need to make sure that this interest isn’t negated by sneaky fees. You can calculate compounding interest yourself with Bankrate’s handy APY calculator, which lets you see exactly how much money different interest rates can net you over a set period of time.
Check for customer service options — and reputations
If you’re planning on going with an online savings account, you’ll want to be sure that the bank also offers ample resources for online customer support, regardless of the hour or circumstance. It shouldn’t be difficult to get in touch with a customer support representative, and if you have a pressing question and can’t pick up the phone, you should be able to contact someone digitally and receive a quick response. We suggest investigating the track records of your own contenders when it comes to customer support. After all, we are talking about your life’s savings here.
If having good customer support is a must for you, Ally is our top pick, but American Express also scored highly in our evaluation — you can contact the company 24/7 by phone or social media.
Consider other savings account types
No, we’re not talking about stuffing cash under your mattress. Standard savings accounts are the most common way to save money and grow your wealth, but they aren’t the only option. Depending on your goals and circumstances, it might also make sense to look into money markets, certificates of deposits (CDs), and individual retirement accounts (IRAs).