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The Best Kasasa Checking Accounts in 2020

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.

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A Kasasa checking account is a special type of banking product that is only available at certain credit unions and community banks. Kasasa checking accounts are free and offer various rewards, such as cash back or online shopping credits. Additionally, Kasasa checking accounts offer nationwide refunds on ATM withdrawal fees.

What is a Kasasa checking account?

Developed by the Kasasa Corporation, a Texas-based financial services and marketing organization, Kasasa accounts help smaller banks compete against larger rivals by providing special features desired by consumers. In exchange for providing rewards and other benefits, Kasasa accounts require qualification. Typically, customers must enroll in online banking and/or electronic statements and undertake a certain number of monthly transactions, such as 12 debit card purchases and one or more ACH transactions.

While every Kasasa checking account comes with no monthly maintenance fees and national ATM fee rebates, the particulars of each individual bank or credit union’s account can differ. As banking is a competitive landscape, even among institutions that offer Kasasa accounts, rates and benefits will vary.

Here’s a look at the top Kasasa checking accounts, including both regionally available accounts and nationally available accounts. To select the best, we looked for Kasasa accounts that offered the highest APYs and generous rewards.

Top regionally available Kasasa checking accounts

InstitutionAvailabilityAPY

Peoples Bank (Arkansas)

Arkansas, Louisiana, and Texas5.12%

Pelican State Credit Union

Arkansas, Louisiana, Mississippi, and Texas5.01%

Chief Financial Credit Union

Michigan5.00%

Kellogg Community Credit Union

Michigan4.25%

Kalsee Credit Union

Michigan4.25%

Peoples Bank (Arkansas) Free Kasasa Cash Account

  • 5.12% APY
  • $0.01 minimum
  • $15,000 maximum
  • Available in Arkansas, Louisiana and Texas

Peoples Bank is an Arkansas-based bank offering a number of checking accounts, but its Free Kasasa Cash account is the real star of the show. This account offers a generous APY of 5.12% on balances up to $15,000, with the portion of any balances over $15,000 earning 0.89% APY.

Other attractive features of this account include up to $25 in nationwide ATM fees refunded per month, no minimum balance required to earn rewards and no monthly service fee.
There is a $0.01 minimum opening deposit required for this account.

As is common with Kasasa accounts, in order to earn the 5.12% APY, you’re required to meet the following qualifications for each monthly qualification cycle: Have at least 12 debit card purchases post and settle, be enrolled in and review eStatements, and be enrolled in and log into online banking. If you don’t meet the qualifications for that cycle, you’ll earn 0.05% APY.

Peoples Bank is headquartered in Magnolia, Arkansas.

SEE DETAILS Secured

on The Peoples Bank (AR)’s secure website

Member FDIC

Pelican State Credit Union Kasasa Cash Account

  • 5.01% APY
  • $0 minimum
  • $7,500 maximum
  • Available in Arkansas, Louisiana, Mississippi, and Texas

Headquartered in Baton Rouge, La., Pelican State Credit Union serves the local community with a full menu of financial products. Pelican’s Kasasa Cash checking account earns 5.01% APY, one of the highest available rates we’ve found in our research.

To get this rate, you’ll have to sign up for electronic account statements and every monthly cycle make 15 debit purchases per month, log on to your online account at least once, and receive at least one direct deposit or other automatic payment, or make one online bill payment. If qualifications aren’t met in any given month, your balance earns 0.05% APY. Best of all, Pelican offers unlimited refunds of third-party ATM fees incurred nationwide.

Membership in Pelican State Credit Union is open to residents of Arkansas, Louisiana, Mississippi, and Texas who join one of four local charitable organizations. Membership also extends to anyone working for the institution’s employer partners.

SEE DETAILS Secured

on Pelican State Credit Union’s secure website

NCUA Insured

Chief Financial Credit Union Free Kasasa Cash Checking

  • 5.00% APY
  • $0 minimum
  • $5,000 maximum
  • Available in the Kalamazoo, MI region

Chief Financial Credit Union serves the greater Detroit metro region. Chief’s Free Kasasa Cash Checking account pays you 5.00% on balances up to a maximum of $5,000, and an APY of 0.39% on the balance over this threshold. Chief will also refund up to $25 in third-party ATM fees every month.

To get the highest rate, you must receive electronic bank statements, and every month make at least 12 debit card purchases that post and settle, and log into you online banking account. Membership in Chief Financial is open to residents of the greater Detroit metro region, and selected other communities in the State of Michigan.

SEE DETAILS Secured

on Chief Financial Credit Union’s secure website

NCUA Insured

Kellogg Community Credit Union Kasasa Cash Account

  • 4.25% APY
  • $0 minimum
  • $7,500 maximum
  • Available in western Michigan

Kellogg Community Credit Union has been providing counties in western Michigan with financial services since 1941. The bank currently offers three types of Kasasa accounts, although it’s Kasasa Cash account is a real winner, paying an impressive 4.25% APY on balances up to $7,500. The portion of your balance above this threshold earns 0.25% APY.

To receive the reward APY, you must agree to receive eStatements, and be enrolled in online banking. Every monthly cycle, you must make at least 12 debit card purchases, log into your online account, and have at least one direct deposit of $500 or more.

Membership in Kellogg Community Credit Union is open to those who live, work, worship, or attend school in, and businesses or other legal entities located in the Michigan counties of Allegan, Barry, Berrien, Branch, Calhoun, Cass, Ionia, Kalamazoo, Kent, St. Joseph, Montcalm, Muskegon, Newaygo, Ottawa or Van Buren.

SEE DETAILS Secured

on Kellogg Community Credit Union’s secure website

NCUA Insured

Kalsee Credit Union Kasasa Cash+ Account

  • 4.25% APY
  • $0 minimum
  • $25,000 maximum
  • Available in the Kalamazoo, MI region

Kalsee Credit Union serves the Kalamazoo, MI region with a full menu of financial products. Kalsee offers four Kasasa accounts: Kasasa Cash+, Kasasa Cash, Kasasa Cash Back and Kasasa Saver. The credit union’s Kasasa Cash+ checking account earns 4.25% APY.

To get the highest rate, you’ll have to open a Kasasa checking account, make 24 debit purchases per month, sign up for electronic account statements, log on to your account at least once per month, and receive direct deposits totaling at least $1,000 per month. You can earn the 4.25% APY on balances up to $25,000, while balances above this threshold earn 0.35% APY. In addition, Kalsee will refund up to $25 in ATM fees incurred at domestic ATMs.

Membership in Kalsee Credit Union is open to anyone who lives, works, or attends school in the Michigan counties of Allegan, Barry, Branch, Calhoun, Cass, Kalamazoo, St. Joseph, or Van Buren.

SEE DETAILS Secured

on Kalsee Credit Union’s secure website

NCUA Insured

Top nationally available Kasasa checking accounts

InstitutionAvailabilityAPY

One American Bank

Nationwide2.00%

Main Street Bank (MI)

Nationwide2.00%

Security State Bank (KS)

Nationwide3.00%

First National Bank of Jeanerette

Nationwide3.00%

First Security Bank & Trust

Nationwide2.01%

One American Bank Kasasa Cash Account

  • 2.00% APY
  • $50 minimum
  • $10,000 maximum
  • Available nationwide

Based in Sioux Falls, SD, One American Bank was founded 135 years ago, before South Dakota had achieved statehood. Today this small regional bank packs a big punch, offering a nationally available Kasasa Cash checking account that earns a decent 2.00% APY on balances up to $10,000.

To earn your Kasasa reward APY, for each monthly qualification cycle simply do the following: Make at least 12 debit card purchase transactions of at least $5.00 each that post and settle to your account; receive electronic bank statements, account notices and disclosures; and log in to online banking at least one time.

SEE DETAILS Secured

on One American Bank’s secure website

Member FDIC

Main Street Bank (MI) Kasasa Checking

  • 2.00% APY
  • $100 minimum
  • $30,000 maximum
  • Available nationwide

Main Street Bank is headquartered in Michigan, but its services are available online, nationwide. Its Kasasa Checking account boasts an impressive APY of 2.00% on balances up to $30,000. This account also stands out thanks to its unlimited monthly ATM refunds, no monthly service fee, no minimum balance needed to earn rewards and a $100 minimum opening deposit.

  • Have at least 10 debit card transactions post and settle
  • Receive e-statements
  • Be enrolled and login to online banking
  • Complete at least one ACH, deposit or bill pay transaction

SEE DETAILS Secured

on Main Street Bank (MI)’s secure website

Member FDIC

Security State Bank Kasasa Cash Account

  • 3.00% APY
  • $100 minimum
  • $10,000 maximum
  • Available nationwide

Security State Bank is a full-service community bank located in Scott County, KS. Nevertheless, Security State’s Kasasa Cash checking account is available nationwide, and earns a respectable 3.00% APY. The Kasasa account has a $100 minimum deposit to earn rewards, and a ceiling up to and including $10,000 to earn the APY. All you have to do is post 12 debit card purchases in each monthly qualification period, enrollment in electronic statements and log on to online banking every month to qualify for rewards.

SEE DETAILS Secured

on Security State Bank (KS)’s secure website

Member FDIC

First National Bank of Jeanerette Free Kasasa Cash Checking

  • 3.00% APY
  • $100 minimum
  • $10,000 maximum
  • Available nationwide

The First National Bank of Jeanerette is a small community bank located in Louisiana, but they’ll let anybody open a free Kasasa Cash Checking account with them. Paying a decent 3.00% APY on balances up to $10,000, the bank will also refund up to $25 in third-party ATM fees. All you need is to agree to receive electronic banking statements, and every month make at least 12 debit card purchases and complete at least one ACH deposit or bill pay transaction.

SEE DETAILS Secured

on The First National Bank Of Jeanerette’s secure website

Member FDIC

First Security Bank & Trust

  • 2.01% APY
  • $100 minimum opening deposit
  • No maxmium
  • Available nationwide

Based out of Charles City, Iowa, First Security Bank & Trust offers a bank account that anyone in the country is eligible to open. It was founded in 1903 and only operates a few branches within Iowa, but you can still open an account and manage it online from anywhere. To qualify for the high rate you’ll need to keep your email address current with the bank, sign up for e-statements, have at least one ACH deposit, and use your debit card 18 times. If you don’t meet those requirements you’ll earn a smaller rate of 0.05% APY. In addition, if you do meet the requirements you can have up to $25 per month in ATM fees refunded.

SEE DETAILS Secured

on First Security Bank & Trust’s secure website

Member FDIC

The bottom line: Are Kasasa checking accounts worth it?

Kasasa accounts can offer great benefits to customers who qualify. If you’re already making the required transactions, such as 12 debit card purchases per month, Kasasa accounts are something of a no-brainer, as they offer rewards, carry no monthly fees and reimburse domestic ATM withdrawals.

However, for those who might have to stretch to qualify for a Kasasa account, it might pay to shop around, as there are plenty of competitor accounts that also charge no monthly fees. Each individual customer will have to weigh out the benefits of a high interest rate – or one of the other Kasasa rewards – against the transaction requirements.

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Best of, Earning Interest

The Best High-Yield Online Savings Accounts in May 2020

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.

Written By

 

We update our lists of the best high yield, online and overall savings accounts on a weekly basis. These are variable-rate accounts, which means that the bank offering the best savings rates can change on any given-day.

The best online savings accounts offer high yields that are as much as 20 times the national interest rate for savings accounts. To top it off, they typically offer perks like:

  • No-fees
  • Low/No minimum balance requirements
  • FDIC insurance
  • Accessibility

If your bank doesn’t check off all these boxes, it may be time to open a new savings account. We’ve identified which banks consistently feature the highest rates in our reviews below.

Market update: Banks have dropped their savings rates considerably due to recent uncertainty caused by the COVID-19 outbreak. Despite interest rates declining overall, we are still seeing many of the pre-crisis top performers continuing to lead the pack in the overall best rates category.

  • 1.30% APY – Goldman Sachs Bank USA
  • 1.30% APY – Capital One
  • 1.30% APY – American Express National Bank
  • 1.30% APY – Barclays Bank
  • 1.30% APY – Synchrony Bank
  • 1.25% APY – Ally Bank
  • 1.50% APY – Vio Bank
  • 1.35% APY – Live Oak Bank
  • 1.30% APY – HSBC Direct
  • 1.30% APY – Citizens Access
  • 1.25% APY – BrioDirect
  • 1.25% APY – CIT Bank
  • 1.75% APY – Fitness Bank
  • 1.61% APY – UFB Direct
  • 1.60% APY – First Foundation Bank
  • 1.56% APY – SFGI Direct
  • 1.50% APY – Popular Direct
  • 1.45% APY – Comenity Direct
  • 1.40% APY – Rising Bank
  • 6.17% APY – Digital Federal Credit Union

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

1. High Rate: Goldman Sachs Bank USA – 1.30% APY, no minimum balance (but no ATM access)

High-yield Online Savings Account from Goldman Sachs Bank USA

Our advertiser Marcus by Goldman Sachs, the consumer bank of Wall Street giant Goldman Sachs, offers a 1.30% APY on deposits. There isn’t a minimum balance requirement to earn the APY and there are no transaction fees. Upon opening the account, you can deposit funds via electronic transfer, wire transfer, or deposit by check. You can get access to your funds via electronic transfer or wire transfer.

Goldman has been investing heavily in Marcus, its online consumer bank. Marcus is already offering some of the best savings accounts and personal loans in the market, and further expansion is expected. The savings account has consistently been paying one of the highest rates in the market. With a 1.30% APY, you can get one of the highest rates in the market from a well-known brand. The maximum deposit is $1,000,000 and deposits are FDIC insured up to the $250,000 limit.

Marcus is accessible both online and via the Marcus mobile app, available only in the Apple App Store.

SEE DETAILS Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

2. High Rate: Capital One – 1.30% APY, no minimum balance

360 Performance Savings from Capital OneA consistent rate leader for its deposit accounts, Capital One now offers its 360 Performance Savings. With a 1.30% APY on all balances and no monthly fee, you get a chance to boost your savings uninterrupted. There are no minimum balances required to open or maintain the account, either.

Capital One is able to offer higher rates and lower (to no!) fees on this online savings account compared to traditional in-branch offerings. Still, you can head to a Capital One branch or Capital One Café to open a new 360 Performance Savings account, if you prefer. You cannot use an ATM to withdraw or deposit funds, but you can visit a branch, call the bank or make your own online transfer. You can access all accounts on your mobile device through the Capital One app, as well.

SEE DETAILS 

Member FDIC

3. High Rate: American Express National Bank – 1.30% APY, no minimum balance (and no fees)

High Yield Savings Account from American Express National BankOur sponsored advertiser, American Express National Bank, offers a Personal Savings account, which earns a 1.30% variable Annual Percentage Yield (APY) as of 4/23/2020. The account charges no monthly fees and requires no minimum deposit, making it an affordable account to open. You must fund your account within 60 days of applying for the account, and the FDIC insures your deposits up to $250,000. Overall, the account is a great option for anyone who wants the flexibility of earning a high interest rate on a sum of money you’ve stashed away, minus the withdrawal restrictions of a certificate deposit.

SEE DETAILS Secured

on American Express National Bank’s secure website

Partner Offer

Member FDIC

4. High Rate: Barclays Bank – 1.30% APY, no minimum balance

Online Savings Account from BarclaysBarclays is a large, old British bank, based in London and with more than 325 years of history. Although Barclays is huge in the United Kingdom, it is a challenger brand in the US. Barclays offers savings products with highly competitive rates. These deposits are used to fund their rapidly growing American credit card business. The online savings account has a 1.30% APY with no minimum balance to open and no monthly fees. Your deposits are FDIC insured up to the legal limit. The Barclays website has a good look and feel. And you can have the confidence of keeping your money with one of the world’s largest and oldest universal banks.

SEE DETAILS Secured

on Barclays’s secure website

Member FDIC

5. High Rate: Synchrony Bank – 1.30% APY, no minimum balance, (and ATM access)

High Yield Savings from Synchrony BankSynchrony Bank pays a healthy 1.30% APY. There is no minimum balance requirement and no monthly fee. In addition to the great rate, you can get an ATM card. Most internet-only banks require you to transfer funds electronically, which can take a few days. If you ever need quick access to your funds, the ATM card makes access easy. You might not recognize the Synchrony brand in the banking space, but it is a large, well-capitalized business. Synchrony used to be a part of General Electric (GE), and was spun out as a separate company. Unfortunately, the digital experience is not the best, but they now have a mobile banking app.

SEE DETAILS 

Member FDIC

6. Favorite Online Package: Ally Bank – 1.25% APY, no minimum balance and you can get a free checking account

Online Savings Account from Ally BankAlly is a bank without branches that had been consistently paying high interest rates on savings accounts. While Ally is still offering rates way above what brick-and-mortar banks are offering, it seems this online bank no longer wants to be seen as the online bank with the most competitive rates. The current APY on Ally’s savings account is 1.25%. Although Ally has dropped its rate significantly, we still favor this online bank. It doesn’t require a minimum balance to earn the APY and, even better, you can open a free checking account (also with no minimum balance requirement). This makes access to your savings account incredibly easy – because you can transfer funds online (or via the app) and have immediate access via checks, debit cards and ATMs. With an Ally account, you will have access to their full suite of expanding (and market-leading) products such as CDs, money market account, checking account, and IRA accounts.

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

7. High Rate: Vio Bank – 1.50% APY, $100 to open

High Yield Online Savings Account from Vio BankVio Bank is the online division of MidFirst Bank, a national private financial institution with over $16 billion in assets. Vio Bank was recently created and is not yet as established as Marcus, Barclays, American Express, Synchrony, and Ally Bank. However, this online bank launched its High Yield Online Savings account with a strong APY (at the time of its launch) and has been consistently competitive since it launched. It’s currently offering an outstanding 1.50% APY on all balances. You only need $100 to open the account. You can fund the account via ACH.

There are a few limitations to keep in mind: incoming ACHs take anywhere between two to five business days to post and the online bank may place a hold your ACH for two or three business days. When you’re ready to transfer funds out of the account, you’ll be limited to $5,000 per outgoing ACH. You’ll also be limited to transferring an aggregate monthly total of $20,000 via outgoing ACHs. As is with every other savings account, you’ll also be limited to making six withdrawals per monthly statement cycle. The good news (aside from the high APY) is that Vio Bank doesn’t charge a monthly maintenance fee. Vio Bank also has a mobile banking app where you can conveniently manage your accounts on-the-go. Also, its website is mobile friendly so it should be fairly easy to do your online banking from a smart phone, as well. We think this online bank is very promising and hope it continues to offer one of the best savings account rates in the nation.

SEE DETAILS Secured

on Vio Bank’s secure website

Member FDIC

8. High Rate: Live Oak Bank – 1.35% APY, no minimum to open, no minimum balance to earn APY

High Yield Online Savings from Live Oak BankFounded in 2008, Live Oak Bank offers a great spread of financial products, including its high-yield Online Savings account. The Online Savings account earns 1.85% APY on all balances. Plus, interest is compounded daily for faster savings. There’ s no minimum deposit requirement to open, either, nor a monthly fee to worry about.
In addition to online access, Live Oak Bank offers a mobile app.

SEE DETAILS Secured

on Live Oak Bank’s secure website

Member FDIC

9. High Rate: HSBC Direct – 1.30% APY, $1 minimum to open, no minimum balance to earn APY

HSBC Direct Savings from HSBC DirectHSBC Direct is the online division of financial giant, HSBC Bank. Based on the amount of assets HSBC Bank has acquired to date, it is the 14th largest bank in the U.S. While HSBC Direct may sound like a new player to the online banking game, this division was actually around prior to the 2008 financial crisis and offered extremely competitive rates. After the financial crisis, the bank renamed the online division to HSBC Advance and slowly started to decrease its online savings account rates, much like other online banks were doing around that time.

Fortunately, HSBC has decided to reenter the online banking space. Since the initial launch in July of 2018, the bank has consistently increased its HSBC Direct Savings Account rate from 1.70% APY to 1.30% APY. You only need $1 to open the account and the APY will be applied to any balance below $2 million. You may fund the account via ACH transfer and the account can be opened online. You will have to deposit new money to the account, which means that you cannot be a member of the HSBC Group in the United States. The account doesn’t have a monthly maintenance fee and all deposits are FDIC insured.

SEE DETAILS Secured

on HSBC Direct’s secure website

Member FDIC

10. High Rate: Citizens Access – 1.30% APY, $5,000 minimum balance amount

Online Savings Account from Citizens AccessCitizens Access is the online division of Citizens Bank. This division was recently created to provide the best savings rates to consumers. While the online division is brand new, the bank its backed by isn’t. Citizens Bank has been around for a while and has grown to have over $122 billion in assets. While you need to deposit and maintain a minimum balance of $5,000 to earn the 1.30% APY, you’ll be funding an account that comes with no fees. If your balance happens to fall below $5,000, the APY will drop to 0.25%. One downside to this online-only bank is that they don’t currently have a mobile banking app. This means that you’ll have to do all of your banking through their website. Luckily, their website is mobile-friendly.

SEE DETAILS Secured

on Citizens Access’s secure website

Member FDIC

11. High Rate: BrioDirect – 1.25% APY, $25 minimum balance amount

High-Yield Savings from BrioDirectBrioDirect is powered by Sterling National Bank, which is a large bank in New York with over $29 billion in assets. This online brand recently launched with a high 1.25% APY. You only need $25 to open the account and you’ll need to maintain at least this amount on a daily basis to earn the APY. This account doesn’t have a monthly service fee and can be funded via ACH, wire transfer, or check.

There are limitations to the amount of money you can transfer in and out via ACH. BrioDirect limits incoming ACH transfers to $500,000. The bank limits outgoing ACH transfers to $25,000 per transaction and a total of $125,000 per month. You are able to link as many external bank accounts as you’d like to this account. You can also initiate ACH deposits and withdrawals from other banks.

You can manage this account online or from Sterling National Bank’s mobile app.

SEE DETAILS Secured

on BrioDirect’s secure website

FDIC Insured

12. High Rate: CIT Bank – 1.25% APY, $100 to open

Savings Builder from CIT BankCIT is a very large bank that you probably never heard of. It has more than $50 billion of assets and makes loans (and leases) to middle market companies and small businesses. To fund those loans, CIT operates an internet-only bank that pays some of the highest interest rates in the country.

While CIT isn’t as big as other online banks, they’re currently offering a very healthy APY of 1.25% on their Savings Builder account. You only need $100 to open the account, but you’ll need to meet one of two requirements to earn the high rate. We really like the options that CIT Bank has put in place to earn this high APY. The two ways to continue earning this high rate are:

  1. Make a monthly deposit of $100 or more into this account
  2. Maintain a daily balance of $25,000 or more

Even better: there aren’t any monthly maintenance fees and interest compounds daily. Deposits are FDIC insured.

SEE DETAILS Secured

on CIT Bank’s secure website

Member FDIC

13. Unique Bank + Highest Overall Rate: Fitness Bank – 1.75% APY, $100 minimum to open

Fitness Savings (12,500+ Steps) from FitnessBankFitness Bank is unique and new online bank. It’s a division of Affinity Bank, which has been around since 2002 and has acquired over $318 million in assets. Affinity Bank decided to launch a concept like no other to reward actively fit individuals with the highest APY currently available. While most institutions choose to offer tiered rates based on balance amounts, Fitness Bank offers tiered rates based on the average number of steps you take on a daily basis. To earn the high 1.75% APY, you’ll need to take an average of 12,500 steps or more per day. If you only take an average of 10,000 to 12,499 steps per day, you’ll earn an APY of 1.55% (which is still a great APY). You’ll earn 1.35% APY if you take an average of 7,500 to 9,999 steps per day. Taking an average of 5,000 to 7,499 steps per day will qualify you for an APY of 1.15%. Finally, if you take anywhere between 0 to 4,999 steps on average per day, you’ll only earn 0.50%.

Fitness Bank will track your steps by requiring you to download its Step Tracker app. The bank will then calculate your average steps from the previous month to determine which tier you qualify for. Once the bank determines which rate your activity qualifies you for, you will continue earning that rate for an entire month until the bank recalculates your activity. The activity requirement will be waived for the first month so that you can get your app all set up and start logging in some steps. For this first month, you’ll automatically earn the 1.75% APY.

In terms of actual money, you will need at least $100 to open the account and you’ll need to maintain this balance to waive the $10 monthly maintenance fee. The bank does impose a limit on the amount of money you’re able to transfer in and out of the account via ACH. You cannot transfer more than $15,000 per day in or out of the account. You also cannot exceed more than six certain withdrawals or you’ll incur an excessive withdrawal fee of $10 for each additional withdrawal. In addition to the Step Tracker app, Fitness Bank has a mobile banking app to manage your account.

SEE DETAILS Secured

on FitnessBank’s secure website

Member FDIC

14. High Rate: UFB Direct – 1.61% APY, $10,000 minimum balance to earn APY

UFB High Yield Savings from UFB DirectUFB Direct is a division of Axos Bank, a bank with over $9 billion in assets. This brand has been known to offer high rates not only on its savings accounts, but on its money market accounts, as well. Currently, you can earn a 1.61% APY on its High Yield Savings Account. You will need to keep a balance of $10,000 in order to earn the high rate. The account comes with a free ATM card, but you may want to contact the bank to find out which ATMs you can use without incurring a fee. The bank’s website doesn’t specify. Its disclosure does state that you will only be able to withdraw $510 on a daily basis. This account doesn’t come with any monthly fees. UFB Direct does have a mobile app that allows you to deposit checks.

SEE DETAILS Secured

on UFB Direct’s secure website

Member FDIC

15. High Rate: First Foundation Bank – 1.60% APY, $1,000 to open

Online Savings Account - New Money Only from First Foundation BankFirst Foundation Bank officially launched in 2008, but its leadership has been in the financial services industry since 1990. This bank was established by the same group that leads the Keller Group, a wealth management firm. The bank has grown to acquire over $6 billion in assets. In October, this bank launched an Online Savings Account with a high APY of 1.60%. You’ll need to have a balance of at least $1,000 in order to open that account and you’ll need to maintain that amount in order to earn the high APY. If your balance falls below $1,000, the APY will drop to 1.60%. This account doesn’t have a monthly service fee.

While Regulation D applies to this account, First Foundation Bank will provide an ATM card if you request one from the bank. The bank will reimburse ATM fees from other banks and ATM operators up to $20. There is a limit to the amount of money that you can withdraw. If you’re withdrawing from an ATM, the bank sets a daily limit of $500. The daily point-of-sale limit is $1,500. If you’re transferring money online or via ACH, the daily limit is $20,000 and the monthly limit is $100,000. If you need to transfer more than the preset limits, you’re able to call the bank and request that they increase the limit. The bank allows you to maintain the account online and through their mobile banking app.

SEE DETAILS Secured

on First Foundation Bank’s secure website

Member FDIC

16. High Rate: SFGI Direct – 1.56% APY, $500 to open

SFGI Direct Savings Account from SFGI DirectSFGI Direct is Summit Community Bank’s online division. They currently have more than $2 billion of assets and is privately owned by Summit Financial Group, Inc. SFGI is FDIC insured through Summit Community Bank, so deposits are protected up to the legal limit. They are currently offering a good rate of 1.56% on balances of $1 or greater. You’ll have to deposit a minimum of $500 in order to open the account, but you can’t make an initial deposit greater than $25,000. After you make your initial deposit, you’re able to add as much money as you’d like to the account. While they do offer a good rate on an online savings account, their online experience is lacking. Their website feels dated and they don’t appear to have a mobile banking app.

SEE DETAILS 

Member FDIC

17. High Rate: Popular Direct – 1.50% APY, $5,000 minimum to open

Popular Direct Ultimate Savings Account from Popular DirectPopular Direct, the online bank of Banco Popular North America, is currently offering an outstanding APY of 1.50% on their Popular Direct Ultimate Savings Account. You’ll need $5,000 to open this account and you’ll have to maintain a daily end of day balance of $500 to avoid the $4 monthly service fee. This account does not come with an ATM card. In order to access your money, you would need to transfer funds to and from an existing checking account via an ACH transfer, which can take a few days. Your deposits are FDIC insured. Popular Direct has a mobile banking app and provides account holders with access to online banking.

SEE DETAILS Secured

on Popular Direct’s secure website

Member FDIC

18. High Rate: Comenity Direct – 1.45% APY, $100 minimum to open

High-Yield Savings Account from Comenity DirectComenity Direct is the online division of Comenity Capital Bank. Comenity Capital Bank has been around since 1989 and has acquired over $9 billion in assets. Comenity Capital Bank launched this online division in the middle of April 2019 and came into the savings space with a high-yield savings account earning 1.45% APY. While you need $100 to open the account, you can earn the high rate with a balance as small as $1 and as big as $10 million.

Comenity Direct’s High-Yield Savings Account doesn’t place limits on ACH transfers. This account doesn’t have any monthly fees and the bank doesn’t charge a fee if you attempt to withdraw from this account more than six times. If you do try to withdraw from the account a seventh time within the same statement cycle, Comenity Bank reserves the right to either deny or reject the withdrawal and may even close the account.

While this is mainly a fee-free savings account, there are a few fees that may be charged if you request paper statements, a paper check withdrawal, and an outgoing wire transfer. Comenity Direct does have a mobile banking app for your convenience. This is one of the best high-yield savings accounts currently being offered, but keep in mind that this online division is brand new. When it comes to accounts with variable rates, we prefer to stick with more established banks with consistently competitive rates.

SEE DETAILS Secured

on Comenity Direct’s secure website

Member FDIC

19. High Rate: Rising Bank – 1.40% APY, $1,000 minimum to open

High Yield Savings Account from Rising BankRising Bank is a divison of Midwest BankCentre and was recently launched in February 2019. Although this internet bank is pretty much brand new, its parent bank has been around since 1906 and has acquired over $1 billion in assets. Rising Bank launched with a strong APY of 1.40%. You’ll need to deposit a minimum of $1,000 in order to open the account and you’ll need to maintain or grow this balance on daily basis in order to continue earning the high rate. This account does have a maximum balance of $500,000. A few other items to be aware of is that interest will be credited to this account every month and if you decide to close the account before the interest is credit to the account, you will not receive the accrued interest. Rising Bank has a mobile app where you can manage your account conveniently.

SEE DETAILS Secured

on Rising Bank’s secure website

Member FDIC

20. For Small Balance Savers: Digital Federal Credit Union – 6.17% APY up to $1k

Primary Savings from Digital Federal Credit Union (DCU)Digital Federal Credit Union (DCU) currently offers a nice account for people who are just starting to save. You can earn an APY of 6.17% with their Primary Savings Account. You will only earn that rate on deposits up to $1,000. Once you have more than $1k, you should consider other accounts on this list. It is a credit union – and your deposits are insured by the NCUA up to the legal limit. Anyone can join the credit union by donating to one of their participating organizations such as Reach Out for Schools, which has a membership fee of $10. You’ll be able to join one their participating organizations when you go to open your account with DCU. DCU is also part of a nationwide CO-OP network that allows their members to have access to shared branches and surcharge-free ATMs throughout the U.S.

SEE DETAILS 

NCUA Insured

MagnifyMoney’s Best Savings Accounts for May 2020

To recap, here are our top picks of the Best Savings Accounts for May 2020.

The Best Savings Accounts in May 2020 Overall

Institution

APY

Bank Review

Goldman Sachs Bank USA High Yield Online Savings

1.30% APY

Goldman Sachs Bank USA Review

Capital One 360 Performance Savings

1.30% APY

Capital One 360 Review

American Express National Bank Personal Savings


1.30% APY

American Express Review

Barclays Bank Online Savings Account

1.30% APY

Barclays Bank Review

Synchrony Bank High-Yield Savings Account

1.30% APY

Synchrony Bank Review

Ally Bank Online Savings Account

1.25% APY

Ally Bank Review

To find the best savings accounts, we look for the banks that consistently offer competitive savings rates. This list is updated weekly to stay on top of the best savings account choices for you.

The Best Online Savings Accounts in May 2020

Institution

APY

Bank Review

Vio Bank High Yield Online Savings Account

1.50% APY




Vio Bank Review

Live Oak Bank Savings Account

1.35% APY

Live Oak Bank Review

HSBC Direct Savings

1.30% APY

HSBC Direct Review

Citizens Access Online Savings Account

1.30% APY

Citizens Access Review

BrioDirect High-Yield Savings Account

1.25% APY

BrioDirect Review

CIT Bank Savings Builder

1.25% APY

CIT Bank Review

Nowadays, the best savings accounts are often found online. New online savings accounts from online banks or even established banks looking to get in on the high-yield action blow traditional savings account rates out of the water. This list is updated weekly to reflect the latest and greatest online savings accounts with consistency over the past two years.

The Best High-Yield Savings Accounts and Rates in May 2020

Institution

APY

Bank Review

Fitness Bank Savings

1.75% APY

Fitness Bank Review

UFB Direct High Yield Savings Account

1.61% APY

UFB Direct Review

First Foundation Bank Online Savings Account

1.60% APY

First Foundation Bank Review

SFGI Direct Savings Account

1.56% APY

SFGI Direct Review

Popular Direct Ultimate Savings Account

1.50% APY

Popular Direct Review

Comenity Direct High Yield Savings Account

1.45% APY

Comenity Direct Review

Rising Bank High Yield Savings

1.40% APY

Rising Bank Review

In today’s fluctuating-rate climate, the best high-yield savings accounts can change from day to day. We stay on top of them for you and list the highest earning savings accounts from this month below.

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 spends dozens of hours grading online savings accounts according to their interest rates, fee schedules, extra features, minimum balance requirements and accessibility, adjusting our rankings as banks and their offerings change on a weekly basis.

We distilled our picks from a list that included hundreds of banks, credit unions and online institutions nationwide.

Our methodology for picking the best savings accounts

To find the best online savings accounts, MagnifyMoney looks at over 6,000 financial institutions each week, from small community banks and credit unions to traditional brick-and-mortar banks to new online banks.

  1. Savings account rates: We heavily weighted the APYs offered by each bank in terms of both magnitude and consistency. Higher savings rates were prioritized over lower rates. Due to the variable rates on savings accounts, we also gave additional consideration to banks that were known to maintain competitive rates over longer periods of time.
  2. Minimum deposit and balance requirements: To ensure accessibility to all customers, we focused on banks that welcome deposits of all sizes, where the ideal banks in this category have minimum balance and deposit requirements of $0.
  3. Bank account fees: Unnecessary fees can eat into your long-term savings in a major way. Banks that offered low or no fees were given priority in this category over banks that are known to charge account maintenance fees, service charges and other surcharges.
  4. Customer service: We considered overall customer satisfaction and bank reputation when weighing each bank performance in this category. While each customer’s experience varies, we looked at relative feedback each bank received at the national level based on data sourced from consumer advocates like the Consumer Financial Protection Bureau (CFPB) and the Better Business Bureau. Banks that failed to meet minimum standards of performance were excluded.

What should I know about savings accounts?

It’s easy to take your savings account for granted, setting up automatic deposits and forgetting about it. But there’s a lot more to savings accounts that you should know.

For one, you can find consistently more competitive savings account rates at online banks than with your typical big bank. Online banks are also more fee-friendly — although there are still some legal limitations you should be aware of to avoid extra fees.

Read on to find out more about how savings accounts work, how many savings accounts you should have and more.

What is a savings account?

The definition of a savings account is a deposit account that earns interest and allows six “convenient” withdrawals per statement cycle. This limit applies to telephonic transfers, preauthorized and automatic transfers and withdrawals and transfers made by check, debit card or another similar method. Savings accounts are offered by traditional brick-and-mortar banks, online banks, credit unions and other financial institutions.

Deposits held in savings accounts at banks are typically insured by the Federal Deposit Insurance Corporation (FDIC), while credit union deposits are insured by the National Credit Union Administration (NCUA). When looking for the best savings account, always choose an institution insured by either the FDIC or the NCUA. This protects your savings account with the backing of the U.S. Federal Government in the event that your bank fails.

How do savings accounts work?

Savings accounts are interest-bearing deposit accounts that hold your money safely and securely with a financial institution. They are liquid, meaning you can withdraw your money at any time you choose. However, due to the limitations of the Federal Reserve’s Regulation D, savings accounts only allow six convenient transfers and withdrawals per statement cycle. Exceeding this limit will typically result in a fee for each additional transaction.

While almost all savings accounts earn interest, the earnings may vary depending on what type of bank you choose. Historically, we’ve seen online savings accounts out-yield traditional brick-and-mortar banks.

When should I use a savings account?

Savings accounts are most often used for general savings, and they’re a much better choice than keeping all of your money in a checking account. A high-yield savings account lets your money grow by earning a strong interest rate. Still, it’s always best to keep a financial cushion in your checking account, to cover expenses and avoid overdrafts.

You can use a savings account to house your emergency fund as well as any cash you don’t need to cover your monthly spending habits. Savings accounts are highly liquid and easy to access when you need them — certificates of deposit (CDs) and investment accounts are much less liquid — but still earns more interest than regular checking accounts.

Separate savings accounts are a great way to meet multiple financial goals. For example, you could save funds for future college tuition costs in one high-yield savings account, and money for your next vacation in a separate online savings account.

How to find the right savings account for you

When shopping for the best savings account, your first consideration should be an account’s interest rate. If you’re going to let your money sit somewhere, you want to make it a worthwhile investment. Second, check for fees — there’s no use earning a lot in savings if that’s just going to be taken away by pesky fees. Finally, consider broadening your horizons so you can weigh all your options.

Compare offers to get the best savings rate. Use our savings account comparison tool to calculate how much you could earn with different accounts. You can filter by ZIP code and size, which can help large-balance savers find better options than no-minimum options.

Don’t forget about fees. Snagging the highest interest rate isn’t always your best bet. You also want to ensure the whole account helps you earn consistent returns. For example, a high-rate online savings account might reset to a lower APY after an introductory period. Perhaps the best rate requires a balance that’s too high or too low for your needs. And watch out for monthly fees that could eat into your savings.

Compare options beyond banks. It’s easy to keep a savings account with the bank your family has banked with for generations. But you could be missing out on incredible savings by ignoring online banks and even credit unions. Online banks traditionally offer substantially higher savings account rates than brick-and-mortar banks. They’re easier on fees, too. For their part, credit unions can also be competitive rate leaders, especially for CDs.

What are the different types of savings accounts?

Financial institutions offer a few different varieties of savings accounts. For instance, a money market account is technically a type of savings account under Regulation D, but it’s often marketed under its own name.

Certain labels are applied to savings accounts to differentiate features or ownership types. For example, an online savings account is just a standard savings account that’s available online. Likewise, a high-yield savings account is simply a standard savings account that earns a high interest rate.

Differences in account ownership do not change the way savings accounts function — withdrawal limits and interest rates remain the same. That said, there are a few details worth highlighting when it comes to savings account ownership types:

  • Individual savings account: This is a savings account for one person. No one else can access funds saved in the account unless the savings account holder authorizes it.
  • Joint savings account: With a joint savings account, two or more people share equal access to funds saved in the account.
  • Custodial account: These accounts let a designated custodian manage funds for the benefit of a minor, who then assumes ownership of the account when they turn 18 or 21 years old, depending on the state. Common custodial accounts are associated with UGMA (Uniform Gift to Minors Act) and UTMA (Uniform Transfer to Minors Act) agreements.
  • Payable on Death (POD) account: This type lets the account owner choose beneficiaries who inherit the funds saved in the account after the owner passes away.

Determining which is the best savings account for you can be a difficult decision and will depend on your individual needs. However, there’s no real limit to the number of savings accounts that you can open; take some time to shop around to find a savings account that combines the highest rates, greatest convenience and still fits your unique needs.

Should I get an online savings account?

An online savings account is your best bet for obtaining the highest interest rate available. Online banks lack the costs associated with maintaining brick-and-mortar branches, and they generally pass the savings onto you in the form of better interest payouts. And like we’ve said, if your money is going to sit in an account, you might as well make it worth your while by growing it at a competitive rate.

Online savings accounts generally feature superior accessibility. Online banks are laser focused on offering the best possible and most user-friendly app experiences. There’s often 24/7 customer service, and they tend to provide very good ATM access. When shopping for the best savings account to suit your needs, make sure you include a good mix of online banks offering high yields, brick-and-mortar banks and credit unions in your search.

Can savings accounts lose money?

If your account balance remains below the FDIC or NCUA deposit insurance threshold, there is virtually no way to lose money kept in a savings account. Federal deposit insurance guarantees that you will not lose money — up to the legal limit — in the event of a bank or credit union failure. If your bank or credit union were to fail, federal deposit insurance guarantees that you get your money back, either in the form of a check or a new account at another insured bank.

You can, however, lose money to fees if you’re not careful. Many savings accounts, especially at traditional brick-and-mortar banks, charge a monthly fee that can dent your savings just for owning the account. For those looking to avoid fees, we’ve found that many online savings accounts have reduced or eliminated their fees entirely.

Do savings account interest rates change?

Savings account interest rates are variable, meaning they can change at the discretion of the institution offering them. This is in contrast to fixed-rate savings vehicles, like CDs, which have set rates for predetermined periods of time.

Institutions tend to reserve the right to change their rates at any time, without warning. Luckily, there are institutions that notify you of upcoming changes, especially if it’s a substantial rate change. Each institution’s level of transparency and communication is something to consider when shopping around for the best savings account.

What impacts savings rates?

Institutions typically alter their rates in response to changes in market interest rates, which are in turn driven by the federal funds rate set by the Federal Reserve. The federal funds rate influences the rates banks lend money to each other. When the Fed increases the federal funds rate, financial institutions respond by increasing the interest rates they offer on deposit accounts. When the federal funds rate falls, interest rates decrease.

If you’re not keen on tracking the federal funds rate, changes to the APY on your savings account may come as a surprise. Luckily, chances are that if you keep your deposits with an online bank, you’ll still get the most competitive rates regardless of a Fed pause or rate decrease. Online savings accounts outperform most brick-and-mortar rates any day.

What are the typical fees associated with savings accounts?

The main fee you should look out for when shopping for any bank account is the pesky monthly service fee. These fees are charged for simply owning an account, and can range from as little as $5 to as much as $25, depending on the institution and the account. Luckily, the industry-leading best online savings accounts are free of monthly service fees.

Another common fee associated with savings accounts is the excessive transaction fee. This fee is charged each time you go over the legal limit of six transfers per statement cycle, and usually runs around $10. Some institutions, like Synchrony, do not charge an excessive transaction fee; however, they will close the account if an account holder makes excessive transactions more than occasionally.

You should also watch out for a paper statement fee. Technically this is not a monthly service fee, but many institutions charge you on a monthly basis if you choose to receive paper statements in addition to electronic statements. Some online savings accounts have done away with paper statements altogether; check with your bank to confirm their terms and conditions.

Should I have a savings account at the same bank as my checking account?

You certainly could choose to keep your savings account at the same bank as your checking account for convenience’s sake, but that doesn’t mean you should. Your savings deserve the best interest rate available, which earns you the highest possible return. If you keep your checking account with a traditional brick-and-mortar bank, you’re not likely to find the best savings account rates at the same institution.

To get the best return on your savings possible, open a high-yield savings account. These accounts are most often found at online banks, but a handful of brick-and-mortar institutions have started offering high-yield online savings accounts that outearn their regular savings accounts by a mile.
It’s not that there aren’t any advantages to keeping a savings account at the same institution as your checking account — you do get slightly quicker transfers between the accounts, and you can see both accounts in a single app dashboard. If these benefits are important to you, check out Ally Bank, Discover Bank or Capital One 360. They offer competitive rates on both savings and checking, and Capital One 360 also has the benefit of branches in select states.

What other high-yield savings options do I have?

  • Money market account: A money market account features the same transaction limitations as a savings account, thanks to Regulation D. Money market accounts generally come with a debit card and checks, unlike most standard savings accounts. Money market accounts also tend to require higher minimum deposits and balances, and are more likely to charge a monthly fee than a savings account.
  • Checking account: A checking account is a highly liquid deposit account designed for handling your everyday expenses. They don’t typically earn any interest — when they do, they feature lower rates than savings accounts. Unlike savings accounts, there are no transaction limitations on checking accounts.
  • Certificates of deposit: CDs are a fixed-rate, fixed-term savings account. Each CD has a set term, typically between three and 60 months. Once you make your opening deposit, you cannot withdraw your money until the CD term ends. Should you make what is known as an early withdrawal, you’ll face a penalty — typically a portion of the interest earned on the account. The interest rate remains the same for the length of the term, unlike savings account rates, which are variable.
  • Mutual funds: A mutual fund is an investment vehicle, not a deposit account. Mutual funds invest in stocks, bonds or other assets, and allow you to diversify your investment portfolio.
magnifying glass

Important savings account definitions

A savings deposit is defined by the Federal Reserve’s Regulation D as having two distinct features: a reservation of right clause and a monthly limit on the number of “convenient” transfers or withdrawals.

Of these two features, the monthly limit on “convenient” transfers is most strictly observed. You are limited to six preauthorized and automatic transfers, telephone transfers and withdrawals and transfers made by check, debit card or a similar method. Going over this limit results in a fee per transaction.

Transfers and withdrawals that are not limited include those made in person at the bank, by mail, by using an ATM or over the phone when the withdrawal is disbursed via check mailed to the you.

Interest

Interest is the yield you earn on your savings deposit, otherwise known as the principal balance. It’s the profit given to you by the bank in exchange for your savings deposit, unlike the interest you owe on a loan.

Rate of interest

The rate of interest is the percentage your money earns in a savings account in one year. This is also referred to as the simple interest rate. Simple interest is different from annual percentage yield (APY), which is explained below.

Compound interest

Compound interest refers to the process by which interest earnings are added back into the principal balance in a savings account, which “compounds” the growth rate of your money. Interest can be compounded — or added back into the principal balance — daily, monthly, quarterly, semiannually or annually.

This process lets your interest earn interest. For example, daily compounding means your principal balance earns interest today, the interest is then added to the principal and that new higher balance earns slightly more interest tomorrow, and so on.

Annual percentage yield (APY)

Savings accounts are typically marketed by referencing their annual percentage yield rather than their simple interest rate. Annual percentage yield takes into account the extra impact of compounding interest over the course of one year. An account’s APY is always higher than the simple interest rate.

Yield rate

The yield rate is how much your savings balance will increase over a given period of time. Unlike simple interest, yield rate operates according to a specified time period. Unlike APY, yield rate is not tied to an annual calculation, so it can represent returns over a number of months or years, for example.

Minimum balance requirement

Many savings accounts have minimum balance requirements, or the amount of money you must keep in your account. Minimum balance thresholds are often required to earn interest or waive a monthly fee.

What are the best banks for savings accounts?

Here’s a summary of our top picks:

  • 1.30% APY – Goldman Sachs Bank USA
  • 1.30% APY – American Express National Bank
  • 1.30% APY – Capital One
  • 1.30% APY – Barclays Bank
  • 1.25% APY – Ally Bank
  • 1.30% APY – Synchrony Bank
  • 1.50% APY – Vio Bank
  • 1.35% APY – Live Oak Bank
  • 1.25% APY – BrioDirect
  • 1.25% APY – CIT Bank
  • 1.30% APY – Citizens Access
  • 1.45% APY – CIBC Bank USA
  • 1.75% APY – Fitness Bank
  • 1.60% APY – First Foundation Bank
  • 1.56% APY – SFGI Direct
  • 1.55% APY – Prime Alliance Bank
  • 1.30% APY – HSBC Direct
  • 1.45% APY – Comenity Direct
  • 1.50% APY – Popular Direct
  • 6.17% APY – Digital Federal Credit Union

Savings Account FAQs

Your money is safe in a savings account as long as you bank with a reputable, insured institution. Your money is protected in case of bank failure by the FDIC for bank deposits or by the NCUA for credit union deposits. Your money should also be protected by safety measures taken by each institution, like firewalls, encryption, antivirus and anti-fraud detection and more. If you want to know more about the systems your bank has in place, you can typically find the information on their website or by giving them a call. It’s a good idea to take safety and privacy into account when shopping for the best savings account.

Deposit accounts aren’t listed on your credit report and they’re not subject to hard credit pulls, unlike when you apply for and use loans or credit cards. The activity in your savings account won’t affect your credit score, nor will the number of times you open a savings account. That doesn’t mean your deposit accounts go unmonitored. ChexSystems is a reporting system that tracks your banking activity. Most banks use ChexSystems to check your banking history for any previous overdrafts, negative balances, account closures and the like. If you do have a rocky banking history, this could make it more difficult for you to open future bank accounts. Still, opening multiple accounts won’t count against you.

You usually can open two or more savings accounts at the same bank, depending on the bank’s own policies. Each account will have its own account number. This tactic can be good for separating different savings goals. Oftentimes, banks can offer more than one type of account which can fit different needs. However, this doesn’t mean that you’ll get the best rates at the same bank. It’s still a good idea to shop across multiple banks to find the best savings account that suits your needs.

You can make ACH transfers and wire transfers from a savings account. If your account includes a debit/ATM card or checks, you can also make payments via those methods. Still, don’t forget that savings accounts are limited to six transfers and withdrawals per statement cycle. If you exceed these limits, you run the risk of incurring excessive withdrawal fees or having your savings account closed altogether.

Most savings accounts don’t include a debit or ATM card, which limits your ability to make in-person purchases. However, you can set up an ACH or wire transfer with your savings account number and bank routing number to send money for a purchase.

The federally imposed six-transaction limit on savings accounts applies to what are considered “convenient” transfers. These include preauthorized and automatic transfers, transfers made over the phone and withdrawals and transfers made by check or by debit or ATM card.You can withdraw money from your savings account an unlimited number of times when made at the bank in person, at an ATM or over the phone if the withdrawal is sent to you via check.

The choice between bank and credit union is largely based on personal preference.
Credit unions tend to be more community-focused than banks. You’re a member of a credit union, not a customer, so credit union members often have a say in credit union governance matters and elections. Plus, credit unions are often based around a specific geographic area, so you can build relationships with employees and fellow members.If it’s high-interest savings accounts you’re after, an online bank is probably your best bet over a traditional bank or credit union. Online savings accounts typically offer the highest rates around and their digital presence makes it easy to access your funds at any time during the day.If you’re still looking for high-interest rates, and aren’t afraid to lock away your cash for long periods of time, take a look at our recommended selection of the best credit unions which tend to offer some of the most competitive CD rates across the board.

You have to pay taxes on your savings account (and other deposit accounts) if you earned $10 or more in interest per year.Your bank will send you (and the IRS) a copy of Form 1099-INT if you meet or exceed this interest earnings threshold. If you don’t receive a 1099-INT from your bank, but earned $10 or more in interest, you’ll still need to report the earnings on your tax return.

Interest earnings are considered regular income for tax purposes. If you earned more than $1,500 in interest, you’ll need to detail the sources of that income on Schedule B of Form 1040.

Online banks don’t incur the costs of maintaining brick-and-mortar branches. These costs include rent, building maintenance, staff salaries and the cost of keeping physical cash safe. Without these expenses weighing them down, online banks reap big savings — savings they then pass on to their customers in the form of high interest rates

You may wish to open multiple savings accounts if you’re an individual with over $250,000 in savings. The FDIC and NCUA insurance only cover your bank accounts at the institution level. If you have an amount that exceeds the $250,000 insurance limit, you should spread your money out between multiple banks.This means that even if you have multiple savings accounts at the same bank, they would all be subject to the same $250,000 insurance limit. However, if you were to open multiple savings accounts across different institutions, you would be guaranteed up to $250,000 at each bank. This would allow all your money to be FDIC- or NCUA-insured.

Technically, there’s nothing stopping you from opening as many savings accounts as you want. However, this can get pretty cluttered and you can lose track of all your finances easily if you’re not careful. Make sure you’re getting the best savings rates for each account you open by shopping around.

April 2020 savings index

As the coronavirus (COVID-19) pandemic continues to place financial strains on many households, we surveyed more than 1,100 American consumers about their savings habits in April. Here’s what we found:

  • 34% of Americans added money to savings in April. That’s the second-lowest number we’ve seen in the seven-month history of the savings index, but still 3 percentage points higher than last month.
  • 1 in 5 consumers pulled money from their savings account in April, which is the highest number we’ve seen in the seven-month history of the savings index.

  • Top 6 things consumers are saving for: general savings (34%), emergencies (33%), vacation (20%), retirement (18%), new car (16%) and a new house/home repair (tied at 12%).
  • 38% of millennials saved money in April, which is more than any other age group. That’s compared with just 30% of baby boomers who upped their savings.

“The importance of having an emergency savings fund has become especially clear as the global health emergency has started to cause massive job losses,” said Ken Tumin, founder of DepositAccounts.com. “However, it’s concerning that 1 in 6 Americans don’t have any savings, making them especially vulnerable during this time of economic uncertainty. It’s never too late to start saving, and consumers who have the ability [to], should strongly consider stashing any amount they can in an FDIC-insured online savings account during this unprecedented pandemic.”

Survey Methodology

MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,184 Americans, with the sample base proportioned to represent the overall population. The survey was fielded April 14-16, 2020.

We defined generations as the following ages in 2020:

  • Gen Z are ages 18 to 23
  • Millennials are ages 24 to 39
  • Gen X are ages 40 to 54
  • Baby boomers are ages 55 to 74
  • Silent Generation are ages 75 and older

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Best of

The Best IRA 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.

Written By

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 May 2020

Account

Minimum opening deposit

APY

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

$0

1.75%

Communitywide FCU IRA

$2,000

1.50%

TIAA Bank Yield Pledge Money Market IRA (Traditional, Roth)

$500

1.40%

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

$25

1.26%

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

$0

1.25%

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

$100

1.20%

All America Bank Variable IRA (Traditional, Roth)

$100

1.10%

Northpointe Bank IRA Ultimate Money Market

$1,000

1.05%

Cadets Federal Credit Union IRA Share Account

$1,000

1.00%

Self-Help Federal Credit Union IRA Account (Traditional, Roth)

$100

0.85%

Signature Federal Credit Union IRA Savings — 1.75% 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 1.75% APY should also entice you, as the interest earned starts to rapidly drop off the further you get down this list.

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on Signature Federal Credit Union’s secure website

NCUA Insured

Communitywide Federal Credit Union IRA — 1.50% 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

TIAA Bank Yield Pledge Money Market — APY 1.40%, 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 1.40%. The only catch is that this rate applies for a term of one year; after that, it’ll drop back down to the normal rates (currently 0.90% – 1.35%, 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

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%.

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on Latino Credit Union’s secure website

NCUA Insured

Ally Bank IRA Online Savings Account— 1.25% 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 1.25%. 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

Alliant Credit Union IRA Savings— 1.20% APY, $100 minimum deposit

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 1.20%.

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on Alliant Credit Union’s secure website

NCUA Insured

All America Bank Variable IRA — APY 1.10%, minimum deposit $100

This Oklahoma-based bank makes its accounts available to anyone online, and those looking for an IRA savings account earning a high APY should take a look. While this bank doesn’t offer some of the more specialized IRAs others do, All America Bank provides the tried-and-true Traditional and Roth IRAs for a modest minimum deposit of $100.

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Member FDIC

Northpointe Bank Ultimate Money Market IRA — APY 1.05%, minimum deposit $1,000

Grand Rapids, Mich.-based Northpointe Bank operates a scattering of branches across the country, but primarily centered on the east coast. Although you can get started with its Ultimate Money Market IRA for as little as $1,000, you won’t earn as much: just 0.20% APY at this deposit level. Once you have at least $25,000 in the account, however, you’ll earn a higher rate of 1.05% APY. It’s generally not wise to keep over $250,000 in the bank because this is the limit of FDIC insurance, but if you choose to do so, balances over $1,000,000 in this account will dip back down to earning 0.50% APY.

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Member FDIC

Cadets Federal Credit Union IRA Share Account — APY 1.00%, minimum deposit $1,000

In 1899, a group of young Polish men in Buffalo, N.Y., formed the Polish Cadet Society, which eventually became The Polish Cadets Club of Buffalo. Many organizations came out of the club, including this credit union. To take advantage of this rate, you can become a member of the credit union by joining the Cadets Club. The credit union will even handle this for you. Your credit union membership will remain active as long as your account is active.

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on Cadets Federal Credit Union’s secure website

NCUA Insured

Self-Help Federal Credit Union IRA Account — APY 0.85%, minimum deposit $100

A credit union with more than 27 branches and $1 billion in assets, Self-Help’s physical locations are scattered throughout California, Wisconsin, North Carolina and Florida. However, anyone in the country can sign up to bank with them online by joining the Center for Community Self-Help, which involves paying a one-time fee of $5.

The IRA account offered by Self-Help Federal Credit Union comes with the option to choose either a traditional or Roth plan.

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on Self-Help Federal 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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