Best Savings Accounts of March 2024
The MarketWatch Guides team reviewed more than 100 banks and credit unions, opened our own accounts and conducted a survey to create our picks for the best savings accounts. Our review process included the most important factors that customers consider, according to our survey data – such as interest rates, fees, account linking and ATM access.
Because we consider multiple account features for this category, our selections for the best accounts don’t necessarily have the highest interest rates. You can see our list of the best high-yield savings accounts for financial institutions with high rates and high savings account scores. You can also learn more about our scoring methodology.
All financial institutions on our list include Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA) insurance of at least $250,000 per depositor, per bank.
- SoFi Bank: Best budgeting tools
- Service Credit Union: Best savings account for military families
- Bask Bank: Best savings account for earning miles
- Discover Bank: Best online savings account
- UFB Direct: Best high-yield savings account
- Capital One: Best savings account for kids
- Citi: Best large bank savings account
- PenFed Credit Union: Best credit union savings account
Research rates from multiple providers to earn as much as possible on your savings. The FDIC’s monthly report on the national average interest rates for deposit accounts can help you compare your options.
*APYs (Annual Percentage Yields) accurate as of March 26, 2024
What Is a Savings Account?
A savings account is a financial tool that allows you to securely store and grow your money while maintaining access to it. Unlike other accounts, such as CDs, which lock your money away for a set period of time, you can access your savings at any time without penalty.
Online Savings Accounts
Many of the best savings accounts are offered by online banks. Since they don’t have the overhead costs of brick-and-mortar banks, they’re able to offer higher APYs to their customers.
However, working with online banks may come with some drawbacks. For one thing, since they don’t have physical branches, customer service options are limited. Some customers prefer the experience of in-person service, especially when there are problems with their accounts. But with online banking, you’ll be dealing strictly with agents via chat, email or phone.
Who Should Get a Savings Account?
It’s safe to say that everyone should have some type of savings account set up, whether for retirement, emergencies or planned events. However, there are a few demographics that might especially benefit from a savings account.
Young Adults and College Students
Savings accounts are ideal for young adults and college students just starting their financial journeys. This will help them cultivate healthy financial habits early and build a solid foundation for stability and independence.
Freelancers and Gig Workers
Freelancing and gig work has become a popular way to earn money, but the income stream is often unpredictable. By starting a savings account, you can ensure that you have enough funds to cover basic expenses during slower times.
Families and Parents
Families and parents need savings in place to safeguard against unexpected expenses and to plan for future milestones. It’s a good idea to start setting aside money early for education, healthcare and emergencies.
Retirees and Seniors
Even if you have a retirement plan, extra savings accounts are never a bad idea. As a senior citizen, you may encounter health-related expenses or other emergencies before your retirement accounts mature or you may need more than you planned for in your later years.
What You Need to Know About Choosing a Savings Account
Savings accounts are great tools for people wanting to grow their money safely while still having access to it . But there are some things you need to be aware of before putting your money into one. Primarily, you should understand the fees, terms and rates associated with your account.
Rates: Choosing an account with a higher APY can significantly boost your savings over time. Despite numerous options to earn up to 5% APY, or higher, on savings accounts – our December 2023 MarketWatch Guides consumer banking survey shows that 62% of Americans earn less than 3% interest on their savings.
Fees: Be mindful of any fees associated with your savings account. These can include monthly service fees, overdraft fees, ATM fees or fees for falling below a minimum balance. Most savings accounts today have some type of monthly fee, though you can typically get the fee waived by meeting certain requirements – like maintaining a certain average balance.
Terms: Each bank has its own terms and conditions regarding its accounts. These terms can also vary for each account type.
“Shop around. Look for an account that not only offers an attractive interest rate but also fits your lifestyle.”
– Joe Camberato, CEO of National Business Capital
What Makes a Good Savings Account
A good savings account should offer a combination of attractive features that maximize your savings dollar and align with your goals. For example, a savings account with an autosave or roundup feature like SoFi offers can help you save a little extra here and there without having to plan. Or you might like the ability to earn miles like you can with Bask Mileage Account.
Savings Account Terms
Understand these common savings account terms so you know how your account works.
Annual Percentage Yield
The annual percentage yield (APY) is the rate your balance will earn in one year when compound interest is included. Many banks compound interest daily, so the APY is often slightly higher than the interest rate. Use our savings calculator to see how much you can earn with different APYs.
Compound Interest
This is earned interest that is applied to your savings account that continues to earn interest as long as you keep the funds in your account.
FDIC Insurance
The Federal Deposit Insurance Corp. (FDIC) is a federal agency that protects consumers’ deposits if a bank that it insures fails. The limit on the amount of money that’s covered depends on the type of bank account. For example, if you’re the sole owner of a checking and savings account at an FDIC-insured bank, at least $250,000 of your total balance in those two accounts is covered.
Many credit unions are similarly insured by the National Credit Union Administration (NCUA), which is another federal agency.
Minimum Balance
This is the smallest amount of money a financial institution allows you to keep in an account. If you have less than this amount you may be charged a monthly fee or have your account closed. You might also miss out on certain perks (such as a higher APY) while your account is below the minimum balance.
Minimum balances can range from about $5 to a few hundred. However, many savings accounts don’t have minimum balances at all.
Pros and Cons of a Savings Account
Explore both the advantages and drawbacks of keeping some of your cash in a savings account.
Helps protect the value of your money against inflation if it’s a high-yield savings account
Protects funds from bank failures if you choose NCUA- or FDIC-insured financial institutions
Convenient access to transfer or withdraw funds as you need them
Some banks offer APYs barely above 0%
Possible monthly service fees that may be waived if you meet certain requirements
APYs fluctuate and are not guaranteed with savings account as they are with certificates of deposit (CDs)
Savings Account Alternatives
While savings accounts are a safe and convenient way to store your money, there are a few alternative options that might give you a higher yield or other features that align with your goals.
Comparison of Deposit Accounts
There are many ways to invest your savings and while a high-yield savings account may work for you, here are some other options to consider:
| Factor | High-Yield Savings Accounts | Money Market Accounts | CDs | Checking Accounts |
|---|---|---|---|---|
| Accessibility | May offer ATM access or only electronic transfers | May offer check-writing capabilities and ATM access | Generally don’t allow access to funds until the term ends | Unlimited transactions, providing easy access to funds |
| APY | Variable rates that are usually higher than checking rates | Competitive, variable rates similar to high-yield savings accounts | Can offer competitive (often fixed) rates that tend to be higher than savings and money market rates | Typically don’t earn interest |
| Insurance coverage | Usually have FDIC or NCUA coverage up to $250,000 per depositor, ownership category and bank | Usually have FDIC or NCUA coverage up to $250,000 per depositor, ownership category and bank | Usually have FDIC or NCUA coverage up to $250,000 per depositor, ownership category and bank | Usually have FDIC or NCUA coverage up to $250,000 per depositor, ownership category and bank |
| Minimum requirements | May require minimum balances or opening deposits | Often require substantial balances or initial deposits | May require high initial deposits | May require minimum balances or opening deposits |
| Risk | Generally low risk, but returns may vary | Generally low risk, but returns may vary | Low risk, with returns that are usually guaranteed upon maturity | Minimal risk, but they don’t tend to earn interest |
| Withdrawal restrictions | May have monthly withdrawal limits | May have monthly withdrawal limits | Typically charge a penalty for withdrawing funds before the term ends | Generally allow unlimited transactions |
FAQ: Savings Accounts and Rates
The bank with the highest interest rate on a savings account may vary depending on the day. Some online banks and credit unions are offering over 5% APY for savings accounts.
Most banks and credit unions offer a maximum APY of 5% to 5.50% for savings accounts.
To get 5% APY on a savings account, you’ll generally need to choose an online bank or credit union.
Yes. Putting money in a savings account is typically safe since most are insured by either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). These provide coverage of up to $250,000 per depository account.
The number of savings accounts you should have depends on your personal financial goals and preferences. Some people prefer to have multiple savings accounts to separate their funds for various purposes. For example, you might have an emergency fund, vacation savings and general fund.
Interest rates on savings accounts can vary depending on economic conditions, bank policies and changes in the market. Most commonly, a bank’s rates will fluctuate with the Federal Reserve rate, which can happen several times throughout the year.
Yes. Interest earned from savings accounts is generally considered taxable income. Retirement accounts, such as IRAs or 401(k)s are typically the only exceptions to this.
Methodology
Our team researched more than 100 of the country’s largest and most prominent financial institutions, collecting information on each provider’s account options, fees, rates, terms and customer experience. We then scored each firm based on the data points and metrics that matter most to potential customers. Read our full methodology.
Our list of the best savings accounts consists of banks and credit unions that have wide availability and received high scores in the savings category of our banking reviews. While APY makes up the highest share of each financial institution’s score in this category, some accounts with midrange APYs made the list because of factors that make them accessible to more consumers. These include having ATM access and minimal or no fees and deposit requirements.
**Data accurate at time of publication
***Rates accurate as of March 26, 2024. Rates, promotions and available accounts may vary by location. Citi Accelerate Savings APY is for Raleigh, N.C.
****Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Weddington Advisors and Great Valley Advisor Group are separate entities from LPL Financial.
Certificates of Deposit are FDIC insured and offer a fixed rate of return if held to maturity. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to affect some of the strategies. Investing involves risks including possible loss of principal.
Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
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