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The Best 6-Year CD Rates in 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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If you want to earn the highest CD rates, you generally need to invest in a longer-term CD. When the bank or credit union gets to keep your money for an extended period of time, it rewards you with higher interest rates.

Higher rates can make a 6-year term an appealing choice when considering CDs. However, there aren’t as many 6-year CDs available as with other CD terms. Most banks don’t offer this particular term, often maxing out at five years or skipping to 7-year CDs. In our analysis, we managed to find ten great choices when sorting through long-term CD data from DepositAccounts.com, a LendingTree-owned company.

To find the best 6-year CDs, we first looked at the highest 6-year CD rates available nationwide. Then we ranked each by APY, taking the accounts’ minimum deposit requirements into consideration for wider availability. We also made sure to include institutions with great health ratings so you know you’re working with a reputable bank with FDIC or NCUA insurance.

The best 6-year CD rates

Institution

APY

Minimum deposit amount

Evansville Teachers Federal Credit Union

1.30%

$1,000

SRP Federal Credit Union

1.26%

$5,000

North American Savings Bank

0.70%

$1,000

Third Federal Savings and Loan (OH)

1.00%

$500

Marcus by Goldman Sachs

0.70%

$500

INOVA Federal Credit Union

0.70%

$200

EmigrantDirect.com

0.70%

$1,000

MySavingsDirect

0.70%

$1,000

Chartway Federal Credit Union

0.65%

$0

1st Source Bank

0.50%

$500

As of December 2020
All rates expressed in annual percentage yield (APY) unless otherwise stated.

1. Evansville Teachers FCU— 1.30% APY, $1,000 minimum deposit

The 6-year certificate is Evansville Teachers FCU’s longest term and earns at a competitive interest rate alongside the credit union’s other certificates. You’ll need at least $1,000 to open an account. The penalty for an early withdrawal will equal either $100 or 180 days’ worth of interest, whichever is greater.

ETFCU was founded in 1936 by several teachers in Evansville, Ind. who needed better financial services. Today, you can be eligible for Evansville Teachers FCU membership not just as a teacher, but also through select employers or organizations, or a family or household member. You may also join by donating $5 to the Mater Dei Friends & Alumni Association.

SEE DETAILS Secured

on Evansville Teachers Federal Credit Union’s secure website

NCUA Insured

2. SRP Federal Credit Union — 1.26% APY, $5,000 minimum deposit

A longer-term account worth consideration is the 7 Year Flex Certificate from SRP Federal Credit Union. It requires an opening deposit of at least $5,000. The account allows you to adjust your rate at the end of your 5th and 6th years, allowing you to snag the current rate at the time if it’s higher. The penalty for an early withdrawal equals one year’s dividends.

SRP Federal Credit Union was founded in 1960. SRP membership is open to members of select Georgia and South Carolina communities, their family and household members, spouses of deceased members and members of the Greater Augusta-Fort Gordon Chapter of the Association of the United States Army.

SEE DETAILS Secured

on SRP Federal Credit Union’s secure website

NCUA Insured

3. North American Savings Bank — 0.70% APY, $1,000 minimum deposit

You can open a North American Savings Bank CD with just $1,000. Your rate is based on the total balances in your NASB checking account(s). The rate given here is the base rate. Larger balances in your checking earn even higher rates. The early withdrawal penalty from NASB CDs between 60 and 120 months would equal six months of interest taken from the balance.

North American Savings Bank began in St. Louis in the early 1920s. Now, it is headquartered in Kansas City, Mo., with locations in the surrounding area.

SEE DETAILS Secured

on North American Savings Bank’s secure website

Member FDIC

4. Third Federal Savings and Loan — 1.25% APY, $500 minimum deposit

The 72-month standard CD is the longest term offered by Third Federal Savings and Loan. It earns at a competitive rate and requires only $500 to open and start saving. The penalty for an early withdrawal from a 72-month CD equals 18 months’ interest.

Third Federal is based in Cleveland, where it was founded back in 1938.

SEE DETAILS Secured

on Third Federal Savings And Loan (OH)’s secure website

Member FDIC

5. Marcus by Goldman Sachs — 0.70% APY, $500 minimum deposit

A big name in the online banking space, Marcus by Goldman Sachs, offers consistently competitive rates. This includes its high-yield 6-year CD, the longest term among its offerings. It features a competitive annual percentage yield and requires an initial deposit of at least $500 within 10 days after opening the account. Marcus by Goldman Sachs makes a 10-day CD rate guarantee, so if the rate increases during that period, you can switch to that higher rate.

Just be careful of making an early withdrawal from the 6-year CD, as it will trigger a penalty of 365 days’ worth of simple interest on the principal.

Marcus by Goldman Sachs is the banking branch of investment giant Goldman Sachs, which traces its history back to 1869.

SEE DETAILS Secured

on Marcus By Goldman Sachs’s secure website

Member FDIC

6. INOVA Federal Credit Union— 0.70% APY, $200 minimum deposit

Earn the best 6-year CD rate from Inova FCU. You need at least $200 to deposit and open up INOVA’s 6-year certificate. The penalty for an early withdrawal from this account is equal to 180 days’ of dividends.

Headquartered in Indiana, INOVA Federal was originally founded to serve the employees of Miles Laboratories in 1942. You can join INOVA through your employer or other organization, or through an immediate family member who is already an INOVA member.

SEE DETAILS Secured

on INOVA Federal Credit Union’s secure website

NCUA Insured

7. EmigrantDirect — 0.70% APY, $1,000 minimum deposit

EmigrantDirect offers a lower but still decent rate on its 60- to 120-month certificates of deposit, including its 6-year term. You need $1,000 to open an account here. The penalty for early withdrawals will be an amount equal to 180 days’ interest.

EmigrantDirect is a digital-only division of Emigrant Bank.

SEE DETAILS Secured

on EmigrantDirect.com’s secure website

Member FDIC

8. MySavingsDirect— 0.70% APY, $1,000 minimum deposit

MySavingsDirect offers a wide range of MyTerm Certificates of Deposit. Its 6-year term falls in between its range of 60 to 120 month terms available at the given APY. Plus, interest is compounded daily for faster savings growth. You’ll need at least $1,000 to open an account. Making an early withdrawal from this account will trigger a penalty of 180 days’ worth of interest.

MySavingsDirect is a digital-only division of Emigrant Bank which dates back to 1850.

SEE DETAILS Secured

on MySavingsDirect’s secure website

Member FDIC

9. Chartway Federal Credit Union— 0.65% APY, $0 minimum deposit

You can take advantage of Chartway FCU’s longest share certificate term of 71 months starting with no minimum. It earns at a competitive rate, which applies to certificates between 60 and 71 months. This rate is not applicable to accounts opened in North Carolina, Nevada, Texas, Utah or Virgina. The penalty for making an early withdrawal from a 71-month certificate will equal 180 days’ worth of interest.

Chartway FCU started as NorVA N.A.S. Federal Credit Union by civilian workers at the Norfolk Naval Air Station in 1959. Today, you can join Chartway if you live, work, go to school or worship in select areas in Texas, Utah or Virgina, you work for a select partner employer or you have an immediate family member who is a member. You may also join by donating $10 to the We Promise Foundation, Chartway’s philanthropic arm.

SEE DETAILS Secured

on Chartway Federal Credit Union’s secure website

NCUA Insured

10. 1st Source Bank— 0.50% APY, $500 minimum deposit

You can get started with 1st Source Bank’s 6-year CD with just $500. The penalty for an early withdrawal is 12 months’ interest earned on the amount withdrawn.

1st Source Bank was established back in 1863 in South Bend, Ind. It has branches in Florida, Indiana and Michigan.

SEE DETAILS Secured

on 1st Source Bank’s secure website

Member FDIC

Is it worth getting a 6-year CD?

It can be worth getting a 6-year CD if you’re signing up for the highest rates on our list. Perhaps it would make a solid addition to a CD ladder you’re building.

In truth, 6-year CD rates aren’t always competitive enough to make them a reliable investment. In fact, 5- and 7-year CD terms consistently have much better rates, despite the small one-year difference.

When we compare 6-year CD rates with 5-year CD rates, the 6-year yields struggle to keep up. You can see above that the best 6-year CD rates jump from 1.30% APY at the top all the way to 0.60%. Meanwhile, all the best 5-year CD rates offer a much better savings opportunity, ranging between 1.65% and 1.30% APY. No matter which 5-year CD you pick from the list, you’re bound to yield some solid earnings.

We tend to expect that the longer the CD term, the higher the rate will be, but we just don’t see that when comparing 6-year CDs with other long-term CDs. On the whole, 6-year CD terms are bookended by better-earning products. Opening 5- and 7-year CDs will give you a wider product selection to choose from and a better chance at growing your savings.

Alternative long-term investments

Other than 5- and 7-year CDs, Ken Tumin, founder of DepositAccounts.com (which similar to MagnifyMoney, is owned by LendingTree) suggests turning to individual bonds to beef up your savings. “Much like a CD ladder, the same technique can be used with individual bonds (Treasury, municipal, corporate, etc.) to build steady savings over time,” he offered. Note that non-Treasury bonds do have some default risk that CDs don’t carry when they have FDIC/NCUA insurance.

Another alternative to a bond ladder is a mutual fund or an ETF of bonds. Unlike a ladder, the value of a bond mutual fund or ETF fluctuates with interest rates. This can give you the chance to boost your savings when interest rates go down. However, the opposite is also true, where the value of your bonds decrease when interest rates rise.

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What Is a Cash Management Account?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Actions have consequences. Staying up too late will turn you into a zombie at work the next morning, eating ice cream for breakfast will force you to buy new jeans — and placing your money in a conventional checking or savings account could yield a piddling amount of interest.

The internet hasn’t found a way to circumvent the biological necessities of sleep and a healthy diet — yet — but it can empower banks and financial institutions to offer accounts with high APYs, all while providing the ease-of-access and convenience of a checking account. In the evolving world of online banking, these are usually called cash management accounts, and you need to know more about them.

You may have read about cash management accounts. They go by a variety of names: hybrid checking, hybrid accounts, cash management vehicles. Like many consumer financial products, readers may be a bit unclear about how these accounts actually work — and to start, note that they are very different than the “cash management accounts” offered by certain online stock brokerages.

“We’re trying not to think like traditional bankers, with the usual boundaries of how an account should be used,” said David Hijirida, CEO of Simple, which offers its own cash management account. “What we’ve found is that most customers use our accounts in a way that combines both checking and savings behaviors.”

Let’s get to the heart of the matter by defining what these new accounts are and whether they’re right for you and your money.

What is a cash management account?

Whatever the name, a cash management account combines the high yield of a savings account or certificate of deposit with the accessibility of a checking account.

With some of the accounts reviewed below — like Aspiration’s Spend and Save and Simple’s Checking and Protected Goals Accounts — the product actually consists of a checking account (which typically earns little to no interest) linked with a savings account (which earns a pretty decent APY) and features instantaneous, unlimited transactions between the two. Others — like Radius’ Hybrid Checking — comprise a single checking account earning a high APY, minus all the usual requirements typical of a traditional high-yield checking account.

While cash management accounts consisting of both a checking and savings account earn some of the highest APYs, you need to watch out that you don’t keep the majority of your funds in the checking or spending portion — where it earns minimal interest. Because transferring funds between the checking and saving portions happens instantly and doesn’t come with any limits, this is an easy mistake to avoid.

The boundary between “cash management account” and “high-yield checking” account can be hazy, but they share the following characteristics that place them in the “cash management” category.

  • Zero fees: One of the more attractive facets of cash management accounts is that most have no monthly maintenance fees (or only charge a small amount). This helps differentiate them from high-yield checking accounts, many of which require users to meet multiple specific requirements each month or pay maintenance fees in order to earn the high APY.
  • A higher APY than your typical checking account: According to DepositAccounts.com (like MagnifyMoney, it too is owned by LendingTree), the average APY a checking account earns is 0.121%. Traditionally that’s been seen as the trade off depositors make with banks in order to have easy, everyday access to their funds. The cash management accounts we review here represent true hybrid accounts that combine the liquidity of checking accounts with the high interest rates of savings accounts. All of them offer a much higher APY than the average checking account and, in many cases, higher than the interest earned in many savings accounts.
  • They’re online accounts, mostly: The institutions offering cash management accounts mostly exist as ones and zeros on the web. Some of these companies, like Aspiration, aren’t even banks themselves, but have partnered with traditional banks to provide customers with their services.

How do cash management accounts earn so much interest?

While the particulars vary from account to account, the principal underlying cash management account combines a traditional checking and savings account in one instrument — you deposit money with a bank or institution, where it earns interest. The financial institution then takes a cut of that interest in order to make money, and passes the rest on to you (which is reflected in the interest that particular account earns).

Because banks prefer customers to deposit as much money as possible for an extended period, they usually give accounts and products that limit customers’ ability to withdraw their cash higher interest rates in order to incentivize depositors into using those products.

Average Checking Account APYAverage Savings Account APYAverage 1 Year CD
APY
Average 5 Year CD
APY
0.121%0.167%0.550%0.786%

As you can see from the chart above — this data comes from DepositAccounts.com — the more liquid your account, the less interest it earns for you. Checking accounts, which provide almost unlimited access to your money, earn the lowest APY on average. Certificates of deposit with a five-year term, which usually come with a steep financial penalty if you withdraw the money before the term is up, provide the highest interest, on average.

So how do the companies offering cash management accounts bypass this norm to offer customers high interest rates on accounts with little to no restrictions on withdrawals? A big part of the answer is their low overhead, thanks to their online-only operations.

Megabanks like Chase employ thousands and maintain a sprawling network of physical locations, while an online-only institution like Aspiration, offering the Spend and Save cash management account, might have only a few dozen employees on its payroll.

“Because we’re online-only, it helps us pass on those kinds of savings to our customers,” said Andrei Cherny, CEO of Aspiration.

Management Fees

0.25%

Account Minimum

$0

Promotion

Three months free for new customers who are referred by an existing Betterment account holder

Management Fees

0.89%

Account Minimum

$100,000

Promotion
N/A
Management Fees

0%

Account Minimum

$100 one-time deposit or $20 monthly deposit

Promotion
N/A

Where does my money go when I deposit it into a cash management account?

Since many of the institutions offering cash management accounts lack the extensive infrastructure of traditional banks, you may be wondering where your money is actually deposited with these accounts.

The answer is that they partner with a bank (or a series of banks) to manage your funds. At the end of the business day, the money in your cash management account is swept into one of these participating bank’s accounts, where it enjoys the normal protections provided by FDIC accounts.

This information should all be disclosed to you when you open a cash management account, and if it’s not you should hesitate before placing a large amount of money in the account.

“As with anything, read the fine print,” said Jonathan Chapman, CFP at WJ Interests based in Sugar Land, Texas. “Look under the hood to see what banks they partner with to ensure they are working with quality institutions.”

Customers should also keep an eye on the individual FDIC-insured accounts where your money is swept at the end of the day. Make sure none of the balances exceed the insurance’s limit ($250,000) — otherwise, the portion of your balance that’s greater than $250,000 is at risk of being uninsured.

The potential pitfalls of cash management accounts

The high interest rates offered by these accounts make them attractive to customers who want their money to grow at a decent rate while still remaining accessible, but they’re not for everyone. Because most of these hybrid accounts are offered by online-only banks or institutions, customers have to feel comfortable banking with a company that may lack decades of history — especially if they’re already accustomed to doing business with another bank.

“As an advisor, my most difficult work is to get people to follow through on my recommendations,” said Jayson Owens, CFP at Bright Road Wealth Management based out of Anchorage, Alaska. “To accomplish this, I rarely recommend changes to a primary checking account. The cost in time typically outweighs the benefit of the change.”

Another related concern customers may have about these cash management accounts is if the companies offering them will stick around for the long haul. “Clients may not lose money but the company may get acquired or shuts down which would cause unnecessary hardship,” said
Deva Panambur, CFA and CFP at Sarsi, a wealth management company based in West New York, N.J.

While you’re not going to be able to waltz into the CEO’s office and demand a look at his five-year plan, you should take into account your gut reaction to how a company offering a cash management account presents itself and whether it has a viable shot at longevity.

The best cash management accounts

Account nameAPY earnedMinimum balanceMonthly Maintenance Fee
Simple Account0.60%$0.01$0
Betterment Cash Reserve 0.40%$0$0
Wealthfront Cash Account*0.35% APY on the entire balance$1$0
SoFi Money0.25% APY on the entire balance if you have $500 or more in recurring, monthly deposits$1$0
Radius Rewards Checking Account0.15% APY on balances of $100,000 and greater; 0.10% APY on balances between $2,500 and $99,999.99$100,000 to earn the highest APY; $2,500 to earn 0.10% APY$0
Aspiration Spend and SaveUp to 1.00% APY on balances up to $10,000; 0.10% on balances over $10,000$1,000 spent monthly on debit card to earn 1.00% APY or rate drops to 0.10%$7 for Aspiration Plus in order to receive the APY

*These cash management accounts currently don’t have a way for you to spend money directly from the account (such as a debit card or check) and require you to transfer money from the cash account to a third-party account before spending.

Simple Account

Simple was created out of frustration with the banking industry. According to the founders, they were confounded by the complexities of certain bank accounts; their solution was to offer a no fee bank account that earns interest and helps you budget your money “in one simple app.”

What makes this bank account stand apart from other online checking accounts? Well, for starters, it’s a checking account that doesn’t have any fees, not even if you use an international ATM (however, a fee may still be charged by the ATM owner). With this cash management account, you can earn 0.60% APY on balances in your Protected Goals account that range from just $0.01 to over $20,000.The Protected Goals account is basically a savings account that lives within your larger Simple account, where you can instantly transfer money in and out of as many times as you want without any penalty.

SEE DETAILS Secured

on Simple’s secure website

Betterment Cash Reserve

Betterment’s Cash Reserve account promises an APY of 0.40%. You can also opt to open a checking account, which they offer through a partnership with nbkc bank.

Because money in the Cash Reserve account is held by several program banks, customers enjoy FDIC protection up to $1 million. There’s no limit to the amount of times you can transfer money in and out of your Cash Reserve account (unlike a traditional savings account at a bank) but it does take 1-2 business days to for Betterment to process these transfers.

SEE DETAILS Secured

on Betterment’s secure website

FDIC Insured

Wealthfront Cash Account

This robo-advisor offers savers a cash management account that earns 0.35% APY and doesn’t require you to open an investment account. Because Wealthfront sweeps the money you deposit in the cash account into several partner bank accounts, your money is FDIC insured up to $1 million, a selling point for those wanting large balances to receive the maximum protection. Wealthfront will soon be rolling out a checking account and debit card feature to allow you to directly spend the money with a merchant Meanwhile, you can transfer funds from the cash account to a third-party account or an internal Wealthfront investment account free of charge.

SEE DETAILS Secured

on Wealthfront’s secure website

FDIC Insured

SoFi Money

Though it’s probably better known for its mortgages and student loans, this online-only investment firm has staked a claim in consumer banking by offering its Money account, which offers a 0.25% APY. SoFi doesn’t require depositors to maintain a minimum balance in this account in order to earn that interest rate, but you will need $500 in monthly deposits; otherwise, that rate drops to 0.01%. Account holders also get additional goodies like fee-free Allpoint ATMs worldwide.

SEE DETAILS Secured

on SoFi’s secure website

Radius Rewards Checking Account

Radius Bank is a community bank headquartered in Boston. The Radius Rewards Checking account is free, as long as you open the account with the required deposit of $100. Because the Rewards account offers their interest rate for a checking account without saddling the customer with a laundry list of requirements — like a number of debit transactions required each month — Radius’s account joins the list of best cash management accounts. You’ll also score unlimited ATM fee reimbursements, up to 1.5% in cash back and if you sign up for direct deposit, you can access your money

SEE DETAILS Secured

on Radius Bank’s secure website

Member FDIC

Aspiration Spend and Save Account

Similar to Simple, Aspiration has packaged together a savings account and a checking account into a single consumer product allowing users to move their money between both portions instantly and as many times as they wish. Users should be careful not to leave the majority of their funds in the checking portion, which owns zero APY. Instead most of the money should live in the savings account, where it can earn the 1.00% APY the company advertises so prominently. To get that APY, you’ll need to upgrade from the base account to Aspiration Plus for a monthly fee of $7. You’ll also need to make at least $1,000 in purchases on the debit card per month or the rate drops to 0.25%, and balances over $10,000 earn 0.10%.

With Plus you get a few extra perks. You’ll earn more cash back on your socially conscious purchases, get one out-of-network ATM fee refunded per month, and be eligible for their Planet Protection program, which aims to offset the carbon footprint you leave by gassing up your car. Again, you can move your money between both parts of the Spend and Save account instantly, so having most of it in the savings portion shouldn’t slow you down during a shopping spree; however, it’s important to note in case you get careless and leave a big chunk of change in the spending portion, where it earns no interest.

SEE DETAILS Secured

on Aspiration’s secure website

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The Best Health Savings Accounts in 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

So, you need to choose a health savings account (HSA) to go along with your new health insurance plan. There are plenty of options out there, and it’s easy to get overwhelmed. The best savings accounts help you save money with high interest rates and low fees—your HSA should be no different. With a high-yielding HSA, you can cover your out-of-pocket medical expenses and boost your savings at the same time.

We’ve taken the work out of finding the best health savings accounts on the market. Using data from DepositAccounts.com (similar to MagnifyMoney, a LendingTree-owned company) we scoured more than 17,100 nationwide banks and credit unions to find the highest health savings account rates available. To ensure quality and availability, we excluded institutions with a DepositAccounts health rating below a B and credit unions with restrictive membership requirements.

Health savings account deposits at all of the institutions listed below are insured by the FDIC or NCUA.

The 10 best health savings accounts in October 2020

Institution
APYMinimum balance to earn APY
Evansville Teachers FCU2.01%$500
Connexus Credit Union
2.00%$15,000
The Adirondack Trust Company1.00%$1
First Technology Federal Credit Union1.00%$10
Lake Michigan Credit Union0.50%$5,000
IncredibleBank0.65%$25,000
Elements Financial0.60%$10,000
Northpointe Bank0.50%$100
Technology Credit Union0.50%$2,500
Corporate American Family Credit Union0.50%$10,000

1. Evansville Teachers FCU: 2.01% APY, $500 minimum deposit

Evansville Teachers FCU’s Health Savings Checking account earns at a great interest rate on all balances of $500 and over. Plus, there’s no maintenance fees. You can also benefit from check writing abilities, debit card access and payroll deductions with an ETFCU HSA.

ETFCU also offers five HSA share certificates with term lengths ranging between one to five years. Each require $1,000 to open and earns a competitive interest rate. However, ETFCU doesn’t recommend you use HSA share certificates unless you’ve had an HSA established for a while, since locking money in share certificates make it much harder to to dip into your funds.

You can find Evansville Teachers Federal Credit Union locations in Indiana and Kentucky. The credit union is also a member of the Alliance One ATM network, which offers fee-free access to about 5,000 ATMs. ETFCU was started by several teachers in Evansville, Ind. in 1936 — but you don’t have to be a teacher to qualify for ETFCU membership, though.

SEE DETAILS Secured

on Evansville Teachers Federal Credit Union’s secure website

NCUA Insured

2. Connexus Credit Union: 2.00% APY, $15,000 minimum deposit

Connexus Credit Union also offers a high health savings account rate, but you’ll need at least $15,000 in your account to earn at that rate. Still, you can earn at decent rates on all other balances larger than $100, with higher balances benefiting best. The account doesn’t require a minimum balance or charge a monthly fee. You can request an HSA debit card when you open your account for use at Connexus ATMs.

You can find Connexus branches and ATMs in Wisconsin, Minnesota, Ohio and New Hampshire. Connexus is also part of the CO-OP Shared Branch network, which gives you access to more than 5,600 Shared Branches and more than 54,000 surcharge-free ATMs through both CO-OP and MoneyPass. To open an account with the credit union, you’ll need to become a Connexus Credit Union member.

SEE DETAILS Secured

on Connexus Credit Union’s secure website

NCUA Insured

3. The Adirondack Trust Company: 1.00% APY, $1 minimum deposit

To get started with an Adirondack Trust Company Health Savings Account, you’ll only need to deposit $1 — after that, there’s no other minimum balance requirement to earn interest. To access your health savings account, you can take advantage of free unlimited check writing and free ATM access with your ATC HSA Visa debit card. Getting paper statements on this account will cost $4, while using online banking will still cost you $2.

Founded in 1901 in upstate Saratoga Springs, N.Y., ATC maintains 13 branches along the Adirondack Mountains area and offers access to two Amsure branches in Saratoga Springs and Albany, N.Y.

SEE DETAILS Secured

on The Adirondack Trust Company’s secure website

Member FDIC

4. First Technology Federal Credit Union — 1.00% APY, $10 minimum deposit

First Technology Federal Credit Union’s HSA Checking account is easy to open and own. In addition to its decent rate, it doesn’t charge HSA setup or monthly service fees, nor are there any minimum balance requirements. You just need at least $10 to open the account and to start earning interest. To open this HSA, you can call First Technology FCU at 855-855-8805.

You’ll receive a free HSA debit card with the account, which you can use at over 30,000 CO-OP ATMs. You can also visit over 40 First Tech branches and access more than 5,000 CO-OP Shared Branch locations.

You can qualify for a First Tech membership depending on your employment, place of residence or by becoming a member of either the Computer History Museum or the Financial Fitness Association. First Technology Credit Union was founded in 1952 by members of Hewlett-Packard and Tektronix.

SEE DETAILS Secured

on First Technology Federal Credit Union’s secure website

NCUA Insured

5. Lake Michigan Credit Union: 0.50% APY, $5,000 minimum deposit

While you’ll only need $5 to open a Lake Michigan Credit Union account, you’ll need at least $5,000 in your HSA to earn at the listed APY; balances below $5,000 will have a much lower rate. The account doesn’t charge a monthly service fee and comes with a free debit card. You can use this debit card to pay for your medical costs and withdraw cash at any LMCU branch. You can also access your LMCU HSA funds through unlimited check writing and online banking.

Founded in 1933, Lake Michigan Credit Union offers open and free membership. As you might expect, you can find LMCU branches in Michigan, but there are also several branches in Florida. Plus, in addition to LMCU ATMs, you can also take advantage of over 55,000 Allpoint ATMs.

SEE DETAILS Secured

on Lake Michigan Credit Union’s secure website

NCUA Insured

6. IncredibleBank — 0.65% APY, $25,000 minimum balance

While there’s no minimum deposit or balance requirement, you’ll want to keep a balance of $25,000 or above in the account to snag the worthwhile 0.65% APY. Balances from $1,000 and up still earn interest, just at much lower rates.

IncredibleBank traces its history back to 1967 as River Valley Bank. Today, it is headquartered in Wausau, Wisc. and has 15 locations in Wisconsin and Michigan.

SEE DETAILS Secured

on IncredibleBank’s secure website

Member FDIC

7. Elements Financial: 0.60% APY, $10,000 minimum deposit

You can benefit the most from Elements Financial’s HSA if you have $10,000 available to set aside for future medical expenses; lower balances still earn interest, but at lower rates. The account does charge a $4 monthly fee, but you can avoid it by averaging a daily balance of at least $2,500.

The account includes a free Visa debit card, which you can use for purchases and to access your funds with over 78,000 ATMs worldwide through the Allpoint, CO-OP and Alliance One networks. In addition to these ATMs, you can visit Elements Financial branches and over 5,000 CO-OP Shared Branches nationwide.

Elements Financial is a credit union that requires membership before you open an account. Founded in 1930, it currently serves employees from over 135 companies in the U.S. If your company is an Elements partner, you can open a checking or savings account or complete an application for a loan or credit card to start the application process. Opening a member savings account gets you into the credit union so you can apply for this HSA.

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on Elements Financial’s secure website

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8. Northpointe Bank: 0.50% APY, $100 minimum deposit

You’ll need just $100 to open a health savings account at Northpointe Bank, but then you’ll earn this APY on any balance of $0.01 or over. You’ll also pay no monthly fee. Debit cards, checks and bill pay are available on the account, which allows unlimited transactions.

With headquarters in Grand Rapids, Mich., Northpointe Bank was established in 1999. The bank has branch locations in 23 states, but you can also bank online.

9. Technology Credit Union: 0.50% APY, $2,500 minimum balance

Technology Credit Union offers both individual and family health savings accounts, which you can open with any balance. You’ll need to contribute $2,500 to secure this rate, but if you can’t swing that much at first, you’ll still earn a competitive APY on balances below $2,500. The monthly maintenance fee is a low $2. Technology Credit Union will even waive the fee for the first six months; after that, you’ll need a minimum balance of $100 to waive the fee.

Founded in 1960, Technology Credit Union was started by employees at Fairchild Camera and Instrument Semiconductor Division in Silicon Valley. Today, Technology Credit Union membership is available to employees at several partner companies, family members of current members, individuals in select California counties and members of affiliated organizations.

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on Technology Credit Union’s secure website

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10. Corporate America Family Credit Union: 0.50% APY, $10,000 minimum balance

Corporate American Family Credit Union, or CAFCU, offers a competitive APY on as little as $1 in your account. To take advantage of this listed rate, you’ll need to fund your HSA with $10,000, but even as little as $5,000 earns you a rate not far below our top 10.

CAFCU was founded by 15 employees at Automatic Credit Union in 1939. After a couple changes in management and name, the credit union has widened its membership eligibility to include employees at sponsor companies, family members of current members and those residing or working within a 25-mile radius of a CAFCU branch. You can also join the credit union by being a member of The Hope Group, which you can join at the end of your CAFCU application.

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on Corporate America Family Credit Union’s secure website

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How to use your HSA wisely

Health savings accounts are used only for medical expenses, and if you shop around you can earn interest on your balances with the right account. But did you know HSAs offer tax benefits, too? You fund an HSA with pre-tax dollars, which lowers your taxable income in the year you make the deposit. As long as you spend HSA funds on approved medical expenses, it doesn’t get taxed. If you do use your HSA funds for something other than approved medical expenses, you may get hit with a 20% tax penalty.

This HSA tax advantage can come in especially handy in retirement. Funding an HSA today reduces your tax burden come tax time. If you wait until retirement to make those withdrawals, you can turn your HSA into a significant retirement contribution. Not only has the balance been earning interest for years, but now you can use that money for medical expenses, which tend to pile up in retirement. Plus, after you reach age 65, you can use your HSA for non-medical expenses without triggering the 20% tax penalty, although the withdrawals are taxed like normal income, similarly to IRA withdrawals. This also applies in the event you become disabled or die.

HSA requirements

You can generally open a health savings account if you’re already covered by a high-deductible health plan (HDHP). This works well since the HSA funds can help you cover the higher out-of-pocket costs that usually come with having an HDHP. To qualify for an HSA, you also can’t have other health coverage, be enrolled in Medicare or be claimed as a dependent on someone else’s tax return.

HSA contribution limits

As set by the IRS, the amount you can contribute to your health savings account will depend on your HDHP coverage, your age, the date you become eligible and the date you stop being eligible. For 2018, if you had self-only HDHP coverage, you can contribute up to $3,450 to your HSA. If you had family HDHP coverage, you can contribute up to $6,900.

For 2020, you can contribute up to $3,550 to your HSA as an individual with self-only coverage (up from $3,500 last year). Individuals with family coverage may contribute up to $7,100 (up from $7,000 last year).

For 2020, an HDHP is defined as a health plan where the annual deductible is greater than $1,400 for self-only coverage and $2,800 for family coverage. Additionally, the maximum annual deductible and for other out-of-pocket expenses is $6,900 for individuals and $13,800 for families.

HSA vs. FSA

A flexible spending account, or FSA, is another type of supplemental medical spending account. Like a health savings account, FSAs are also funded with pre-tax dollars to use towards qualified medical expenses like prescriptions and copayments. FSAs are employer-sponsored, however, and are usually funded through voluntary salary contributions, but your employer can also contribute. You cannot open an FSA if you’re self-employed. No taxes are deducted from your contribution. For 2020, you cannot contribute more than $2,750 to an FSA.

What further sets FSAs apart from HSAs is that you must use the money in an FSA by Dec. 31 of the contribution year, unless you’re granted a grace period or a $500 carryover option by your employer. A big drawback to FSAs is that if you don’t use the money in the account on time, your employer gets those funds. This is also true if you were to leave the company. To the opposite, the funds in an HSA are yours to keep even if you leave your company.

Health savings account vs. online savings accounts

While health savings accounts help you designate funds toward medical expenses, most HSAs don’t earn at the competitive rates we’ve come to see from online savings accounts. A $10,000 deposit into a health savings earning 2% APY would yield $200 after a year of annual compounding interest. This doesn’t fall too far behind some of the best online savings accounts. A savings account earning 2.45% would yield only $45 more than the HSA after a year.

Still, you’ll find plenty more high-yield options to really boost your savings by looking at online savings accounts, and not just for medical expenses. Plus, you typically don’t have to meet any requirements to open a savings account, like having an HDHP or meeting credit union membership qualifications.