After years of moribund rates, savings accounts are finally providing decent interest. The Fed’s interest rate hikes to counter inflation have filtered down to consumer accounts, as many retail banks, online banks and “neobanks” have gradually increased their annual percentage yields (or APYs) on their highest-performing savings accounts.
While they used to top the charts, rates of 0.50% are no longer competitive. APYs have surpassed 1.00% at several banks, and more banks are creeping closer with APYs of 0.85% or 0.90%. Many banks have increased their rates multiple times in the past few months.
The biggest banks of the country haven’t gotten the memo yet — you’ll still find negligible APYs for savings accounts at the top three of Chase, Bank of America and Wells Fargo. That means you’ll likely have to forgo easy access to physical branches in order to qualify for the top APYs.
The best savings accounts in our list offer APYs at 0.85% or higher, while charging no fees for monthly maintenance fees or minimum deposits. Read on to discover our picks for best savings accounts.
Best savings accounts
Bask Bank, an online subsidiary of Texas Capital Bank, offers two different types of savings accounts. Its Mileage Savings Account gives American Airlines mileage back for every dollar saved annually, while its Interest Savings Account provides an APY of 1.50% that’s at or near the top of the current bank savings account rates for mid-May.
Bask Bank doesn’t offer any checking accounts, nor other traditional savings options like money market accounts or CDs. There are no monthly maintenance fees nor any required minimum balance. Bask Bank’s only significant fee is a $35 charge for outgoing wire transfers. ACH electronic transfers are free, but take one to three days to process, a standard practice for online banks.
There is no minimum deposit to open a savings account at Bask Bank, though there is a monthly deposit limit of $100,000.
It’s worth noting that Bask Bank’s variable savings account rate of 1.50% could change at any time. For now, however, it’s the best straight-up savings rate we could find. The biggest limitation for Bask Bank savings is that the bank does not allow joint ownership of accounts.
Savings accounts and checking accounts are meant to complement each other, so why not combine them into one account that provides both services? That’s exactly what the SoFi Checking and Savings Account does, while offering a sizable APY on your balance.
In order to get the sweet 1.25% APY with SoFi, you’ll need to set up a direct deposit from an employer, payroll or benefits provider, although there’s no minimum deposit requirement. If you don’t have direct deposit, the account earns 0.70% APY, which is still quite high.
There are no monthly maintenance fees or balance requirements with SoFi Checking and Savings, and no fees for using the roughly 55,000 ATMs supported by the Allpoint network. It does not provide any reimbursement for nonnetwork ATM fees from other banks. SoFI also provides paper checks at no cost.
So what makes SoFI a savings account? Its “vaults,” which are extensions of your account that let you save money for an emergency fund or targeted spending goal like a vacation or housing down payment. You can create up to 20 vaults, and if you want to spend any money from them, you’ll need to transfer it to your main “spending balance.”
Until July 31, 2022, SoFi is offering bonuses of $50 to $300 for new accounts with qualified direct deposits. Direct deposits of $1,000 to $1,999 will earn $50; direct deposits of $2,000 to $4,999 will get $100; and direct deposits of $5,000 and up will earn $300. The qualifying period for these bonuses lasts 30 days from the date of your first direct deposit.
Capital One may not have the sheer number of physical branches as big bank competitors Wells Fargo or Chase, but its robust 0.90% APY is far higher than the 0.01% to 0.03% return on your savings that you’ll get at those major banks.
There are no monthly maintenance fees for Capital One 360 Performance Savings, nor minimum balance requirements. Because there are no ATM cards or checks, Capital One 360 Performance Savings works best with a complementary checking account.
The Capital One mobile app makes it easy to snap pictures of checks to deposit them. Sending money to another bank account with ACH transfers is free, but the process may take one to three days. Outgoing wire transfers incur a $30 fee, and cashier’s checks purchased at physical locations cost $10.
Along with more than 700 full branches mostly located in New York, New Jersey, Connecticut, Delaware, Maryland, Texas, Louisiana, Virginia and the District of Columbia, Capital One also provides more than 30 cafe-style locations across the country that the company acquired when it purchased ING.
These cafes don’t include full banking services, but they do provide 24/7 ATMs and representatives who can answer questions and help customers manage their accounts. Capital One members also receive a 50% food discount at these cafes.
Withdrawing money quickly can be one of the big challenges of holding an online-only savings account. Unlike checking accounts, savings accounts are generally limited to six withdrawals per month by law, and if your bank is online-only, withdrawing money usually requires an electronic or wire transfer. That’s why having ATM access can be crucial.
A few online savings accounts do offer ATM access, and Synchrony tops our list. Synchrony Bank is a subsidiary of Synchrony Financial, the largest provider of private-label credit cards in the US that was spun off from GE Capital Retail Bank in 2014.
Synchrony High-Yield Savings includes no monthly maintenance fees or minimum balance requirements and offers a very competitive APY of 0.85%. Outgoing wire transfers cost $25. There’s no option of a complementary checking account at Synchrony, though ATM access lessens that blow.
Synchrony customers can withdraw money fee-free from thousands of ATMs featuring the Visa Plus or Accel logos. Synchrony doesn’t charge to use non-network ATMS and will provide $5 per month to reimburse other bank’s ATM fees.
However, Synchrony users are still limited to six withdrawals per month. There are no listed fees for surpassing that limit, but the bank retains the right to close your account if the maximum number of withdrawals is repeatedly broken.
Tiered savings rates are a fairly common feature among online banks. For example, Lending Club High-Yield Savings offers 0% APY for the first $9.99, 0.05% for balances $10 to $2,499 and 0.85% for balances greater than $2,500. Axos High-Yield Savings flips that savings equation around with 0.61% APY on balances up to $25,000 and 0.25% return on anything higher.
The Varo Online Savings Account takes the notion of savings tiers one step further with a whopping 5% APY for balances between $0 and $5,000. As long as you maintain a balance in that range for a whole month while adding at least $1,000 in direct deposits, you’ll get 5% back in interest per year. That $5,000 balance limit must be kept every day of a month to receive the 5% APY.
Interest at Varo is compounded daily and credited monthly. If you accidentally reach a daily balance that’s more than $5,000, Varo will drop your APY for the month down to the still very competitive rate of 1.20%.
Varo Online Savings includes no monthly maintenance fees nor minimum balance requirements. If your account balance remains at zero for nine months, Varo reserves the right to shut down your account.
Compare best savings accounts
Best savings account for APY
Best checking and savings combination
Best for in-person banking
Best savings account with an ATM card
Best savings account for low balances
Bank/institution
Bask Interest Savings
SoFi Checking and Savings
Capital One 360 Performance Savings
Synchrony High-Yield Savings
Varo Online Savings
APY
1.50%
1.25%
0.90%
0.85%
1.20-5.0%
Minimum deposit
$0
$0
$0
$0
$0
Estimated annual earnings on $1,000 deposit
$15
$12.50
$9
$8.50
$50
Estimated annual earnings on $10,000 deposit
$150
$125
$90
$85
$120
Branch access
No
No
Yes
No
No
Monthly fee
$0
$0
$0
$0
$0
FAQs
What is a savings account?
A savings account is a safe place to keep money you don’t intend to spend right away. It’s a bank account that generally provides a higher rate of interest on your balance, while limiting the number of withdrawals you can make per month. Most savings accounts will restrict you to six withdrawals per month (the federal limit).
Savings accounts are generally insured by the Federal Deposit Insurance Corporation for up to $250,000. Saving accounts can be used to build an emergency fund or save money for a specific financial goal like a vacation, new car or down payment on a home.
How do savings accounts work?
Savings accounts work similarly to most banking accounts — you can deposit and withdraw money, and you’ll earn compound interest on the balance in your account. You’ll need to fund your savings account in order to earn any interest, and most savings accounts will provide different interest rates based on your balance.
Some savings accounts will charge monthly maintenance fees, though they can usually be waived by maintaining a minimum balance or reaching a minimum threshold of direct deposits per month.
Your withdrawals from savings accounts are usually limited to six per month by federal law. If you break that rule you may face a fee or a conversion of the account into a checking account.
What are the different types of savings accounts?
The potential number of savings accounts is as many as banks want to create — students, seniors, veterans and other categories of banking customers have unique savings accounts available to them.
In general, however, there are three different kinds of savings accounts.
Standard deposit account: Our list of best savings accounts consists of these banking accounts. They provide a standard rate of interest for your balance that is usually higher than checking accounts while limiting your access to the money. They generally limit you to six withdrawals per month, although ATM withdrawals can sometimes be excluded from that restriction.
Money market account: Money market accounts can often bridge the gap between checking and savings accounts. While they will usually require higher balances and base their rates on the money market, they do let you write checks. The same six-withdrawal limit applies to money market accounts. Money market accounts are not stock investments in money-market funds.
Certificates of deposit: Certificates of deposit, or CDs, generally provide extra interest for committing your money to a specific term when it cannot be withdrawn. CD terms start at three months or so and can run up to five or 10 years. CDs can be “laddered,” so that a one-year CD can be rolled over into a two-year CD, and then a three-year CD and so on.
What are the major differences between checking and savings accounts?
Most checking accounts are designed to facilitate transactions and payments, whether via a debit card, a mobile app such as Apple Pay or a paper check. Most checking accounts don’t offer interest; those that do usually provide a very low rate of 0.1% or less.
Savings accounts offer significantly higher interest rates and online-only banks typically offer the highest yields. These accounts provide a safe place to store money while keeping it accessible. Until recently, savings account holders were generally limited to making six transactions per month.
How many withdrawals can I make from a savings account?
In normal times, the Federal Reserve limits account holders to six withdrawals a month (to preserve liquidity for financial institutions). In response to the pandemic, the Federal Reserve made a rule change to Regulation D allowing unlimited money withdrawals without a monthly fee penalty.
What is a high-yield savings account?
A high-yield savings account offers a higher interest rate than a traditional savings account. These accounts may have certain deposit requirements, monthly fees or be available only to customers in certain states.
Traditional savings accounts at a bank will have interest rates ranging from 0.05% to 0.1% while high-yield savings can go as high as 1%.
Why are interest rates so low right now?
Interest rates in the US and around the world have been low for a long period, mostly since the economic crisis of 2008-2009. Interest rates are generally set low during times of economic downtown or uncertainty in order to spur investment and spending. Low interest rates tend to reward borrowers rather than lenders.
In the US, the Federal Reserve sets a target rate range, which influences the specific interest rates set by individual banks. Since 2009, the Fed has consistently kept rates low, which has led to low interest rates for savings accounts. As of May 16, the average interest rate for savings accounts is 0.07%.
That noted, many banks will offer a higher savings rate to attract new customers. The market for high-yield savings accounts is competitive, with some banks offering particularly high rates for an introductory period of time. Because of this, interest rates at financial institutions may change regularly.
Do you have to pay taxes on the interest earned from a savings account?
Yes. Your bank will send you a 1099-INT form each year when your savings account earns more than $10 in interest.
CNET reviews savings accounts by comparing them across set criteria, including annual percentage yield, monthly fees, minimum deposits or balances and access to physical branches. Because APYs at individual accounts can vary, we look at the estimated annual interest on $1,000 and $10,000 levels of savings.
We reviewed more than two dozen leading traditional banks and online financial offerings to determine our best savings accounts. Along with the aforementioned criteria, we also considered sign-up bonuses and other rewards. All savings accounts must also be insured by the FDIC.
Savings accounts researched
Affirm SavingsAlly Online Savings AccountAmerican Express High Yield Savings AccountAxos High Yield SavingsBank of America Advantage SavingsBarclays Online Savings
BrioDirect High-Yield Savings
Capital One 360 Performance SavingsChime Savings Account
Citi Accelerate
Citizens Online Savings AccountConsumers Credit Union Savings
Discover Online Savings Account
Lending Club High-Yield Savings
Marcus High Yield Savings
Nationwide My Savings
PenFed Credit Union Premium Online Savings Account
PNC High Yield SavingsPopular Direct Select SavingsSallie Mae SmartyPig
Synchrony High Yield Savings
Schwab Bank High Yield Investor Savings
Synchrony High Yield Savings
Vio Bank High Yield Online Savings AccountWells Fargo Platinum Savings
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