Best Savings Accounts Of July 2024

Here are five of the best accounts we analyzed, starting with the highest APY.

• Bask Interest Savings Account: 5.10% APY
• Varo Savings Account: 3.00% to 5.00% APY
• USAlliance Financial High Dividend Savings: 4.55% APY
• Affirm Money Account: 4.35% APY
• Capital One 360 Performance Savings Account: 4.25% APY

These accounts combine competitive rates with attractive banking perks. While these picks don’t feature all of the best savings account interest rates on the market, they do offer the most overall value. To find the highest rates available, see the Best High-Yield Savings Accounts.

All account information and APYs are accurate as of June 6, 2024.

• Savings Accounts: Definition, How They Work, Types and More
• Pros and Cons of Savings Accounts
• How To Open a Savings Account
• Alternatives to Savings Accounts
• Methodology

What Is a Savings Account?

A savings account is a type of bank account designed to store money you don’t need right away. Savings balances typically earn interest that compounds daily and is deposited into your account monthly.

You can find the best savings accounts at online banks, brick-and-mortar institutions and credit unions. They’re often used to hold emergency funds and save for short-term goals like a down payment on a house or an upcoming vacation.

• It’s FDIC-insured (NCUA-insured at a credit union) and earns a higher interest rate than you’d typically earn with a checking account.
• Traditionally, savings accounts were limited to six withdrawals per month, under the Federal Reserve’s Regulation D.
• The Fed suspended Regulation D in April 2020 to give families more access to funds during the coronavirus pandemic. But, many banks still enforce the six-withdrawal monthly limit.

How Does a Savings Account Work?

Banks, credit unions and fintech companies often feature one or more savings accounts in their lineup of banking products. Different types of savings accounts exist, but they all generally work the same.

• Interest. Savings accounts are interest-bearing or dividend-earning accounts. The interest or dividends you can earn depends on your account balance, how long you leave funds untouched and the institution’s interest rate and compounding frequency. Savings accounts carry variable interest rates that are subject to change. Financial institutions often follow federal funds rate trends.
• Transaction limits. Prior to the pandemic, the Federal Reserve enforced Regulation D, a limit of six monthly transactions for savings accounts. The Fed removed this limit in April 2020, but some banks still enforce withdrawal restrictions and charge fees or reject transactions in excess of six.
• Deposits. With a standard savings account, you’re free to make deposits as you please. Aside from daily or monthly funding limits, there are no restrictions on adding funds to a savings account.
• Transfers and withdrawals. Most savings accounts permit ACH transfers, direct deposit transfers and wire transfers. Others may also allow check and cash deposits. Many banks provide several options for transferring money from one bank account to another, including internal transfers, external transfers and peer-to-peer transfers. If you want to withdraw money from a savings account, you can first transfer it to another account or visit a branch or ATM.

What Is a Savings Account Used For?

A savings account is designed to help you save money. It’s a safe and secure place to store your money while earning interest on your deposits. Savings accounts are often used for:

• Emergency funds
• Vacations
• Down payments on automobiles
• Furniture or home improvement projects
• Weddings
• Educational expenses
• Teaching kids about money

Types of Savings Accounts

There are six primary types of savings accounts:

1. Traditional savings accounts. These are regular savings accounts available with the majority of banks and credit unions that may or may not earn variable interest.
2. High-yield savings accounts (HYSAs). HYSAs earn interest rates that beat national averages and rates available with most traditional savings accounts.
3. Money market accounts (MMAs). These are savings accounts that tend to offer more cash withdrawal options than other savings accounts and rates comparable to or better than HYSAs.
4. Certificates of deposit (CDs). CDs are time deposit accounts that offer a fixed rate for a set period of time with penalties for early withdrawal.
5. Cash management accounts. These are cash accounts often available with brokerages that typically earn interest and function similarly to checking accounts.
6. Specialty savings accounts. Specialty savings accounts, such as kids’ savings accounts and vacation savings accounts, are designed to meet the needs of a certain demographic or accomplish a particular goal.

The right choice for you will depend on your needs and goals.

Savings accounts have several advantages and disadvantages over other types of accounts.

PROS	CONS
FDIC-insured (up to $250,000)	Traditional accounts have low interest rates
Easy access to funds	Some savings accounts have monthly fees
High-yield accounts earn competitive interest rates	Savings accounts are typically limited to six withdrawals per month
Separation of funds can help you avoid overspending	Inflation may outpace savings account APYs
Good for short-term goals and emergency funds	Not ideal for long-term growth

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You can quickly apply online for most savings accounts by following these six steps:

1. Research banks, to choose where to open your account.
2. Navigate to your preferred bank’s website, and find the account you want to open.
3. Look for a link inviting you to sign up.
4. Fill out the online application.
5. Wait for the account to be approved. (This is often instant, but it may take a few days if the bank needs additional information from you.)
6. Fund your account using a linked bank account or other methods.

During the application process, you’ll likely need to provide this information for yourself and any joint owners on the account:

• Your name
• Address
• Email address
• Phone number
• Date of birth
• Social Security number
• Government-issued photo ID

How To Open a Savings Account for a Child

Once you’ve researched and selected a savings account for your child, opening the account is typically a straightforward process. First, gather the required identification for yourself and the child, and fill out the application—either online or at a branch. Once your application is approved, simply make a deposit to start accruing interest.

How To Close a Savings Account

As your financial needs and personal goals change, you may find yourself needing to close a savings account. Here are some general guidelines for closing a bank account.

• Cancel any recurring transactions. Switch your recurring bill payments, direct deposits and automatic savings deposits to another bank account.
• Withdraw your money. Withdraw your balance as cash or transfer funds to another bank account. Leave enough cash in your savings account to cover outstanding transactions that haven’t cleared.
• Ensure your account is in good standing. It’s a good idea to wait a bit before closing an account, even if you’ve already moved your money. Double-check that all payments, transfers and transactions have gone through, and make sure you don’t have a negative balance.
• Close your account. Contact your bank to let them know you want to close the account. Some banks may allow you to close your account online using a form, while others may require a phone call to customer service or a visit to a local branch. Get confirmation of the closure in writing.

While savings accounts offer a place to grow your money, they aren’t the only option. Here are some alternatives that may be a better fit depending on your goals.

Savings vs. Checking vs. MMA

Savings accounts, checking accounts and money market accounts (MMAs) are useful deposit accounts you can consider for your banking needs. These vary in function, restrictions and features.

Checking and savings accounts are available at almost all banks and credit unions, and it’s common to have both, as one is for spending and one is for saving. Money market accounts and savings accounts are both designed for saving, but you may choose one over the other depending on your savings goals, or you may use both for different purposes. Here’s an overview of how these three account types compare.

	SAVINGS ACCOUNTS	CHECKING ACCOUNTS	MMAs
Function	Short and medium-term savings, emergency funds	Everyday spending	Short and medium-term savings with some spending functionality
Interest	Interest-bearing	Sometimes interest-bearing	Interest-bearing; may have requirements you must meet to earn interest
Withdrawals	May carry withdrawal restrictions, typically limited to six per month	No restrictions	May carry withdrawal restrictions, typically limited to six per month
Fees	May include fees for monthly maintenance, excessive withdrawals, inactivity, wire transfers, stop payments and paper statement	May include fees for monthly maintenance, ATM usage, overdrafts, insufficient funds, wire transfers, stop payments, returned payments, foreign transactions, paper checks and paper statements	May include fees for monthly maintenance, ATM usage, overdrafts, insufficient funds, wire transfers, stop payments, returned payments, foreign transactions, paper checks, paper statements and excessive withdrawal
Common Features	Online and mobile access	Debit or ATM card, check-writing privileges and online and mobile access	Debit or ATM card, check-writing privileges and online and mobile access

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Savings vs. CDs

The best CDs, or certificates of deposit, typically offer higher interest rates than traditional savings accounts. But in exchange, you have to lock up your funds for a fixed period of time, known as a term. If you withdraw money before the term ends, you’ll usually incur a penalty.

Savings accounts usually offer lower interest rates compared to CDs, but they are more flexible since they often have no minimum deposit requirements and allow for up to six withdrawals per month.

• CDs are a great option for those who have a specific savings goal in mind and don’t need immediate access to their money.
• Savings accounts are a great option for emergency funds and short-term savings goals, making them ideal for those who want to keep their money liquid.

Roth IRA vs. Savings Account

Roth IRAs and savings accounts are both popular ways to save money, but they serve different purposes. A Roth IRA is a long-term retirement savings account that lets you invest after-tax dollars and earn tax-free growth on your investments. This means you won’t pay taxes on the money you withdraw from the account during retirement.

However, you generally can’t withdraw money from a Roth IRA before age 59 1/2 without paying a penalty. That’s why it’s important to have other savings options—such as a savings account—available for emergencies or short-term financial goals. If you want to maximize the interest earned on your savings balance, consider looking into a 5% interest savings account.

To create this list, Forbes Advisor analyzed 73 savings accounts at 53 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. We ranked each institution on 12 data points within the categories of APY, fees, customer experience, digital banking experience and minimum requirements.

Here’s the weighting assigned to each category:

• APY: 30%
• Fees: 40%
• Customer experience: 10%
• Digital experience: 10%
• Minimums: 10%

We also considered whether there were complex tier structures or requirements to earn the APY. To be on this list, the savings account must be nationally available.

To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.

Banks We Monitor

Acorns, Affinity Federal Credit Union, Affirm, Alliant Credit Union, Ally Bank, Amalgamated Bank, American Express, Apple Federal Credit Union, Armed Forces Bank, Axos Bank, BancorpSouth Bank, Bank of America, Bank OZK, Bank5 Connect, BankDirect, BankPurely, Barclays, Bask Bank, BECU, Bethpage Federal Credit Union, Blue Federal Credit Union, BMO Harris, Bread Financial, BrioDirect Banking, Cadence Bank, Capital One, CFG Community Bank, Charles Schwab Bank, Chase, Chevron Federal Credit Union, Chime, CIBC Bank, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Consumers Credit Union (MI), Copper, Credit Union of Denver, Current, Digital Federal Credit Union, Discover, Dollar Savings Direct, E*Trade Bank, EBSB, EmigrantDirect, Exchange Bank and Trust, Fidelity, Fifth Third Bank, Financial Partners Credit Union, Financial Resources Federal Credit Union, First Citizens Bank, First Foundation Bank, First Horizon Bank, First Internet Bank, First National Bank and Trust, First National Bank of America, Fitness Bank, FNBO Direct, Georgia’s Own Credit Union, Golden1 Credit Union, Greenlight, Greenwood Credit Union, Hanscom Federal Credit Union, Heritage Bank, HSBC, HSBC Direct, Hughes Federal Credit Union, Huntington Bank, Huntington National Bank, Ideal Credit Union, iGoBanking, Incredible Bank, KeyBank, Kinecta Federal Credit Union, La Capitol Federal Credit Union, LendingClub, Live Oak Bank, M&T Bank, MAC Federal Credit Union, MainStreet Bank, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My Banking Direct, My eBanc, MySavingsDirect, NASA Federal Credit Union, Nationwide Bank, Navy Federal Credit Union, nbkc Bank, Northpointe Bank, Nuvision Federal Credit Union, One, Pacific National Bank, Paramount Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Presidential Bank FSB, PSECU, Purepoint Financial, Quontic, Quorum Federal Credit Union, Radius Bank, Regions Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Santander, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, Service Credit Union, SFGI Direct, Simple, SmartyPig Bank, SoFi, Spectrum Credit Union, State Bank of Texas, State Department Federal Credit Union, State Farm Bank, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, Texas Capital Bank, EverBank, Truist, U.S. Bank, UFB Direct, Union Bank & Trust, USAA, USAlliance Federal Credit Union, Varo Bank, Vio Bank, Webster Bank, Wells Fargo, Zions Bank and Zynlo Bank.

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