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Best Money Market Rates & Accounts – April 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.

Updated March 6, 2020

If you’re looking to save more money beyond your regular savings account, consider adding a money market account to the mix. A money market account can earn at a higher rate than a savings account, especially if you have a larger balance to deposit. Many MMAs tier their rates as well, rewarding higher balances with higher rates.

Like most deposit accounts, the rate on money market accounts has grown over the past few years, up from 0.188% APY in 2016 to 0.372% APY in January 2020. Savings account rates have also increased, but still averaged only 0.272% APY in January 2020.

You can do much better than a 0.372% APY on a money market if you’re willing to break with traditional brick and mortar banks. Opening an MMA at the bank around the corner, for example, may not yield more than 1.00% APY, while an internet-only bank might offer a rate of 2.00% APY or higher. With a rate like that, you can boost your savings by a wide margin.

If you were to put $50,000 into an MMA earning 0.04%, you would earn only $20 in interest over a year. Put that same starting amount into an online bank account at 2.00%, and you’d earn $1,000 in interest over a year.

With so many options out there, it can seem daunting to search for a new bank account with a potentially new bank. We’ve made it it easier for you by rounding up the best money market accounts out there. We searched through over 12,000 banks and credit unions to find the money market accounts paying the highest interest rates. We also looked at an account’s minimum requirements and fund accessibility.

Overall, we found that internet banks consistently beat the competition. You might not recognize all their names — new online banks are continuing to crop up — but if it’s high interest rates you’re looking for, it might be good to branch out since online banks are the way to go.

MagnifyMoney’s Best Money Market Accounts for April 2020

Here are our favorite accounts for April 2020:

The Best Money Market Rates & Accounts in April 2020

Institution

APY

Minimum Deposit Amount

Discover Bank

1.35% APY

$2,500

Ally Bank

0.75% APY

$0

Sun East Federal Credit Union

1.25% APY

$5,000

Affinity Plus Federal Credit Union

2.02% APY

$0

Prime Alliance Bank

1.71% APY

$10,000

Pacific National Bank

1.75% APY

$5,000

CFG Bank

1.90% APY

$25,000

Northpointe Bank

1.85% APY

$25,000

UFB Direct

1.70% APY

$25,000

CIT Bank

1.80% APY

$100

Virtual Bank

1.25% APY

$100

Premier Members Credit Union

2.00% APY

Up to $2,000

1. Discover Bank – 1.35% APY, $2,500 minimum deposit to open

Money Market from Discover BankDiscover Bank has become a household name for many financial products, and its money market account is no exception. Currently, Discover is offering a 1.45% APY on its Money Market account for balances under $100,000. Balances above $100,000, though, will earn an APY of 1.50%. There is a minimum opening deposit of $2,500 for Discover’s Money Market account, but after that, there are no minimum balance fees.

SEE DETAILS 

Member FDIC

2. Favorite Online Package: Ally – 0.75% APY, no minimum deposit and link to free checking

Online Savings Account from Ally BankAlly Bank is a very popular internet-only bank. If you’re able to keep a minimum daily balance of $5,000, you’ll be rewarded with a 0.75% APY. Although the interest rate on the money market account is not the highest, Ally does offer a very competitive overall package – particularly if you link the account to an Ally checking account. The checking account has no minimum balance and no monthly fee. You can link your money market account to your checking account to provide overdraft protection. Money would be transferred to your checking account with no transaction fee if you ever made a mistake. You would be able to access your money market account with your Ally ATM card, which has free AllPoint access and up to $10 of non-Ally ATM fees reimbursed every month. This money market account is a nice way to provide yourself with overdraft protection while earning interest. If you don’t need check-writing capabilities on your savings, you would still be better off with Ally’s savings account.

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

The rest of these are the best money market accounts listed by APY regardless of minimum balance:

3. High Rate: Sun East Federal Credit Union, 1.25% APY, $5,000 minimum balance to earn APY

MAX-Yield Money Market Account Special - New Money (13 Month Intro Rate) from Sun East Federal Credit Union

Sun East Federal Credit Union was established in 1949 by employees of the Sun Oil Company. These employees wanted to help each other out financially and decided to do so by establishing their own credit union. Since its establishment, the credit union has grown to acquire over $634 million in assets. Anyone can become a member of this credit union by donating $10 to the Sun East Charitable Foundation. You can also qualify by your location, family members, or through employers.

Once you become a member of this credit union, you’ll be able to open the Max-Yield Money Market Account. This account is currently offering a 1.25% APY that is guaranteed for 13 months. You’ll need to maintain a balance of at least $5,000, but the balance can’t exceed $250,000. Keep in mind that after the 13-month promotional period ends, the account will turn into the Classic MMA. The Classic MMA earns a much lower APY. If you aren’t able to maintain the minimum balance of $5,000, you’ll incur a monthly fee of $10. This account does come with check-writing capabilities. You’re able to manage this account online as well as through the credit union’s mobile app.

SEE DETAILS Secured

on Sun East Federal Credit Union’s secure website

NCUA Insured

4. High Rate: Affinity Plus Federal Credit Union, 2.02%APY, $0 minimum balance to earn APY

Superior Money Market from Affinity Plus Federal Credit Union
Affinity Plus Credit Union is a Minnesota-based credit union, but even if you do not live in the North Star state, you can take advantage of the attractive financial products they offer. Membership to the credit union is open to anyone who makes a one-time dues payment of $25 to the Affinity Plus Foundation.

Affinity Plus Credit Union offers a slew of money market accounts, but its Superior Money Market Account stands out, with a 2.02%  APY on balances up to $25,000. Additionally, there is no minimum deposit required and no monthly maintenance fees. Balances over $25,000 earn a 1.00% APY.

To earn the higher 2.02% APY, you must have a minimum direct deposit of $500 per month (which could come from payroll, Social Security or unemployment) to any Affinity Plus checking, savings or money market account, and also be enrolled in digital statements. If you don’t meet those requirements, you’ll earn 0.10% APY.

SEE DETAILS Secured

on Affinity Plus Federal Credit Union’s secure website

NCUA Insured

5. High Rate: Prime Alliance Bank – 1.71% APY, $10,000 minimum balance to earn APY

Personal Money Market from Prime Alliance BankPrime Alliance Bank was established in 2004 and has grown to acquire over $455 million in assets. The bank is currently offering a Personal Money Market account with an APY of 1.71%. You’ll need to deposit and maintain a balance of at least $10,000 in order to earn this APY. If your balance drops below $10,000, the APY will drop to 1.61%. There aren’t any monthly fees with this account. Prime Alliance Bank will provide an ATM card if you request one. This account can be managed online or via the bank’s mobile app.

SEE DETAILS Secured

on Prime Alliance Bank’s secure website

Member FDIC

6. High Rate: Pacific National Bank – 1.75% APY, $5,000 minimum balance to earn APY

MMDA Online Special (New Money Only) from Pacific National BankPacific National Bank has quite an interesting history. In 1982, Banco Del Pacifico Ecuador (BPE) decided to establish Banco Del Pacifico International in Miami, FL as an Edge Act bank. The Edge Act allowed national banks to do international banking through divisions chartered by the Federal Reserve Bank. By 1985, Banco Del Pacifico International decided to become a national bank charter and changed its name to Pacific National Bank. Since this change, the bank has acquired over $499 million in assets. The bank initially offered its services to South Florida residents, but decided to expand to all U.S. residents with a valid Social Security Number in 2016. Today, Pacific National Bank is offering an online special on its money market account. With a minimum deposit of $5,000, you could earn an APY of 1.75%. You’ll need to maintain that amount in the account on a daily basis to waive the monthly maintenance fee of $25 and to continue earning the high rate. Check writing is available with this account, but keep in mind that you can only make six certain transaction within a month due to federal law. If you exceed six certain transactions within a month, Pacific National Bank will charge a fee of $20 per additional transaction. You may also make ACH transfers, free of charge, without any limits after the initial funding. In addition to banking online, the bank offers a mobile banking app for your convenience.

SEE DETAILS Secured

on Pacific National Bank’s secure website

Member FDIC

7. High Rate: CFG Bank 1.90% APY, $25,000 minimum balance to earn APY

Online CFG High Yield Money Market - New Money from CFG Bank
CFG Bank is a privately owned and operated bank headquartered in Baltimore. While the bank only has a handful of locations scattered throughout Maryland, it offers many of its products online, nationwide.

Currently, CFG Bank is featuring a 1.90% APY on its High Yield Money Market account. However, this rate is only available for new funds, there is a minimum deposit of $1,000 required to open and a minimum daily balance of $25,000 required to obtain the APY. A minimum daily balance of $1,000, though, will still earn you an APY of 1.80%.

SEE DETAILS Secured

on CFG Bank’s secure website

FDIC Insured

8.High Rate: Northpointe Bank – 1.85% APY, $25,000 minimum balance, checks and debit card available

Liquid Money Market from Northpointe BankNorthpointe Bank is a fairly large bank located in Grand Rapids, MI. They have over $1 billion in assets and have only been around since 1999. Currently, they’re offering a 1.85% APY on their money market account. While you’ll only need $1,000 to open the account, you’ll have to have a minimum balance amount of $25,000 to earn the high APY. If you have a balance between $1,000 and $2,500, you won’t earn an APY. If your balance is between $2,500 and $25,000, you’ll earn a 1.05% APY. Once your balance exceeds $1 million, the APY will drop to .50%. This account comes with a debit card and checks. Northpointe Bank does not charge a monthly maintenance fee, but will charge a $15 Excess Transaction Fee each time you exceed six certain transactions a month. They offer online banking and have a mobile banking app.

SEE DETAILS 

Member FDIC

9. High Rate: UFB Direct – 1.70%APY, $25,000 minimum balance to earn APY

High Yield Money Market Account from UFB Direct

UFB Direct is a division of Axos Bank, a federally chartered, publicly traded and FDIC-insured bank based in San Diego. In recent months, UFB Direct has become increasingly aggressive with high rates targeting big balances. The APY of 1.70% is an outstanding rate, but you need to have a balance of at least $25,000. If your balance drops below that, you’ll earn an APY of 0.50%. You’ll also need to keep an average daily balance of at least $5,000 in the account in order to avoid a monthly maintenance fee of $10.00. You will get a Visa debit card and have access to limited check writing. We think this is the best option for people with big balances that they want to keep in a money market account.

SEE DETAILS Secured

on UFB Direct’s secure website

Member FDIC

10. High Rate: CIT Bank – 1.80%APY, $100 minimum balance

Money Market Account from CIT Bank CIT Bank is a well-established internet bank offering an array of financial products at competitive rates. Currently, its Money Market account features an attractive APY of 1.80% with no monthly service fee. There is a minimum required deposit of $100 for this account, and an overdraft fee of $25. Interest is earned on your entire daily balance, and is compounded daily and paid out monthly.

SEE DETAILS Secured

on CIT Bank’s secure website

Member FDIC

11. High Rate: Virtual Bank – 1.25% APY, $100 minimum balance

eMoney Market Special from Virtual Bank

As its name suggests, Virtual Bank is an internet-only bank that offers money market accounts and CDs. Currently, its eMoney Market account is worth exploring, with a 1.80% APY and a low minimum opening deposit of $100. This APY, though, only applies to new money not currently held at Virtual Bank. There is a minimum amount of just $0.01 required in order to earn interest, however you must maintain a daily minimum balance of $100 in order to avoid the $5 monthly service charge. Virtual Bank’s eMoney Market account comes with free mobile deposits.

SEE DETAILS Secured

on Virtual Bank’s secure website

Member FDIC

12. Premier Members Credit Union – 2.00% APY up to $2k

Money Market Account from Premier Members Credit Union

Premier Members Credit Union is open to anyone willing to make a $5 donation Impact on Education, a charity for the Boulder Valley School District. This credit union is currently offering an incredible rate of 2.00% with only $5 to open the account. You can earn this APY on balances up to $2,000. Amazingly, even if you grow the balance up to $5,000, you’ll earn 0.50% APY. As the balance increases, the APY decreases to the following:

  • $5,000.01-$10,000: 0.35%
  • $10,000.01-$50,000: 0.25%
  • $50,000.01-$100,000: 0.25%
  • $100,000.01-$250,000: 0.15%
  • $250,000.01+: 0.15%

Premier Members Credit Union rewards low balance savers by placing the highest rate with the lowest deposit, but if the balance grows they start using a reverse tier system where they blend the APY as the balance grows. Checks are available with this account, but you can only make six withdrawals per month. Each additional withdrawal will be assessed a $10 fee.

SEE DETAILS Secured

on Premier Members Credit Union’s secure website

NCUA Insured

What is a money market account?

A money market account is a special type of savings account: Cash you put in the account remains deposited with the financial institution, where it earns a variable annual percentage yield. Because the name of this deposit product has the word market in it, you may assume a money market account is some kind of investment product, but it’s not.

One of the features that differentiates a money market account from a savings account is that institutions generally make it easier to access deposited funds by offering checks and ATM cards. Note that some institutions are starting to provide them for savings accounts, too. Keep in mind that much like a savings account, money market accounts are governed by Regulation D, the Federal Reserve rule stating you can only make a maximum of six withdrawals via check or debit card. Additional withdrawals may incur a fee from your bank or credit union.

It’s also important to understand that money market accounts are different from money market funds. In the 1980s, shoulder pads and hair weren’t the only things that were big: Yields on money market funds were both low-risk and offered a good rate of return. To help out the banking sector, Congress passed the Garn-St Germain Depository Institutions Act of 1982, which allowed banks to offer a new type of savings account — money market accounts — with an interest rate based on those offered in money markets.

What to consider before opening a money market account

Before you get bogged down in the details, let’s take a look at some quick pros and cons of a money market account.

Pros:Cons:
  • Typically carry higher interest rates than savings accounts
  • Convenient access to your funds with check-writing abilities and a debit/ATM card (not offered on all accounts)

  • May carry monthly maintenance fees or a high balance to waive one
  • Still limited to six transfers and withdrawals per month like a savings account (or you’ll face a fee)
  • You’re better off using a higher yield product like CDs for money you won’t need in the immediate future

Who money market accounts are best for

Now that you know the basics of a money market account, should you get one? They’re a good choice if you have a big deposit you’d like to keep safe and growing at a high interest rate. Then when you need to access that money, perhaps for an upcoming purchase or in an emergency, you can often easily do so with an ATM/debit card or by writing a check.

Savings accounts vs. money market accounts

Money market accounts often earn a higher rate than standard savings accounts. The caveat is that MMAs often require higher opening deposits or higher balances than a standard savings account. Even so, you may also find that one bank’s top money market rate earns at the same rate (or lower) as a savings account at another bank.

For example, one of the best savings accounts, Ally’s Online Savings account, offers a 1.50% APY while its money market account earns at a mere 0.75% APY (on most balances). So if it’s high interest rates you’re after, be sure to compare accounts across the board rather than turning immediately to a money market account. Just be sure to keep your balance limits in mind when shopping around.

What often separates money market accounts from savings accounts is their check-writing abilities or issued ATM/debit cards. This provides easier access to your money especially if you have larger balances you’re saving for a bigger purchase. Not all money market accounts offer these features, though. Furthermore, money market accounts are still savings vehicles, so they’re also limited to six outgoing transactions per month, like transfers and withdrawals.

Read more about the differences between money market and savings accounts here.

CDs can offer higher rates than money market accounts

Savings accounts and money market accounts often pay much lower interest rates than CDs. Right now you can get a 1-year CD paying 1.85% APY (with only a $500 minimum). You can find the best CD rates here. If you build a CD ladder, you can take advantage of 5-year rates that are currently as high as 1.01%. Creating a CD ladder also allows you to protect your investments over the years by locking in today’s high rates in a long-term account while also staying flexible for any potential rate increases with your shorter-term accounts. The interest rate on a money market account can change right away, at the bank’s discretion.

If you need some savings more immediately, money market accounts are great places to keep that money— it’ll keep growing, while still remaining accessible. In contrast, should you need to access your CD funds before it matures, you’ll likely face a pretty heavy penalty, typically forfeiting three to six months of interest.

A money market account isn’t the same thing as a money market fund

Money market accounts, like deposit accounts, provide FDIC insurance on your deposits up to $250,000. Money market funds, on the other hand, are investment accounts, most likely sold by your broker, and are regulated by the Securities and Exchange Commission instead. Money market funds invest in highly liquid cash and cash equivalent securities that typically mature within 13 months.

As an example, Vanguard offers the Prime Money Market Fund. Like other money market funds, this one “invests in short-term, high-quality securities.” Its objective is to keep the fund trading at $1 and generate a decent return. Still, money market funds can end up with a lower return than those you see from the money market accounts listed in this article. Since money market fund returns are dependent on the market and the Federal Reserve Rate, it’s important to keep an eye on the current interest rate climate to see whether investing in these funds are worth your time and money.

Money market funds charge expense ratios, or management fees, that are charged as a percentage of your fund (Vanguard’s is currently 0.16% as of Dec. 2018). You can also end up paying some transaction fees. It’s important to watch out for an account’s fees which can often lessen your total investment in the end. Like money market accounts, money market funds can also require a high minimum balance to open an account.

Most people compare the return of a money market fund (sold by their broker) to the interest rate paid by a traditional bank (sold by their local bank teller). As a result, they are willing to take the risk of a money market fund. However, as you can see from the best money market accounts in this article, you can get FDIC insurance and beat the return of most funds without taking on the risk of market investments.

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The Best Online Checking Accounts for April 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.

The best checking accounts offer competitive rates, rewards and easy access to cash without any fees. If you’re looking for the best online checking account for your banking needs, take a look at our top picks for April 2020.

Every week, MagnifyMoney’s elite team of financial experts review offers from over 12,000 banks and credit unions, highlighting the best checking accounts offers we can find. We analyze each account for the following features:

  • Competitive interest rates
  • No monthly account fee or minimum balance requirements
  • No ATM fees and ATM-fee reimbursements
  • Bonus and cash-back offers
  • Special features for students and small businesses

Here are MagnifyMoney’s top picks for the best checking accounts in April 2020:

The Best Checking Accounts in April 2020

Best Overall Checking

Simple

Simple Review

Best High-Yield Checking

Consumer Credit Union Rewards Checking

Consumer Credit Union Review

Best Free Checking Account

Axos Bank Rewards Checking

Axos Bank Review

Best No-Fee Checking

BBVA Free Checking

BBVA Compass Review

Best Checking Account Bonus

Wells Fargo

Wells Fargo Review

Best Rewards Checking Account

Discover Cashback Debit

Discover Bank Review

Best No-ATM Fee Checking

TD Bank Beyond Checking

TD Bank Review

Best Business Checking Account

Axos Bank Business Interest Checking

Axos Bank Review

Best Checking Account for Students

Chase College Checking

Chase Bank Review

Best Joint Checking Account

Ally Bank

Ally Bank Review

Best Overall Checking Account – Simple

Simple

SEE DETAILS Secured

on Simple’s secure website

Highlights:

  • Free access to 40,000 Allpoint ATMs
  • No overdraft fees
  • Access to tools that allow you to automate your budgeting and savings
  • APY: 1.55% on balances in Protected Goals
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: Through a partnership with BBVA, Simple offers a great checking account with attractive budgeting features and a competitive APY. This account is great for those looking for a traditional checking account without unnecessary fees and stocked with benefits like interest and free ATM access.

What to watch out for: While you can earn a decent APY on the funds in your Protected Goals account, Simple doles out a dismal 0.01% APY on funds that are not in your Protected Goals account, a sub-account designed for money you set aside for savings. It’s also worth noting that fees may apply to ATMs outside of its Allpoint ATM network, and there is a Visa fee of up to 1% if the card is used internationally.

Best High Yield Checking Account – Consumers Credit Union Rewards Checking

Consumers Credit Union (IL)

SEE DETAILS Secured

on Consumers Credit Union (IL)’s secure website

NCUA Insured

Highlights:

  • Access to over 30,000 ATMs
  • Most lucrative rates require minimum direct deposits or spend on CCU Visa credit card
  • APY: up to 3.09%
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

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

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

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

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

Best Free Checking Account – Axos Bank Rewards Checking

Axos Bank

SEE DETAILS Secured

on Axos Bank’s secure website

Member FDIC

Highlights:

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

Read the full review

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

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

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

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

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

Best No-Fee Checking Account – BBVA Free Checking

BBVA

SEE DETAILS Secured

on BBVA’s secure website

Member FDIC

Highlights:

  • Free ATM access at BBVA ATMs
  • For $5 per month, you can receive up to four rebates per statement cycle for ATM fees charged by other banks, as well as no BBVA fees at non-BBVA ATMs
  • APY: None
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: If you’re looking for a basic checking account that gets the job with no fees or frills, the BBVA Free Checking account is a product worth exploring.

This checking account provides you with the basic checking necessities, with no monthly fees. Additionally, it gives you the ability to customize your account further for additional charges. For example, an extra fee of $2 a month will give you unlimited cashier’s checks.

What to watch out for: With the BBVA Free Checking account, there is a $25 minimum balance required to open an account and a potential overdraft fee of $38.

Best Checking Account Bonus – Wells Fargo Everyday Checking

Wells Fargo Bank

SEE DETAILS Secured

on Wells Fargo Bank’s secure website

Member FDIC

Highlights:

  • Access to over 13,000 Wells Fargo ATMs
  • Features budgeting, cash flow and spending tools
  • $10 monthly service is waived if you meet any one of their requirements
  • APY: None
  • Maintenance Fee: $10
  • Current Promotions: $400 bonus with $4,000 in direct deposits

Read the full review

Why we picked it: Wells Fargo’s Everyday Checking account is currently offering an attractive bonus offer, expiring July 31, 2020. Upon opening a new Wells Fargo Everyday Checking account and depositing a minimum of $4,000 in qualifying direct deposits within 90 days of opening, you’ll receive a $400 bonus.

This offer is only available to new Wells Fargo checking and savings customers in Denver, Houston, Miami, Orlando, Fla., Phoenix and Seattle. You also must not have received a bonus for opening a Wells Fargo consumer checking or savings account within the past 12 months.

What to watch out for: This account requires a $25 initial deposit to open. You should also be aware of the not-so-obvious fees associated with this account, which include a $2.50 fee for cash withdrawals at non-Wells Fargo ATMs in the U.S ($5 outside of the U.S.) and a $35 overdraft fee.

Best Rewards Checking Account – Discover Cashback Debit

Discover Bank

SEE DETAILS 

Discover Bank's website is secure

Member FDIC

Highlights:

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

Read the full review

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

What really earns this account the title of Best Rewards Checking account, though, is the fact that it offers 1% cash back on all debit card purchases, up to $3,000 per month. This is a unique perk among checking accounts, and if you prefer cash back to earning interest, this could be the account for you.

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

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

TD Bank

SEE DETAILS 

Member FDIC

Highlights:

  • No fees at TD Bank ATMs, and reimbursed fees for out-of-network ATMs for accounts that maintain a daily balance of at least $2,500
  • No required minimum opening deposit
  • Overdraft fees reimbursement offered up to two times per year
  • APY: Up to 0.01%
  • Maintenance Fee: $25
  • Current Promotions: N/A

Read the full review

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

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

What to watch out for: Be aware that the 0.05% APY is available only to accounts with a minimum daily balance of $50,000. Accounts with balances between $10,000 and $49,999 receive an APY of just 0.03%, while balances under $10,000 receive an APY of just 0.01%. There is also a $35 overdraft fee associated with this account.

Best Business Checking Account – Axos Bank Business Interest Checking

Axos Bank

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on Axos Bank’s secure website

Member FDIC

Highlights:

  • Unlimited domestic ATM fee reimbursement
  • Up to 50 free transaction items per month
  • Monthly service fee can be waived if you maintain an average, daily minimum balance of $5,000
  • APY: Up to 0.80%
  • Maintenance Fee: $10
  • Current Promotions: New business owners eligible for a $50 Welcome Bonus

Read the full review

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

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

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

Best Checking Account for Students – Chase College Checking

Chase Bank

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on Chase Bank’s secure website

Member FDIC

Highlights:

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

Read the full review

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

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

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

Best Joint Checking Account – Ally Bank Interest Checking

Ally Bank

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Member FDIC

Highlights:

  • Free access to Allpoint ATMs and up to $10 in ATM fee reimbursements per statement cycle
  • No required minimum opening deposit
  • 0.10% APY on balances less than $15,000; 0.50% APY on accounts with a minimum daily balance of $15,000
  • APY: Up to 0.50%
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: Ally Bank’s Interest Checking account features minimal fees, variable interest and added perks like up to $10 in ATM fee reimbursements every month.

All of Ally Bank’s banking products support joint ownership, and you are allowed up to four owners on the account without any additional fees, making this an easy pick for our Best Joint Checking account.

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

FAQs: What should I know about checking accounts?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What should I look for in a checking account?

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

Find an account with few or zero fees

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

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

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

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

Pair your checking account with a high-yield savings account

You might want to pair your checking account with a high-yield savings account if you’d like to maintain your day-to-day spending but stash away a portion of your cash to earn a higher rate of return in longer-term savings.

This is also a great option for those who don’t want to be tempted with the ability to easily spend their savings on everyday needs.

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

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

Resist the urge to hoard cash in a checking account

With easy access, low fees and the safety of FDIC insurance, it can be tempting to use checking accounts as a place to hoard all of your cash. However, checking accounts generally offer much less interest than high-yield savings accounts which makes them a poor store of value.

Keep in mind that deposit accounts will typically pale in comparison to any returns you can reap from investing your extra money in the market. It’s a good idea to keep just enough in your checking account to cover your daily needs, meet any minimum balance requirements and avoid any possible overdraft charges. To get the most out of your money, consider storing any cash you don’t need in a separate high-yield savings account or CD.

There are two main reasons your money would be better off not sitting in checking:

#1 You could miss out on higher interest rates
Interest rates on checking accounts are generally pretty pitiful. Even when they seem high (perhaps 0.60% or even 1.00%), there can be a lot of hoops to jump through in order to secure that interest rate. Instead, consider putting your money into one of the nation’s best savings accounts,best money market accounts or CDs. Your money can easily earn 1.00% or more with those accounts.

#2 You don’t want to give fraudsters access to your life savings
Fraud is another reason you may want to keep a minimal amount in checking. Bank fraud is so prevalent you’ll likely get smacked by it at some point. For credit card users, it isn’t as worrisome because the money charged to a credit card isn’t coming directly out of your bank account and credit issuers commonly offer zero fraud liability protection. On the other hand, debit card fraud means a crook gains direct access to your account and can be draining your actual funds in real time. By not keeping a ton of money in checking, you can reduce the damage a thief can do.

If your card is stolen and you report it to your bank within two days, you can be responsible for up to $50 of unauthorized charges. Waiting longer than two days can make you responsible for up to $500 in unauthorized charges. Additionally, if you notice any unauthorized charges on your account statement, you have 60 days to tell your bank to avoid liability for following transfers. Even if your bank reimburses you for the funds, it’s still a hassle to spend days — even weeks — without having access to that money.

Other Options Besides Checking Accounts

Consider a cash management account

Cash management accounts are a relatively new type of money management account that has become increasingly popular. These accounts are a hybrid of both checking and savings accounts while offering features common to both.

Cash management accounts can offer the convenience and liquidity of checking accounts, plus the interest earnings of high-yield savings accounts. Some cash management accounts feature separate checking and savings accounts under one banner, with instant and unlimited transfers between the two. Others comprise a single account featuring both a competitive interest rate and unlimited liquidity.

Before you go running for the best of both worlds, it’s important to note that not all cash management accounts offer the same FDIC-insurance carried by checking or savings accounts offered by most major banks. This can subject you to some level of risk that you might not necessarily face with a typical FDIC-insured checking or savings account.

Consider hybrid savings/checking accounts

In today’s competitive savings rate atmosphere, some banks are offering the best of both a checking and savings account in the same product, like the Simple Checking Account + Protected Goals Account, our top pick above. These hybrid accounts offer the flexibility of a checking account by including a debit card and avoiding the six-transaction limit of savings accounts. Some accounts might also offer the ability to write checks through the account (however, Simple does not).

Even better, these hybrid accounts also offer the high-yield competitive rates of a savings account (think above 2%!). Opening this kind of account can prove to be a great addition to your savings profile, especially since most checking accounts tend to offer unremarkable rates. Simple goes even further by helping you save towards a specific Savings Goal instead of just earning a high interest rate — although saving at least $2,000 towards that goal enables that high rate.

Of course, money market accounts are already known as hybrid-like accounts with high interest rates. But without limiting your transfers and transactions to six per cycle, these new checking/savings hybrid accounts (or cash management accounts, as they might be called) are able to set themselves apart from money market accounts. Money market accounts also tend to require much higher balance limits and charge monthly service fees, unlike these new accounts we’re starting to see.

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Best of, Earning Interest

The Best High-Yield Online Savings Accounts in April 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.

Start saving today with these high-yield bank accounts

Updated April 3, 2020

The best online savings accounts provide consumers with interest rates that are, on average, 1.47 percentage points higher than the rates offered by traditional brick-and-mortar banks as of March 2020. Every week, MagnifyMoney’s elite team of financial analysts reviews and compiles the best savings account offers from dozens of online banks.

If you’re still skeptical about switching to an online bank, consider the facts:

  • Online savings accounts offer higher rates, and you often end up saving on the cost of the account. With lower overhead costs, online banks typically charge lower fees.
  • Your funds are just as safe stashed with an FDIC-insured online bank as they would be with the bank branch on Main Street.
  • Many online banks offer round-the-clock customer support and online chat features that make it easy to resolve issues 24/7, without ever needing to visit a branch.

Our weekly picks of the best online savings accounts with high yield rates are featured below:

1. High Rate: Goldman Sachs Bank USA –  1.70% 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 1.70% 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 1.70% 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: American Express National Bank – 1.60% 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 1.60% variable Annual Percentage Yield (APY) as of 3/25/2020. 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.

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on American Express National Bank’s secure website

Partner Offer

Member FDIC

3. High Rate: Barclays Bank – 1.60% 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 1.60% 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

4. Favorite Online Package: Ally Bank – 1.50% 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 1.50%. 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.

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on Ally Bank’s secure website

Member FDIC

5. High Rate: Capital One – 1.50% 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 1.50% 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.

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Member FDIC

6. High Rate: Discover Bank – 1.50% APY, no minimum balance

Discover Bank is famous for its credit cards. But it also has an online consumer bank. The savings account pays 1.50% APY. There is no minimum deposit or balance requirement, opening this savings opportunity to all kinds of savers. Discover doesn’t charge a monthly fee, either, nor an excessive transaction fee.
Discover provides customers with on-the-go access through its mobile app, which includes mobile check deposit.

7. High Rate: Vio Bank – 1.75% 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 1.75% 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.

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on Vio Bank’s secure website

Member FDIC

8. High Rate: Live Oak Bank – 1.75% 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.

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on Live Oak Bank’s secure website

Member FDIC

9. High Rate: CIT Bank – 1.75% 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 1.75% 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

10. High Rate: Citizens Access – 1.70% 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 1.70% 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: Synchrony Bank – 1.50% APY, no minimum balance, (and ATM access)

High Yield Savings from Synchrony BankSynchrony Bank pays a healthy 1.50% 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

12. High Rate: CIBC Bank USA – 1.45% APY, $1,000 to open

CIBC Agility Savings - Online Only from CIBC USACIBC Bank USA is the U.S. division of a Canadian based bank. This division was established in 1991 and has since acquired over $27 billion in assets. Currently, CIBC Bank USA is offering an online-only Agility Savings account with a competitive APY of 1.45%. You’ll only need $1,000 to open the account. While there isn’t a monthly maintenance fee, you may be charged $10 if you make more than six transactions per statement cycle. CIBC Bank USA does have a mobile banking app, but make sure that you download the app for the U.S., not Canada.

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on CIBC USA’s secure website

Member FDIC

13. Unique Bank + Highest Overall Rate: Fitness Bank – 2.10% 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 2.10% 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 2.00% (which is still a great APY). You’ll earn 1.75% 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 1.25%. 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 2.10% 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 Rates on two savings accounts: CommunityWide FCU – 2.00% APY or 1.90% APY, $1 minimum to open

High Rate - quarterly withdrawals only from Communitywide Federal Credit UnionCommunityWide Federal Credit Union was established in 1967. Anyone can become a member of this credit union by joining Habitat for Humanity Helpers, Marine Corps. League of St. Joseph Valley, or Michiana Goodwill Boosters. You may also qualify through your employer or a relative who’s an existing member.

Once you become a member of CommunityWide FCU, you’ll be able to open one of two unique savings accounts: High Rate Account and Funds Account. These accounts act like a hybrid between a savings account and a CD since the credit union only allows you to withdraw from these accounts during a specific time period.

The High Rate Account currently earns 2.00% APY. You only need $1 to open the account and earn the APY. While you can deposit money into the account anytime, you’ll only be able to withdraw from the account within the first five (5) days of each quarter. If you withdraw money outside of this window, you’ll incur a withdrawal penalty that is equal to 30 days dividends.

If withdrawing money once a quarter isn’t feasible for you, you can open the Funds Account instead. This account allows you to withdraw money within the first five (5) days of each month. The minimum to open and earn the APY is still $1, but the APY drops to 1.90%. If you withdraw money from this account early, you’ll incur a penalty that is equal to 7 days dividends. These accounts are unique as they really help you save money while still giving you flexibility to withdraw within a certain timeframe.

SEE DETAILS Secured

on Communitywide Federal Credit Union’s secure website

NCUA Insured

15. High Rate: First Foundation Bank – 1.75% 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 1.75%. 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 0.10%. 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 $5,000 and the monthly limit is $10,000. 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 – 1.71% 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 1.71% 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: Prime Alliance Bank – 1.71% APY, $10,000 minimum balance amount

Personal Savings Account from Prime Alliance BankPrime Alliance Bank was established in 2004 to provide financial assistance to local businesses and residents. However, through its online banking platform, it’s now able to reach more customers while keeping that local bank service. Today, it’s grown to acquire over $455 million in assets.

While the bank’s Personal Savings Account doesn’t require a minimum amount to open the account, you will need to have at least $10,000 in the account to earn the high APY of 1.71%. If your balance is below the amount, you’ll earn 1.61% APY. This account doesn’t have a monthly service fee. You’re able to request an ATM card and withdraw as much as you need from an ATM, but the account is limited to six certain withdrawals and transfers due to federal regulations. You’re able to maintain the account online or through the bank’s mobile app.

SEE DETAILS Secured

on Prime Alliance Bank’s secure website

Member FDIC

18. High Rate: HSBC Direct – 1.70% 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 1.70% 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

19. High Rate: Popular Direct – 1.70% 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 1.70% 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

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 April 2020

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

The Best Savings Accounts in April 2020 Overall

Institution

APY

Bank Review

Goldman Sachs Bank USA High Yield Online Savings

1.70% APY

Goldman Sachs Bank USA Review

American Express National Bank Personal Savings


1.60% APY

American Express Review

Barclays Bank Online Savings Account

1.60% APY

Barclays Bank Review

Ally Bank Online Savings Account

1.50% APY

Ally Bank Review

Capital One 360 Performance Savings

1.50% APY

Capital One 360 Review

Discover Bank Online Savings




1.50% APY




Discover Bank Review

The Best Online Savings Accounts in April 2020

Institution

APY

Bank Review

Vio Bank High Yield Online Savings Account

1.75% APY




Vio Bank Review

Live Oak Bank Savings Account

1.75% APY

Live Oak Bank Review

CIT Bank Savings Builder

1.75% APY

CIT Bank Review

Citizens Access Online Savings Account

1.70% APY

Citizens Access Review

Synchrony High Yield Savings

1.50%APY

Synchrony Review

CIBC Bank USA Agility Savings

1.45%APY

CIBC Bank USA Review

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

Institution

APY

Bank Review

Fitness Bank Savings

2.10% APY

Fitness Bank Review

CommunityWide FCU High Rate and Funds Accounts

2.00% APY and 1.90% APY

CommunityWide FCU Review

First Foundation Bank Online Savings Account

1.75% APY

First Foundation Bank Review

SFGI Direct Savings Account

1.71%APY

SFGI Direct Review

Prime Alliance Bank Personal Savings Account

1.71% APY

Prime Alliance Bank Review

HSBC Direct Savings

1.70% APY

HSBC Direct Review

Popular Direct Ultimate Savings Account

1.70% APY

Popular Direct Review

What should I know about savings accounts?

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

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 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.

 

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.

Online savings index February 2020

Our online savings index tracks the monthly performance of a basket of online savings rates relative to a basket of savings rates from brick-and-mortar institutions.

  • Despite four Fed rate increases in 2018, savings yields at brick-and-mortar banks were pinned at less than 0.1%. Meanwhile, average yields at online banks soared, peaking above 2% in early 2019.
  • The spread between rates at online banks and brick-and-mortar banks widened considerably in the period between August 2017 and June 2019, then compressed somewhat in late 2019.

March 2020 savings index

In the midst of the coronavirus (COVID-19) pandemic, we surveyed 1,520 American consumers about their savings habits in the month of March. Here’s what we found:

  • Overall, 31% of Americans added or plan to add money to their savings account this month. That’s the lowest number we’ve seen in the six months we’ve conducted this survey.

  • Our survey also found that a similar number of consumers didn’t take money out of their savings at all. Savings habits remain unchanged for 35% of respondents who neither added nor withdrew funds from their account.

  • The number of Americans saving for emergencies increased sharply. Nearly one-third (32%) indicated they’re working on an emergency savings fund, which is a 45% increase from last month’s numbers. Of course, consumers may not all be adding to their emergency fund, but it’s definitely a start.
  • About 1 in 6 Americans (16%) don’t have any savings, leaving their finances in a precarious state during the global health pandemic.
  • More millennials (ages 24 to 39) and Gen Z (ages 18 to 23) saved money this month compared to their older counterparts. Nearly 4 in 10 (38%) of millennials and Gen Z, respectively, added money to their savings, compared to 31% of Gen X and 23% of baby boomers.

“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 1,520 Americans, with the sample base proportioned to represent the overall population. The survey was fielded March 18-19, 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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