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Compare The Best Savings Accounts of 2024

Whether you're saving for a rainy day or a big purchase, discover the best savings accounts available with The Smart Investor's easy-to-use comparison tool.

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My Banking Direct
5.55% APY
$500 minimum deposit
FDIC Insurance (up to $250,000)
LendingClub
5.00% APY
$100 minimum deposit
FDIC Insurance (up to $250,000)
USAlliance Financial
4.55% APY
$500 minimum deposit
NCUA protection (up to $250,000)
CIBC Bank USA
4.52% APY
$1,000minimum deposit
Eligibility Restrictions
Laurel Road
5.15% APY
No minimum deposit & monthly fees
FDIC Insurance (up to $250,000)
Prime Alliance Bank
4.50%
No minimum deposit
FDIC Insurance (up to $250,000)
Bank5 Connect
5.10% APY
$100,000 minimum deposit
FDIC Insurance (up to $250,000)
Ivy Bank
5.30% APY
$2,500 minimum deposit
FDIC Insurance (up to $250,000)
Rising Bank
5.00% APY
$1,000 minimum deposit
FDIC Insurance (up to $250,000)
CIT Bank Savings
Up to 5.00% APY
$100 minimum deposit
Mobile check deposit
Upgrade Savings
5.21% APY
No monthly fees or minimum deposit
Promotion:
$200 $200 welcome bonus when you start using a new Rewards Checking account and make 3 purchases with Upgrade OneCard
Citizens Access Savings
4.50% APY
$0.01 minimum deposit
No monthly fees
TIAA Savings Account
5.05% APY
No monthly fee
Excellent mobile app
Barclays Online Savings
4.35% APY
No monthly fees or minimum deposit
Highly rated app
SoFi Savings Account
up to 4.60% APY
No monthly fees or minimum deposit
Promotion:
$50 - $300 New customers should deposit $1,000 - $5,000 to get the promotion. Expired on 06/30/2024
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How To Compare Savings Accounts?

Comparing savings accounts involves considering various factors to determine which option suits your financial goals and preferences. Here are some steps to help you compare savings accounts:

  • Interest Rates: Look at the interest rates offered by different savings accounts. Higher interest rates generally mean more earnings on your savings. Compare the annual percentage yield (APY), which includes compound interest, rather than just the nominal interest rate.

  • FDIC Insurance: Research the bank's reputation and stability. Look for banks that are insured by the Federal Deposit Insurance Corporation (FDIC) in the United States or similar deposit insurance schemes in other countries. This protects your deposits up to a certain limit in case the bank faces financial difficulties.
  • Account Fees: Consider any fees associated with the savings account. These may include monthly maintenance fees, transaction fees, or fees for falling below a minimum balance. Look for accounts with minimal or no fees.

  • Minimum Balance Requirements: Check if there is a minimum balance requirement for the account. Some accounts require you to maintain a certain balance to avoid fees or to access higher interest rates. Ensure the minimum balance is realistic for your financial situation.

  • Account Access: Evaluate the accessibility of your funds. Determine if the account provides online banking, mobile apps, ATM access, or the ability to link the account to your existing banking relationships. Convenient account access can make managing your savings easier.

  • Account Restrictions: Consider any limitations or restrictions on the account. Some savings accounts may have restrictions on the number of withdrawals or transfers you can make per month. Ensure the account's restrictions align with your intended usage.

  • Additional Features: Some savings accounts offer additional perks and features, such as unique savings plans, savings buckets, relationship bonuses, or promotions. Assess these extra benefits and determine their value to you.
  • Reviews and Recommendations: Read customer reviews and seek recommendations from friends, family, or financial advisors. Hearing about others' experiences with specific savings accounts can provide valuable insights.

By considering these factors, you can compare savings accounts effectively and select the one that best suits your needs.

Will Savings Account Rates Keep Increasing?

The Federal Reserve implemented the most significant interest rate increase in history, resulting in interest rates reaching a 15-year high.

 

The Fed's efforts to combat inflation led to a decrease in inflation. However, it's important to note that despite these efforts, inflation remains above the target level.

Hence, the possibility of further interest rate hikes remains, with the Federal Reserve potentially considering additional increases. However, there are opposing factors to consider.

The Fed has already expressed concerns about the banking crisis, which continue to grow. In light of this ongoing situation, the Fed may adopt a cautious approach and opt to monitor developments before making any further decisions.

Should I have Multiple Savings Accounts?

We believe that if you have a significant amount of money, it can be a good idea to think about having multiple savings accounts. We've seen banks run into problems recently, and if that happens, your deposits are usually protected up to $250,000 per account per person.

So, if you have a large amount of money, there's a risk of losing most of it if your bank fails. By spreading your money across several accounts, preferably with different banks, you avoid putting everything in one place. This way, you reduce the chance of losing most of your money unexpectedly.

Furthermore, having multiple savings accounts can also be advantageous when you have diverse financial objectives. It enables you to allocate savings for various goals, such as a down payment on a home, emergency funds, a vacation, or a new car. This approach facilitates prioritization and the ability to save for multiple goals simultaneously.

Nevertheless, in most other cases, maintaining multiple savings accounts may not be advisable. Managing and tracking numerous accounts, especially across different banks, can become cumbersome and confusing. Additionally, depending on the amount of money involved, you may incur multiple fees that eat your savings.

As a general rule, it's smart to have sufficient savings to cover your living expenses for three to six months as an emergency fund. This fund serves as a safety net in case unexpected expenses, job loss, or medical emergencies occur, and it's important to keep it in a liquid form, such as a savings account, so you can access it easily when needed.

In addition to your emergency fund, it's also a good idea to save for specific goals, such as buying a house, going on a vacation, or preparing for retirement. However, these types of savings can be allocated to other investment options that are less liquid, such as certificates of deposit (CDs), bonds, or mutual funds.

Savings Account vs CDs

Savings accounts and certificates of deposit (CDs) are both popular options for saving money, but they have some key differences. Here's a comparison between savings accounts and CDs:

  • Interest Rates: Generally, CDs offer higher interest rates compared to savings accounts. This is because CDs require you to deposit your money for a specific term, allowing the bank to lend it out for longer periods. Savings account interest rates tend to be lower, but they offer more flexibility.

  • Term and Flexibility: Savings accounts have no specific term; you can keep your money in the account indefinitely. CDs have fixed terms, and the interest rate is locked for the duration of the term. If you don't need immediate access to your funds and can commit to a fixed term, CDs can offer higher interest rates.

  • Penalties and Withdrawals: Savings accounts allow you to make unlimited withdrawals without penalties. However, there may be limitations on the number of certain types of withdrawals per month due to federal regulations. With CDs, withdrawing funds before the maturity date usually results in penalties, which can vary depending on the length of the remaining term.

  • Saving Goals: Savings accounts are suitable for short-term savings goals or emergency funds where you need regular access to your money. CDs are better suited for longer-term savings goals or when you have a specific timeline in mind, such as saving for a down payment on a house or a future education expense.

Savings Account vs Treasury Bonds

Savings accounts and treasury bonds are both financial instruments used for saving money, but they have distinct differences. Here's a comparison between savings accounts and treasury bonds:

  • Return on Investment: Savings accounts typically offer a bit lower interest rates compared to treasury bonds. Keep in mind that selling treasury bonds before their maturity date may result in potential losses or gains depending on the bond price at the time.

  • Investment Term: Savings accounts do not have a specific term and can be held indefinitely. Treasury bonds have fixed terms, and the bonds can be purchased with maturities ranging from a few months to 30 years. The longer the term, the higher the potential yield on the treasury bond.

  • Purpose and Goals: Savings accounts are suitable for short-term savings goals, emergency funds, or easily accessible cash. They provide a safe place to hold money and earn some interest. Treasury bonds, on the other hand, are more commonly used for longer-term goals, such as retirement planning or income generation over an extended period. They are often part of a diversified investment portfolio.

  • Accessibility: Savings accounts are widely available through various banks and financial institutions, making them easily accessible. Treasury bonds can be purchased directly from the U.S. Department of the Treasury or through a brokerage account.

  • Risk and Safety: Savings accounts offered by reputable banks are considered low-risk, as they are insured by the Federal Deposit Insurance Corporation (FDIC) in the United States, providing protection for deposits up to a certain limit. Treasury bonds, on the other hand, are backed by the full faith and credit of the government, making them very safe investments as well.

Opening A Savings Account In A Time Of Inflation

Opening a savings account during a time of inflation can still be a prudent financial move, despite the impact of inflation on the purchasing power of money. Here are some considerations to keep in mind:

  • Preserve Capital: While inflation erodes the value of money over time, keeping your funds in a savings account can still help preserve the capital. By earning interest on your savings, even if it may not outpace inflation, you can minimize the loss of purchasing power compared to holding cash.

  • Diversify Investments: While a savings account is a secure option, consider diversifying your investment portfolio to combat inflation. Explore other investment options such as stocks, bonds, real estate, or inflation-protected securities like Treasury Inflation-Protected Securities (TIPS). These investments may have the potential to outpace inflation over the long term. On the other hand, these investments carry a risk, and you can have a negative yield.

  • Maximize Rate: Look for savings accounts that offer higher interest rates to maximize your earnings. Some financial institutions provide high-yield savings accounts with better interest rates compared to traditional savings accounts. Research and compare options to find the best rates available.

  • Monitor and Adjust: Stay informed about the current inflation rate and adjust your savings and investment strategy accordingly. Regularly reassess your financial goals, review your savings progress, and consider reallocating funds to investments that can better combat inflation over time.

Savings Account Pros And Cons

Opening a savings account is like any other investing option, and therefore it's a good idea to consider the pros and cons before making a decision. Here are some pros and cons of savings accounts:

Pros
Cons
Safety
Limited Growth Potential
Liquidity
Inflation Risk
Easy Access
Fees
Interest Earnings

Savings accounts offered by reputable banks are considered safe and low-risk. They are typically insured by government-backed programs, such as the FDIC in the United States, providing protection for deposits up to a certain limit.

Savings accounts offer high liquidity, allowing you to access your funds easily. You can make withdrawals or deposits at any time without penalties, providing flexibility in managing your money.

Savings accounts are widely available through various banks and financial institutions. They can be opened with relative ease, and account management is typically convenient with options for online banking, mobile apps, and ATM access.

While savings account interest rates may not be the highest, they still offer some level of return on your deposits. Your money can grow over time through compound interest, allowing you to accumulate savings.

While savings accounts provide a secure place to hold your money, they may not offer significant growth potential. Hostircally, other investments such as stocks, bonds and mutual funds performed better than savings accounts.

Savings accounts are vulnerable to the effects of inflation. Inflation can erode the value of your money, and if the interest earned on your savings does not keep pace with inflation, the purchasing power of your funds may decrease.

While this is not ao common, especially in online banks, some savings accounts may come with maintenance fees or transaction fees.

Traditional vs Online Bank Savings Account

There are several factors to consider when comparing traditional with online bank savings accounts. Here are the main features of each option:

Traditional Banks
Online Banks
Safety
Limited Growth Potential
Liquidity
Inflation Risk
Easy Access
Fees
Interest Earnings

Traditional banks are often well-established and have a long history of serving customers. They typically have a large network of physical branches, which can be advantageous if you prefer in-person banking or need access to services like cashier's checks or safe deposit boxes.

Traditional banks provide face-to-face customer service at their branches, making it easier to ask questions, resolve issues, or discuss financial matters with a bank representative.

Traditional banks often offer a range of financial services, including checking accounts, loans, credit cards, and investment products. If you prefer to have multiple accounts or need comprehensive banking services, a traditional bank can be convenient.

Traditional banks usually have a widespread network of ATMs, which can be beneficial for withdrawing cash or depositing funds without incurring fees.

Online banks often offer higher interest rates on their savings accounts compared to traditional banks. This can result in greater earnings on your savings over time.

Online banks tend to have fewer fees associated with their savings accounts, as they have lower overhead costs compared to brick-and-mortar banks. This can lead to savings on maintenance fees and other charges.

Online banks provide 24/7 access to your savings account through their websites or mobile apps. You can manage your funds, make transfers, and track your savings at your convenience from anywhere with an internet connection.

Online banks often compete by offering innovative features, such as budgeting tools, goal tracking, and automatic savings programs, to enhance your savings experience.