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Strategies to Save

99% of Savings Accounts Don’t Beat Inflation: Here Are Some With Higher Rates

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.

savings account

Inflation — or the increase in prices and the decrease in the purchasing power of money — is an economic concept commonly discussed in the news and among most adults as it affects cost of living, finances and savings. Right now, the inflation rate is 2.3% annually and has been over 2% for more than a year, according to the Consumer Price Index (CPI).

In comparison, the average savings account rate is still only 0.26% for nearly 9,000 savings accounts at banks and credit unions across the U.S. For certificates of deposit (CDs), the news is a little better. The average rate is 1.04% (for a one-year CD) among nearly 7,000 banks and credit unions.

While savings account and CD rates are finally starting to increase, very few banks and credit unions offer rates that will outperform the rate of inflation. In a new study, MagnifyMoney sifted through more than 15,000 personal savings accounts and one-year CDs to see where one could earn enough on their savings to keep up with the rate of inflation of 2.3%. Overall, the results were disappointing.

Key findings

  • The average savings account rate is only 0.26%.
  • The average one-year CD rate is only 1.04%.
  • Only 0.4% of the nearly 9,000 savings accounts reviewed last month offered an annual percentage yield (APY) greater than the inflation rate of 2.3%. Often, that savings account rate was capped at the first $500 to $5,000 on deposits.
  • Only 3.4% of one-year CDs were yielding 2.3% or more in November 2018.
  • Credit unions and online banks make up most, though not all, of the savings accounts and CDs that outpace inflation.
  • Some of the best rates are offered by credit unions, for which membership for many may not be possible.
  • Half of the savings accounts reviewed yield 0.15% or less annually.
  • Half of the one-year CDs reviewed yielded 1.00% or less annually.
  • Even though some of the one-year CDs reviewed are offering yields greater than the inflation rate of 2.3%, many interest rate observers expect inflation to increase even faster in the months ahead, meaning that inflation may still get the better of these deposits.

Breaking down the data

Let’s look at some data visualizations that highlight some of the key findings of this study. These three charts below will show you:

  1. The distribution of CDs with the best rates by financial institution (i.e., brick-and-mortar banks, online banks, credit unions)
  2. Distribution of 366 savings account yields
  3. Distribution of 396 one-year CD APYs

Check out this chart that shows which CDs beat inflation by financial institution type. Only 14 brick-and-mortar banks offer rates that compete with the current inflation rate.

This chart displays the distribution of savings account yields as of October 2018. Only seven savings accounts surveyed offer 2.3% or more.

You can see the distribution of one-year CD APYs across 396 CDs in the chart below.

Why many savings accounts and CDs aren’t outpacing inflation

Now that we’ve looked at the data and seen the statistics on savings account and CD rates compared to the inflation rate, let’s discuss two reasons why many savings accounts and CDs are not outpacing inflation.

Big banks play on convenience

Brick-and-mortar banks often compete over convenience, rather than on deposit rates. The price of offering a branch or ATM in as convenient a location as a Starbucks may be more affordable than offering better rates. When a bank snags new business because it’s a convenient option, customers may be less inclined to leave for a better rate.

The largest banks, which represent the largest share of low rate deposits, also have an interest in getting funds into their brokerage and investment accounts, rather than high-yield deposit accounts. In a brokerage account, the bank can earn money on trading commissions and fees on funds.

Online banks, regional banks and credit unions looking to compete with larger banks can’t win when it comes to the number of branches and locations they offer. Often, they don’t have a brokerage arm either. So they compete for new customers by offering attractive rates on deposits.

Inflation rates are increasing faster than interest

If the interest paid on your savings account does not keep up with the rate of inflation, the purchasing power of your savings will decrease over time. For example, if you buy a one-year, short-term CD at 2.5% but inflation increases from 2.3% to 4% within the year, there is no way for your investment to keep up — even with a higher earning rate.

6 standout banks with a high-rate savings or CD account

Putting your money in a savings account or a CD is almost always a better option than keeping your money at home. Savings accounts offer more flexibility and allow you to withdraw your money frequently with limited penalties. A CD often offers higher interest rates but limits access to your funds until the CD term expires.

Based on the data and findings from the MagnifyMoney study, where can one go to get savings account or CD rates that beat inflation? While the majority of banks and credit unions are not offering high-rate savings or CD accounts, here some financial institutions that stand out.

Savings account options that outperform inflation

If you are looking for a savings account that offers a high yield and flexible access to your money, here are options that may be right for you. Just be aware that income from bank accounts is taxable, so even if the headline rate is above inflation, your net return may be below inflation depending on your tax situation.

Vio Bank

The High Yield Online Savings Account from Vio Bank carries a 2.52% APY for all balances. It takes just $100 to open this account and there’s no monthly fee, making Vio Bank an accessible and low-cost option to earn a savings rate this high.

CIT Bank

Another high-yield account to consider is CIT Bank’s Savings Builder account. It offers a 2.20% APY on a tiered basis — savers can earn this high rate by either maintaining a balance of $25,000 or higher or depositing $100 or more into the account each month. It takes just $100 to open a Savings Builder account, and it has no maintenance fee.

Popular Direct

One of the highest savings rates we could find is offered by Popular Direct, the online arm of Popular Bank. It offers a 2.55% APY on its Plus Savings Account, and interest compounds daily. You’ll need to deposit a minimum of $5,000 to open this account, and maintain a balance of $500 or more to get the $4 monthly service fee waived if you.

CDs options that outperform inflation

If you are looking to save your money in a CD and can agree to the terms, these three banks or credit unions are offering rates that outperform inflation.

PenFed Credit Union

For a one-year CD, PenFed Credit Union offers a 1.80% APY and requires just $1,000 to open a CD. This rate outperforms the inflation rate (2.3%) significantly.

Live Oak Bank

Next is another bank with high-rate CDs, Live Oak Bank. Its 12-month CD comes with an APY of 2.40% and requires a minimum opening deposit of $2,500.

Greenwood Credit Union

Greenwood Credit Union is offering a 12-month CD term with a 2.00% APY. The minimum opening deposit is $1,000.

Let’s look at a real-world example. If you were to deposit $10,000 in a one-year CD at Greenwood Credit Union with a 3.00% APY, you’d earn $300 after 12 months.

Based on the results of this study, there are very few (.4%) brick-and-mortar banks, online banks and credit unions that offer high-yield rates on savings accounts and CDs. In most cases, the inflation rate of 2.3% is higher than interest rates being offered. Based on the last year, the inflation rate has stayed above 2%, while savings account rates average only 0.26% and one-year CD rates average 1.04%, according to the MagnifyMoney study.

Still, some financial institutions offer rates that outperform the inflation rate. Check out all your options using the MagnifyMoney savings accounts marketplace. You can also check out some credit unions and online banks that offer high-yield rates for one-year CDs using MagnifyMoney’s CD rates comparison tool.


MagnifyMoney surveyed roughly 9,000 personal savings accounts and 6,000 one-year CDs of banks and credit unions available in the U.S. to determine the percentage of products with annual percentage rates that are greater than that of inflation, as measured by the September 2018 Consumer Price Index annualized rate of 2.3%. Banks were surveyed Oct. 30, 2018.

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

Sage Evans
Sage Evans |

Sage Evans is a writer at MagnifyMoney. You can email Sage here

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Strategies to Save

Best Money Savings Apps

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.

best mobile apps

Saving money isn’t always as simple as the oft-prescribed “put it away and don’t touch it” advice makes it seem. With financial concerns constantly tugging at our attention, it can be difficult to find the time and money to save for future goals, events or the unavoidable emergency.

If the savings aren’t there when you need them, you may finance a purchase or cover an emergency with debt like a credit card or personal loan. In a pinch, those tools can be invaluable. But taking on debt should generally be considered a last resort, as carrying debt comes with its own risks.

Luckily for the tech-savvy, the fintech revolution gave rise to several mobile apps designed to help you save money — and make saving a bit more interesting, to boot. Read on to discover the best money savings apps to help you save for short term goals like a vacation, long term goals like a home or college education, and pad your all-too-important emergency fund.

Best money savings apps to help you save daily

Consistency is the root of wealth-building. That said, it follows that saving a little bit of money every single day can be a good practice to start building a wealth mentality. It also happens to be a great way to save money without feeling drastically penalized today to serve your future goals, since you can split your saving into small chunk sand meet targeted saving goals. The following money savings apps can help you get into the habit of saving a little bit of money every day.

Best for saving money on a tight budget: Joy

App Store: 4.3/5, Google Play: n/a
If you’re on a tight budget, the Joy app may be a great way to find money you didn’t think you had.

This free iOS app analyzes your income and spending habits and calculates how much money you can safely save each day without breaking your budget. The Joy app won’t automatically make the transfer for you, so you’ll have to open up the app and decide whether or not to save the money. If you say yes, the funds will be transferred from your linked account to an FDIC-insured Joy savings account.

You can also elect to save more or less than the amount suggested, as you can move money into your Joy savings account anytime. If you need a reminder, set up a daily notification to remind you to make the transfer.

When you’re ready to spend your savings, you can transfer the funds from the Joy savings account to an external account.

Another popular app, Digit, deserves honorable mention. Digit calculates how much you can save each day and will make the transfer for you, automatically — however, Digit costs $2.99, so it may not be a viable option for those on a tight budget.

Best for saving up an emergency fund: Chime Banking

App Store: 4.7/5, Google Play: 4.4/5
Standard financial advice suggests keeping three to six months worth of monthly expenses stashed away in an emergency fund, just in case you run into a financial emergency. In reality, however, around 40% of Americans report they aren’t able to cover a $400 emergency out-of-pocket, while the average U.S. monthly household expenditure is about $5,005.

Chime, a mobile-only bank, hopes its app’s automatic savings features may just help you beat the status quo and make it a little less painful to finally build up your emergency fund. The Chime app is free and available for both iOS and Android devices.

When you enroll in direct deposit and Save When You Get Paid, Chime will automatically transfer 10% of each paycheck into a seperate Chime savings account for you. If you’re enrolled in Chime’s automatic savings program, the bank will also automatically round up each transaction made with your Chime Visa debit card and deposit the amount into your savings account, too.

Best for saving money for a vacation: Tip Yourself

App Store: 4.6/5, Google Play: 4.4/5
Tip Yourself is a free app that may help you save for your dream trip. With the Tip Yourself app, available on iOS and Android devices, you can reward yourself for positive behavior by transferring a little bit of money to your digital tip jar each time you accomplish a personal goal.

If you make it to the gym on a Tuesday, for example, tip yourself $1 (or whatever amount you feel you deserve). The same goes for every other personal goal you may have, such as getting to work earlier or calling your parents once a week.

The app aims to help its users build savings habits and motivate them to stay more consistent about their personal goals, too. The app also has a social feed, so you can share your wins — big and small — with your peers in a supportive community. If you’re into maintaining a streak, there is also a calendar that keeps track of the days you did tip yourself.

With Tip Yourself, you can set a savings goal for your next vacation. When you reach your goal, you’ll feel confident taking a vacation knowing the money you’re spending is your reward for keeping the promises you made to yourself.

Best money savings apps to help you save monthly

Saving money on a monthly basis for large goals doesn’t have to come down to what’s left over at the end of the month. And it won’t, if any of the following money savings apps have anything to do with it. The apps below encourage users to set aside the funds when they have them, before the money is absorbed into their monthly expenses.

Best for saving money for a car: Qapital

App Store: 4.8/5, Google Play: 4.5/5
A car is a fairly large savings goal to meet, but it can seem less daunting if you can save a bit toward your vehicle each time you are reminded why you need the car in the first place — that’s where Qapital comes in.

With Qapital, you can set customizable autosave rules for just about anything, so you can save money simply with the actions you take living your life. You can set a custom rule; for example, you can save a certain amount of money each time you pay for a public transit ticket or fill up the tank for that friend who drives you to work.

Qapital has a bunch of other ways to help you save up for a car, too. With the round up rule, the app will round up all of your transactions and automatically transfer the difference to your designated goal account. So each time you pay for anything, you will have a little bit of money going toward your car. The spend less rule saves whenever you spend less than a certain amount with a retailer or in a certain spending category, and the guilty pleasure rule saves a certain amount whenever you spend on a chosen guilty pleasure, like ordering takeout.

When your goal is funded, you can withdraw the funds and spend it on your chosen vehicle. The free Qapital app is available for both iOS and Android devices.

Best for saving money for a child’s future: Kidfund

App Store: 4.8/5, Google Play: n/a
Whatever your child’s future holds, having the money on hand to help them accomplish their goals will come in handy. With Kidfund, not only can you contribute to your child’s future success, but so can your family, friends and anyone who supports your child’s dreams.

You can open a dedicated savings account for each of your children and set a rule to gift money to your child’s account on a periodic basis. For example, you can gift each of your children’s Kidfund accounts $20 each month. Kidfund awards interest based on the balance within the account.

On top of your giving, you can invite your friends and family members to follow your child’s Kidfund account and they can gift money to the account for birthdays, holidays or whatever reason. When the time comes, you’ll have the money waiting in the Kidfund account to fund your child’s dreams.

Kidfund is a free social savings app available only on iOS devices.

Best for saving money for the holidays: Simple

App Store: 3.8/5, Google Play: 4.2/5
Simple is a mobile-first bank that helps you set aside money for future goals. With a fee-free Simple account, you can set and fund financial goals with a target date. Simple will then calculate how much money you need to transfer periodically to reach your goal by your specified target date, based on the frequency you set.

For example, you can set a goal to save $500 for holiday shopping over 10 months and set the frequency to transfer an amount each month. Simple will automatically set aside $50 each month so you’ll reach your goal for the holidays.

The money for the goal will remain in your Simple account, but will be set aside and tagged for that specific purpose. The amount designated toward the goal will be deducted from your total to give show you how much money is safe for you to spend. The Simple app is free and available on iOS and Android devices.

Best money savings apps to help you save in the long term

Saving for long-term goals can be difficult when you can’t see the tangible results of your efforts just yet. Using one of the money savings apps below may help you keep track of the progress made toward your savings goal, so you can stay motivated as you wait, save and watch the investment you are making towards your future grow with time.

Best for saving money for a house: Rize

App Store: 4.2/5, Google Play: 3.7/5
Rize is a free automatic savings app available for both iOS and Android devices. It helps you earn extra money on your savings for a long-term goal (like a home down payment) and offers a high APY on your cash savings. You also have the option to earn even more on your savings by investing the funds. You set a goal amount and how often you want Rize to pull a specified amount of money from your account, and the app will do the rest of the work for you.

You can set investment or cash savings goals. The money saved in a Rize account earns interest on cash savings. If you choose to invest your money, it’s put into exchange-traded funds which earn varying interest rates.

Rize doesn’t charge any fees on your cash savings or require a minimum amount to open an account; instead, it lets you decide how much you want to pay. If you invest your money, Rize asks you contribute a minimum $2 per month to your account and pay an annual 0.25% management fee of your invested assets.

Rize also has a few built-in features to help you reach your goal a bit faster. It calls the features “Power Ups,” and you can turn them on or off at any time. You can use the Accelerate feature to automatically increase your contribution by 1% each month. So if you are saving $100 toward your down payment this month, Rize will increase your contribution to $101 the next month.

Rize also has a Boost feature that calculates how much extra money you have based on your income and spending habits, and automatically transfers up to $5 to your goal whenever “it makes sense,” which Rize says is about once or twice a week.

Best for saving money for college: Clarity Money

App Store: 4.7/5, Google Play: 4.1/5
Clarity Money is a free automatic budgeting and savings app available for both iOS and Android devices. The app helps you save by setting rules for how often and how much you want Clarity to automatically stash away for goals, like paying for next semester’s tuition or funding your child’s college savings account.

Clarity Money also has a few other features that may help you find more money in your budget to save for school fees. The app can analyze your expenses to find where you may be able to cut back on subscription services and free up some of your funds. Its budgeting features display your spending habits and let you know when you are going over your intended budget in a category, so you can adjust your spending behavior before you overspend. Clarity Money does not charge any fees for its services.

Best for saving money for retirement: Acorns

App Store: 4.7/5, Google Play: 4.3/5
Acorns is an investing app popular for letting its users invest the spare change from their daily transactions with its Acorns Core option. With Acorns Core, the app automatically rounds up your transactions to the nearest dollar and invests the difference into your chosen investment portfolios (once you’ve reached a minimum $5 in roundup savings).

Acorns also has a retirement savings feature called Acorns Later. With Acorns Later, you can invest your money in an Independent Retirement Account (IRA) and set recurring contributions from your linked account. You can invest using a Roth IRA, Traditional IRA or SEP IRA. The ETFs in your investment portfolio will automatically adjust to fit your needs over time based on your retirement date and goals. You can’t have Acorns Later without have Acorns Core, and having both costs the user $2 per month. Acorns Core only is $1 per month.

The Acorns app is free and available for both Android and iOS devices, but the Acorns service costs $1, $2, or $3 (with the Acorns Spend checking account) per month depending on what plan you select.

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

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at [email protected]

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Earning Interest, Reviews, Strategies to Save

Review of Live Oak Bank’s Deposit Rates

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.

Live Oak Bank’s savings account

When it comes to the best savings accounts with high interest rates, Live Oak Bank currently has one of the highest rates.


Minimum Deposit


Up to $5 million

(but only up to $250,000 is FDIC-insured)

  • Minimum opening deposit: $0
  • Monthly account maintenance fee: $0
  • ATM fees: None
  • ATM fee refunds: None

Live Oak Bank currently has one of the best savings account rates available. This means that Live Oak Bank is lowering the bar and allowing anyone to take advantage of these high interest rates, no matter how much is in his or her pocket right now.

Live Oak Bank wants you to use your savings account, and use it often, which is one reason why it has no monthly maintenance fee. If there is no activity on your account for 24 months and your balance is less than $10.01, Live Oak Bank will take the remainder of your balance as a Dormant Account Fee and close your account.

Getting money into a Live Oak Bank savings account from an external bank account can take a little bit of time depending on how you do it. If you request the money through Live Oak Bank’s online portal, the funds won’t be available for up to five or six business days. But if you opt instead to send the money to Live Oak Bank from your current bank, the money will be available as soon as it’s received. Your Live Oak Bank savings account will start earning interest as soon as the money posts to your account.

You can easily withdraw your money at any time via ACH transfer. Simply log into your Live Oak Bank savings account and electronically transfer it to whichever bank account you wish. It’ll be available in two to three business days.

You are limited to making just six withdrawals per month with this savings account. That’s not a Live Oak Bank thing; that’s a federal regulation imposed upon savings accounts in the U.S. If you absolutely can’t wait until next month to make another withdrawal past your allotted six per month, you’ll be charged a $10 transaction fee for each additional action.

Live Oak Bank CD rates

Live Oak Bank also has some of the best CD rates with a decent deposit amount.



Minimum Deposit

6-month CD



1-year CD



18-month CD



2-year CD



3-year CD



4-year CD



5-year CD



  • Minimum opening deposit: $2,500
  • Early withdrawal penalty:
    • CD terms that are less than 24 months — 90 days’ interest penalty
    • CD terms that are more than 24 months — 180 days’ interest penalty

Live Oak Bank currently offers the highest CD rates. This bank’s minimum deposit requirements also seem to be right on par with other bank’s minimum deposit requirements. Currently, the best CDs out there have minimum deposit requirements both above and below Live Oak Bank’s $2,500 benchmark.

Only U.S. citizens and permanent residents are eligible to open these accounts. It’s a relatively straightforward process to open a CD: Simply complete the forms online, provide any needed documentation (such as your current bank account details), and wait for an account approval. Once your account is open, you can transfer over your deposit, where it will be held for five days before officially launching your CD.

If you need to take out your deposit early, bad news: As with many CDs, you’ll face an early-withdrawal penalty at Live Oak Bank. If your original CD term was for six months, one year or 18 months, you’ll be charged 90 days’ worth of interest. If your original CD term was for longer than that, you’ll be charged a higher rate of 180 days’ worth of interest.

If you are able to resist the urge to withdraw your money early, congratulations! Your CD will automatically renew into a second CD with the same term length. However, don’t panic if that’s not what you want: You have up to 10 days after the CD has matured to withdraw your money penalty-free and park it in your own bank account (whether it’s with Live Oak Bank or not).

It’s easy to overlook Live Oak Bank for other larger, more established consumer banks like Ally or Discover Bank. But Live Oak has some of the best CD rates around, and the best savings account available on the market today.

Lest you be scared away by its smaller name, consider this: This tiny-but-growing bank is getting rave reviews from customers and employees alike. It carries an “A” health rating, and has a top-notch online banking portal. About the only thing missing is a checking account to let you seamlessly do all of your daily banking with this great company.

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

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here