The Best Savings Account
- APY of 1.90% — that's 20 times the national average, and more than most savings accounts we looked at
- Friendly, responsive customer service and a variety of online resources
- Useful mobile app that allows you to manage fund transfers and deposit checks
How We Found the Best Savings Accounts
24 Savings Accounts Evaluated
9 Factors Considered
The Best Savings Account
To find the best savings account, we focused on online banks. Our top picks all feature high interest rates, are convenient — you don’t have to live in a particular part of the country to have access to them — and have great customer support features for when you have a question about your account or want to learn more about banking. Whether you’re looking for an introductory savings account or are trying to maximize interest rates, online banks offer great savings accounts that outcompete their brick-and-mortar competitors.
How We Chose the Best Savings Account
To find the best savings account, we started with a list of all the online banks that offered savings accounts and Federal Deposit Insurance Corporation (FDIC) backing. This means if your bank fails, the government will typically reimburse you up to $250,000. All 24 of our initial contenders — from big names like Ally Bank to lesser-known options like Live Oak Bank and DollarSavingsDirect — are federally insured through the FDIC.
High interest rates
Online banks tend to offer much higher interest rates for their savings accounts than brick-and-mortar contenders. Most of the banks on our list offer annual percentage yields (APY) of 1.2% or higher (frequently climbing up to 1.80% and above), which is a stark contrast to the national average of 0.08%. For example, if you made a single $1000 deposit with a 0.08% APY, at the end of the year, you’d have $1000.80. The same deposit in an account with 1.45% APY would give you $1014.50 — 18 times more income than the lower APY account.
To find the savings accounts with the best interest rates, our next step was to directly compare APYs. Our 24 contenders offered APY anywhere from 0.01% (Chime) to 1.85% (Ally), with an average (mean) APY of 1.44%. To ensure competitive rates, we cut any banks that fell below this 1.44% average.
Good customer service
We then evaluated the customer service of our 18 finalists, following methodology similar to the one we used when we reviewed the best banks. Here are the things we looked for:
- Customer Support: We gave points to banks which offered 24/7 live customer support. No one wants to wait for “business hours” when they need answers to time-sensitive questions.
- Modes of Communication: Every bank gave us a phone number to call, but we gave extra points to banks that went above and beyond by offering live chat, email support, or customer service through a social media platform — like answering questions and complaints on Twitter or Facebook. As far as we’re concerned, the easier it is to get ahold of a representative, the better.
- Easy-to-locate Fee Schedules: We were impressed with Ally Bank and Discover Bank for transparently displaying their fee schedule front and center on their savings account main pages. On the other hand, UFB Direct buried its account details in a 30+ page PDF document that made us hunt through the fine print to learn whether we could be charged an overdraft fee. We wanted banks that made it easy for us to compare our options and make informed decisions.
This left us with five savings accounts available nationally — but to find our top picks, we took a closer look at each bank’s fee schedules and disclosures to make sure we wouldn’t need to pay excessive charges just to have an account. Some of the most common fees include:
- Minimum Balance Fees: a charge for not maintaining a certain level of money in your savings account.
- Monthly Maintenance Fees: a charge to offset costs of maintaining your account with this bank.
- Dormancy or Inactivity Fees: charges usually levied if there has been no account activity (transfers, withdrawals, or deposits) for a prolonged period of time.
- Excessive Withdrawal Fees: the FDIC only permits six withdrawals per month (not including ATM withdrawals). Most banks will charge a fee if you exceed that limit.
None of our top picks have a minimum balance fee, but there is one fee none of our finalists could avoid: a charge for excessive withdrawals. While excessive transaction policies vary, most banks charge a fine (around $10 to $20 per transaction). And some banks will refuse the transaction, convert your account to a non-interest earning account, or close it entirely.
The 2 Best Savings Accounts
Why we chose it
High interest rate
Ally Bank's online savings account has a 1.90% APY rate — which is 20 times the national average. Although APY can fluctuate frequently, Ally Bank has a strong track record of staying competitive. It has consistently outperformed our other top picks over the past few years: Three years ago, Ally Bank’s APY rate was 1%, compared to Discover Bank’s 0.95%, American Express’ 0.85%, and Bank of Internet USA’s rate of 0.61%.
Ally Bank won first place in our customer service test, offering the most resources and most friendly representatives. If you need to get in touch, their lines are open (with a live representative) 24/7, and they have a phone line option to select if you have impaired hearing. If you’d like to skip the phone, you can also contact Ally Bank through its live chat, email support, or through one of its social media pages (like Facebook and Twitter).
Solid mobile app
Ally Bank’s mobile app has a 4.8-star rating in Apple Store and a 3.5 rating on Google Play, with customers referencing its usable and clean design. If you do a lot of on-the-go banking, Ally lets you manage fund transfers — whether they’re one-time or recurring — and deposit checks. If you have a checking account through Ally Bank, you can also pay bills through the app.
Note: you still need to use Ally’s website to locate ATMs (a consideration only if you hold a checking account, as you won’t be able to have a debit card directly attached to your savings account).
Points to consider
Like all of our top picks, Ally Bank doesn’t charge a maintenance fee or require a minimum balance, and it doesn’t charge an inactivity or dormant fee. That said, you will need to put some funds into your savings account within 30 days of opening it, or they will close the account. Ally Bank also charges a $10 fee for excessive transactions, and warns if you’re consistently treating your savings account more like a checking account, they will close your savings account or convert it into a checking account.
Wire transfer restrictions
You won’t be able to make international wire transfers with Ally Bank. Ally charges $20 for each domestic outgoing wire transfer, but incoming transfers and cashier’s checks are free.
Why we chose it
International wire transfers
Discover Bank's main leg up is the option to make an international wire transfer from your savings account — Ally only allows you to make domestic transfers. This is especially beneficial to those who work with international banks frequently.
Reliable mobile app
We liked Discover Bank’s mobile app, which lets you check your account balances or submit a deposit while on the go. You’ll also be able to locate the nearest ATM, and the app will let you know ahead of time if it’s in-network and fee-free or not. Like Ally, you won’t be issued an ATM card if you only sign up for Discover Bank’s savings account, so this last feature is only a consideration if you also hold a checking account through Discover.
Additionally, it’s safe to say Discover’s mobile app is well-received by most of its users with a 4.8 out of 5 rating in the Apple Store and a 4.6 out of 5 on Google Play. Users like the app’s blend of high functionality with a clean, easy-to-use design that gives digestible updates on your account.
Points to consider
Neither bank charges monthly maintenance, minimum balance fees, or inactivity/dormancy fees, but discover Bank’s other fees typically run $5 to $10 more expensive than Ally Bank’s (which means you could easily lose some of that interest you’re earning). In particular, Discover Bank’s higher outgoing wire transfer and excessive transaction fees mean some customers are likely to save money by choosing Ally.
Discover Bank did well in our customer support evaluation, although it didn’t quite impress us as much as Ally. Like Ally Bank, Discover Bank has 24/7 customer support, and you can contact them via phone or social media. However, Discover doesn’t offer a live chat or email option — for an immediate response, you’ll need to hop on the phone.
How to Choose a Savings Account
Decide how much you want to save
If you want to maximize your earnings and potential wealth, looking into a savings account with the highest interest rate possible is definitely worthwhile. However, you need to make sure this interest isn’t negated by sneaky fees. You can calculate compounding interest yourself with Bankrate’s handy APY calculator, which lets you see exactly how much money different interest rates can net you over a set period of time.
Check for customer service options — and reputations
If you’re planning on going with an online savings account, you’ll want to be sure the bank also offers ample resources for online customer support, regardless of the hour or circumstance. It shouldn’t be difficult to get in touch with a customer support representative, and if you have a pressing question and can’t pick up the phone, you should be able to contact someone digitally and receive a quick response. We suggest investigating the track records of your own contenders when it comes to customer support — after all, we are talking about your life’s savings here.
If having good customer support is a must for you, Ally is our top pick, but American Express also scored highly in our evaluation — you can contact them 24/7 by phone and via social media.
Consider other savings account types
No, we’re not talking about stuffing cash under your mattress. Standard savings accounts are the most common way to save money and grow your wealth, but they aren’t the only option. Depending on your goals and circumstances, it might also make sense to look into money markets, certificates of deposits (CDs), and IRAs. You can check out our review of the best IRA accounts, or read our review of the best banks, which also includes a discussion of CD rates. To learn more about money markets, we’d suggest reading up on the U.S. Securities and Exchange Commission’s overview of the topic.
Savings Account FAQ
Why choose online over brick-and-mortar?
While you’ll likely be getting a higher interest rate with an online bank, choosing digital does mean giving up some of the conveniences of a brick-and-mortar — like walking in and asking for help or making a physical deposit. The tradeoff is that you don’t have to worry about whether there’s a branch nearby or coordinating the bank’s strict business hours with your schedule. Online banks are open for business to customers across the nation. The best online banks also translate some of the overhead normally spent on rent and electricity into increased benefits for you.
Can banks charge inactivity fees?
The short answer: it depends. Some banks have a more stringent inactivity policy than our finalists: If your account has seen one year go by without any transfers, withdrawals, or deposits, they will charge you $10 for a dormant or inactive account. If you’re carrying a low balance on a forgotten account, this policy allows them to slowly whittle it down until it reaches $5, at which point they will close the account. Our top picks don’t charge your account for inactivity or dormancy.
What is the difference between APR and APY?
Annual Percentage Yield (APY) and Annual Percentage Rate (APR) are two ways to calculate interest. APR typically measures the interest a bank will charge you for borrowing money, and APY is the amount of interest you will end up earning on your deposits or investments. APY is more helpful because it includes compound interest (essentially the interest that your interest earns), thereby giving you a more realistic expectation of how much money you’ll make.
Will savings interest rates change?
Yes, sometimes multiple times per year. APY is based on the Federal interest rate and the decisions of each individual bank. While all of our finalists currently offer extremely competitive APYs, it’s always a good idea to double-check rates before choosing a savings account based solely on annual percentage yield.
How many times can I withdraw from my savings?
The FDIC requires banks limit the number of transactions per savings account to six per month. There are some exceptions: Transactions made in person and withdrawals from an ATM don’t count, and pre authorized transactions, automatic transfers, and telephone, fax, or online banking transfers are all on the FDIC's list of limited transactions. So, as long as you won’t need to make account transfers more than, say, once a week, you’re unlikely to fall afoul of this rule.