Best Savings Accounts of July 2024: Grow Your Funds
Sarah Sharkey
Banking & Investing Expert
Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make savvy financial decisions. She lives in Florida with her husband and dogs. When she’s not writing, she’s outside exploring the coast.
Robert Thorpe
Senior Editor
Robert is a senior editor at Newsweek, specializing in a range of personal finance topics, including credit cards, loans and banking. Prior to Newsweek, he worked at Bankrate as the lead editor for small business loans and as a credit cards writer and editor. He has also written and edited for CreditCards.com, The Points Guy and The Motley Fool Ascent.
Updated June 30, 2024 at 4:02 am
A savings account is a key part of a stable financial plan. But not all savings accounts are the same. While some of the best savings accounts offer top interest rates and minimal fees, others provide little more than a place for your funds to collect dust.
Selecting the best savings account comes down to your unique situation. Of course, the best savings account rates come into play. But you’ll also want to consider the features offered through each account. We break down some of the best savings accounts to help you compare and find the top option for your needs.
Newsweek Vault’s banking experts have done hundreds of hours of research to present you with all the latest information about your banking options. Whether you’re interested in opening a new checking account or savings account, our research spans all the top online banks, credit unions and brick-and-mortar branches.
We assessed the following five key factors to help you choose the best account for your personal finance needs.
- Associated fees
- ATM access
- Balance requirements
- Customer service
- Interest-earning potential
- Best overall: Discover Online Savings Account
- Best for multiple savings goals: Ally Bank Savings Account
- Best travel rewards: Bask Mileage Savings Account
- Best welcome bonus: SoFi Checking and Savings Account
- Best for new savers: Varo Online Savings Account
- Best for access to physical cash: Synchrony High Yield Savings
- Best for no fees: Capital One 360 Performance Savings Account
- Best for established savers: CIT Bank Platinum Savings Account
- Best for savings automation: Valley Direct Online Savings Account
- Best for same-day transfers: Marcus by Goldman Sachs Online Savings Account
- Best for fast account opening: LendingClub High Yield Savings Account
- Best for maximum interest earning: UFB Secure Savings
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Compare the 12 Best Savings Account Rates in 2024
Best Overall
Discover Online Savings Account
Vault Verified
Why We Chose It
Discover offers a solid high-yield savings account with a competitive rate and no monthly fees. The bank earned top marks for overall customer satisfaction for savings providers in the J.D. Power 2023 U.S. Direct Banking Satisfaction Study, which bodes well for a positive experience.
Pros
- High marks for customer satisfaction
- No monthly fees
- Competitive APY
Cons
- Higher APYs available elsewhere
- No ATM card available
- No physical branches
Best Welcome Bonus
SoFi Checking and Savings Account
Vault Verified
Why We Chose It
The savings side of SoFi’s Checking and Savings offers a competitive APY, if you set up a direct deposit or deposit at least $5,000 into the account every 30 days. After you set up this direct deposit, you could earn a welcome bonus of up to $250.
Since this is a checking and savings account in one, you’ll enjoy check-writing privileges and ATM access. SoFi’s AutoSave feature and automatic debit card Roundups, which round your purchases to the nearest dollar and deposit them into your account, can also help you save more.
Pros
- Enticing welcome bonus
- Competitive APY
- No monthly fees
Cons
- Must set up direct deposit for competitive APY
- Must open checking and savings account combo
- No physical branches
Best for No Fees
Capital One 360 Performance Savings Account
Vault Verified
Why We Chose It
Capital One’s 360 Performance Savings Account offers a competitive APY without any monthly fees attached. Savers also have the option to open multiple accounts to separate different financial goals. Capital One 360 offers the convenience of in-branch banking with the features of online banking you’ve come to expect, like no fees and high interest rates.
Pros
- Competitive APY
- No monthly fees
- Automatic savings tools
Cons
- Higher APYs available elsewhere
- No ATM card available
- Limited physical locations
See our review of Capital One Banking
Best for Travel Rewards
Bask Mileage Savings Account
Vault Verified
Why We Chose It
Instead of earning cash, Bask Bank’s Mileage Savings Account provides a unique opportunity to earn 2.5 American Airlines AAdvantage miles for every $1 you save in your Bask account. Savers can keep their funds safe and build travel rewards to fund their next vacation. If you open an account by May 31, you can earn 10,000 bonus miles with an opening and daily balance of at least $50,000 for 90 consecutive days of the 120 days from account opening.
Pros
- Earn 2.5 American Airlines AAdvantage miles for every $1 saved annually
- No monthly fees
- No minimum balance requirements
Cons
- Value of airline miles may not match the APY of a high-yield savings account
- No ATM access
- No checking accounts available through Bask Bank
Best for Established Savers
CIT Bank Platinum Savings Account
Vault Verified
Why We Chose It
CIT Bank’s Platinum Savings Account comes with an attractive APY. But savers must have a minimum of $100 available to open the account and hold a balance of at least $5,000 to earn the top APY available, which makes it a better choice for established savers.
Pros
- Competitive APY
- No monthly fees
- Interest compounds daily
Cons
- $100 minimum opening deposit
- Must have a balance of at least $5,000 to earn the top APY
- No physical branches
Best for Multiple Savings Goals
Ally Bank Savings Account
Vault Verified
Why We Chose It
Ally Bank’s Savings Account offers a competitive APY, without charging any monthly service fees or requiring a minimum opening deposit. Savers can use buckets to visualize progress toward different savings goals and automatic savings tools help streamline your savings strategy.
Pros
- Competitive rates
- No monthly service fees
- Automated savings tools
Cons
- No cash deposit option
- No physical branches
- Higher APYs available through other banks
Best for New Savers
Varo Savings Account
Vault Verified
Why We Chose It
Varo’s high-yield savings account has no minimum balance requirement or monthly fees. It also currently offers a 5.00% APY on up to $5,000 in savings if you receive at least $1,000 in direct deposits and maintain a positive account balance. Above the $5,000 mark, savers will earn a competitive 3.00% APY. New savers can appreciate the extra boost to their efforts as they build their savings account.
Pros
- Competitive APY on balances up to $5,000
- No minimum monthly fee
- Automated savings tools
Cons
- APY is less competitive for balances over $5,000
- Must meet requirements to enjoy top APY
- No physical branches
Best for Access to Physical Cash
Synchrony High Yield Savings
Vault Verified
Why We Chose It
Not all banks offer an ATM card with their savings accounts. Savers who want access to cash with the help of an ATM card will enjoy Synchrony’s High-Yield Savings account. Plus, it offers a competitive APY and doesn’t have any minimum deposit requirements or monthly fees attached.
Pros
- No monthly fees
- Optional ATM card
- Competitive APY
Cons
- Only reimburses up to $5 in out-of-network ATM fees per month
- $25 outgoing wire fee
- No physical branches
Best for Top Rates
Valley Direct Online Savings Account
Vault Verified
Why We Chose It
Valley Direct offers one of the highest APYs available and doesn’t require you to maintain a high balance to earn it. You can start saving within this account with just $1 and you won’t encounter any monthly fees. Valley Direct makes it easy to schedule transfers from another account to ramp up your earnings with a “set it and forget it” approach.
Pros
- High APY available
- Open an account with just $1
- Automated savings tools
Cons
- No welcome bonus
- No mobile check deposit option
- No physical branches
BEST FOR SAME-DAY TRANSFERS
Marcus by Goldman Sachs Online Savings Account
Vault Verified
Why We Chose It
The Marcus Online Savings Account earns a highly competitive 4.40% APY with no minimum balance or deposit requirements (though the account will close if not funded within 60 days). Although you won’t get an ATM card with this savings account, Marcus offers same-day transfers when made through Marcus by noon; funds will show by 5 pm the same day. With unlimited transfers and withdrawals, you can access your money from an external account with an ATM card or through a physical branch if one is available.
Pros
- Same-day transfers available
- Contact center available 24/7
- No credit check
Cons
- No physical branches
- No ATM card
- Must have an external bank account
BEST FOR FAST ACCOUNT OPENING
LendingClub High-Yield Savings Account
Vault Verified
Why We Chose It
Do you need a savings account fast? Look no further than LendingClub. You only need your Social Security Number and a minimum of $100 to open the account, which takes three minutes or less to apply and open. The account doesn’t require a minimum balance to stay open, and you’ll earn one of the highest APY for an online savings account—5.00% on your entire account balance. LendingClub also provides a free ATM card, but you must log into the mobile app or online banking to locate ATMs.
Pros
- Free ATM card
- Fast account opening
- Free transfers
Cons
- Must open an account to access the ATM locator
- Only available online
- Must use an external account to fund
BEST FOR MAXIMUM INTEREST EARNING
UFB Secure Savings Account
Vault Verified
Why We Chose It
If you want to maximize your earnings but don’t want to lock up your money in a CD, the UFB Secure Savings Account might be the next best thing. You’ll earn an impressive 5.25% on all balances, with no minimum deposit requirement or maintenance fees. You also get a complimentary ATM card, which you can use at any Axos Bank or Allpoint ATM locations. UFB also supports SMS banking, so even if you don’t have service, you can still access your account features through text message.
Pros
- Digital tools for 24/7 access
- Free ATM card usage at Allpoint locations
- Interest rate APY comparable to best CD rates
Cons
- Limitations on some withdrawal options
- $10 excess withdrawal or transaction fee
- No physical branch locations
Savings Account Introduction
A savings account is a useful financial tool. Let’s explore how this type of account might fit into your financial picture.
What is a Savings Account?
A savings account is a deposit account that is intended to hold funds you plan to use in the future. Savings accounts don’t necessarily give easy access to spending money. For example, you likely won’t find a debit card or checkbook attached to your savings account balance.
In general, savings accounts are designed for you to hold and grow your funds for long-term financial goals or as an emergency stash.
Who Should Get a Savings Account?
A savings account is a good choice for people who want to save money in an easily accessible account where it can earn interest.
Savers can use this specialized account to set aside funds for a specific goal, like building an emergency fund, a down payment on your next car, or a luxurious vacation.
“The right savings account can put the wind in your financial sails. Seek out an account that offers the right balance of high APYs and low fees.”
— Sarah Sharkey
Savings Terminology
Like other financial products, savings accounts come with their own set of helpful terminology. Explore the language of savings accounts in the list below.
- Compound interest: You can earn compound interest when the interest you’ve earned earns interest. For example, if you earn $10 in interest on your $100 deposit in the first year, the next cycle of interest earnings would be based on a principal amount of $110. Over time, the power of compounding interest allows your initial savings account balance to grow.
- Interest: For savers, interest is the amount the bank pays you to keep your funds in a savings account. Savers may see an interest payment within their bank account based on the account balance and interest rate.
- Interest rate: The interest rate on a savings account indicates the percentage of interest the bank will pay you to keep your funds in the account.
- Annual percentage yield: Annual percentage yield (APY) indicates the real rate of return on your savings, which takes the interest rate and the frequency of compounding into account. The APY gives you a clear view on the total interest paid from the account in one year.
- Minimum balance requirement: A minimum balance requirement indicates the amount of money you must keep in the account to avoid fees. If your balance falls below the minimum requirement, the financial institution may charge a penalty fee.
- Money market account: A money market account is a type of deposit account that sometimes offers higher interest rates than savings accounts. Generally, a money market account has more flexible spending tools, like a checkbook or debit card. Savings accounts rarely offer these spending tools.
How to Open a Savings Account
If you decide to open a savings account, it’s typically a straightforward process. Below is a closer look at the steps you’ll need to take.
- Explore your options: Before you can open a savings account, you’ll need to decide which option is the best fit for your situation. Some of the features you might want to consider include the APY, minimum balance requirements, automated tools, fees, and accessibility.
- Gather the necessary documents: After you’ve selected the right bank account for your needs, it’s time to gather information for the application. In many cases, you’ll need to provide your Social Security number, date of birth, address, contact information, funding account information, and a government-issued ID.
- Submit an application: With all of your information in one place, submitting an application for your savings account should go smoothly.
- Await approval: Some financial institutions will let you know about the status of your application in a matter of minutes. But in some cases, it can take days or weeks to find out if your application was approved.
- Fund the account: If your application is approved, you can fund your account. Depending on the bank, you might be able to do this with a check, cash, or an electronic transfer.
Pros and Cons of Savings Accounts
Every financial product has some advantages and disadvantages. Take a closer look at what to expect from a savings account below.
Pros
- Earns interest
- FDIC-insured
- Easy access to funds
Cons
- Fees are possible
- Relatively low returns
- FDIC limited to $250,000
Saving Accounts Alternatives
A savings account isn’t the only place to store your funds. If you are looking for another solution, explore some alternatives below.
Savings Account vs. Checking Account
If you are looking for an account to manage your day-to-day spending, a savings account likely isn’t the right fit. However, a checking account is designed to handle everyday transactions.
A checking account allows you to deposit and withdraw funds frequently. Typically, checking accounts come with a debit card or checkbook, which you can use to make regular transactions. But since most checking accounts don’t earn interest, it’s not an ideal place to save for long-term goals.
Savings Account vs. CDs
A certificate of deposit (CD) is a type of deposit account that holds your funds for a set period of time. With a CD, you give up access to your funds for a predetermined amount of time. In exchange, you’ll earn interest on the funds held within the CD.
The downside of a CD is that you cannot access the funds early without paying an early withdrawal penalty. With that, a CD is usually only a good option if you are confident you won’t need the funds for the duration of the term. If you might need the funds or don’t have any other savings to lean on, then the flexibility of a savings account is the better solution.
Savings Account vs. Money Market Account
In some cases, money market accounts offer higher interest rates than savings accounts. But many money market accounts come with higher minimum balance requirements.
If you are looking for an interest-earning account that comes with a checkbook or debit card and an attractive interest rate, a money market account might be the right fit.
Newsweek writer Mandy Sleight contributed to this post.
Frequently Asked Questions
What is a Savings Account Best for?
A savings account is best for stashing cash intended to be used in an emergency or for a specific purchase in the mid-term. The interest-bearing nature of a savings account gives you an opportunity to grow your funds without giving up easy access to the money.
Are Savings Accounts Good?
Savings accounts are a good part of any financial plan. In general, the appropriate use for a savings account is to build emergency savings or work toward a specific goal. Once you have sufficient savings in a savings account, it might be time to branch out into an investment account that offers potentially higher returns.
Can You Take Money Out of a Savings Account?
Yes. You can take money out of a savings account without incurring a withdrawal penalty. However, some banks limit how many withdrawals you can make in a month without incurring a fee. The standard transaction limit is six per month, though the amount can vary by financial institution.
How Often Do Interest Rates On Savings Accounts Change?
Banks determine account interest rates, which vary by account type and offering. Interest rates on savings accounts are variable, which means they can change at any time without notifying the customer. Some banks offer the same interest rate for all account balances or reserve the highest interest rate APY for larger balances. For example, CIT Bank requires a daily balance of at least $5,000 to earn 5.00% APY; balances below $5,000 only earn 0.25% APY.
Do I Have To Pay Taxes On My Savings Account?
You don’t have to pay taxes on your savings account balance, but you do have to pay on the interest you earn. The Internal Revenue Service (IRS) categorizes the interest you earn on bank balances as earned income, which your bank will report on a 1099-INT tax form and send to you to include in your tax return. If you earn less than $10 of interest with a bank, you might not receive a 1099-INT, but you still have to report it as earned income and pay taxes on it.
More From the Vault: Guide to Savings Accounts
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
Sarah Sharkey
Banking & Investing Expert
Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make savvy financial decisions. She lives in Florida with her husband and dogs. When she’s not writing, she’s outside exploring the coast.