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ByTaylor Moore Finance & Insurance Writer

Taylor Moore is a finance writer for Reviews.com. Her work has been published in Chicago magazine, the Chicago Reader, and elsewhere.

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

Why Trust This Review?

Since 2015, Reviews.com has helped thousands of people make smart financial decisions. We’ve investigated savings accounts from the top banks in the U.S. in order to recommend the best savings account for your needs. We update all of our reviews regularly to ensure that they stay accurate. The author of this review does not own stock in any of the companies mentioned, or in any other financial institutions.

The Best Savings Accounts: Summed Up

  Ally Bank Discover Bank DCU Capital One Varo
Best for
Most people Mobile experience High APY for low balances Kids Early direct deposit
Minimum deposit
$0 $0 $5 $0 $0
Maximum APY
1.80% 1.80% 6.17% 1.00% (Kids Saving Account)
1.90% (360 Performance Saving Account)
2.80%
Outgoing wire transfer fee
$20 $30 $15 $30 N/A
Overdraft fee
$25 $0 $30 $35 $0 (up to $50 in overdrafts with No Fee Overdraft Program)
International wire transfers
24/7 customer service
View plans View plans View plans View plans View plans

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


Best Overall

Ally Bank
Ally
Great customer service, competitive 1.80% APY, and limited fees
Pros
High interest rate
Great customer service
Solid mobile app
Cons
Fees
Wire transfer restrictions

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

Fees

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


Best Mobile Experience

Discover Bank
Discover
An impressive 1.80% APY and the ability to send international wire transfers
Pros
Reliable mobile app
Bonus offer for minimum deposits
International wire transfers
Cons
Customer service options

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

Best APY for
Low Balances

DCU Credit Union
DCU
High APY guarantees returns three times that of other online banks if your balance is under $1,000
Pros
High APY for low balances
No monthly fees or minimum balance
Cons
Poor BBB rating
Membership required

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.

Membership required

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

Best for
Kids

Capital One
Capital One
Helping kids learn how to save with educational budgeting tools
Pros
Kids-specific saving account
Convenient online tools
No fees or minimum balance
Cons
APY low for online banks

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

Best for
Early Direct Deposit

Varo
Varo
Reap the benefits of a high APY and early payday
Pros
Early direct deposit
High APY
No fees or minimum account balance
Cons
Maximum account balance

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.

High APY

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 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).

Savings Accounts FAQ

What is a savings account?

A savings account is a federally insured deposit account at a bank or credit union that earns interest. On the spectrum of deposit accounts, it’s somewhere between a checking account and a CD. Brent Weiss, CFP, Chief Evangelist of Facet Wealth, says, “The primary perk of a savings account is to get a higher rate of interest than a traditional checking account without having to lock the money up for a period of time, like CDs in some cases.”

They’re best for emergency funds or saving for short-term goals, he says. Savings accounts provide a good balance between liquidity and rate of return, and the act of dividing your finances can be helpful. “From a behavioral finance perspective, having separate accounts for each goal, and even naming the accounts, can improve your likelihood of saving for and achieving the goal,” Weiss says.

Why choose online over brick-and-mortar banks?

While you’ll likely be getting a higher interest rate with an online bank, choosing digital does mean giving up some of the conveniences of a brick-and-mortar — like walking in and asking for help or making a physical deposit. The trade-off is that you don’t have to worry about finding a nearby branch or coordinating the bank’s strict business hours with your schedule. Online banks are open for business to customers across the nation. The best online banks translate some of the overhead normally spent on rent and electricity into increased benefits for you.

Online banks also have the advantage of being tech-forward. John Durrant, EVP, Retail & Direct Banking at Capital One, recommends going with a bank that offers “digital tools which can help increase your financial savvy and savings. Apps that accompany your account can now monitor your credit for free and boast all the features of mobile banking – look for features such as automatic transfers, which can keep your savings growing.”

Are online banks safe?

Yes. Online banks that are insured by the FDIC (Federal Deposit Insurance Corporation) have the same protections as traditional banks like Bank of America, Citi, Chase, and Wells Fargo. This means that if you have cash in a bank that fails, the federal government will protect up to $250,000 of that money. All of our picks are insured by the FDIC — with the exception of DCU, which is insured by the NCUA (National Credit Union Administration).

Can banks charge inactivity fees?

The short answer: It depends. Some banks have a more stringent inactivity policy than those of our finalists. If your account has seen one year go by without any transfers, withdrawals, or deposits, they will charge you $10 for a dormant or inactive account. If you’re carrying a low balance on a forgotten account, this policy allows them to slowly whittle it down until it reaches $5, at which point they will close the account. Our top picks don’t charge your account for inactivity or dormancy.

What is the difference between APR and APY?

Annual Percentage Yield (APY) and Annual Percentage Rate (APR) are two ways to calculate interest. APR typically measures the interest a bank will charge you for borrowing money, and APY is the amount of interest you will end up earning on your deposits or investments. APY is more helpful because it includes compound interest (essentially the interest that your interest earns), thereby giving you a more realistic expectation of how much money you’ll make.

Will savings interest rates change?

Yes, sometimes multiple times per year. APY is based on the federal interest rate and the decisions of each individual bank. While all of our finalists currently offer extremely competitive APYs, it’s always a good idea to double-check rates before choosing a savings account based solely on annual percentage yield.

How many times can I withdraw from my savings?

The FDIC requires that banks limit the number of transactions per savings account to six per month. There are some exceptions: Transactions made in person and withdrawals from an ATM don’t count, and pre-authorized transactions, automatic transfers, and telephone, fax, or online banking transfers are all on the FDIC’s list of limited transactions. So, as long as you won’t need to make account transfers more than, say, once a week, you’re unlikely to fall afoul of this rule.

Can your funds be seized?

The only creditor that can seize your funds from a bank without a court-ordered judgment is the IRS. It may seize or “levy” funds if you fail to pay your taxes or settle existing debts and you have failed to take action on its notices. The creditor, not the bank, is tasked with informing you of the levy if the judgment is approved by a court.

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