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Strategies to Save

Where People Save the Most: Super Saving Metros

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.

Give credit to the residents of Dubuque, Iowa. They saved their pennies last year, according to a recent study by MagnifyMoney.

Dubuque earned the highest Saving Score in MagnifyMoney’s Super Saving Metros report, which looks at the savings habits of residents living in the biggest metropolitan areas across the United States.

Relying on data from the IRS and U.S. Census Bureau, MagnifyMoney created a Saving Score for nearly 400 U.S. metropolitan areas. This score reveals:

  • Which areas boasted the greatest percentage of adults who earned money from interest-bearing vehicles, such as savings accounts and certificates of deposit (CDs)
  • How much interest on average these residents claimed on their 2017 tax returns
  • What percent of their annual income came from interest

We’ve changed our study a bit this year. Instead of looking at cities with populations larger than 25,000, as we have in the past, this year we are looking at savings within entire metropolitan statistical areas. These areas often include several cities and provide a more accurate look at the savings habits of residents within a larger area.

One of our key findings? As a nation, the U.S. doesn’t have a lot of savers. Nationally, 28.3% of U.S. residents who filed income tax returns in 2017 earned interest income on their savings. This interest income averaged $554, equal to 0.76% of filers’ total income for the year.

Not all metro areas are created equal when it comes to savers, though. In Naples, Fla., for instance, filers reported an average of $3,224 of interest income on their taxes last year. But in Pittsfield, Mass., that average was a far lower $481.

There are also significant differences among metropolitan areas in how many residents earn enough interest from their savings to report to the IRS. Filers who earn more than $10 of interest on savings accounts, CDs, money market accounts, high-yield checking accounts or certain types of taxable bonds have to report their interest income. MagnifyMoney found that in Peoria, Ill., 48% of filers reported interest income on their returns. But in Los Angeles, just 30% did.

Key findings

  • Dubuque pulled down the top savings spot among the 381 U.S. metropolitan areas that MagnifyMoney studied. The city had the highest Saving Score, an impressive 97.8 out of a possible 100.
  • Naples, which came in second with a Saving Score of 97, topped the country with the highest amount of average interest income per return, a strong $3,224. Naples also ranked first in highest percentage of interest income compared to total income. Filers here earned an average of 2.33% of their total annual incomes from interest on their savings.
  • Peoria had the highest percentage of filers who earned at least some interest income. About half of the federal tax returns filed here last year had some amount of interest income.
  • Iowa might have been the thriftiest state in the country in 2017. Dubuque notched the highest Saving Score in this year’s study. But the cities of Cedar Falls and Cedar Rapids also earned high scores. This isn’t a one-time fluke either. MagnifyMoney found a similar trend when looking at the numbers from earlier tax years.

What does the Saving Score measure?

It can be challenging to determine how much the residents of a particular metropolitan area are saving. For our study, we crafted a Metro Saving Score that relies on data from the IRS and U.S. Census Bureau for 381 metropolitan areas across the country.

We looked at three key factors to calculate our score:

  • The percentage of all tax returns that declared interest income
  • The percentage of residents’ total annual income that came from interest earned from savings
  • The average interest income recorded on tax returns in a metropolitan area

50 cities with the top Saving Scores


Dubuque led our list of the metro areas with the biggest savers, earning a healthy Saving Score of 97.8. But what’s so special about Dubuque?

The area isn’t especially rich: The U.S. Census Bureau reported that the median household income stood at $56,154 in 2016 in Dubuque County and $48,021 in the city of Dubuque itself. That’s below the median annual household income of the U.S. as a whole, which was $57,617 in 2016. The Census Bureau also said 16.8% of the city’s residents lived in poverty, while 29.7% of residents have earned a bachelor’s degree or higher.

Regardless of the relatively modest incomes here, 44% of tax filers in the Dubuque metro area claimed interest income on their returns. This interest income averaged $781 per return, which accounted for an average of 1.24% of these residents’ annual income.

So why the high savings rate? Maybe it’s the low unemployment rate. The Bureau of Labor Statistics said the unemployment rate in Dubuque was a low 2.2% as of August 2018. It’s easier to save when you’re employed. Also, it’s not that expensive to live in Dubuque. The Census Bureau said the median costs for owners with a mortgage is $1,102 a month, while the median cost for renters is $728 a month.

Things are a bit different in Naples, where the Census Bureau said the annual median income was $84,830 in 2016. It’s important to note that median income isn’t the same as average income. The median is the dollar amount that half of all residents in an area earn less than each year and half earn more. In Naples, half of all households reported an annual income of less than $84,830, while half reported an annual income higher than that.

What is clear, though, is that the residents of this Florida city have more money to save, which might be why Naples ranked second with a Saving Score of 97. Here, 36% of income tax returns included interest income. The interest income per return in Naples was high, too, leading our survey with a hefty $3,224.

In Fairfield County, Conn., which came in third with a Saving Score of 96.3, 36% of tax returns recorded interest income. The interest claimed here was sizable, too, with an average of $2,434 claimed per return. Again, the residents here have more money to save, with the Census Bureau reporting a median household income of $86,670 in 2016.

Santa Barbara, Calif., and Boston rounded out the top five metro areas on our list. Santa Barbara earned a Saving Score of 95.7, with 36% of tax returns here claiming interest income. This income accounted for 1.18% of annual income earned by residents here. The interest income per return in Santa Barbara was a healthy $1,074.

And in Boston, with its Saving Score of 94.2, 37% of returns claimed interest income, with an average per return of $920.

10 cities with the most savers

Dubuque again represented itself well on our list of metropolitan areas with the most savers. But it didn’t top it. The No. 1 spot went to another Midwestern city, Peoria, where 48% of tax returns listed some form of interest income.

What makes Peoria residents such good savers? It’s hard to say. The income here isn’t sky-high, with the Census Bureau stating that the median household income stood at $46,547 in 2016. At the same time, though, it’s not expensive to live in Peoria, freeing up residents to save. The Census Bureau said it cost $1,200 a month for owners with a mortgage, while the median value of a home was $127,200. Those who rented didn’t pay too much, either, with the Census Bureau reporting a median gross rent of $746 a month.

Then there is Dubuque. Again, the income here wasn’t high, but housing isn’t overly expensive, perhaps making it easier for residents to save. The Census Bureau reported that owners with a mortgage paid a median value of $1,102 a month, while those who rented paid a median of $728 a month. Maybe that’s why Dubuque tied for second with 44% of returns claiming interest income.

Dubuque tied for this spot with Ithaca, N.Y., where the same percentage — 44% — of returns claimed interest income. It’s not easy determining how Ithaca residents were able to save so much. The Census Bureau reported that the median annual household income here was just $30,291 in 2016, while 44.8% of the people lived in poverty. At the same time, the median value of owner-occupied homes stood at a fairly high $219,100. This makes Ithaca’s high savings rate a bit of a mystery.

Appleton, Wis., is easier to explain. This area ranked fourth on our list with 42% of returns claiming interest income in 2017. This isn’t surprising: The Census Bureau said the median household income here was $53,878 in 2016, while the median value of owner-occupied homes was a fairly low $137,800. Perhaps residents spent less on housing costs and were able to save more.

Iowa City, Iowa, finished fifth on our list, tied with Appleton with 42% of returns claiming interest income. That percentage was a popular one, with Rochester, N.Y., and yet another Iowa city — Cedar Falls — tying with Appleton and Iowa City.

10 cities that earned the most interest income

Here is a not-so-shocking fact: People who make more money tend to save more of it. That’s proven by our list of metro areas in which taxpayers claimed the most interest on their returns.

Look at Naples. Those living here earned a lot of interest income in 2017. According to our research, the average return filed here in 2017 listed a whopping $3,224 in interest income. That easily topped our list. The reason is fairly obvious: A lot of wealthy people live here.

The city is a costly one, with the Census Bureau showing that the median home value is $770,000, while it costs owners with a mortgage a median $2,987 a month. With those barriers to entry, it’s not surprising that the median household income was $84,830 in 2016. When you earn more, it’s easier to save more — a lesson made clear in Naples.

Fairfield County was second on this list, with the average tax return listing interest income of $2,434 in 2017. Again, this is another high-income area, with the Census Bureau reporting that the median household income was $86,670 in 2016.

Next on our list is Vero Beach, Fla., where the average interest income reported on tax returns stood at a healthy $1,839. This city is a bit more puzzling: The Census Bureau showed that the median household income was a modest $38,405 in 2016. And it’s not particularly cheap to live here, with the Census Bureau stating the median costs for owners with mortgages as $1,654, while monthly rent stands at a median of $829.

Coming in fourth on our list is another Florida tourist metro, Fort Myers, where the average interest income per return was $1,195. This is an interesting place: In the city of Fort Myers, with a population of almost 80,000, the median household income is $38,971. But if you focus on the smaller area of Fort Myers Beach, where the population is just more than 7,000, the median household income is $59,416.

The New York City metro area claimed the fifth spot on this list, with an average interest income of $1,146 reported per return. With a population of more than 8.6 million, New York City itself sees a wide range of yearly incomes. The median household income is $55,191, but plenty of households saw a far higher income than that. This helps explain the Big Apple’s high spot on this list.

10 cities with the lowest Saving Scores

While there are plenty of metro areas where people are saving, there are others that have earned low Saving Scores from our research. In most of these areas, the median household income is low. In others, unemployment is high.

This isn’t surprising: It’s a challenge to save when you don’t make enough and you’re struggling to find a job.

The first metro area on our list of areas with the lowest Saving Scores — Hinesville, Ga. — earned a Saving Score of just 0.5, with 15% of income tax returns filed in 2017 claiming interest income. The average filer here claimed just $80 worth of interest on their returns.

The median household income stood at $42,949 in 2016, according to the Census Bureau. That is below the median household income for the U.S., which the Census Bureau said was $57,617 in 2016.
El Centro, Calif., ranks high on this list, too, coming in second. Unemployment is a problem here, with the Federal Reserve Bank showing the rate at a high 17.2% in El Centro as of August 2018.

Third on our list was Fayetteville, N.C., earning a Saving Score of 1.8. Only 18% of tax returns here claimed interest income in 2017, with the average return listing just $149 in interest income. The median household income was $43,882 in 2016, while 18.4% of the population lived in poverty. The Census Bureau also reported that 14.2% of the people younger than 65 do not have health insurance, a factor that could account for the low savings rate here.

Pine Bluff, Ark., scored a low 3.0 Saving Score with 19% of income tax returns claiming interest income. Pine Bluff’s population is declining, falling to 42,984 in 2017, a drop from 49,083 in 2010 — a dip of 12.4%. At the same time, the median household income was just $30,942 in 2016, while 32.5% of residents lived in poverty.

Rounding out the bottom five of savers was the metropolitan area of Florence, S.C., with a Savings Score of 3.7. Just 17% of returns here claimed interest income in 2017. The median household income here was not terrible, but at $44,989 is still below the median for the U.S.

How to save more money

Need to increase your savings rate? There’s no secret formula. Start with crafting a household budget. List the income that comes into your household each month and the money you spend during the same time. Include both fixed expenses such as your monthly rent, mortgage payment, auto payment or student loan payments while estimating those that vary each month, such as your utility bills, transportation costs and grocery bills. Make sure to also budget for discretionary expenses such as eating out and entertainment.

This budget will tell you how much you should have at the end of the month for savings. If you don’t have much, or if you are spending more than you are earning, you’ll need to cut back on whatever expenses you can. This might require slashing your spending at the supermarket or cutting back on restaurant meals.

Be sure to start an emergency fund, too. You use the dollars in this fund to pay for any unexpected expenses that pop up, such as a busted water heater or blown transmission on your car. If you have this fund built up, you won’t have to resort to paying for these emergencies with a credit card, something that will build up your debt and make it even more difficult to save.

It’s important to note, too, that it might be a bit easier now to earn interest on your savings. That’s because as the Federal Reserve raises its benchmark interest rate, banks and credit unions are starting to do the same, boosting the interest rates attached to their savings accounts and CDs. These rates might still be small, but they are set to improve, so now is a great time to begin saving those dollars.

Methodology

To rank cities, MagnifyMoney created a Saving Score on a scale of 0 to 100 that included three equally weighted components:

  1. How broadly individuals in the metro saved (measured by the percentage of all tax returns that declared interest income, ranked by percentile).
  2. The metro’s dedication to saving regardless of their income (measured by the percentage of total income that came from interest, ranked by percentile).
  3. The absolute magnitude of savings in the metro (measured by the average interest income per tax return, ranked by percentile).

MagnifyMoney measured these factors using anonymized data from tax returns filed with the IRS from Jan. 1 to Dec. 31, 2017.

To be counted as a saving household, the taxpayer must declare interest income using Form 1099 on their 2016 tax returns. Filers who earned over $10 in interest on savings and investments, including a high-yield checking or savings account, a CD, a money market account or certain types of taxable bonds, should have received a copy of 1099-INT, which reflects interest income reported by financial institutions to the IRS.

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.

Dan Rafter
Dan Rafter |

Dan Rafter is a writer at MagnifyMoney. You can email Dan 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
iStock

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]

Advertiser Disclosure

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.

APY

Minimum Deposit

2.15%

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.

Term

APY

Minimum Deposit

6-month CD

2.00%

$2,500

1-year CD

2.40%

$2,500

18-month CD

2.45%

$2,500

2-year CD

2.45%

$2,500

3-year CD

2.45%

$2,500

4-year CD

2.45%

$2,500

5-year CD

2.50%

$2,500

  • 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.

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Lindsay VanSomeren
Lindsay VanSomeren |

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