Best Savings Accounts of April 2024: Grow Your Funds
Updated April 18, 2024 at 10:47 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.
Methodology 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
Our Picks - 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 top rates: Valley Direct Online Savings Account
Compare the 9 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.
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.
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 American Airlines AAdvantage miles. Savers can keep their funds safe and build travel rewards to fund their next vacation.
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 $100 available to open the account and 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.
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
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 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.
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.
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.
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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.
