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The Best IRA Savings Accounts

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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Saving enough for retirement remains a daunting goal for many Americans. A 2018 survey by financial services company Northwestern Mutual found 41% of respondents worried about their retirement savings. Individual retirement accounts (IRAs) can help keep your blood pressure down by providing you with a powerful savings tool for retirement with significant tax advantages.

While you may associate IRAs with investing in stocks and bonds, one of the safest places to open an IRA is with a bank or credit union in the form of a savings or money market account. The list of IRA savings accounts below are the best for earning a high interest rate on your savings while keeping your future nest egg secure.

Top 10 IRA savings accounts of September 2020

Account

Minimum opening deposit

APY

Premier Members Credit Union IRA Money Market Account (Traditional, Roth)

$0

2.00%

Patelco Federal Credit Union Money Market Select IRA (Traditional, Roth, CESA)

$0

2.00%

Latino Community Credit Union IRA Share Account (Traditional, Roth, SEP)

$25

1.26%

Signature Federal Credit Union IRA Savings (Traditional, Roth, CESA)

$0

1.00%

Communitywide FCU IRA

$2,000

1.00%

Ally Bank IRA Online Savings Account (Traditional, Roth, SEP)

$0

0.80%

Lake Michigan Credit Union (Traditional, Roth)

$5

0.80%

TIAA Bank Yield Pledge Money Market IRA

$500

0.75%

Capital One 360 IRA Savings (Traditional, Roth)

$0

0.65%

Alliant Credit Union IRA Savings (Traditional, Roth, SEP)

$0

0.65%

Premier Members Credit Union IRA Money Market Account (Traditional, Roth) — APY 2.00%, minimum deposit $5

Premier Members Credit Union is the merged company formed by two well-established credit unions: Boulder Valley Credit Union and Premier Members Federal Credit Union. It caters to residents of Colorado, but you can also join through their affiliation with Boulder Valley School District’s charity Impact on Education. It’s worth noting that you’ll only earn this high APY on your first $2,000. After that, the rate drops down in tiers.

SEE DETAILS Secured

on Premier Members Credit Union’s secure website

NCUA Insured

Patelco Federal Credit Union Money Market Select IRA (Traditional, Roth, CESA) — APY 2.00%, minimum deposit $0

Just as Premier’s rate is dependent on the size of your deposit, Patelco Federal Credit Union also steps down its APY the more money you have invested; the rate begins dropping after $2,000. Patelco is based in California, and you’re eligible to join if you live, attend school or worship in certain California communities. Students at a few universities also qualify, as do employees of one of their member companies and associations. If none of these apply to you, you can also join by becoming a member of the nonprofit Financial Fitness Association, and your first year is on the credit union.

SEE DETAILS Secured

on Patelco Credit Union’s secure website

NCUA Insured

Latino Community Credit Union IRA Share Account — 1.26%, minimum deposit $25

This North Carolina credit union offers its banking products to anyone in the nation so long as they make a one-time $10 donation to the Latino Community Development Center, a nonprofit promoting financial literacy and general economic development “for low-income Latino and other immigrant communities in North Carolina,” according to its mission statement.

The credit union offers an IRA share account — their version of a savings account — with either a Traditional, Roth or SEP plan. The account requires a minimum deposit of $25 and currently earns an APY of 1.26%.

SEE DETAILS Secured

on Latino Credit Union’s secure website

NCUA Insured

Signature Federal Credit Union IRA Savings — 1.00% APY, $0 minimum deposit

Membership in the American Consumer Council qualifies you to join up with this Virginia-based credit union, which offers Traditional, Roth and CESA IRAs. The barrier to funding these IRAs couldn’t be lower—there’s no minimum deposit required, meaning you could open an IRA savings account with the change you find under a couch cushion (though we recommend trying to save more for your retirement). The APY should also entice you, as the interest earned starts to rapidly drop off the further you get down this list.

SEE DETAILS Secured

on Signature Federal Credit Union’s secure website

NCUA Insured

Communitywide Federal Credit Union IRA — 1.00% APY, minimum deposit $2,000

Anyone can become a member of Communitywide FCU by joining the Michiana Goodwill Boosters or the Marine Corps League of St. Joseph Valley. Communitywide offers both traditional IRA and Roth IRA accounts, with a $2,000 deposit needed to open, with dividends paid into the account on a quarterly basis.

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on Communitywide Federal Credit Union’s secure website

NCUA Insured

Ally Bank IRA Online Savings Account— 0.80% APY, $0 minimum deposit

Ally may be an online-only bank, but its history stretches back to the beginning of the 20th century as a financial institution that helped automaker General Motors finance sales. In its current iteration, Ally offers a wide range of competitive savings products, including an IRA account that earns an APY of 0.80%. Ally offers three different types of plans: Traditional, Roth and SEP, covering a variety of retirement needs while offering a high rate of return.

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on Ally Bank’s secure website

Member FDIC

Lake Michigan Credit Union Money Market Savings — APY 0.80%, minimum deposit $5

You don’t have to belong to any specific industry, company or organization to join Lake Michigan Credit Union. Becoming a member allows you to access all of their products and services and requires only a minimum donation of $5 to the ALS (Amyotrophic Lateral Sclerosis) Foundation if you live outside Michigan or Florida.

Lake Michigan Credit Union offers traditional and Roth IRA plans, with no maintenance fees. The APY is 0.80%.

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on Lake Michigan Credit Union’s secure website

NCUA Insured

TIAA Bank Yield Pledge Money Market — APY 0.75%, minimum deposit $500

You might be more familiar with TIAA as an investment company, but it also operates a banking division based out of Islandia, N.Y. You can open an IRA within a Yield Pledge Money Market account at this bank with an APY of 0.75%. The only catch is that this rate applies for a term of one year; after that, it will drop back down to the normal rates (currently 0.50%0.60%, depending on your balance level). In addition, if you already have a Yield Pledge Money Market account or a Yield Pledge Checking account at TIAA, you can’t open this account with the same money. It’ll need to come from elsewhere.

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on TIAA Bank’s secure website

Member FDIC

Capital One IRA Savings Account — APY 0.65%, $0 minimum deposit $0

Capital One offers a range of products, including checking, savings, credit cards, loans and this IRA account. Both Traditional and Roth IRAs are available. You’ll pay no monthly fee and earn the APY on your entire balance. Capital One was established in Richmond, Va., in 1994.

Alliant Credit Union IRA Savings— APY 0.65%, minimum deposit $0

Although based in Illinois, it’s a simple matter for anyone in the country to join this credit union. A $10 donation to Foster Care to Success qualifies you for membership and the ability to take advantage of Alliant’s personal banking products, including their IRA Savings account.

Alliant offers three different plans for its IRA savings: Traditional, Roth and SEP. The APY is 0.65%.

SEE DETAILS Secured

on Alliant Credit Union’s secure website

NCUA Insured

What’s the benefit of an IRA savings account?

Like any IRA account, an IRA savings account provides tax advantages to the saver. The exact benefits depend on the IRA plan or type you choose. While the two most common types of IRA offered are Traditional and Roth, more specialized versions of the account are also available, including:

  • Simplified Employee Pension (SEP): A type of IRA that can be used by either small business owners on behalf of their employees, or by self-employed individuals, the SEP IRA functions similar to a Traditional IRA — except it has a much higher annual contribution limit. You can contribute 25% of your annual compensation to the plan or $57,000 (whichever is the lesser), and like a Traditional IRA, those contributions are tax-deductible.
  • Savings Incentive Match Plan for Employees (SIMPLE): Another IRA tailored for small-business owners or those who are self-employed, SIMPLE plans allow you to put up to $13,500 of your business net earnings into the account, where the money remains tax-deferred until you start taking your withdrawals.
  • Coverdell Education Savings Account (CESA): This account aids with saving for education costs for those 18 years old or younger, but functions similar to a Roth IRA with more limits. For example, the beneficiary must be 18 years or younger when the account is set up (or be a special needs beneficiary), and you can make a maximum contribution of $2,000 per year. Only those with modified adjusted gross incomes of up to $110,000 ($220,000 if filing a joint return) may make a contribution to the account, and the contributions are not tax-deductible. The beneficiary can use the funds from the CESA for qualifying expenses toward their education.

How does an IRA savings account work?

You can contribute money to your IRA savings account anytime, just as you would with an ordinary savings account. However, because this is an IRA product, it’s still subject to a 2020 contribution amount limit of $6,000 (or $7,000 if you’re age 50 or older), the same as an IRA account at a brokerage firm.

In that same vein, the penalties for withdrawing money early from your IRA remain in effect for the IRA savings account. Taking money from your Traditional IRA savings account incurs a 10% penalty if you’re younger than 59 1/2 years old (and assuming you don’t qualify for one of the special circumstances allowing a penalty-free withdrawal, such as a first-time home purchase).

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Banking

Best Savings Accounts for Kids

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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Piggy banks are fun for small change, but if you want to teach your kids important lessons about managing money and the power of compound interest, get them their own savings account. While your local bank branch probably offers more than one savings account product, you might consider looking online for one that’s designed with children in mind.

To aid in your search, we have chosen six savings accounts tailored for kids from a selection of nearly 100 kids’ savings options offered at banks and credit unions around the country. We based our selections on how well they met these five criteria:

  • Competitive annual percentage yield (APY): Accounts should demonstrate the rewards you can get by saving your money, and a competitive interest rate helps achieve that objective.
  • Low fees: Kids don’t need to lose their money to fees, so finding an account with zero fees was important.
  • Low minimum deposits: Most kids don’t have a large amount of money to save when they first open an account. Having a low minimum deposit requirement can help them get started quicker.
  • Broad geographical reach: Banks and credit unions need to be available to a large geographic market, with extra points for physical locations where kids can go and deposit cash and coins.
  • Great educational tools: Savings accounts that are geared to kids should have some educational tools to help them learn about what it takes to achieve financial success. Bonus points if the tools are fun, too.

 

Best overall savings account for kids: Capital One

Kids Savings Account from Capital One Capital One’s Kids Savings Account has all of the features you’d expect to see in a savings account for adults but with the additional feature of parental controls, which makes it a great overall solution for kids of all ages. The account earns 0.50% APY, has no monthly fees and can be opened with $0. You can set it up the account, and make your initial deposit at a later date.

The Kids Savings Account parental controls allows parents to sign into the account under their own usernames and passwords to help their children manage their funds. Parents always control transfers in and out of the account, offering good balance between independence for the young holder and parental oversight. Kids get to view their balance and watch their money grow.

Capital One lets you create an automatic savings plan linked with other accounts, so you can automatically transfer your child’s allowance into their Kids Savings Account. When it comes to geographical reach, Capital One has approximately 500 branch locations, as well as a great mobile banking app, which allows you to deposit checks and check balances.

Capital One Kids Savings Account
APY: 0.50%
Monthly Fees: $0
Minimum Opening Balance: $0

SEE DETAILS Secured

on Capital One’s secure website

Member FDIC

Best savings account for college savings: Citizens Bank

CollegeSaver from Citizens Bank (RI) If you want to be rewarded for consistent savings, the Citizens Bank CollegeSaver account has a bonus you might consider. If you open the account before your child is six and make a deposit of at least $25 each month until your child turns 18, Citizens Bank will give you a $1,000 bonus (the current account APY is a low 0.01%). You can also open this account if your child is between 6 and 12 years of age, but the minimum monthly deposit will be $50 and opening deposit is $500.

If you were to open the account today with an initial deposit of $25 upon the birth of a child (and assume the current APY held for 18 years), and then deposit $25 a month for 18 years, your $5,400 investment would accrue $24.48 in interest. Add the bonus and you’ll end up with $6,449.48. The bank doesn’t put any stipulations on how the money can be spent, so you can use the balance for college or any other financial needs.

Citizens Bank CollegeSaver
APY: 0.01%
Monthly Fees: $0
Minimum Opening Balance: $25 for children under six years old; $500 for children age six to 12

SEE DETAILS Secured

on Citizens Bank (RI)’s secure website

Member FDIC

Best savings account for a young child: PNC Bank

S is for Savings from PNC Bank If you want to engage your child with educational tools, PNC’s S is for Savings account offers a lot. Granted, this account offers the lowest APY of the banks that made this list, but it makes up for it with its interactive online banking experience.

The Learning Center features Sesame Street characters that will help them learn basic money concepts. The site has fun activities you and your child can do together.

Features include the ability to set up automatic savings deposits that help them see the benefits of having a savings routine. Kids can work towards goals and learn about the three components of money: saving, sharing and spending. As your child gets older, you may choose to transfer their accumulated balance to a savings account at a bank that offers a higher interest rate.

PNC Bank’s S is for Savings
APY: 0.01%
Monthly Fees: $0 for account holders under 18
Minimum Opening Balance: $25

Best savings account for teens: Alliant Credit Union

Kids Savings Account from Alliant Credit Union When your child turns 13, Alliant Credit Union considers them to be a young adult, offering their High-Rate Savings Account with a 0.65% APY and no monthly fees. For teens who want to set savings goals, the credit union allows them to set up supplemental accounts that can be earmarked for specific items, such as saving for a new car.

What makes this a great option for a teen is that Alliant also offers an interest-paying teen checking account for kids ages 13-17. The checking account earns an APY of 0.25%. The two accounts can be linked and both will earn your teen interest. Alliant also refunds up to $20 per month in ATM fees if the teen uses out-of-network machines.

To open an account at Alliant Credit Union, you must be a member. Membership is open to employees or former employees of partner businesses or organizations. Or you can join by making a $10 donation to the Foster Care to Success Foundation.

Alliant Credit Union High-Rate Savings:
APY: 0.65%
Monthly Fees: $0
Minimum Opening Balance: $5

SEE DETAILS Secured

on Alliant Credit Union’s secure website

NCUA Insured

Best APY for a kid’s savings account: Spectrum Credit Union

MySavings from Spectrum Credit Union Spectrum Credit Union currently offers the highest interest rate on the market for a kid’s savings account, but only on a relatively limited balance. Spectrum’s MySavings account earns 7.00% APY on account balances up to $1,000, making for a rate that’s higher than many CDs. Balances over $1,000 earn the regular savings rate, which is 0.40%. A high interest rate can help get kids excited about savings as their balance will grow quicker.

Spectrum Credit Union currently has branches in six states, but deposits can be made nationwide through the Credit Union CO-OP Shared Network. Membership is open to anyone by joining the Contra Costa County Historical Society ($15 membership fee) or the Navy League of the United States ($25 annual membership fee).

Spectrum Credit Union MySavings
APY: 7.00% for the first $1,000; 0.40% on balances above $1,000
Monthly Fees: $0 for account holders under 18
Minimum Opening Balance: $0

SEE DETAILS Secured

on Spectrum Credit Union’s secure website

NCUA Insured

Best online tools for a kid’s savings account: Capital One

Kids Savings Account from Capital One Kids are digital natives, and that makes a kid’s savings account’s online banking features extra important. In addition to being our pick for best overall savings account for kids, the Capital One Kids Savings Account offers a great selection of online saving and budgeting tools that will keep kids engaged and informed.

One of the best features is the ability to create additional savings accounts and set a target goal for each account. For example, you child may set a goal for holiday gifts, another goal for a new bike or car and another goal for vacation money. They can even give each account a nickname, such as “My Wheels Fund.”

Capital One has a full suite of online tools for your child to track their progress and success, helping to keep them focused on their goals. Capital One also offers standard features on its mobile banking app, some of which are available for kids, including the ability to check their balance or make a mobile deposit.

Capital One Kids Savings Account
APY: 0.50%
Monthly Fees: $0
Minimum Balance: $0

SEE DETAILS Secured

on Capital One’s secure website

Member FDIC

Why your kid should have a savings account

It’s never too early to start teaching your kids about money, and a savings account is a great tool to help accomplish this aim. According to the 9th Annual Parents, Kids & Money Survey by T. Rowe Price, 55% of parents said their child has a savings account, but just 23% of kids said that they talk to their parents frequently about money. Parents who discuss financial topics with their kids at least once a week are more likely to have kids who say they are smart about money than than those who do not have a discussion with their children.

Savings accounts show kids the value of saving at an early age. They get to watch their money grow as compound interest work its magic, and they can set short- and long-term goals for the money they save. The reward of achieving the goals will teach life lessons on patience and planning. Once you open an account for your kids, share money management tips with them, things like “paying yourself first” by saving a portion of gifts and allowances they receive instead of spending it all.

When you teach your child good money habits early on, you help set them up for success later in life. Putting your child on the path for financial responsibility and independence by choosing the best savings account for kids could be the greatest gift you can give them.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Reviews

Fitness Bank Savings Review

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

Fitness Bank’s savings account option

Fitness Savings Account

This unconventional savings product offers customers the chance to earn an outstanding APY when they are physically active. The daily average number of steps you took in the previous month determines the APY you earn on your account balance. The table below outlines the five earning tiers that this bank currently offers:
APY Tiers*Minimum Balance to Earn APYSteps Required
0.50%$1500-4,999
0.75%$1005,000-7,499
0.85%$1007,500-9,999
0.95%$10010,000-12,499
1.05%$10012,500+

If you are a US citizen age 65 or older, you qualify for a different rate schedule:

APY Tiers*Minimum Balance to Earn APYSteps Required
0.75%$1000-4,999
0.85%$1005,000-7,499
0.95%$1007,500-9,999
1.05%$10010,000+
  • Minimum opening deposit: $100
  • Minimum daily balance to earn APY: $100
  • Monthly account maintenance fee: $10, waived by maintaining the minimum daily balance.
  • ATM fee: N/A
  • ATM fee refund: N/A
  • Overdraft fee: $40

These rates truly are outstanding if you live an active lifestyle. The first month, everyone gets highest APY regardless of number of steps they take. After that, your APY will be assigned based on your daily average number of steps over the course of the prior month. Needless to say, if you don’t live a very active lifestyle, or if you have a health condition that would prevent you from meeting the step requirements, this may not be the best account for you.

This bank charges a $10 monthly maintenance fee if you don’t maintain a minimum average daily balance of $100. If you’re not confident you can maintain this minimum, you may want to look at a checking account rather than a savings account — keep in mind, however, that Fitness Bank only offers a savings account. If you meet the minimum balance requirement, the monthly maintenance fee will be waived.

This savings account does not come with an ATM card or checks. You are limited to six certain withdrawals and/or transactions per month, per Regulation D, which is enforced by the federal government, although banks do have some flexibility in allowing more than six per month in certain cases. At Fitness Bank, if you make more than six withdrawals per month you will be charged a $10 fee for each additional withdrawal.

If you want to go above and beyond achieving the highest APY available from this account, you can join one of Fitness Bank’s challenges. Every month, there is a step challenge where you can compete with all other participating Fitness Bank members to get the highest number of average daily steps. Top competitors will be awarded with prizes at the end of the month. You can also set up challenges just for your family or friend group, or for a group of employees participating in a workplace challenge.

How to get Fitness Bank’s savings account

Opening a savings account at Fitness Bank is a straightforward process. The bank boasts account setup will take you less than two minutes.

You’ll fill out a quick online application, supplying basic information like your name, address and Social Security number, along with documentation of your driver’s license or passport. Then you’ll need to provide funding information, namely your bank account number, credit card or debit card.

SEE DETAILS Secured

on FitnessBank’s secure website

Member FDIC

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How Fitness Bank’s savings account compares

This bank offers phenomenal rates. At the time of writing, they offer the highest savings account rate in the market — if you can rack up the steps needed to earn it. In addition, you will have to be comfortable doing your banking 100% online with this savings account. You will not receive a checkbook or ATM card – all of your withdrawals and deposits will be completed via electronic transfer. If you’d prefer ATM access or the ability to visit a physical branch, Fitness Bank is not the right match for you.

The minimum deposit required to open and maintain an account without incurring a monthly maintenance fee isn’t outrageous. But you can find savings accounts offering somewhat competitive rates without these requirements. And to repeat, you’ll have to meet the step requirements; if that challenge goes unfulfilled, the advantages of saving with Fitness Bank wane. Its rates get progressively less competitive the fewer steps you take.

Overall review of Fitness Bank’s banking products

This bank offers a unique financial product aimed at promoting wellness. Its minimum balance and deposit requirements are fairly average for the industry, as are its fees. While its offerings are fair and get more generous as you take more steps, you will likely find better rates elsewhere if you cannot realistically meet these specific fitness standards. If you can, though, you’re in for some of the best rates on the market.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.