Savings Accounts: Reviews & Comparisons
Looking for a safe and accessible account that offers decent interest rates? Read on to learn how SuperMoney's tools can help you compare and filter savings accounts (some of which are our partners).
A savings account is a great place to keep your emergency fund. Savings accounts are easy to open, and often have lower fees and minimum balance requirements than checking accounts. The Consumer Finance Protection Bureau recommends having at least $400 in a savings account as an emergency fund. However, it's better if you can have at least three months of living expenses in your fund. Just putting aside $5 to $10 a week can go a long way towards achieving financial security.
That being said, not all savings accounts are created equal. So how can you find a savings account that's right for you? SuperMoney's tools can help you compare and filter savings accounts based on the rates, terms, and features that matter the most to you.
What types of savings accounts are there?
There are three primary types of savings accounts to choose from, each with its own unique advantages.
- A regular savings account earns interest, is highly liquid, and usually has low fees.
- A money market account generally offers a higher interest rate than a regular savings account. However, the minimum balance required to open an account and to avoid fees is also higher. And some accounts limit the number of checks you can write each month.
- A certificate of deposit (CD) offers a fixed rate of interest for a specified timeframe. That means that even if market rates fall, a CD's interest rate won't change. However, CDs provide less liquidity -- you cannot access your funds until after the specified timeframe ends. If you do withdraw money early, you may forfeit some of the interest you earned.
How do you compare savings accounts?
Every bank's savings accounts are different. In order to compare savings accounts and find the right one for your situation, you must first identify which features matter most to you.
For example, if you are looking to minimize costs, you may prefer a bare-bones account with low or no fees. Or maybe you'd to maximize your returns and don't mind paying a little extra for it! Wherever your priorities lie, the right savings account is out there. You just need to know what to look for.
What savings account features should you consider?
Let's dig deeper into the factors that differentiate one savings account from the next.
Minimum deposit requirement
Most savings accounts require a certain minimum deposit to open the account. This minimum varies widely for different accounts. Accounts with a high APY (annual percentage yield) often require a large minimum balance to open an account or to start earning interest.
Don't worry if you don't have much money to save. There are accounts with low minimum balances. Some don't even have a minimum amount. Keep in mind that a lower minimum deposit may mean a lower interest rate or fewer features.
Minimum balance requirement
Most banks require you to maintain a certain balance in your savings account. If you dip below this minimum, you'll incur fees.
There are two different ways that banks assess your balance:
- The average daily balance allows for fluctuations in your account. As long as your average balance for the cycle is above the bank's minimum, then there is no fee.
- A minimum daily balance requires that your balance never drops below a set minimum. As long as your balance never drops below the minimum, there is no fee.
When selecting a savings account, make sure that your balance will be larger than its stated minimum. And consider how you manage your balance. Will your balance fluctuate throughout the month (but stay, on average, above the minimum)? Or will it remain steady?
There are a number of fees that you may have to pay in order to maintain your savings account.
For example, if you fail to meet your account's minimum balance requirements, you'll have to pay a fee. However, you can sidestep these fees by choosing a savings account with a moderate (or nonexistent) minimum balance requirement.
Likewise, many banks charge account maintenance fees. These charges occur on a monthly or yearly basis, and can be avoided by maintaining a high enough balance.
Other fees you may encounter include overdraft fees, withdrawal fees, balance transfer fees, and more. When you compare savings accounts, consider how you intend to use yours. How much money are you looking to store? How often will you make withdrawals? Will you need to wire money overseas? Then, choose a savings account that won't penalize your intended activities.
Interest rate (APY)
In a savings account, your balance will earn interest over time based on an annual interest rate. As your interest compounds, your balance's growth will accelerate. An account's expected annual rate of return (including compounding interest) is known as its Annual Percentage Yield (APY).
When you compare savings accounts, look to each account's APY to find out what kind of returns you can expect. Generally speaking, a higher interest rate is always better.
APY minimum balance
Some accounts offer a higher APY if you deposit more money. However, to receive this higher rate, you must keep your balance above that figure. In some situations, the bank will offer multiple tiers of interest rates for different ranges of balances.
When reviewing account options, you should find out what APY is offered for lower balances, as well as for higher ones. You never know when an emergency may take a dent out of your savings. In situations like these, you should know that your remaining balance will still earn a decent interest rate.
In this day and age, online access to your savings account is crucial. A streamlined online platform is the easiest way to manage and transfer money on a day-to-day basis. If your bank offers a mobile app for remote access to your account, that's even better.
Most banks do not charge for online access to your accounts, but you should still confirm whether there is a fee for online access.
Which is the best bank for savings accounts?
The best bank for your next savings account will depend on your personal financial situation and your goals. An account may offer a high APY and low fees but it's of little help if you can't meet the minimum balance required to qualify for them.
Which bank offers the best interest rate for savings?
Again, the answer to this question will depend on how much you have to deposit in a savings Account. Enter the amount you plant to save in the filter below and see which financial institution offers the best rates and lowest fees.
Can you lose money in a high yield savings account?
No, as long as the financial institution you are using is FDIC insurred. Granted, the rates of a high yield savings accounts are not high enough to secure your retirement. However, they are the best place to put cash you might need in a pinch or for a goal in the next couple years. We say this because the rates are competitive, you can access your money whenever you want, and they're FDIC insured up to $250,000.
Ready to get started?
A savings account is a perfect place to keep your money safe, or to save up for that next big purchase. Ready to start comparing your options? Use the tools below to find one that suits your needs.
APY (Annual Percentage Yield)
APY Minimum Balance