If you’re looking to build your emergency fund or stash away some extra cash for that big screen TV you’ve had your eye on, a savings account is a logical choice. While traditional savings accounts don’t carry the same level of risk as other savings vehicles they also don’t offer the same type of return. In today’s economic climate, interest rates for savings accounts are at historic lows which means you’ll need to shop around to find the best deal. We’ve put together a list of banks that are offering the best rates right now, along with a few useful tips to help you choose the right account.
At the top of the list is SmartyPig, which styles itself as an “online piggy bank” for people who are looking to reach a specific savings goal. SmartyPig features a very solid 1.40% APY, and you can even link your account to a SmartyPig Cash Rewards reloadable debit card and get 1 percent cash back on your purchases.
Barclays Bank Online Savings
U.K.-based Barclays launched its online banking services for U.S. customers just last year and they currently offer one of the top savings accounts rates. New customers can enjoy a 1.65% APY, with no minimum deposit and no monthly maintenance fees.
American Express Bank
When you open a savings account online with American Express, you’ll be able to take advantage of a 1.40% APY, (rate effective as of August 4, 2022). You can set up an account with as little as $0 and there are no fees and no balance minimums to worry about.
If you’re looking to keep it simple, you can’t go wrong with a savings account from FNBO Direct. For just a buck, you can open your account online to get the great 1.20% APY they’re currently offering. As an added bonus, you can send money and receive money via text or email using Popmoney.
Ally offers a 1.60% APY for its online savings account. There’s no minimum opening deposit and no monthly maintenance fees. You can make deposits via snail mail, Ally eCheck Deposit or use your smartphone to make deposits through the Ally mobile app.
Discover doesn’t just issue credit cards; they also offer a range of options for savers, including money market accounts and CDs. Currently, you can get a 1.50% APY when you set up an online savings account. You’ll have to put up $500 to open the account but there are no minimum balance requirements or transaction fees.
At CIT Bank, there’s an introductory offer of 0.80% APY in the first 30 days. Account balances below $25,000 will then earn a 0.36% APY. However, this bumps up to 0.80% APY with minimum monthly deposits of at least $100. All account balances of more than $25,000 receive a 0.80% APY.
Choosing a Savings Account
While you want to keep your eyes peeled for the best interest rates, there are other things to consider when you’re looking for a place to park your cash. For example, you need to know whether there’s a minimum deposit to open an account or whether you’ll be charged a fee if your balance drops below a certain limit. You should also consider the bank’s overall reputation, especially when it comes to customer service. A great rate may not be worth if you’re constantly having to jump through hoops when you need help with your account.
Online vs. Traditional Banks
Something else you’ll want to think about is whether you should set up a savings account online or through an old-fashioned brick-and-mortar bank. In terms of the interest rates alone, you’re more likely to get a better deal if you go with an online bank. The trade-off is that you may not necessarily find online banking to be as convenient if you’re used to handling your account in person. If you’re on the fence, you can compromise by keeping your traditional checking account at your local bank and linking it to an online savings account.
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