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The Best Business Savings Account Rates in 2021

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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Are you looking to start or grow a business? Opening a business savings account can offer federal protection for the funds you deposit (up to $250,000) and provide a source of liquidity should inevitable expenses arise. You can earn interest while setting aside money for capital improvement or income taxes. A commercial savings account can add credibility to your business, arm you with a business debit card and help your cash flow.

The best way to choose an account that fits your needs is to start by comparing the annual percentage yield (APY) offered by banks and credit unions. Then look for benefits that might make the account attractive based on your needs. Is there a monthly maintenance fee or a minimum deposit to open? Does the bank provide ample access to ATM and online account services?

Deciding which business savings account is best for your needs can be a difficult process, but hopefully this roundup of our picks for best savings accounts will help give you a head-start.

The best business savings account rates — January 2021

Source: Deposit Accounts, January 13, 2021

1. Dedicated to Businesses: Live Oak Bank, 0.60% APY, No minimum balance

Live Oak Bank awards a 0.60% APY on its business savings account. There is no minimum opening balance or deposit required to open a business savings account.

The business savings account is open to deposits of up to $5 million and is free of monthly maintenance fees. You may make up to 6 withdrawals from your Live Oak Bank Savings account per statement cycle, including pre authorized, automatic and telephone transfers. After that there’s a $10 fee per withdrawal. Live Oak Bank, established in 2008, holds assets of $2.12 billion.

The bank is in Wilmington, N.C., and is a member of the FDIC. Learn more about business savings at Live Oak Bank.

Small Print: The bank may verify credit and employment history at its discretion, meaning you may receive a pull against your credit report.

Restrictions on joining: none.

SEE DETAILS Secured

on Live Oak Bank’s secure website

Member FDIC

2. First Internet Bank, 0.40% APY, No minimum balance, ATM services

First Internet Bank offers an FDIC-insured savings option for businesses with a good 0.40% APY on any balance amount. You only need $100 to open the account. There is no minimum balance to deposit or maintain the account to earn the APY.

While it only costs $100 to open your business savings account and you must maintain an average daily balance of $1,000 to avoid a $2 monthly maintenance fee.

Unlimited deposits can be made each month and six transfers or withdrawals are allowed without charge. Keep in mind that the FDIC only insures up to $250,000. So, if you deposit more than $250,000 into the business savings account, the excess deposit amount will not be insured by the FDIC.

The First IB ATM cards are offered to sole proprietors only. There is no charge for ATM transactions or electronic statements. Founded in 1999 by the First Internet Bancorp, First IB offers remote banking in all 50 states.

Fine print: Only six preauthorized, automatic, PC, or telephonic transfers are allowed each month. This restriction is common among most of these institutions, however, First Internet Bank will charge you $5 per item if you go beyond the allotted six.

Restrictions on joining: none.

SEE DETAILS Secured

on First Internet Bank’s secure website

Member FDIC

3. Axos Bank: 0.50% APY, no minimum balance, ATM access

Axos Bank, formerly known as BofI Federal Bank offers one of the top APY rates in our nationwide survey of business savings accounts. The bank’s Business Premium Savings Account with a high-yield 0.50%APY can be opened with a $25,000 minimum deposit. While this account requires no minimum balance, interest is only doled out on funds of $24,000 and up.

Axos Bank also makes it easy to access your funds when you need it. Customers have ATM access to their accounts along with free online banking. However, ATM withdrawal limits are $1,010 per day and there’s a daily purchase limit of $5,000. BofI is an FDIC-insured bank based in San Diego and publicly traded online. Other products include Business Interest Checking and Business Money Market accounts.

SEE DETAILS Secured

on Axos Bank’s secure website

Member FDIC

4. Presidential Bank (Maryland), up to 0.50% APY, $5,000 to open, ATM services

Presidential Bank’s Commercial Premier Savings account offers 0.50% APY for balances up to $35,000, making it a decent — if not extraordinary — bet for business owners.

Business customers are not required to maintain a minimum balance on the account in order to receive all ATM privileges. So long as you use one of their ATMs you won’t incur fees, but there is a $0.75 ATM fee for non-network ATMs. Free online banking, mobile banking and ATM card come with the account.

Established in 1985, Presidential Online Bank was one of the first lenders to offer online banking. Located in Bethesda, Md., it currently lists assets in excess of $550 million.

Restrictions on joining: none.

SEE DETAILS Secured

on Presidential Bank (MD)’s secure website

Member FDIC

5. Financial Resources Federal Credit Union, 0.40% APY, $10,000 to earn APY

Financial Resources Federal Credit Union offers a premium tiered rate account, dubbed its Business Purple Savings account. The sweet spot of this account applies to balances between $10,000 and $49,999, which rewards you with an APY of 0.40%. The rates for all of the tiers are as follows:

  • $0 – $499: 0.05%
  • $500 – $9,999: 0.35%
  • $10,000 – $49,999: 0.40%
  • $50,000 – $99,999: 0.50%
  • $100,000 and more: 0.60%

This account requires a Financial Resources Membership Savings account in the name of your business, with a minimum balance of $10.

Restrictions on joining: To join, you must also join the American Consumer Council or meet other eligibility requirements.

SEE DETAILS Secured

on Financial Resources Federal Credit Union’s secure website

NCUA Insured

6. Premier America Credit Union, 0.30% APY, $250 to open

Premier America Credit Union is currently offering an attractive rate of 0.30% on its Business Savings account. There is a required minimum deposit of $250 associated with this account. There are no minimum or maximum limits listed.

Premier America Credit Union has physical branches in California and Texas, but offers its products and services nationwide online.

Restrictions on joining: To join, you must also join the Thousand Oaks Alliance for the Arts or meet other eligibility requirements.

SEE DETAILS Secured

on Premier America Credit Union’s secure website

NCUA Insured

7. Prime Alliance Bank, 0.25% APY, $1 minimum balance

Prime Alliance Bank is currently offering a competitive APY of 0.25% for balances starting at just $1 for its Business Savings Account. If you have more cash to stash, though, you’ll be rewarded with an even higher APY. Balances between $100,000 and $199,999 earn an APY of 0.45% while balances of $200,000 or more earn an APY of 0.60%.

The Business Savings Account does not require any minimum balances, and it does not have any monthly maintenance fees. Additionally, Prime Alliance offers unlimited deposits and up to six transfers or withdrawals per month.

Restrictions on joining: none.

SEE DETAILS Secured

on Prime Alliance Bank’s secure website

Member FDIC

8. TAB Bank, 0.25% APY, $25 minimum to open

TAB Bank’s Business Savings account is currently featuring a decent APY of 0.25% with a low minimum deposit of just $25, and a low $1 minimum daily balance required to earn the APY. There is no maximum limit listed for its Business Savings account.

TAB Bank is based in Ogden, Utah, but offers its services and products to consumers nationwide online.

Restrictions to joining: None.

SEE DETAILS Secured

on TAB Bank’s secure website

Member FDIC

9. Service Credit Union, 0.25% APY, $50 minimum to earn APY

Currently, Service Credit Union is offering an attractive 0.25% APY on funds in its Business Savings account, as long as you maintain a daily balance of at least $50. This account features no monthly fees. Additionally, Service Credit Union offers a Secondary Business Savings account, also with a 0.25% APY, if you want to save for multiple savings goals at the same time.

Membership to Service Credit Union is open to anyone who also joins the American Consumer Council.

Restrictions to joining: Join the American Consumer Council

SEE DETAILS Secured

on Service Credit Union’s secure website

NCUA Insured

10. Greenwood Credit Union, 0.25% APY, $100 minimum to earn APY

Greenwood Credit Union’s Business Share Savings account is currently featuring an attractive APY of 0.25%. While there is a low minimum deposit of just $5 required to open this account, a minimum of $100 is required to start earning the APY. This account does not come with any limits on deposits or withdrawals.

Membership to Greenwood Credit Union is open to anyone who simply opens and maintains a Share account with a minimum deposit of $5.

Learn more about business savings accounts

How we ranked the best business savings accounts

To come up with this list, we first used data from DepositAccounts.com, which tracks rates on a range of deposit accounts across thousands of banks in the U.S. Note: DepositAccounts is also owned by MagnifyMoney’s parent company LendingTree.com.

We eliminated any institutions that were given a health rating below a B by DepositAccounts. We also weeded out any credit unions that have very restrictive membership requirements. From there, we chose the top 10 business savings accounts with the highest APY. And lastly, all the banks on our list offer FDIC or NCUA insurance.

Business savings accounts vs personal savings accounts

Business and regular savings accounts may offer many of the same features ,such as 24/7 online banking, free electronic reporting, debit cards, fund transfers and ATM machines.

The trade-off in choosing a business account is that you’ll get services focused on business planning and spending in exchange for a less-desirable APY.

When you compare the interest earned on a business savings account with the best rates offered on savings accounts, it may not look like opening a business account is a wise strategy. The top business savings account APY right now is 1.40%. The top APY among personal savings accounts is 0.60% with no minimum deposit and ATM access. You can weigh the services, charges and minimum account fees between the top business and top personal savings accounts to decide which is best for you.

There are other benefits to offset any differences in earnings, particularly if your business is incorporated. It’s considered sound business practice to separate your personal saving and checking accounts from your business saving and checking accounts. A business account can help you manage cash flow, accounting, recordkeeping and working capital. At income tax time, separate accounts can help you differentiate business from personal expenses.

Paired with a business checking account, your business savings account can add professional branding, since all payments and correspondence with clients will bear your business name.

Or you can create savings in your business account to pay quarterly income taxes or purchase equipment.

Finally, business savings accounts are secure when you open accounts with banks and credit unions that are insured up to $250,000 per account by the FDIC or the NCUA.

North Shore Bank of Brookfield, Wis., says that a business savings account can boost your credit ratings and make it easier to obtain a business loan, since the lender can see you have an account dedicated to your company.

Choosing the right business savings account

When evaluating a financial institution for your business, there’s more than just finding a good APY.

Many of the banks on our Top 10 list look great on the APY front but carry fees that can eat into any of the returns you might make. Particularly, watch out for fees for ATM or bank withdrawals, monthly service fees and ATM fees.

The Small Business Administration (SBA) has identified the key factors to consider when searching for the right bank or credit union. These include:

  • Customer service reputation
  • Access to branches or no-surcharge ATMs
  • Benchmarks to have fees waived
  • Automatic FDIC insurance

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The Best CD Rates – January 2021

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’re looking for a better yield on your savings and have time to burn, a high-rate CD at an online bank would be a great option. With a CD, you agree to lock up your funds in an account for a specific period of time, and in return the bank offers a higher yield than you’d find on a standard savings account. If you’re not keen on the idea of completely locking your money away for a set amount of time, you may want to consider a no-penalty CD. These accounts give you the benefit of locking down a rate for a set amount of time without requiring you to lock in your money for the length of the term.CDs are often seen as the next level up after savings for that reason. If you’ve maxed out your savings account with enough funds to see you through the next year or so, it can be wise to start shoveling savings into a CD to maximize your returns.

For the best CD rates in the industry, check out online banks. They tend to offer much better interest rates than traditional banks, thanks to the lack of typical brick-and-mortar costs.

For example, let’s say you find a 12-month CD at a big brick-and-mortar bank that requires a $1,000 minimum deposit and pays 0.05% APY. If you were to open that account with just the minimum, you’d earn 50 cents after a year. Even a bigger deposit of $10,000 would only yield $5 at maturity.

At an online bank, on the other hand, you could earn 2.80% often with a minimum deposit of $1,000. Opening the account with $1,000 would yield $28, while a $10,000 deposit would earn $280 in a year, a much better return on your money no matter how you look at it. (If you would rather get a savings account or money market with no time restriction, look at the best savings accounts or best money market accounts).
Check out MagnifyMoney’s top picks for the best CD rates below.

Do you have a savings goal in mind? Tell us about it!

The best CD rates for January 2021

To find the best CD rates, we look for the banks that consistently offer competitive CD rates month over month. This list is updated weekly and the rates are organized by 1-year rates from highest to lowest. Here are the accounts from top banks with consistently competitive CD rates:

3 months – 5 years: Ally Bank – 0.20% APY – 0.85% APY; $0 minimum deposit to open (higher APY with higher deposit)

12 Month High Yield CD from Ally Bank

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

Ally is one of the largest internet-only banks in the country. Ally’s former advertising campaign made it very clear: no branches = higher rates. And Ally has consistently paid some of the highest rates in the country across savings accounts, money market accounts and CDs. For savers with fewer funds, Ally is unique. There is no minimum deposit to open a CD. However, if you have more money, you’ll earn more in interest and in some cases, earn a higher APY. And one of our favorite features of Ally: they often (although not always) offer preferential rates on renewal. Far too often banks give the biggest bonuses to new customers, but Ally has done a good job of rewarding its existing customers. All deposits at Ally are FDIC insured up to the legal limit.

3-months:
  • 0.20% APY (less than $5k)
  • 0.20% APY ($5k minimum deposit)
  • 0.20% APY ($25k minimum deposit)
18-months:
  • 0.60% APY (less than $5k)
  • 0.60% APY ($5k minimum deposit)
  • 0.60% APY ($25k minimum deposit)
6-months:
  • 0.25% APY (less than $5k)
  • 0.25% APY ($5k minimum deposit)
  • 0.25% APY ($25k minimum deposit)
3-year:
  • 0.65% APY (less than $5k)
  • 0.65% APY ($5k minimum deposit)
  • 0.65% APY ($25k minimum deposit)
9-months:
  • 0.30% APY (less than $5k)
  • 0.30% APY ($5k minimum deposit)
  • 0.30% APY ($25k minimum deposit)
5-year:
  • 0.85% APY (less than $5k)
  • 0.85% APY ($5k minimum deposit)
  • 0.85% APY ($25k minimum deposit)
12-months:
  • 0.60% APY (less than $5k)
  • 0.60% APY ($5k minimum deposit)
  • 0.60% APY ($25k minimum deposit)
6 months – 6 years: Marcus by Goldman Sachs – 0.15% APY – 0.60% APY; $500 minimum deposit to open

High-yield 12 Month CD from Marcus by Goldman Sachs

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on Marcus By Goldman Sachs’s secure website

Member FDIC

Our advertiser Marcus by Goldman Sachs is the online consumer bank of Goldman Sachs (the large investment bank). Your funds are FDIC insured, and Goldman offers very competitive annual percentage yields (accurate as of 7/9/20). Even better: there is only a $500 minimum deposit. So, if you don’t have enough money to meet the minimum deposit of the other banks on this list, or you are looking for another bank for your savings, GS is a good option. It also doesn’t hurt that they also offer some of the best CD rates in the market today. Here are their rates:

Term

APY

Minimum Deposit Amount

6 months

0.15%

$500

9 months

0.25%

$500

12 months

0.55%

$500

18 months

0.55%

$500

24 months

0.55%

$500

3 years

0.55%

$500

4 years

0.55%

$500

5 years

0.60%

$500

6 years

0.60%

$500

3 months – 10 years: Discover Bank – 0.20% APY – 0.60% APY, $2,500 minimum deposit to open
Discover is best known for cash back credit cards. However, Discover has also quietly built a leading internet bank that offers checking accounts, savings accounts and CDs. Discover has invested in a mobile banking app and strong on-shore customer service.Although Discover does not always have the highest rate, it is very close (within basis points) across all durations. If customer service and digital tools (like apps) are important to you, Discover is an excellent consideration. Note: you can even get a CD rate with a duration as short as 3 months. However, you would be better off opening a high yield savings account if you plan on saving the money for less than a year.Keep in mind that all CD terms come with an early withdrawal penalty if you choose to withdraw money before your maturity date. If your Discover CD is less than one year, the penalty is worth three months of simple interest. If the term is between one to three years, the penalty is worth six months of simple interest. Four-year CDs have a penalty that is worth nine months of simple interest. Five year CDs have a penalty that is worth 18 months of simple interest and seven to 10-year CDs have a penalty that is worth 24 months of simple interest.

CD TermAPY
3-months0.20%
6-months0.25%
9-months0.30%
12-months0.50%
18-months0.50%
2-year0.50%
30-months0.55%
3-year0.55%
4-year0.55%
5-year0.60%
7-year0.60%
10-year0.60%
1 year – 5 years: Barclays Bank – 0.25%0.25% APY, no minimum deposit to open
Barclays is one of the oldest banks in the world. Although they’re based in London, they do have a U.S. presence and offer competitive rates on their CDs and savings account. Currently, they’re offering some of the highest CD rates in the market, and they have an edge over the rest of the institutions on this list: they don’t require a minimum balance to earn the APY or open an account. Deposit as little or as much as you’d like into a term of your choice and you can start earning interest as long as the account is funded within 14 days of opening the CD. Additionally, your funds are insured through the FDIC.

CD TermAPY
1-year0.25%
2-year0.25%
3-year0.25%
4-year0.25%
5-year0.25%
1 year – 5 years: Citizens Access – 0.10% APY – 0.25% APY; $5000 minimum deposit to open

Online 1 Year CD from Citizens Access

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on Citizens Access’s secure website

Member FDIC

Citizens Access is the online division of Citizens Bank, N.A., aimed at providing more convenient access to better banking products. Both divisions are headquartered in Providence, R.I. Citizens Bank was founded in 1828 and as of September 2019, had $150 billion in assets.Citizens Access’ online CD accounts require a pretty high opening deposit of $5,000. However, all its terms earn at premium rates, making your savings more worthwhile. Citizens Access also offers an easy opening process to build a CD ladder with them. You’ll need to deposit at least $5,000 in each new CD, though.

When you fund any new Citizens Access CD within 10 days after opening, the bank’s CD Rate Pledge will apply, snagging you the highest interest rate offered by the bank for that CD term within those 10 days. Here are their rates:

CD TermAPY
12 months0.10%
2 years0.10%
3 years0.15%
4 years0.20%
5 years0.25%
6 months – 5 years: Communitywide FCU – 0.75% APY – 1.00% APY; $1,000 minimum balance

12 Month Share Certificate from Communitywide Federal Credit Union

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on Communitywide Federal Credit Union’s secure website

NCUA Insured

In exchange for a $1,000 minimum deposit, Communitywide’s 12-month share certificate earns a 0.80% APY. One great feature is flexibility regarding your dividends, which may be compounded in the certificate, deposited to another share certificate, or transferred to another account. Another feature to understand is that there is no automatic renewal of Communitywide’s share certificates, which could be a good thing for savers who like to be reminded to survey the best rates available before rolling over their investments.

For over 50 years, Communitywide Federal Credit Union has provided banking services to the citizens of northern Indiana, and now a completely revamped online and mobile portal brings its great rates to you, wherever you are. Membership in Communitywide FCU is open to members of the Michiana Goodwill Boosters or the Marine Corps League of St. Joseph Valley, as well as employees of over 40 companies in the central Midwest region.

Term

APY

6 Months

0.75%

12 Months

0.80%

60 Months

1.00%

6 months – 5 years: State Department Federal Credit Union – 0.55%1.10% APY, $500 minimum deposit

12 Month Certificate from State Department Federal Credit Union

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on State Department Federal Credit Union’s secure website

NCUA Insured

State Department FCU offers an array of CDs, ranging in term length of six months to 60 months. Its 1-year CD has a particularly competitive rate, with a 0.80% APY. This product requires a low minimum deposit of $500, and dividends are compounded daily.

Membership to State Department FCU is open to anyone who also joins the American Consumer Council and opens a savings account at the credit union with just $1.

TermAPY
6 months0.55%
12 months0.80%
24 months0.90%
36 months1.00%
48 months1.00%
60 months1.10%
7 months – 5 years: Lafayette Federal Credit Union – 0.70%1.26% APY, $500 minimum deposit

1 Year Fixed CD from Lafayette Federal Credit Union

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on Lafayette Federal Credit Union’s secure website

NCUA Insured

Lafayette Federal Credit Union offers both variable rate and fixed rate certificates of deposit, but its crown jewel is certainly its 1-year fixed rate CD, with an APY of 0.80%. For this product, a $500 minimum deposit is required to open an account and to earn the high APY. Lafayette’s CDs will automatically renew upon maturity, unless otherwise requested by the customer.

Lafayette Federal Credit Union opens its arms to anyone who also joins the American Consumer Council or the Home Ownership Literacy Council. It offers its products online, nationwide.

CD TermAPY
1-year0.80%
2-year0.90%
3-year1.01%
4-year1.16%
5-year1.26%
3 months – 5 years: Greenwood Credit Union – 0.50% APY – 1.10% APY, $1,000 minimum deposit to open

12 Month CD from Greenwood Credit Union

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on Greenwood Credit Union’s secure website

NCUA Insured

Greenwood Credit Union is currently offering a competitive rate of 0.75% APY on its one-year CD offering. This account requires a minimum deposit of $1,000, and you can easily open it online.

Greenwood Credit Union extends its membership to anyone who opens a Share account for a minimum of just $5.

TermAPY
3 months0.50%
6 months0.50%
12 months0.75%
13 months0.50%
15 months0.85%
18 months0.80%
24 months0.90%
30 months0.95%
36 months1.00%
48 months1.00%
60 months1.10%
6 months – 5 years: Latino Credit Union — 0.60% APY – 0.95% APY, $500 minimum deposit

12 Month CD from Latino Credit Union

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on Latino Credit Union’s secure website

NCUA Insured

Latino Credit Union offers an impressive selection of CDs, which range in term length from six months to five years. Currently, its 1-year CD boasts a competitive rate of 0.75% APY. There is a $500 minimum deposit required for this product.

Latino Credit Union expands its membership to anyone who joins the Latino Community Development Center for a one-time membership fee of $10.

TermAPY
6 months0.60%
12 months0.75%
18 months0.75%
24 months0.80%
36 months0.90%
48 months0.95%
60 months0.95%

The best no-penalty CD rates

No-penalty CDs are unique because these accounts allow customers to withdraw from their CD without incurring an early withdrawal penalty. These CDs are an attractive offer to customers as it provides no risk if they choose to withdraw their money early. Here are some of the best no-penalty CD rates that are available nationwide:

11 months: Ally Bank – 0.50% APY – 0.50% APY; $0 – $25,000 minimum deposit to earn APY

No Penalty 11 Month CD from Ally Bank

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on Ally Bank’s secure website

Member FDIC

Unlike the other two banks that offer multiple terms, Ally Bank only offers one term on its no-penalty CD. While Ally doesn’t require a minimum deposit to open, it does reward higher balances with higher APYs. This no-penalty CD is great for low-balance individuals who want to keep their money liquid. However, if you’re okay with locking your money into a CD for 12 months, you’re better off going with Ally’s regular 12-month CD as it has a higher APY (0.60% APY vs 0.50% APY) and doesn’t have a certain balance requirement to earn that high rate.

If you still choose to open Ally’s 11-month no-penalty CD and you need to withdraw money before the terms ends, you’ll need to withdraw your funds in full and won’t be able to do so until seven days after funding the account. Here are the tiered rates for Ally’s no-penalty CD:

TermAPYMinimum balance to earn the APY
11 months0.50%None
7 months – 13 months: Marcus by Goldman Sachs – 0.45% APY – 0.25% APY; $500 minimum deposit to open

7 Month No-Penalty CD from Marcus by Goldman Sachs

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on Marcus By Goldman Sachs’s secure website

Member FDIC

Similar to its regular CDs, you only need a minimum of $500 to deposit into Marcus Goldman Sachs’ no-penalty CDs. This makes these CDs highly attractive to customers with smaller deposits. If you choose to open one of these CDs, you’ll only be locked in for seven days after you fund the account. After the seventh day, you’re free to withdraw your funds, but keep in mind that you’ll need to withdraw the full amount.

These CDs are an excellent option if you want your money to remain liquid or if you want to invest your money into an interest-earning account for a short amount of time. One thing to note is that the 7-month no-penalty CD has a much higher rate than the regular 6-month CD (0.45% APY vs 0.15% APY). The high APY makes Goldman’s 7-month no-penalty CD a fantastic option if you want to earn interest in a short amount of time. Here is Goldman’s full list of no-penalty CD rates:

TermAPYMinimum balance to earn the APY
7-month0.45%
$500
11-month0.35%
$500
13-month0.25%
$500
6 months: Investors eAccess – 0.25% APY; $500 minimum deposit to open

6 Month No Penalty CD from Investors eAccess

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on Investors EAccess’s secure website

Member FDIC

Investors eAccess is the online division of Investors Bank, a large bank headquartered in New Jersey that was established in 1926. The parent bank currently has over $26 billion in assets. The online division was launched earlier this year and decided to introduce itself by offering a strong rate on its inaugural product, the eAccess Money Market account. It seems this online bank is slowly offering different deposit accounts, but one thing that sticks out is that it’s offering these new products with high rates.

Currently, Investors eAccess is offering two types of CDs: a 6-month No-Penalty CD and a 10-month regular CD. The 6-month No-Penalty CD is comes with a strong 0.25% APY. You need at least $500 to open the account and you’re free to withdraw from the principal amount after the first seven calendar days from opening the account without incurring any penalties. If you choose to withdraw the full amount (including any interest earned) before the maturity date, you won’t incur any penalties, but the full withdrawal will close the account. Regardless of how much you choose to withdraw from the account, the bank will send you the funds via an official Bank Check. The check will be made out to the account owner and mailed First Class to the address on file.

TermAPYMinimum balance to earn the APY
6-month0.25%$500
11 months – 14 months: PurePoint Financial – 0.15% APY – 0.10% APY; $10,000 minimum deposit to open

13 Month Online No-Penalty CD from PurePoint Financial

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on PurePoint Financial’s secure website

Member FDIC

PurePoint Financial is the online division of Union Bank. Both the parent bank and this online division are backed by financial giant, Mitsubishi UFJ Financial Group (MUFG). Under the MUFG Union Bank umbrella, this institution has acquired over $130 billion in assets. As its online division, PurePoint Financial has been able to offer its customers highly competitive rates not only in CDs, but in an online savings account.

Currently, PurePoint Financial is offering an extremely competitive rate of 0.10% on its 13-month no-penalty CD. It also offers an 11-month and a 14-month no-penalty CD, but those two accounts have lower rates than its 13-month no-penalty CD. Keep in mind that you’ll need at least $10,000 to deposit into any of these CDs. If you do choose to withdraw money from this CD before the term is up, you’ll need to withdraw the full amount. You’ll also have to wait seven days after you fund the account to withdraw any of the money. Here’s a full list of PurePoint Financial’s no-penalty CDs.

TermAPYMinimum balance to earn the APY
11-month0.15%$10,000
13-month0.10%$10,000
14-month0.10%$10,000

The highest CD rates from banks and credit unions by term

The following banks and credit unions are currently offering the highest CD rates for each term.

Best 1-year CD rates

Best 1-year CD rate from a Credit Union – Connexus Federal Credit Union, 0.71% APY, $5,000 minimum deposit

12 Month Certificate from Connexus Credit Union This Wisconsin-based credit union cracks our ranking of the best credit union CD rates for its 12 -month share chertificate’s 0.71% APY. It requires a bit of a hefty minimum deposit of $5,000 to open an account, but its APY is fairly generous compared to its competitors. Anyone can join Connexus by joining the Connexus Association and making a $5 donation.


SEE DETAILS Secured

on Connexus Credit Union’s secure website

NCUA Insured

Best 1-year CD from a National bank: Paramount Bank — 0.75% APY, $1,000 minimum deposit required

12 Month CD from Paramount Bank (MO) Paramount Bank offers an array of CDs, including a competitive 1-year CD that boasts a rate of 0.75% APY. There is a minimum deposit of $1,000 required for this account, and interest is paid to your account on a monthly basis.

While it’s headquartered in Missouri, Paramount Bank offers its products to consumers nationwide, online.


SEE DETAILS Secured

on Paramount Bank (MO)’s secure website

NCUA Insured

Best 2-year CD rates

Best 2-year CD rate from a Credit Union: Evansville Teachers FCU– 1.04% APY, $1,000 minimum deposit

2 Year CD from Evansville Teachers Federal Credit Union To join this credit union, you may make a $5 donation to the Mater Dei Friends & Alumni Association. You may want to strongly consider doing so, as the 2-year CD rate offered by Evansville FCU is the best on the market in terms of APY, at 1.04%. Plus, it only requires a minimum balance of $1,000.


Best 2-year CD from a National Bank: MutualOne Bank – 0.80% APY, $500 minimum deposit

24 Month CD from MutualOne Bank MutualOne Bank offers an array of CDs, including a 2-year CD with a standout APY of 0.80% for a minimum deposit of $500. Although MutualOne Bank only has branches in Massachusetts, its products are available to consumers online, nationwide.


SEE DETAILS Secured

on MutualOne Bank’s secure website

Member FDIC

Best 3-year CD rates

Best 3-year CD from a Credit Union: American Heritage Federal Credit Union – 1.10% APY, $1,000 minimum deposit

36 Month Share Certificate from American Heritage Federal Credit Union American Heritage Federal Credit Union is currently featuring a standout rate of 1.10% on its 36-month CD offering, requiring a reasonable $1,000 minimum deposit. American Heritage FCU also offers Bump Up CD offerings, which allow you to increase your dividends one time during the term of your CD.

American Heritage Federal Credit Union opens its membership to anyone who also makes a donation to the Kids-N-Hope Foundation.


SEE DETAILS Secured

on American Heritage Federal Credit Union’s secure website

NCUA Insured

Best 3-year CD from a National Bank: Comenity Direct – 0.85% APY, $1,500 minimum deposit

3-Year CD from Comenity Direct Comenity Direct is the internet-only arm of Comenity Capital Bank, a Utah-based bank with roots dating back to 1986. Comenity Direct offers an array of certificates of deposit, with term lengths of 1 year, 2 years, 3 years, 4 years and 5 years, all featuring attractive APYs.

There is a $1,500 required minimum deposit for all CDs. Comenity Direct charges no monthly maintenance fees on its CDs, although there is a $25 fee per outgoing wire transfer, $15 fee per paper check request and a $5 fee per paper statement request. Like most CDs, there are fees associated with early withdrawal. Once your CD matures, you can choose to automatically renew it or cash out without penalty within a 10-day grace period.


SEE DETAILS Secured

on Comenity Direct’s secure website

Member FDIC

Best 4-year CD rates

Best 4-year CD rate from a Credit Union: Hiway Federal Credit Union – 1.20% APY, $25,000 minimum deposit

48 – 59 Month CD from Hiway Credit Union You’ll need a $25,000 minimum deposit to snag this top rate from Hiway Federal Credit Union. Smaller deposits as low as $500 will still earn interest, just at lower interest rates. The early withdrawal penalty for this range of CDs equals 365 days’ dividends.

Hiway Federal Credit Union was founded in 1931 to serve the financial needs of Minnesota Department of Transportation employees. Today, membership is extended to members of select communities, employees of select employer groups, relatives and roommates of eligible individuals and members of the Minnesota Recreation and Park Foundation or Association of the U.S. Army.


SEE DETAILS Secured

on Hiway Credit Union’s secure website

NCUA Insured

Best 4-year CD rate from a National Bank: Hyperion Bank – 0.90% APY, $500 minimum deposit

48 Month CD from Hyperion BankHyperion Bank offers a large selection of CDs, with terms ranging from 30 days up to 60 months. Currently, its 4-year CD stands out for its 0.90% APY and low minimum deposit of just $500, making it one of the most attractive 4-year CDs currently available.

Based in Philadelphia, Hyperion Bank offers its products and services to consumers online, nationwide.


SEE DETAILS Secured

on Hyperion Bank’s secure website

Member FDIC

Best 5-year CD rates

Best 5-year CD rate from a Credit Union: Affinity Plus FCU – 1.50% APY, $500 minimum deposit

60 Month CD from Affinity Plus Federal Credit Union Affinity Plus Federal Credit Union offers an array of certificates with different term lengths, but its 60-month Basic Certificate stands out with an impressive 1.50% APY and a reasonable minimum deposit requirement of $500.

Affinity Plus opens its membership to anyone who makes a one-time dues payment to Affinity Plus Foundation.


SEE DETAILS Secured

on Affinity Plus Federal Credit Union’s secure website

NCUA Insured

Best 5-year CD rate from a National Bank: First Internet Bank – 0.96% APY, $1,000 minimum deposit to open

60 Month CD from First Internet Bank First Internet Bank of America boasts a robust rate of 0.96% APY on its 60-month CD, making it one of the best 5-year CDs currently offered. There is a minimum deposit of $1,000 required for this account, and there is no monthly maintenance fee.

First Internet Bank has roots dating back to 1999, and it claims to be the first FDIC-insured institution to operate entirely online.


SEE DETAILS Secured

on First Internet Bank’s secure website

Member FDIC

The cities that are most likely to use CDs for their savings

We recently looked at the 100 largest U.S. metros to find the cities with the highest percentage of households that own certificates of deposit.

Among the 100 largest U.S. metros, San Francisco came out on top, with 25.4% of households owning certificates of deposit. That’s more a little more than twice as many households, on a percentage basis, than Greensboro, N.C., our bottom-ranked city, where only 12.5% of households own CDs.

Typically, households in large cities are more likely to sock money away in CDs. Chicago, Los Angeles, New York and Washington, D.C. — among the 10 largest metros in the U.S. — all make our list of top 10 cities where people own CDs. There are some exceptions: Odgen, Utah ranks No. 4 in the nation for CD saving: 21.9% of Ogden households have CDs.

Variability in local CD rates may explain some of the differences, as the highest rates available by state can vary by as much as one percentage point. In fact, in Jan. 2019, Utah had the highest average local 1-year CD yield in the country.

Questions to ask before you open a CD

1. How are CDs different from savings accounts?

With a CD, the saver and the bank make stronger commitments. The saver promises to keep the funds in the account for a specified period of time. In exchange, the bank guarantees the interest rate during the term of the CD. The longer the term, the higher the rate – and the higher the penalty for closing the CD early. With a savings account, you’re limited to six withdrawals or transfers per month. Otherwise, you can empty the account at any time without paying a penalty. You can’t lock in the interest rate on a savings account, though, since the bank can change the interest rate at any time.

2. Am I better off keeping my cash in savings?

CDs work best if you’re confident you won’t need to access a certain amount of money for a specified period of time. Let’s say you have $10,000 laying around that you can safely say you won’t need to use for two years. In a high-yield savings account earning 2.45%, you would earn $496.00 over two years with annual interest compounding — and potentially even more, if your bank compounds interest more frequently. If you put that money into a 2.90% 2-year CD, you would earn $588.41 (compounding yearly) once the account matures. The extra interest income is easy money, considering the ease of opening an account online. However, if you think you might need to use the money in the next couple of months, especially if your finances are already a little rocky, a savings account is a much better idea for its better flexibility.

It’s important to note that deposit rates are a bit in flux right now, due to the uncertainty surrounding the federal funds rate (more on that below). But we’re currently seeing some high, favorable interest rates on 1-year CDs, rates that outstrip savings account rates.

If you can afford to part with the funds, “choosing a 1-year CD now does make sense rather than keeping the money in a savings account,” says Ken Tumin, founder of LendingTree-owned DepositAccounts.com. “However, it is possible that 1-year rates could go below some savings account rates.”

That’s why it’s important to compare rates before you sign up for a certain account.

Tumin also notes that there is an added tax benefit to opening a 1-year CD now over a savings account. With a 1-year CD, you can choose to have interest paid at maturity, or in 2020 on accounts opened now. Taxes would be owed on that interest for 2020, but not paid until 2021. Savings accounts, on the other hand, pay out interest each month. So a savings account opened today will generate interest income for the 2019 tax year.

3. What CD term length should I select?

The early withdrawal penalties on CDs can be significant. On a 1-year CD, 90 days’ worth of interest is a typical penalty, although it can reach as high as 180 days. On 2- and 3-year CDs, a 6-month penalty is about average. The impact of the penalty on your return can be significant: if you opened a one-year CD with a 2.65% APY and closed it after six months, you would forfeit half of the interest and earn only 1.32%. You would have been better off with a savings account paying 2.25%.

The worst case scenario is with the longest CDs. 5-year CDs usually have a one-year penalty for taking out funds early. If you open a 5-year CD and close it quickly, you could actually end up losing money.

Given the risk of early withdrawal penalties, it’s important that you’re completely confident that you will not need to withdraw the money early. Check that you already have enough savings in a flexible emergency fund to cover you for the next few years in the event of an accident or surprise trip to urgent care. Ask yourself whether your deposit would be put to better use paying off any debts. If you’re not completely convinced you can sock away that much money for such a commitment, go for a shorter CD term or a savings account.

As of right now, if you’re trying to jump on the best rates and have cash to stash away for years, your best bet is to lock in a 5-year CD to get the best rates possible.

“It doesn’t look like we’ll see another Fed rate hike in the first half of the year,” says Ken Tumin. “In the last month or two, we’re seeing some drops in CD rates.”

However, this downward movement looks like more of a correction being made by banks who may have boosted their CD rates too far too fast, instead of signaling the start of an industry-wide drop in rates.

“We won’t see a big drop until we see signs that the Fed will start cutting rates,” Tumin notes.

Tumin suggests finding long-term CDs with small or mild withdrawal penalties, like Ally. That way, in the event you do need to break into your funds (whether for an emergency or to move to a new, higher rate), you won’t lose the majority of your savings. So while there are still 5-year CDs out there with 3% APY and higher, you’re going to want to lock those in for the long term.

4. Should I consider my local bank or credit union?

The interest rates shown in this article are all from credit unions and online banks that offer products nationally. However, our product database includes traditional banks, community banks and credit unions.

If traditional banks offered better rates, they would have been featured in this article. Internet-only banks have dramatically better interest rates. That should not be surprising — because internet-only banks do not have branches, they are able to pass along their cost savings to you in the form of higher interest rates and lower fees.

If you’re worried about early withdrawal penalties, credit union CDs might be your best bet; on average, they tend to have lower penalties than banks. Pair that with high credit union CD rates, and you’ve got a winning savings combo. (Interestingly, while internet banks tend to offer the best CD rates, they also tend to assess bigger early withdrawal penalties than brick-and-mortar banks.)

How to find the best CD for you

If you don’t find an account that meets your needs in this article, you can use the MagnifyMoney CD tool to find the best rate for your individual needs. Input your zip code, deposit amount and term. The tool will then provide you with CD options, from the highest APY to the lowest.

Even though CDs are traditionally pretty structured, you still have hundreds of options available to you. If your savings goal is years in the future, look closer at longer terms like 5- and even 10-year accounts. If you don’t quite have thousands of dollars to stash away, you can find a bank that requires a lower minimum deposit, if at all. You can also find select no-penalty CDs, which tend to be around one year long or less.
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Banking

Editors’ Choice: Best Checking Accounts for January 2021

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

 

Reviewed By

The best checking accounts can provide a competitive interest rate, ATM fee reimbursements and even cashback rewards. If your current account doesn’t offer any of these features, it may be time to switch.

Why Trust Us?

At MagnifyMoney, it is our mission to inform our readers about the best financial opportunities out there. Our insights have been cited by top financial publications including Marketwatch, CNBC and the Wall Street Journal.

Our dedicated team of financial experts spent dozens of hours grading each checking account on its features, including fees, minimum balance requirements, ATM and branch network availability, APYs and customer satisfaction. We distilled our picks from a list that included hundreds of banks, credit unions and online institutions nationwide.

We ensure our list is updated every month as new banks are added to our database, and we update information as banks change their terms. Check out our best checking account picks for October 2020 and click on the links in the table below to read about why we picked each bank.

Please note: While this list is up-to-date as of this writing, many banks have cut back on or even halted their hours temporarily in response to the COVID-19 outbreak to protect their customers and employees. Many banks continue to offer standard services online and over the phone as well as through automated ATMs.

Best Checking Accounts of January 2021

Summary of the Best Checking Accounts for January 2021

Best Overall Checking Account

Ally Bank Interest Checking

Ally Bank Review

Best High-Yield Checking Account

Consumer Credit Union Rewards Checking

Consumer Credit Union Review

Best Free Checking Account

Axos Bank Rewards Checking

Axos Bank Review

Best No-Fee Checking Account

Discover Cashback Debit

Discover Bank Review

Best Checking Account Bonus

HSBC Premier Checking

HSBC Premier Review

Best Rewards Checking Account

Radius Bank Rewards Checking

Radius Bank Review

Best No-ATM Fee Checking Account

TD Bank Beyond Checking

TD Bank Review

Best Business Checking Account

Axos Bank Business Interest Checking

Axos Bank Review

Best Checking Account for Students

Chase College Checking

Chase Bank Review

Best Joint Checking Account

PNC Virtual Wallet Checking Account

PNC Virtual Wallet Review

Best Overall Checking Account – Ally Interest Checking

Highlights:

  • Free access to Allpoint ATMs and up to $10 in ATM fee reimbursements per statement cycle
  • No required minimum opening deposit
  • 0.10% APY on balances less than $15,000; 0.25% APY on accounts with a minimum daily balance of $15,000
  • APY: Up to 0.25%
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: Ally Bank’s Interest Checking account features minimal fees, variable interest and added perks like up to $10 in ATM fee reimbursements every month. The bank itself has a solid history of consistently offering top-tier rates, even in a plunging rate environment.

All of Ally Bank’s banking products support joint ownership, and you are allowed up to four owners on the account without any additional fees.

What to watch out for: There’s not much to watch out for with this account, just be aware of the $25 overdraft fee.

Best High Yield Checking Account – Consumers Credit Union Rewards Checking

Highlights:

  • Access to over 30,000 ATMs
  • Most lucrative rates require minimum direct deposits or spend on CCU Visa credit card
  • APY: up to 4.09%
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: The Consumers Credit Union has routinely offered sky-high rates, even in a plummeting rate environment, earning this account the title of Best High-Yield Checking account.

While this is a tiered rate account, the lower tiers — which can be earned with fewer requirements — still offer attractive rates that are well above those offered by other banks and credit unions.

What to watch out for: While balances between $10,000 and $25,000 — regardless of your tier — earn an APY of 0.20%, it’s worth noting that balances over $25,000 earn an APY of just 0.10%.

Additionally, if you don’t meet the monthly activity requirements, you’ll earn an APY of just 0.01% and won’t receive ATM refunds. The account also has an overdraft fee of $30.

Best Free Checking Account – Axos Bank Rewards Checking

Highlights:

  • No overdraft or non-sufficient funds fees
  • Unlimited domestic ATM fee reimbursements
  • APY: up to 1.25%
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: We have crowned the Axos Bank Rewards Checking account as the Best Free Checking account not only for its attractive features, but for its consistency, too.

The Axos Bank Rewards Checking account has consistently offered competitive APYs — even as earning rates drop at other banks. This account also offers all of the bells and whistles that the best standard checking accounts have been known to include, like ATM fee reimbursements and no overdraft fees.

What to watch out for: The Axos Bank Rewards Checking account is a tiered, interest-earning variable rate account. So, in order to earn the 1.25% APY, you must meet the following requirements:

  • Receive monthly direct deposits totaling $1,000 or more
  • Use your debit card for a total of 15 transactions per month minimum of $3 per transaction)

If you don’t meet those requirements, you will receive a reduced APY from what is advertised. There is also a $50 minimum balance required to open this account.

Best No-Fee Checking Account – Discover Cashback Debit

Highlights:

  • No insufficient funds fee
  • Access to over 60,000 no-fee ATMs
  • 1% cash back on up to $3,000 of debit card purchases per month
  • APY: None
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: The Discover Cashback Debit checking account is a truly no-fee checking account, with no fees, no insufficient funds fees and access to over 60,000 ATMs.

As the icing on the cake, this account offers 1% cash back on all debit card purchases, up to $3,000 per month. This is a unique perk among checking accounts, and if you prefer cash back to earning interest, this could be the account for you.

What to watch out for: There aren’t too many surprises with this account, just be aware that fees for non-Discover ATMs may apply.

Best Checking Account Bonus – HSBC Premier Checking

Online HSBC Premier Checking

SEE DETAILS Secured

on HSBC’s secure website

Member FDIC

Highlights:

  • Unlimited ATM fee rebates within the U.S.
  • No foreign transaction fees
  • $50 monthly service waived if you meet any one of the requirements
  • APY:0.01%
  • Maintenance Fee: $50
  • Current Promotions: $450 welcome bonus

Read the full review

Why we picked it: HSBC is currently offering up to a $450 welcome bonus for those who open and fund a new Premier Checking account by March 31, 2021. To earn the bonus, you must make recurring monthly qualifying direct deposits totaling at least $5,000 from a third party to your HSBC Premier checking account for three consecutive calendar months, beginning the second full calendar month after account opening. You also must be a new HSBC customer to take advantage of this offer, and fund your new account with new money.

What to watch out for: The Premier Checking account earns a dismal 0.01% APY on balances of $5 or more. It also charges a hefty $50 monthly fee.

Best Rewards Checking Account – Radius Bank Rewards Checking

Highlights:

  • Earn up to 1.00% cash back on debit card purchases
  • Offers early direct deposit
  • Unlimited ATM fee rebates
  • APY:0.10% on balances between $2,500 and $99,999, 0.15% on balances over $100,000
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: Radius Bank’s Rewards Checking account features a robust rewards program, offering up to 1.00% cash back on debit card purchases as well as a decent APY on the funds in your account. There is a minimum $100 opening deposit required for this account.

This account also stands out for offering unlimited ATM fee rebates, an early direct deposit feature and no fees.

What to watch out for: To earn the cash back, you must maintain a minimum balance of at least $2,500.

Best No-ATM Fee Checking Account – TD Bank Beyond Checking

Highlights:

  • No fees at TD Bank ATMs, and reimbursed fees for out-of-network ATMs for accounts that maintain a daily balance of at least $2,500
  • No required minimum opening deposit
  • Overdraft fees reimbursement offered up to two times per year
  • APY: Up to 0.03%
  • Maintenance Fee: $25
  • Current Promotions: N/A

Read the full review

Why we picked it: TD Bank’s Beyond Checking account is a great option for those who prioritize fee-free access to ATMs.

With this account, not only do you receive fee-free ATM access to TD Bank’s network of ATMS, but if you maintain a minimum daily balance of at least $2,500, TD Bank will reimburse you for any fees incurred at out-of-network ATMs.

What to watch out for: Be aware of the dismal APY offered, and note that there is also a $35 overdraft fee associated with this account.

Best Business Checking Account – Axos Bank Business Interest Checking

Business Interest Checking

SEE DETAILS Secured

on Axos Bank’s secure website

Member FDIC

Highlights:

  • Unlimited domestic ATM fee reimbursement
  • Up to 50 free transaction items per month
  • Monthly service fee can be waived if you maintain an average, daily minimum balance of $5,000
  • APY: Up to 0.81%
  • Maintenance Fee: $10
  • Current Promotions: $100 welcome bonus for businesses that incorporated after June 1, 2020

Read the full review

Why we picked it: Axos Bank’s Business Interest Checking account stands out among other business checking account products for a myriad of reasons, most notably its surprisingly low fees.

Additionally, Axos Bank throws in a number of freebies with its Business Interest Checking account, from ATM fee reimbursements to free checks, making it our pick for the Best Business Checking Account.

What to watch out for:Transactions are $0.50 each after the first 50, and there is a $100 minimum opening deposit required for this account.

Best Checking Account for Students – Chase College Checking

Chase College Checking

SEE DETAILS Secured

on Chase Bank’s secure website

Member FDIC

Highlights:

  • $6 monthly service fee waived for up to five years if you are 17 to 24 years old, have proof of student status and are enrolled in college, or if you meet any one of Chase’s monthly requirements
  • No monthly service fee on a Chase Savings account linked to this account for overdraft protection
  • APY: None
  • Maintenance Fee: $6
  • Current Promotions: $100 welcome bonus for businesses that incorporated after June 1, 2020

Read the full review

Why we picked it: The Chase College Checking account is a great option for students, as it waives its monthly service fee for those between the ages of 17 and 24 who have proof of a student status, for up to five years while in college.

With widespread ATM access, the ability to pay friends with QuickPay or Zelle and a robust mobile app, this account checks all the boxes for college students.

What to watch out for: For this account, you’ll need to show proof of student status. Also, there’s a $2.50 non-Chase ATM fee and $34 overdraft fee associated with this account.

Best Joint Checking Account – PNC Virtual Wallet

Highlights:

  • Free access to 18,000 ATMs, plus two PNC ATM fee reimbursements per statement cycle and up to $5 in fee reimbursements from other financial institution’s ATM surcharges per statement cycle
  • Budgeting tools and features
  • Fee waiver
  • APY: N/A
  • Maintenance Fee: $7, but waived if certain requirements are met
  • Current Promotions: N/A

Read the full review

Why we picked it: The PNC Virtual Wallet is a standout checking account that supports joint ownership. This account comes with a plethora of budgeting tools that can help couples manage their money more effectively, such as the ability to create budgets for different spending categories and set up alerts for certain account activities. This account also waives its $7 monthly maintenance fee if you have a minimum of $500 in monthly direct deposits or if you maintain a monthly balance of $500 in the Spend + Reserve account — both of which are easier to achieve with two people owning the account, as opposed to one.

What to watch out for: If you can’t meet the monthly qualifications to waive the monthly service fee, you’ll have to pay $7 per month. Additionally, your balance does not earn interest.

Other Honorable Mentions

Charles Schwab High Yield Investor Checking: This account from investment firm Charles Schwab offers a few attractive perks like unlimited ATM fee rebates worldwide, no monthly fees or minimums and no foreign transaction fees. However, the Charles Schwab High Yield Investor Checking account falls flat with its paltry 0.03% APY, which can’t quite compete with the Best High Yield Checking Account, the Consumers Credit Union Rewards Checking account, which earns up to 4.09% APY.

Aspiration Spend and Save: The Aspiration Spend and Save cash management account is one of the most fee-friendly accounts out there, even allowing you to pay a monthly fee in an amount that you think is fair. Aspiration comes with the added bonus of access to over 55,000 ATMs, cash back rewards — especially at conscience-minded businesses. However, to reap the real benefits (including up to 0.00% APY on balances in your Save portion), you will have to pay $15 per month for Spend and Save Plus.

Betterment Checking and Cash Reserve: Another cash management account, Betterment Checking and Cash Reserve maximizes your FDIC insurance up to $1 million and provides unlimited transfers in and out of your account. It also earns interest at 0.40% APY.

Chase Premier Plus Checking: A step up from Chase’s basic checking account, the Chase Premier Plus Checking account earns interest (although at a paltry 0.01% APY) and waives select fees, including on the first four non-Chase ATM transactions per month. However, its features don’t quite justify the $25 monthly service fee, which you can only waive by meeting certain requirements.

Chime: The mobile-first Chime account is great for individuals who have trouble with traditional checking accounts. It allows you to receive direct deposit up to a couple days early, grow savings automatically and even overdraw your account for free if you meet certain eligibility requirements. Chime also provides free access to over 38,000 ATMs, which you can access with the account’s linked debit card. Despite all these perks, Chime doesn’t earn any interest on account balances. However, Chime does stand out for having a robust, no-overdrafting policy.

TIAA Bank Yield Pledge Checking: Despite TIAA Bank’s Yield Pledge promise, which ensures their rate will always remain among the top 5% of competitive accounts, the Yield Pledge Checking account earns a pretty low APY of 0.12%. Luckily, there is no monthly service fee, nor fees for out-of-network ATM usage. Plus, you can get reimbursed for ATM surcharges. This made it a strong contender for our Best Overall Checking Account.

Varo Money: Pioneering fintech company Varo offers a pretty much fee-free, checking-like cash management account, where customers who meet certain requirements can overdraft up to $50 at no cost. Varo also can get you your paycheck up to two days early with direct deposit, offers fee-free access at over 55,000 Allpoint® ATMs and provides a free Varo Visa® Debit Card, which you can lock in the app at any time. Though all of these perks are nice, the checking account doesn’t earn interest; you’ll have to open the Varo Savings Account for that.

Capital One 360 Checking: The Capital One 360 Checking account is easily accessible via its debit card, mobile and online. There’s no fee or minimum balance to worry about. You also get access to over 39,000 Capital One or Allpoint ATMs for free. However, it can’t quite keep up with its competitors with its low 0.10% APY.

Bank5 Connect High-Interest Checking: Bank5 Connect’s High-Interest Checking account isn’t always so high-yield, as it earns 0.20% APY. Still, the account is relatively customer friendly as it doesn’t charge any monthly maintenance fees and offers free access to thousands of ATMs nationwide in addition to up to $15 in surcharge reimbursements.

How we chose the best checking accounts

We took a look at hundreds of financial institutions and reviews. We considered the following factors:

  1. Checking account rates: We heavily weighted the APYs offered by each institution on their checking accounts, paying attention to both high interest rates and consistent rates. Higher and more consistently competitive interest rates were prioritized over others, respectively.
  2. Minimum deposit and balance requirements: We also controlled for accessibility by looking at minimum deposit and balance requirements, prioritizing banks and accounts that have low requirements or none at all.
  3. Bank account fees: The best bank accounts are the ones that don’t cut into your hard-earned money. We favored checking accounts that don’t charge monthly service fees or ATM fees, as well as those that offer ATM-fee reimbursements.
  4. Special offers: As an added bonus to their checking accounts, some institutions offer cash bonus offers for new customers or even cash-back rewards for debit card usage. We made sure to include these special accounts and offers so you can get more from your account.
  5. Specialized accounts: Checking accounts aren’t one-size-fits-all — nor should they be. We looked for specialized accounts that have specific features made for certain groups, like students to joint account holders.

What are the best banks for checking accounts?

In summary, these are our picks for the best checking accounts:

What should I look for in a checking account?

When shopping for a checking account, keep in mind that their main purpose is to provide a convenient and safe place to stash the cash you use for your daily spending. With that in mind, factors such as safety, ease of use and minimal costs should be top-of-mind. When looking for checking accounts, that means finding accounts with zero fees, a wide ATM network, Federal Deposit Insurance Corporation (FDIC) insurance and overdraft protection. Accounts with these features, alongside earned interest or rewards, are your best bet.

Understand what you want from a checking account

A great first step to finding the right checking account is first understanding what you want from a checking account. Of course, you’ll want an account that’s easily accessible. But only you can decide whether that means prioritizing brick-and-mortar branches, mobile app access or worldwide ATMs. As debit cards are a big part of accessibility, also make sure you’re getting a debit card that’s protected.

Figure out what kind of fees — if any — you want to pay for your checking account. No fee checking accounts exist, and they’re some of the best checking accounts on the market.

If you’re a senior citizen, a student or perhaps a couple looking for joint account ownership, these are things to consider when making your checking account wishlist. There are several specialized accounts out there that offer special deals and features for members of these groups.

Then determine whether you want your checking account to earn interest or other rewards. Often these rewards only add to the checking account experience, rewarding you for owning the account rather than you paying to own it. Rewards on some accounts may also offset any fees you face.

If you don’t know where to start, it helps to check out high-yield checking accounts first. These accounts are most often free, easily accessible, provided by reputable institutions and, as an added bonus, can earn you money.

Also consider that perhaps it’s not a checking account you need at all, but rather a prepaid debit card account. You deposit money into prepaid cards as you would with a checking account, but you cannot use more than what’s in the account. This allows you to avoid overdrafting your account and paying the exorbitant fees that often come with that. Just watch out: prepaid debit cards are also known for their multiple fees for reloading the card, monthly service, ATM usage and more.

Find an account with few or zero fees

There are many checking accounts that charge little to no fees. Online banks, in particular, offer checking accounts with zero fees, as they are able to save on the operational costs that burden brick-and-mortar banks. Some checking accounts even offer unlimited ATM-reimbursements or a monthly allowance for reimbursable ATM surcharges.

Since many checking accounts offer little to no interest, it’s even more critical to opt for an account with minimal fees. Common checking account fees include:

  • Maintenance fees
  • Minimum balance fees
  • ATM fees
  • Overdraft fees

Even if you’re using a high-yield checking account, why pay your bank fees for access to your own cash? It’s a good idea to check for bank fees when shopping for a checking account. If your checking account has any monthly balance or spending requirements, make sure you stay within those limits to avoid any unnecessary fees.

Check for widespread ATM access

There’s nothing worse than needing cash in a pinch and not having any way to get some. Then even when you find an ATM, it’s out of your bank’s network so to add insult to injury, you’re charged a fee (or two) for using the ATM.

Avoid this situation by finding a checking account that offers widespread ATM access. Often, this isn’t even brick-and-mortar banks which may offer free access to a few thousand branded ATMs across the country. Online banks tend to go above and beyond, offering free access to tens of thousands of ATMs, often worldwide, through ATM networks like AllPoint and MoneyPass.

Look for FDIC Insurance

You want to make sure your money is protected no matter what. FDIC insurance — and National Credit Union Administration insurance for credit unions — insures your money up to legal limits, which for an individual’s checking account would amount to $250,000. This means that up to $250,000 in your checking account will be recovered if your bank or credit union fails.

In the event of institution failure, you’ll either get a check for the amount that was in your checking account, or set up with a new account for the same amount at another insured institution.

Look for Overdraft Protection

Overdraft protection is a crucial feature, especially if you’re often at risk of overextending your funds. This feature works in a few different ways, depending on the institution and the account. Often, a bank’s overdraft protection will link your checking and savings accounts, drawing on your savings account when you overdraft from your checking account. Other iterations may simply not allow you to overdraft the account at all.

Typically, you have to enroll in overdraft protection. Some accounts charge an extra fee for overdraft protection, but many of the best no-fee checking accounts offer this feature for free.

Look for a checking account that pairs with a high-yield savings account

You might want to pair your checking account with a high-yield savings account if you’d like to maintain your day-to-day spending but stash away a portion of your cash to earn a higher rate of return in longer-term savings.
This is also a great option for those who don’t want to be tempted with the ability to easily spend their savings on everyday needs.

If this is what you’re looking for, start by finding a checking account that fits your daily spending needs, is easily accessible and FDIC-insured. You can then track your spending and set up regular deposits into a separate, high-yield savings account for any excess cash you don’t spend. Keep in mind that not all savings accounts are created the same, and it’s worth shopping around for the best rates when it comes to your savings account.

If you want your money to do more for you with less maintenance, online checking is the way to go.

Where do households have the most checking accounts in 2020?

More than 90% of households in the nation’s 100 largest metros have a checking account in 2020, according to data from Standard & Poor’s. But some metros have higher percentages of households with checking accounts than others, according to MagnifyMoney’s research. And almost 6 in 10 of the metros have a lower percentage of households with checking accounts in 2020 than they did in 2015.

Key takeaways

  • If you’re looking for places where checking accounts are more prevalent, look to the Pacific Northwest. Seattle tops the list with 95.4% of households having a checking account. Portland, Ore. (94%), and Boise, Idaho (93.5%), are the metros with the next highest percentage of households with checking accounts.
  • Only 88% of households in Detroit have a checking account. Detroit is tied with two California metros — Bakersfield and Fresno — at the bottom of our list of the 100 largest metros.
  • New York state appears to have more cities with a lower percentage of households with checking accounts than the rest of the nation. Albany, Buffalo, New York City, Rochester and Syracuse all are in the bottom 10 metros with checking accounts in 2020.
  • Of the 100 largest metros, 39 had a higher percentage of households with checking accounts than they did in 2015. However, 58 metros saw the percentage of households with checking accounts fall in the past five years. Three metros — New Haven, Conn; Boston; and Lansing, Mich. — saw no changes from 2015 to 2020.

Methodology

In June 2020, MagnifyMoney used Standard & Poor’s data to examine the percentage of households with checking accounts in 2020 in the 100 largest metropolitan statistical areas (MSAs) in the U.S. Using further S&P data, we then compared them to the percentage that had a checking account in 2015.

FAQs: What should I know about checking accounts?

A checking account is a bank account for your day-to-day spending needs. They typically come with a debit card, which allows you to make purchases and provides quick and easy access to cash, making it a safer option than carrying cash. Many checking accounts are also offered with paper checks.

Unlike savings accounts, checking accounts typically have no transaction limits, making them the most liquid option for your money aside from holding large amounts of cash. Checking accounts are also FDIC-insured which adds peace of mind.

Checking accounts are used for your everyday spending needs and generally don’t carry interest (however high-interest checking accounts do exist); by contrast, savings accounts usually carry higher interest rates and are meant for you to save money over the long-run.

Keep in mind that savings accounts will typically restrict access to your cash to around six withdrawals per month while checking accounts allow you almost unrestricted access to any cash you hold in the account.

It’s a good idea to maintain a free or no-fee checking account for day-to-day use. Generally speaking, the best checking accounts allow unfettered access to cash and carry no monthly fees, ATM-fees, or other account surcharges.

It’s generally better to keep just enough in your checking account to cover your daily needs, meet any minimum balance requirements and avoid any possible overdraft charges.

Despite their everyday usefulness, checking accounts aren’t the best places to stash your cash long-term. Savings accounts usually offer higher interest rates, making them a better place to store cash.

There are many free checking account options out there. Some options — especially those offered by online banks — are free accounts that even offer extra features like interest and rewards. Keep in mind that many banks will still feature things like inactivity fees, minimum balance requirements or paper statement charges for their “free checking” accounts.

If you’re paying monthly maintenance fees, minimum balances fees or even third-party ATM fees, it’s worth it to do some research, as there are other accounts out there that will give you more bang for your buck and won’t nickel and dime you for it either. Shop around to find the best free checking account for you.

Yes, many checking accounts earn interest, although the amount offered is typically far less than rates offered by savings accounts or money market accounts.

If you’re looking for the best high-yield checking account, many smaller banks and credit unions offer Kasasa checking accounts, which are essentially free checking accounts that offer higher interest rates, so long as you meet a few monthly requirements.

Checking account interest is taxed if you earned $10 or more in interest in a year. For all your interest-earning deposit accounts, your bank should send you a copy of Form 1099-INT, which they will also send to the IRS. This form will help you report the interest income on your tax return. If you don’t receive this form from your institution, but still earned $10 or more in interest, you will still have to report the interest on your taxes.

If you were lucky enough to earn $1,500 or more in interest, you will have to detail the sources of that income on Schedule B of Form 1040.

Almost every checking account offered by major banking institutions is insured by the FDIC, which provides an account holder with up to $250,000 in federal deposit insurance in the event the underlying bank runs into trouble.

As with any other deposit account, it’s easy to find out whether your checking account has FDIC coverage. You can check to see if your financial institution has FDIC insurance by looking for the “Member FDIC” tag that often appears at the bottom of the bank’s marketing materials.

FDIC insurance covers deposits in checking accounts, savings accounts, CDs and money market accounts, up to $250,000 per ownership category per person within a single financial institution. Credit unions receive deposit insurance from the National Credit Union Administration (NCUA), up to $250,000 per owner, per insured credit union, per account category.

One checking account should suffice for most shoppers. However, there may be instances where you’d want to open multiple checking accounts to help keep your finances organized or separated for different purposes.

For example, many small business owners have their own business checking account to segregate their professional finances from their personal finances.

Some parents may even want to open separate student checking accounts to help teach their kids or budding college students financial responsibility and keep track of their finances.

Keep in mind that you can also open joint checking accounts, which make it easier for couples and those who share their lives to also share finances and track spending. With a joint account, two or more people share ownership, and can deposit and withdraw funds from the same checking account.

Every checking account will feature a routing number and an account number. These two numbers are associated with your bank account and serve as unique identifiers for your account.

The routing number associated with your checking account is a nine-digit string of numbers that identifies the institution that manages your checking account.

Your bank account number identifies your personal account and is the unique identifier that your bank uses to direct cash or wire transfers, track your balance, and rout payments as needed.

If you were rejected after trying to open a checking account, it’s probably because you have a rocky past with previous accounts. When you apply for new bank accounts, most institutions run your information through ChexSystems, which keeps a record of your banking history when institutions report it. This means any history of overdrafts, negative account balances, account closures and the like will be available for ChexSystems users to see.
If you were rejected from opening a new checking account, take a look at your ChexSystems report. It may help to figure out what bad marks on there you may be able to change. There may even be errors on the report that you can dispute and have removed.

A second-chance checking account is a type of checking account available to those who might not otherwise qualify for a traditional checking account due to their credit or ChexSystems history.

It may be worth exploring a second-chance checking account if your banking history might have been blemished by closing an account with a negative balance or outstanding fees.

Typically, second-chance checking accounts have lower spending limits, fewer features and may charge monthly maintenance fees. However they exist mainly to assist people who are determined to get their financial lives back on track. Once you’ve had the chance to rebuild your credit history, you may be able to trade back up for a standard checking account.

Deposit accounts, including checking and savings accounts, are not included in your credit report, since you’re not borrowing money from these kinds of accounts. So the way you use your checking account or even when you close a checking account doesn’t affect your credit.

If you overdraft your checking account and don’t pay back what you owe to your institution, however, that can land in your credit report if the institution sends it to collections. That’s because it’s become more about your debt, which is reported in credit reports, than simply your checking account.

Overdraft protection works a lot like it sounds: it protects you when you overdraft your account. Often, overdraft protection links your checking account to a savings account. Any time you overdraft your checking account, funds are automatically pulled from the savings account to cover the purchase.

Other institutions may offer overdraft protection that simply doesn’t allow you to overdraft the account. This prevents the transaction from going through, but also prevents you from facing an overdraft fee and recovering the extra cost.

Depending on the type of overdraft protection and the institution, overdraft protection can come at an extra fee, or it could be free.

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