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How to Write a Check

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

Writing a personal check has almost become as obsolete as using a floppy disk or folding a paper map. In today’s digital age, whether you are buying milk or a pair of shoes, paying bills or giving back money you owe to a friend, you typically pay for it all using a debit card, credit card or a money app. They are faster and easier to use than writing out a paper check, and sometimes come with rewards.

However, there are certain circumstances where personal checks are preferred. “Some landlords ask for the rent to be paid by check and some people do not have access to apps or smartphones,” said Erin Lowry, author of “Broke Millennial Takes On Investing: A Beginner’s Guide to Leveling Up Your Money.”

“Most people also write a check when they are gifting money at a wedding or graduation, even though at those events you can still use apps like Venmo or PayPal.”

If you do not know how to write a check, or the last one that you wrote was back in 1992, here are the step-by-step instructions you need:

Date: Write the date that you wrote out the check. “You can also post date a check for it to be cashed at a later time,” said Kara Stevens, founder of The Frugal Feminista and author of “The Happy Finances Challenge.”

“Just make sure that no matter what date you write on the check, the funds are available [that day],” she said.

Pay to the order: On this line, write out the name of the person or business whom you are paying. For example, let’s say Aunt Mabel fronted you $50 for movie tickets, you would write out her full name, Mabel Smith, on this line. Paying for groceries at Walmart? Then write “Walmart” here. Sending your dentist a payment for your root canal? The dentist’s full and legal business name must be written out. Ask what it is if you are not sure.

In some situations, you may not want to put a name on this line. Instead, you can write the check out to “cash” so it can be cashed or deposited by anyone. It’s convenient, yes, but it comes with the risk that someone you didn’t intend to can find it and deposit or cash it.

Amount in numbers: In the box next to the dollar sign, write in the numeric amount of the check. For example, if you are paying back Aunt Mabel, you would write the amount as $50.00 or $50.—. How to write a check with cents? If the amount has dollars and cents, write it like this: $105.93.

Amount in words: On the long line in front of “dollars,” write out the dollar amount of the check in words and the cents as a fraction. For example, Aunt Mabel’s $50 would become “Fifty and 00/100.” The price of those cool shoes as dollars and cents would be written as “One hundred five and 93/100.”

Then, draw a line from the end of the fraction to the end of the line. “Drawing this line prevents someone from fraudulently changing the amount,” said Stevens.

Most importantly, the numbers in the box must match what’s written out in words. “When my husband and I got married in 2018, we received a check that had $100.00 written in the box, but ‘Two hundred and 00/100’ written out. We couldn’t cash it because of this discrepancy,” said Lowry.

Signature: Every check must be signed legibly by you. Some stores have machines that will automatically fill in everything on the check for you except your signature. Only do this at the store and watch that the check has been completely filled out. “Do not sign a blank check,” said Stevens. “Anyone can fill in their name and cash it.”

“Once you are done, record the date of the check as well as the check number, amount and who you wrote it out to in your checkbook register,” said Stevens, who said that to stay organized, you should write out your checks in numerical order.

Memo: Stevens said that the memo section is often overlooked, but should be used every time you write out a check. “Write a reminder for yourself here that you bought a gift for mom or repaid a friend,” she said. It’s not necessary to write out a memo, but over time, you may not remember what the check was for. Since banks no longer send copies of the check back to you once they are cashed or deposited, you can still see a picture of the check and your memo electronically.

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Voiding checks: When setting up a direct deposit or automatic bill payment, an employer or bank may need a voided check from you. To write a void check, simply write the word VOID in big capital letters across the entire face of the check. “It prevents someone else from cashing it,” said Stevens.

Account numbers: On the bottom of your checks, there are two sets of important numbers that you should memorize. The one on the left is your bank’s routing number and the number on the right is your personal checking account number. Knowing these numbers is important in case you lose your checks or must call the bank.

Stevens also suggests keeping your extra checks in a safe location inside your home. “If someone does break in, they can steal your checks and use them to take money from you,” she said. “Treat your checkbook as you would your credit or debit card.”

Keep in mind that when you write a personal check to pay for items, you may be asked to show identification.

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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Lisa Iannucci |

Lisa Iannucci is a writer at MagnifyMoney. You can email Lisa here

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Banking

What Is a Wire Transfer?

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

There are plenty of reasons you might need to send money from your bank account, and a wire transfer can be an easy way to get the job done. They’re speedy, convenient and can help you make large payments — such as putting a down payment on a home or helping a sick relative with medical expenses — on short notice.

What is a wire transfer?

A wire transfer is the process of sending money to someone, either domestically or internationally, from one bank or credit union to another through their secure systems. Those internal systems include services like SWIFT or Fedwire, but today, wire transfers can also be sent by alternative providers, such as Western Union, TransferWise and MoneyGram.

Completing a wire transfer is pretty straightforward, but there are some key pieces of info you need in order to send one:

  • Your recipient’s full name and address
  • Your recipient’s bank account number and bank routing number
  • The amount you want to wire

Some banks might also require a specific code to identify where you’re sending your money. The type of code you use — including SWIFT codes, BIC codes or IBAN codes — will vary depending on the bank and whether the money is being sent internationally.

Many banks and credit unions allow you to send wire transfers through your account online, while others require that you come in and fill out paperwork. Once all the documents are filled out, the bank will charge you a fee for the service (more on that below) and your money will be on its way.

How long does a wire transfer take?

How long it takes to complete a wire transfer depends on a few factors. Domestic wire transfers are typically sent the same day, but it also depends on how the recipient is receiving the money.

For example, if the recipient chooses to receive the funds at a Western Union location, they may be able to get the wire transfer in just a few hours. Meanwhile, a domestic bank-to-bank wire transfer can take one to two business days.

Sending an international transfer can take several days, depending on your bank and the receiving country’s processing system. To find out exactly how long an international wire transfer will take, check with your specific bank or credit union.

There are also some speed bumps worth watching out for — especially when it comes to international transfers.

  • Western Union’s rules state that funds may be delayed or services rendered unavailable based on the amount sent, the destination country, currency availability, identification requirements and differences in time zones, among other complications.
  • Chase’s Global Transfer stipulates that they process wire transfers through their own internal review process, and they may contact the sender to verify their request. That could delay the wire transfer.

As a result, an international wire transfer could take a few days to show up in the recipient’s account. It may not be an instant transfer, but it’s usually faster than mailing a check.

How much does a wire transfer cost?

The fee for sending a wire transfer varies based on the amount you’re sending, whether you’re using your bank or an alternative provider like Western Union and whether the transfer is domestic or international.

Domestic wire transfers cost $4 at Walmart, which uses the cash transfer service MoneyGram. At some banks and financial services companies, those fees can be a lot higher: Ally charges $20, while Wells Fargo charges $30.

International wire transfers are typically a lot more costly. Banks typically charge about 5% on the daily exchange rate in addition to hefty international money transfer fees, so a $10,000 transfer could cost you up to $500 in fees to your bank, plus other fees.

Some banks and credit unions do not charge a wire transfer fee to their account holders, but there might be stipulations. For example, Chase Global Transfer does not charge a wire fee if their account holder is sending an online wire of $5,000 or more to a bank outside the U.S. in foreign currency.

Keep in mind, too, that you can send a wire transfer through such services as Western Union or TransferWise using money from your credit card, but your credit card company considers wire transfers a cash advance and may charge you cash advance fees and higher interest rates. That’s in addition to the fees you will be charged from whichever service you use.

Are wire transfers safe?

Wire transfers are generally considered to be secure, but there is one major issue to keep in mind: Once you’ve sent the money, you can’t get it back.

Hopefully you’ve never fallen for the “You won a trip, now wire us a deposit to hold your spot!” scam and you’re always sending your wire transfer to someone you know and trust, but there also more convincing wire transfer scams out there.

Fraudulent schemes include one where you’ve been told that you won a jackpot and need to secure your money, and another where Facebook scammers pose as your friends, messaging you that they’re in trouble and financial help. Always double-check in these situations.

Additionally, the Consumer Financial Protection Bureau (CFPB) has issued rules to protect consumers who send money electronically—typically over $15—to foreign countries. It won’t cover every situation, so you should still be careful who you are sending money to, but it does provide some protection.

For example, CFPB rules generally require that banks and wire transfer companies disclose the exchange rates and fees that are collected by the company—as well as information on when the funds will be available to the consumer—before you send your money.

If there are any problems, the rules also state that consumers have 30 minutes (and sometimes more) to cancel a transfer. The CFPB also requires companies to investigate if a consumer has a problem or claims that their money has not arrived.

Sending a wire transfer safely is all about staying vigilant and aware. Here are a few tips to keep your money safe from fraud:

  • Always know the person or business you’re sending money to.
  • If your friend messages you on social media that they are in trouble and need money, take caution. Ask them a question only they would know the answer to, or ask for some other proof of identification.
  • If you are purchasing a home and receive a phone call from a settlement company to send money in order to close, verify that information with your mortgage broker before sending a dime.
  • Do your due diligence: Make sure the items you purchase and the person you purchase them from are legit.

What are the alternatives to wire transfers?

If a wire transfer doesn’t seem like the best option for you, there are some other options available. Here are some of the alternatives to consider:

  • P2P payment apps: There are plenty of peer-to-peer (P2P) payment apps used widely by consumers today, including services such as PayPal and Zelle, or mobile apps such as Venmo and Cash App. These services come with their own potential fees, and may limit how much you can send — that being said, they’re convenient to use and even allow you to pay multiple parties at once.
  • ACH transfers: Automated Clearing House (ACH) transfers are often used for “direct deposit” payments, such as when you receive your paycheck electronically or pay your credit card bill online. These transfers are pretty similar to wire transfers, but with some different limitations: For example, you cannot use third-party services like TransferWise with ACH payments, and there often some restrictions on the amount you can send.
  • Joint bank accounts: If you’re regularly sending money to a family member or spouse, it may be worth opening a joint bank account together. That way, you can both withdraw and deposit from a shared source of funds.

So is a wire transfer is your best way of sending money? That depends on where the funds are going, how much you’re sending and how quickly you need it to get there. Above all, it’s important to know your options — and potential security risks — before sending money in any form.

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.

Dillon Thompson
Dillon Thompson |

Dillon Thompson is a writer at MagnifyMoney. You can email Dillon here

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Banking

Best Savings Accounts

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

Interest rates on savings accounts vary greatly, which means you need to shop around to find your best rate available. It’s possible to find rates reaching well past 2%, while the average savings account rate stands at around 0.27% (as of December 2019). This is why we check rates daily at more than 5,000 U.S. banks and credit unions, to make it easy for you to gain the best possible return on your savings.

The savings account table below allows you to compare savings account rates offered by financial institutions such as online banks, credit unions, community banks and the big nationwide banks. The best savings account rates are published at the top of the table, and APYs decrease as you scroll down the list. Feel free to filter the results by location and investment amount for more customized results.

A savings account is a key component of everyone’s financial life. Whether you’re shopping around for a new savings account or you need to open one for the first time, this comprehensive guide should help you get started. Below, you’ll find the best savings accounts to choose from, and a full brief on every aspect of selecting the right account for your needs.

Everybody needs something a little different from their savings account. That might mean you want to maximize your interest earnings, while others might need easy branch access. For that reason, we’ve outlined the best savings accounts in several different categories to better help you find the right one for your preferences.

Best Savings Account Rates from Top Online Banks

Some people really put an emphasis on banking with a well-known, dependable bank that offers high rates and great features. For this reason, we’ve compiled a list of the big online banks that have had competitive rates for two consecutive years and either don’t require a minimum deposit amount or have a low minimum deposit amount requirement.

1. Synchrony Bank – 1.80% APY, no minimum deposit to open accounts

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Synchrony Bank, a subsidiary of Synchrony Financial, has been around since 1932. The bank’s history has been deeply rooted in the credit card industry, but it’s done a great job establishing itself as a top online bank over the years.

Back in 2014, having a savings account that offered a 1.00% APY was rare, but Synchrony Bank established itself by offering this rate. Since then, it has consistently offered one of the top savings account rates in the market; currently, it’s offering a 1.80% APY. There isn’t a minimum deposit requirement to open the account or earn the APY. There are also no monthly fees.

You can fund this savings account a number of ways: ACH, mobile check deposit, direct deposit, wire transfer, or a mailed check. Incoming transfers will typically take three business days to post unless you initiated the transfer after 10pm EST.

One really big perk of this account is that it comes with an ATM card — Synchrony is partnered with the Accel network for ATM access. You will be limited to withdrawing a maximum of $1,000 per day, and if you use an out-of-network ATM domestically, Synchrony will refund you up to $5 per statement cycle. Synchrony Bank has a mobile app for your convenience.

2. American Express National Bank – 1.75% APY, $1 minimum balance amount

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While this institution was established in 1989, American Express National Bank can trace its roots back to 1850 when its parent company, American Express, was originally founded. Not unlike Barclays, American Express is widely known for its credit card products.

With our sponsored advertiser, American Express National Bank, you can also open deposit accounts like its Personal Savings Account. Luckily for banking customers, the account historically offers good rates that consistently land it in top rankings. Today, you can take advantage of its 1.75% variable Annual Percentage Yield (APY), as of 11/7/2019, with any deposit amount. The account doesn’t charge a monthly fee, nor any fees for wires or to deposit checks.

This high yield savings account does not come with an ATM/debit card or checks. You can deposit money by mailing a check and make online transfers to and from your account. When pulling funds from your external bank, it will take five business days to appear in your account when you initiate the transfer from your Personal Savings account, and one to three when you initiate through your external account. Sending funds from your Personal Savings Account will take one to three business days no matter which side you initiate from. American Express Personal Savings is accessible online only; it does not have a mobile app.

3. Goldman Sachs Bank USA – 1.70% APY, no minimum deposit to open account

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Marcus by Goldman Sachs® is a brand of Goldman Sachs Bank USA that powers the bank’s online savings accounts, as well as its personal loans. Marcus launched its online savings account in 2016 with a competitive rate (at the time). While savings rates have fluctuated, continue to do so, this online brand has continued to offer a consistently competitive rate on its savings account. Today, the bank is offering a 1.70% APY. There isn’t a minimum deposit amount or balance requirement to earn the APY — plus, this account doesn’t come with any monthly fees either.

You can easily fund the account by either transferring your funds directly from a linked external bank account, setting up direct deposit, sending a check or sending a domestic wire transfer. While you can deposit as much as $1 million per account, you’ll only be able to transfer a maximum of $125,000 per outgoing transfer when initiated online. Marcus does give you the option to call its customer service number if you need to withdraw more than that amount. Keep in mind that you’ll be limited to making six certain withdrawals or transfers per statement period.

One downside to this online-only bank is that it doesn’t currently have a mobile app that allows you to conduct transfers, so you’ll have to conduct transfers on Marcus’ website. However, the online bank did join forces with Clarity Money, a personal finance app from Goldman Sachs Bank USA. Through Clarity Money, you’ll be able to monitor your account and manage your finances in a simple way.

4. Barclays – 1.70% APY, no minimum deposit to open account

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Barclays originated in London over 300 years ago. In 1965, Barclays incorporated Barclays Bank in California, and in 1971, incorporated Barclays Bank of New York, where its Wealth unit is now based. While the bank has a presence in several U.S. cities, it settled its headquarters in Wilmington, Del. in 2001, where the online business currently resides.

While Barclays had been predominantly making a name for itself in the credit card space, the bank launched its online savings account in 2012 with a fairly competitive rate. Since its launch, the bank has remained consistent with its rate and even decided to up its game in March 2019 to compete with the other online banks. Today, Barclays holds on to a 1.70% APY, and doesn’t require a minimum amount to open the account or a balance to earn that APY.

You can fund the account by transferring funds via ACH, setting up direct deposit, mailing a check or uploading a picture of a check via the bank’s Deposit Checks feature. Be aware that Barclays may hold your deposited funds for up to five business days if deposited by check or electronically. If you fund the account via ACH or transfer from another bank, the funds will be available immediately. The maximum amount that you can withdraw or deposit is $250,000 per transaction.

If having the ability to bank at the palm of your hand is important to you, you’ll be happy to know that Barclays has a mobile app.

5. Ally Bank – 1.70% APY, no minimum deposit to open account

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Ally Bank traces its history back to 1919, when it was GMAC, a division of GM designed to help auto dealers finance and maintain their inventory. It became Ally Bank 90 years later in 2009 and now offers a range of financial products well beyond auto loans.

Today’s Online Savings Account rate may not be the highest we’ve seen from Ally Bank, but it has remained a top competitor nonetheless. Its 1.70% APY will still yield solid savings and requires no minimum deposit to get started. There’s no monthly fee here, either, which allows your savings to grow effortlessly. Ally Bank is relatively low on fees and maintains transparency around the fees it does charge — these include outgoing domestic wires, paid overdraft items and excessive transactions.

As an online bank, Ally Bank doesn’t allow for cash deposits to be made into its Online Savings Account, though you can still deposit checks remotely with Ally eCheck Deposit and make online, wire and mail transfers in and out of the account. You can also make transfers out of your account over the phone and by requesting a check. Online transfers between Ally Bank accounts are immediate, while transfers between Ally Bank and non-Ally accounts take three business days. Free next-day transfers are available to select customers depending on account tenure, account activity and transfer activity.

Ally Bank offers an extensive and helpful mobile app that allows you to make deposits, pay your bills, transfer money, find in-network ATMs and view your balances and transactions. You can download the app on various platforms including Android, iOS and Windows.

Best Rates from New Online Savings Accounts

Over the last year or so, there have been a ton of new online banks being created by bigger banks or big banks introducing new online savings options. This list includes those banks that have either launched within the last two years or introduced a brand-new savings account with consistently high rates within the last two years.

1. HSBC Direct – 2.05% APY, $1 minimum deposit to open account

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HSBC Direct is the online-only offering from HSBC Bank USA, which traces its history back to the Hongkong and Shanghai Banking Corporation Limited in 1865. As part of HSBC Bank USA, the HSBC Direct Savings account earns a competitive 2.05% APY on all balances. You must open an account with at least $1 in new money, meaning money not already on deposit with HSBC. There is no monthly fee to worry about here.

HSBC Direct provides Money Management Tools that are designed to help you manage your money, set goals and stick to a budget. This includes email alerts for bills, low balances and fees, customizable goals and comparable income and spending.

When you have an HSBC US account, you can pay bills and make transfers and other payments in the Move Money section. Transfers in and out of the account typically take three to five business days to clear. Deposits into the account are limited to $3,000 daily and $5,000 monthly. An ATM or debit card is not included with this account.

Take advantage of the HSBC Mobile Banking App for further accessibility, like mobile check deposit. You can find it in the App Store and Google Play.

2. Vio Bank – 2.02% APY, $100 minimum deposit to open account

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Vio Bank is an online division of MidFirst Bank which was founded in 1911.

Vio Bank has certainly been a recent stand-out candidate for its competitively high rates on its CDs as well as its High Yield Online Savings Account. It currently earns 2.02% APY and compounds interest daily for better savings. Plus, there’s no monthly fee. You will need at least $100 to open the account. It’s better to stick to electronic statements here, because paper statements cost $7 each.

Vio Bank doesn’t provide debit cards or check writing capabilities on its High Yield Online Savings Account or any other accounts. Instead, you’ll have to make online ACH transfers. Deposits into the account may take five or more business days. You’re limited to $25,000 daily and $100,000 monthly on transfers to and from external accounts initiated by Vio Bank. There aren’t any limits on transfers initiated outside, though. You can fund your High Yield Online Savings Account by mailing a check, depositing a check on mobile or sending an incoming wire.
In addition to its online presence, Vio Bank extends itself to a mobile app, as well, which allows you to manage your accounts and make transfers on the go. It is available in the Apple App Store and Google Play Store.

3. North American Savings Bank (NASB) — 1.97% APY, $50,000 minimum deposit to earn APY

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Founded in 1927, North American Savings Bank is headquartered in Kansas City, Mo. It is a full-service bank with a range of deposit and lending products. You can find NASB locations in the Kansas City area.

NASB’s High Rate Savings account reserves its 1.97% APY for high balances between $50,000 and $5 million. Any balance outside of that range that will earn 0.10% APY instead. Whatever your balance, NASB guarantees your rate for six months after opening. You’ll need at least $50,000 to open the account. There is no monthly fee to worry about, and you will have to enroll in E-Statements.

You can access your account online, over the phone and through Mobile Banking, which includes Mobile Check Deposit.

4. CIT Bank – 1.85% APY, $100 minimum deposit to open account

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CIT was founded in 1908 in St. Louis, Mo., and is now headquartered in Pasadena, Ca. CIT’s personal banking sector also includes OneWest Bank in Southern California.

The 1.85% APY on the Savings Builder account isn’t earned outright. When you open the account, it will start earning at a 2.176% interest rate from the day you open it through what’s known as the first “Evaluation Day,” which falls a couple months after opening. On each Evaluation Day, CIT will determine whether you qualify for the 1.85% APY for the next month. You can qualify by either maintaining a balance of $25,000 or more or making at least one monthly deposit of $100 or more. Failure to meet these requirements will bump your APY down to 1.24%. Interest is compounded daily.

You’ll need at least $100 to open a Savings Builder account. It does not charge a monthly maintenance fee. You can fund your Savings Builder account through electronic fund transfers, mailed checks or wires. You can use these same methods to transfer money out of your account; just note, though, that an outgoing wire will cost $10 for accounts with a balance of less than $25,000.

The CIT Bank mobile app provides another outlet to manage your accounts, deposit checks and make transfers.

5. CIBC USA – 1.85% APY, $1,000 minimum deposit to open account

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CIBC, or Canadian Imperial Bank of Commerce, began as two Toronto-based banks: The Canadian Bank of Commerce (founded in 1867) and the Imperial Bank of Canada (founded in 1875) — the two banks merged in 1961. CIBC expanded into the U.S. in 1991 with CIBC U.S., and established its headquarters in Chicago. You can find CIBC USA locations in Illinois, Michigan, Missouri and Wisconsin.

The online-only CIBC Agility™ Online Savings Account offers a competitive 1.85%APY on all balances, although you’ll need at least $1,000 to open an account and get started. It does not charge a monthly fee, so your savings can keep growing uninterrupted.

To withdraw funds from your account, you can make transfers between accounts (both internal and external) or submit a request in writing for a check to be issued in your name. To deposit money, you can also make ACH transfers or send a cashier’s or personal check to CIBC USA in either the bank’s name or your name. Check deposits are placed on a 10-day hold.

In addition to online account access with CIBC NetBanking, you’ll also have further on-the-go access with the CIBC US Mobile Banking App.

Best High-Yield Savings Accounts

If the feature you care about the most is the rate a bank offers on a savings account, this list is for you. These banks are currently offering the highest savings account rates.

1. FitnessBank – 2.30% APY, $100 minimum deposit to open account

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Personal goals often revolve around health and money and Fitness Bank seeks to seamlessly bring those together. Fitness Bank is a division of Affinity Bank, which was founded in 2002.

The Fitness Savings Account earns interest on balances over $100. The exact APY you earn on your Fitness Savings Account depends on your average daily step count which is calculated each month. The top rate of 2.30% APY is reserved for customers who log 12,500 steps or more. The rate drops to 2.00% APY for an average daily step count between 10,000 to 12,499; to 1.75% APY for 7,500 to 9,999 steps; and to 1.25% APY for 5,000 to 7,499 steps. Finally, the rate plummets to 1.00% APY if you’re logging 4,999 or fewer steps. When you open a new account and have at least $100, the account will have an initial APY of 2.30% until the rate adjustment date after the first full month.

You need at least $100 to open a new Fitness Savings Account. You must also maintain a $100 minimum average daily balance in order to waive the $10 maintenance fee. There is no fee for incoming wires. You can deposit money into your account through online transfers, which typically take three to five days to post.

To track your steps, you will need to download the FitnessBank Step Tracker app. Then you can link it with your Garmin, FitBit, Apple Health or Google Play.

2. BrioDirect – 2.20% APY, $25 minimum deposit to open account

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For the next best high-yield savings rate, head to BrioDirect which doesn’t require any physical commitment from you. BrioDirect is an online brand of Sterling National Bank, founded in 1888, which manages and holds your accounts.

Open a BrioDirect High-Yield Savings account with just $25 to start. You’ll also need to maintain at least $25 in the account to earn the 2.20% APY. There is no monthly fee and the only other posted fees are a $10 excessive transaction charge and a $35 overdraft/insufficient funds fee.

You can transfer money between your BrioDirect savings account and other accounts using the bank’s External Transfers feature online or by calling the bank. You can also fund the account by wiring the money or sending a check. There isn’t a BrioDirect-branded mobile app, but you can use Sterling’s Personal Mobile Banking app to manage your accounts.

3. CommunityWide Federal Credit Union — 2.10% APY, $1 minimum deposit

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CommunityWide Federal Credit Union was founded in 1967, originally as the West Washington Association Federal Credit Union. The credit union is headquartered in South Bend, Ind. CommunityWide is also a CO-OP member, which opens up branch and ATM access to thousands of shared branches across the country.

CommunityWide membership is open to members of select communities and groups, employees, retiree and donor member of select organizations, spouses of persons who died while within CW’s field of membership and immediate family household members of qualified members.

CW’s Funds account offers a higher interest rate than its standard savings account. You need just $1 to open the account and earn interest at its competitive 2.10% APY. The catch here is that you can make withdrawals from the account only on the 1st to 5th of each month. Withdrawals outside of this window will incur a penalty equal to seven days’ dividends.

You can access a CW Funds account online and on mobile. You can use Remote Deposit Capture on mobile to deposit checks. The Funds account accepts direct deposit and other recurring deposits.

4. SFGI Direct — 2.07% APY, $1 minimum balance

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Member FDIC

SFGI Direct is an online division of Summit Community Bank, which provides FDIC insurance on any SFGI Direct deposits. Summit Community Bank is headquartered in headquartered in Moorefield, W.V.

Open an SFGI Direct Savings account with just $500 and start earning interest at 2.07% APY with just $1. There is no monthly fee on the account.

SFGI Direct can be accessed online. You can set up online transfers in and out of the Savings account directly within your account.

5. Prime Alliance Bank — 1.96% APY, $10,000 minimum balance to earn APY

Prime Alliance Bank

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Member FDIC

Prime Alliance Bank was founded in 2004 and is headquartered in Woods Cross, Utah. This is its one location that you can bank at, otherwise reachable over the phone, email and fax.

Prime Alliance Bank’s Personal Savings account earns its competitive 1.96% APY on balances $10,000 and over. Balances between $1 and $9,999 will earn 1.86% instead, which is still a solid rate at which to grow your money. There is no monthly fee on the account.

You can access your account online and on mobile, where you can use Mobile Deposit to deposit checks remotely.

 

Best Savings Account Bonus Offers

Some banks offer cash bonuses to bring in new customers. There are often requirements that need to be met in order to qualify for these bonuses, so you’ll want to pay attention to those prior to applying. This list includes banks offer bonuses for opening a savings account.

1. Discover – $200 bonus with $25,000 minimum deposit + 1.70% APY on all balances

Discover Bank

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Member FDIC

Largely known for its credit cards, Discover also offers an array of high-yield deposit accounts. With roots as the Greenwood Trust Company, founded in 1911, Discover Bank came into being by name in 2000.

You have until January 6, 2020 to open a new Discover Online Savings Account and redeem this bonus offer. If you deposit at least $15,000 into the new account by Jan. 20, 2020, you’ll earn a $150 bonus. Deposit at least $25,000 by the same date, and you’ll earn a $200 bonus. If you qualify, the bonus will be deposited by Feb. 3, 2020. You can apply online or by phone using the code MM1219.

The account itself earns at a solid 1.70% APY, and interest is compounded daily. There are no minimum deposit or balance requirements or a monthly fee.

2. Citibank – $400 bonus with $15,000 minimum deposit

Citi

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Member FDIC

Based in Sioux Falls, S.D., Citi traces its history back to New York City in 1811.

Snag a $400 from Citibank by being a new customer an opening a Citibank Account Package by Dec. 31. Deposit at least $15,000 in either the checking or savings account within the package within 30 days of opening the account. The money must be new to Citibank and kept across both accounts for 60 days.

The Citibank Account package includes both the checking and savings account. There is a $25 monthly fee which you can waive with a $10,000 minimum balance across both accounts. The checking account earns a 0.01% APY, and the savings account will earn between 0.04% and 0.13%, depending on your balance. Citibank offers a mobile app to access your accounts.

3. Associated Bank — $400 bonus with $25,100 minimum deposit

Associated Bank, NA

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Member FDIC

Associated Bank was founded in 1970 when three Northeast Wisconsin banks merged. It is headquartered in Green Bay, Wisc.

Earn a $400 bonus when you open both an Associated Choice Checking account and an Associated Relationship Savings account by June 30, 2020. Open the Choice Checking account with at least $100. You must also make three payments through Associated Bank Online Bill Pay or at least one direct deposit of $300 or more within 45 days of account opening. Open the savings account with at least $25,000. You must maintain a $25,000 minimum combined balance between the two accounts for 90 days to receive the reward 120 days after account opening.

Email yourself a coupon code from the offer page to bring into a branch to redeem. Your new accounts must be funded with new money not already held with Associated Bank. Associated Bank employees and customers who already have or have had a checking account or Associated Relationship Savings account at Associated Bank within the last six months are not eligible for the offer.

The Associated Choice Checking account earns between 0.01% and 0.05% APY, where higher balances earn higher rates. There is a $25 monthly fee, which you can waive with at least $10,000 in combined deposit accounts or either an HSA or investment account. The Associated Relationship Savings account earns according to balance tiers, between 0.10% and 1.35% APY.

4. Chase – Up to $350 bonus with $10,000 minimum deposit and direct deposit in a qualifying checking account

Chase Bank

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on Chase Bank’s secure website

Member FDIC

Established way back in 1824, Chase is headquartered in Columbus, Ohio. It has a presence in 33 states and Washington D.C.

Another checking and savings mix-and-match bonus, you have until Jan. 21, 2020 to open a new Chase Total Checking account. Once it’s open, setting up direct deposit will snag you a $200 bonus. Earn another $150 when you open a Chase Savings account and deposit at least $10,000 in new money within 20 business days. You must also maintain that balance for at least 90 days.

The accounts themselves aren’t too remarkable. The Chase Total Checking account charges a $12 monthly fee unless you have direct deposits totaling $500 or more, a minimum $1,500 balance at the beginning of each day or a $5,000 average beginning day balance in combined account balances. The Chase Savings account also charges a fee, $5 per month, that you can waive with a minimum $300 balance at the beginning of each day, at least one repeating automatic transfer of at least $25 or more from your personal Chase checking account or Chase Liquid® Card, a linked Chase College Checking account for Overdraft Protection, an account owner younger than 18 or a qualifying linked account. Chase provides users with a mobile app to manage accounts.

5. Wells Fargo – $250 bonus with $15,000 minimum deposit

Wells Fargo Bank

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Member FDIC

Wells Fargo was founded in 1852 and is headquartered in San Francisco.

Earn a $250 bonus by opening a new Wells Fargo savings account with a $25 minimum deposit by Dec. 31, 2019 and depositing at least $15,000 in new money within 10 days of opening. New money means that it must not already be held in a Wells Fargo account. You must also maintain a $15,000 minimum daily balance for 90 days after account opening.

Wells Fargo requires you to open the new savings account in a branch with a valid bonus offer code which you can find online. The offer’s scope is very limited, serving only customers in Dallas, Texas and Washington, D.C.

Wells Fargo has two savings accounts. Way2Save Savings earns a mere 0.01%APY, while the Platinum Savings account earns either 0.05% APY or 0.90% APY, depending on your balance. Wells Fargo provides a mobile app for its customers to deposit checks and manage accounts on the go.

Best Savings Account Rates from Credit Unions

Some people prefer to do their banking with credit unions because of the member benefits that extend beyond the deposit accounts. This list includes credit unions that currently offer the best savings account rates for low and high depositors.

1. Digital Federal Credit Union – 6.17% APY, up to $1,000 account balance

Digital Federal Credit Union (DCU)

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NCUA Insured

Chartered in 1979, Digital Federal Credit Union is based in Marlborough, Mass. and is the largest credit union headquartered in New England by asset size. Eligibility for DCU membership is based on your family relationship to a current member, the company you work for or retired from, an organization you belong to or a community you’re a member of (where you live, worship, attend school, etc).

DCU offers its members a whopping 6.17% APY on its Primary Savings account. However, this high APY applies to the first $1,000 in your account. Everything over that will earn 0.25% APY. The account requires a $5 opening deposit and balance to maintain membership. There is no monthly service fee.

Transfers through DCU’s Payment Center impose a minimum amount of $0.01 and maximum amount of $2,500.

DCU offers account access through branches (both DCU and CO-OP), online, at ATMS and over the phone. There is no mobile app.

2. Blue Federal Credit Union — 5.00% APY, $25 minimum deposit

Blue Federal Credit Union

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Blue Federal Credit Union formed in 2016, as a merger of Wyoming-chartered Warren Federal Credit Union and Colorado-based Community Financial Credit Union. Blue has locations in Colorado and Wyoming, as well as thousands more CO-OP Shared Branches around the country.

With a Blue Federal Credit Union Accelerated Savings account, it’s best to keep a maximum of $1,000 in the account. Balances between $25 to $1,000 maintain the high rate of 5.00% APY, while anything over $1,000 drops to 0.10% APY. To earn dividends at all, you must maintain a $25 minimum balance and make a transfer of at least $5 per month into the account. Dividends are calculated daily and paid monthly.

Blue Federal Credit Union is accessible in person, over its 24/7 call center phone line, online and on mobile.

3. St. Mary’s Bank — 5.00% APY, $25 minimum deposit

St. Mary's Bank

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Founded in 1908, St. Mary’s Bank is headquartered in Manchester, N.H. It was the first credit union founded in America, known then as St. Mary’s Cooperative Credit Association. All its locations are in New Hampshire, but membership is open to anyone who purchases one share of capital stock for $5.

For higher-than-usual savings at St. Mary’s Bank, look to its Rainy Day Savings account. It gives a big 5.00% APY boost to balances $25 – $499. Balances between $500 and $999 earn 3.00% APY, remaining competitive, but balances $1,000 and over drop to a mere 0.05% APY. To earn interest, you must make a monthly automatic transfer of at least $25 from direct deposit or a St. Mary’s Bank checking account.

Almost quite literally meant for rainy day savings, this account limits you to one free withdrawal per month. Each subsequent withdrawal will cost $2. There is no monthly fee on the account.

St. Mary’s Bank is accessible online, over the phone, at branches and through its free mobile banking app, available for Android and Apple devices.

4. CommunityWide Federal Credit Union – 2.00% APY, $1 minimum deposit to open account

Communitywide Federal Credit Union

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on Communitywide Federal Credit Union’s secure website

NCUA Insured

CommunityWide Federal Credit Union was founded in 1967, originally known as West Washington Association Federal Credit Union, settling into its current name in 1985. Based in South Bend, Ind., CommunityWide opens membership up to employees/retirees/donors of select employer groups, relatives of qualified members and members of select charity groups.

The Funds account from CW is a unique approach to savings. You’re allowed to make a withdrawal from the account between the 1st and 5th of each month; any withdrawals outside of that period are subject to a penalty of seven days’ dividends. Complying with this account’s requirements allows you to earn at 2.00% APY, a higher rate than the credit union’s standard savings account. You need only $1 to open an account and there is no monthly fee to maintain the account.

In addition to online access, CW provides mobile access either through your browser or its mobile app available for iOS and Android, which allows for check deposit.

5. USALLIANCE Financial – 1.90% APY, $500 minimum balance amount

USALLIANCE Financial

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NCUA Insured

USALLIANCE Financial was founded in 1966 by a handful of IBM employees. Today, it opens up membership to various neighborhoods in the New York City metro area, select schools, houses of worship and members of certain community-oriented organizations.

The High Dividend Savings account earns 1.90% APY and compounds interest daily. You’ll need to open an account with at least $500 and maintain a $500 minimum balance to keep earning dividends.

While there is no monthly fee, there is a $5 withdrawal fee that applies to any movement of money out of the account, including transfers. To transfer funds between accounts, you can initiate either through USALLIANCE or from your external account. Transfers will take a few days to post.

USALLIANCE offers its mobile app in both the Apple Store and Google Play. It allows you to view all your activity, pay bills, deposit checks and more.

Savings Account FAQs

What is a savings account?

A savings account is a type of deposit account where you can stash money for any length of time, long or short. Banks and credit unions reward you with an attractive return on your savings balance — thanks to the magic of compound interest, your savings can grow steadily over time. Keep in mind that unlike checking accounts, savings accounts aren’t designed to handle frequent transactions. Due to the Federal Reserve’s Regulation D which mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle.

While they give customers a safe place to stash their money, savings accounts serve a different purpose for financial institutions. Banks and credit unions use their customers’ deposits to fund loans and other products. Banks charge borrowers interest on loans, which funds in part the interest you earn on your savings deposits. So when you open and fund a savings account, you’re helping your bank fund its business.

Is my money protected in a savings account?

The money you place into a savings account at a bank is generally protected by FDIC insurance, up to the legal limit. This limit applies per person, per bank, per ownership category.

For example, you would receive full FDIC coverage of a $250,000 deposit made to a savings account at ABC Bank, and you would get full FDIC insurance on $250,000 deposited in a savings account with XYZ bank.

If ABC Bank went under, you wouldn’t lose a dime of your deposit. The FDIC would either set you up with a new account at another FDIC-insured bank for the same amount as the closed account, or send you a check for the balance. However, if you had a $50,000 checking balance and a $250,000 savings account balance with ABC Bank, you would only receive $250,000 in total FDIC insurance for your accounts — with a potential loss of $50,000.

Credit unions rely on National Credit Union Administration (NCUA) insurance. The NCUA is an independent agency that maintains the National Credit Union Share Insurance Fund (NCUSIF), which funds deposit insurance payouts. All federal credit unions are insured by the NCUA. State-chartered credit unions are regulated by the state supervisory authority where the credit union’s main office is located, but they may also have NCUA insurance.

How should I use funds in my savings account ?

Money kept in a savings account is best left alone unless you absolutely need it. To maximize the return on your savings, stash most of your liquid cash flow in a savings account, and only keep the funds you need for day-to-day spending in your checking account. That allows your money to grow more efficiently — more money in a savings account means more interest earned and compounded.

Is it easy to move money in and out of a savings account?

How easy it is to move money in and out of your savings account depends on your financial institution. Typically, a transfer between deposit accounts goes through Automated Clearing House (ACH). ACH transfers should only take one to two business days to clear, often clearing immediately or within one business day. Some institutions, however, may take the full two days depending on their own rules and regulations.

Keep in mind that savings accounts have a limit of up to six certain transfers or withdrawals per month, thanks to the Federal Reserve’s Regulation D, or Reg D. This limit only applies to “convenient” transfers and withdrawals made by “preauthorized, automatic, telephonic agreement, order or instruction, or by check, debit card or similar order made by the depositor and payable to third parties.” Less convenient transactions are exempt from this regulation, including withdrawals or transfers made in person at the bank or ATM, by mail or over the phone.

Making more than six transactions per cycle will often result in an excessive transaction fee depending on the financial institution. Exceeding the limit several times can lead to the bank closing your account for good.

Do I need a savings account?

It’s safe to say that everyone should have a savings account. If your money is going to sit in a bank account, it might as well earn interest while it’s there. And if you’re going to earn interest, it’s surely best to find an account that earns the most interest possible — namely a high-yield savings account.

Even if you’re not interested in chasing the highest possible interest rate, you should still have a savings account to keep your money safe. Some people don’t trust banks and stash cash under their mattresses. But what happens if your house burns down or there’s a break-in? Stolen or lost funds are gone for good. Meanwhile, money in a savings account is kept safe by the FDIC, which even offers bank skeptics peace of mind. FDIC insurance means you’ll get your money back no matter what.

What should I consider when applying for a savings account?

If you’re not sure which account to choose, consider your savings priorities first. If you’re trying to reach a savings goal, a high-yield savings account will help you reach your goal faster than a lower-rate account.

Perhaps you want an account where you don’t have to worry about fees. There are several free savings accounts and accounts that don’t charge for excessive withdrawals that would be perfect for your needs.

Generally, though, these two features should be your top priorities when applying for a savings account. A high-yield savings account grows your money more efficiently, and not having fees taking out a chunk of those savings helps you keep it.

Is it better to have a savings account with a bank or a credit union?

If you’re looking at interest rates, there’s not much difference between the average savings accounts offered by banks and credit unions. In June 2019, the average savings account rate from brick-and-mortar banks earned just 0.28% APY, while credit unions had an average APY of 0.25%. But that doesn’t mean you won’t find competitive rates at banks or credit unions — it simply means you’ll need to shop around.

The same goes with fees. A 2018 MagnifyMoney survey of 57 rewards checking accounts from banks and credit unions indicated that credit unions tend to charge slightly higher fees than their traditional bank counterparts. However, credit unions are nonprofits, and tend to charge fairer fees than big banks do.

For many people, the choice of bank or credit union is a matter of personal preference. When you join a credit union, it means that you own a piece of the institution along with the other members. With a credit union there’s more transparency about how your deposits are being used — many people prefer to know that they are funding loans and helping other members, as opposed to paying big executive paychecks.

When it comes to physical access, banks usually have credit unions beat. Big banks have the money to spread their branches throughout the country, while credit unions tend to serve specific communities and locations. Still, credit unions very often partner with other credit unions and ATM networks to provide their members with widespread ATM access. Note that the CO-OP Financial Services credit union service organization has the second largest branch network in the United States.

Why should I open a high-yield savings account?

A high-yield savings account is an easy way to boost your savings without any extra effort on your part. Let’s say you have $5,000 in a 0.01% APY savings account, which is a typical rate from traditional, big banks. Assuming you don’t make any additional contributions, in a year, you’d earn a whopping 50 cents in interest. That’s a pretty poor rate.

Switching that $5,000 deposit over to a high-yield savings account that earns 2.00% APY would yield $100 and change in interest annually — that’s definitely a sight better than 50 cents. Additional recurring deposits, perhaps monthly, would increase your savings even more. Setting up automatic recurring deposits an easy way to turbocharge your savings.

What fees are typically associated with a savings account?

Many deposit accounts charge a monthly maintenance fee. The exact fee amount depends on the bank and specific account, but they can range anywhere between $5 to $15 a month. The good news is that there’s almost always a way to waive the fee. Typically this means maintaining a minimum monthly balance or making a certain number of transactions per month. You seldom have to worry about any monthly fees with online savings accounts.

Banks often charge for returned deposits, overdrafts, excessive transactions, expedited delivery or transfers, incoming and outgoing wire transfers, and paper statements. Avoid these things and skip the fees. If you’re worried about overdrafting your account, monitor your balance closely. There’s no need to pay $35 for overdrafting your account.

Are online savings accounts safe?

Many of the best savings accounts are available online. By operating only over the internet, banks are able to save on the cost of owning and maintaining physical branches. Banks pass those savings onto their customers in the form of the high rates you see above.

But just because they’re online doesn’t mean they’re any less secure than a well-known bricks-and-mortar bank. Reputable online banks offer FDIC insurance on your balances up to the legal limit. If you’re unsure, you can use the FDIC’s BankFind tool to double check a bank’s insurance status.

As for online security, most banks employ the same security features as the big banks, if not more. This includes network and browser encryption, firewalls, anti-virus scanning and anti-malware protection. Banks may also offer additional safety features like two-step authentication, automatic logout, fingerprint identification and proactive account monitoring. You can always check a bank’s exact safety features on its website, which applies to both online-only and brick-and-mortar banks.

Can I open more than one savings account?

You sure can. If you have a lot of cash on hand, opening multiple savings accounts can allow you to maximize your FDIC insurance. Think of the scenario mentioned above: Keep $250,000 in an ABC Bank savings account and $250,000 in an XYZ savings account. Dropping the total $500,000 in a single ABC Bank savings account would leave $250,000 uninsured.

Opening more than one savings account may also help you keep track of separate savings goals. For example, you can use one savings account to house your emergency fund which you never touch except for dire circumstances. Keeping it separate from your other accounts may make it easier for you to avoid dipping into your emergency backstop.

If you do have more than one savings account, just make sure they all earn at competitive rates.

How often do savings account rates change?

Unlike certificates of deposit, savings accounts have variable rates. This means that the bank can decrease or increase their rate at any point, often without notice. However, you can typically expect rate changes to happen on or right after the start of a month.

Deposit account rates often track the federal funds rate, which is set by the Federal Reserve. The federal funds rate establishes the rate banks and other financial institutions charge each other for lending. So when the federal funds rate is cut, banks tend to cut their own rates in response. This includes not only deposit rates, but loan rates as well. Conversely, banks boost their interest rates when the Fed raises the federal funds rate. Keep an eye on the Federal Reserve’s regular meetings to get a better sense of where the federal funds rate — and therefore your deposit rates — are headed.

Do I pay taxes on savings account interest?

If you earn $10 or more in interest in a year, then yes, your savings interest is taxable. Your bank or financial institution will send you a 1099-INT form documenting the interest you’ve earned. Using that form, you include your interest earnings with your annual tax filing. The bank will also send a copy of your 1099-INT form to the IRS.

Even if you don’t receive a 1099 from your bank, you’ll still need to report interest earned on your tax return. Plus, if you earned more than $1,500 in interest in a year, you’ll need to list out the sources of all that interest income on Schedule B of the 1040 Form.

Your earned interest is taxed according to your marginal tax bracket. If you earned $50 in interest and you’re in the 22% tax bracket, you’ll pay $12 in taxes on that interest earned.

What are the alternatives to a savings account?

Having a savings account is a crucial part of your financial life, but there are other types of deposit accounts that you can (and perhaps should) fit in.

Certificates of deposit

A certificate of deposit (CD) is a time deposit. Unlike savings accounts, which have no expiration date, CDs operate according to defined terms. Typically, CD terms range between three and 60 months, although some institutions offer terms beyond these parameters. Once you make your initial deposit, you have to wait for the term to expire — or mature — to access your funds and interest earnings.

CDs are a solid savings alternative for folks who have already maxed out their other savings accounts. They’re also good for longer-term savings goals. Opening a longer CD lets you lock in a high rate for the length of the term and not have to deal with the rate fluctuations that come with regular savings accounts.

CDs often require a minimum deposit to open, often ranging between $500 and $10,000. Any deposits larger than that are often considered “jumbo” CDs. However, there typically aren’t monthly fees to worry about with a CD.

Withdrawing money from a CD before maturity will result in an early withdrawal penalty. Remember how banks use savings accounts to fund their loans? The same is true here, except with CDs, you’re essentially making a promise to the bank that they can use those funds for a set amount of time.

For example, if you open a five-year CD, the bank expects to be able to use the funds for loans over a period of five years. If you withdraw that money after three years, the bank loses access to those assets and charge you a penalty. The penalty is often expressed as a portion of the interest earned. In this example, you might be charged 365 days’ worth of interest for making that early withdrawal. Some banks may offer “no-penalty” CDs, which tend to have shorter terms, that allow you to avoid the penalty.

Money market account

A money market account resembles a savings account more closely. It earns interest without an expiration date and limits your outgoing transactions to six per cycle. However, money market accounts can also include some checking account features like a debit card and the ability to write checks. This makes them a good alternative if you plan to dip into the account a bit more regularly, rather than using it only for emergencies.

Money market accounts tend to earn at higher interest rates than regular savings accounts. However, they also tend to require higher balances to open and then earn interest. Money markets often charge monthly fees, as well, even when they’re online.

Checking account

Checking and savings accounts are the bread and butter of your financial life. While savings accounts are meant for stashing your money away, checking accounts are designed to help you move through the world, making payments, sending transfers, getting cash and more.

That doesn’t mean that your checking account can’t earn interest, too, however. Maximize your savings by opening a high-yield checking account to match your high-yield savings account. Checking accounts don’t earn at rates as high as savings accounts, but that way, all your money in all your accounts can be growing. For more efficiency, consider keeping the majority of your funds in your savings account for better growth — then you can transfer funds over to your checking account as needed.

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Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here