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Best savings accounts for July 2022

Best available rates across different account types for Friday, July 01, 2022
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Bankrate's guide to choosing the right savings rate

Online banks tend to offer higher rates than brick-and-mortar banks. They are able to do this because they usually have fewer overhead costs. Online banks also need a way to attract your money, so they tend to offer higher yields than banks with branches.

Banking with an online bank that’s a member of the Federal Deposit Insurance Corp. (FDIC), can be a great way to earn a higher rate and ensure your money stays protected. Just make sure you’re within the FDIC’s limits and guidelines.

Bankrate's experience on financial advice and reporting

At Bankrate, we regularly survey approximately 4,800 banks and credit unions in all 50 states to provide you with one of the most comprehensive comparisons of interest rates. All of the savings accounts below are insured by the FDIC at banks or the NCUA at credit unions. When selecting the best savings account for you, look for the highest yield while also considering introductory rates, minimum balances and accessibility.

We strive to help you make smarter financial decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. The top banks listed below are based on factors such as APY, minimum balance requirements and broad availability.

Best online savings accounts and rates of July 2022

Here are Bankrate's selections for the best widely available savings account rates from top online banks:

Bank APY Minimum Opening Deposit FDIC Insured Bank? Bank Review
Bread Savings High Yield Savings 1.65% APY
$100
Yes
Comenity Direct Review
Citizens Access Online Savings Account 1.25% APY
$5,000
Yes
Citizens Access Review
Barclays Online Savings Account 1.10% APY
$0
Yes
Barclays Bank Review
Discover Online Savings Account 1.10% APY
$0
Yes
Discover Bank Review
Synchrony High Yield Savings 1.10% APY
$0
Yes
Synchrony Bank Review
Popular Direct Ultimate Savings Account 1.05% APY
$5,000
Yes
Popular Direct Review
Citi Accelerate High Yield Savings 1.01% APY $0 Yes Citibank Review
Ally Bank Online Savings Account 1.00% APY
$0
Yes
Ally Bank Review
American Express High Yield Savings Account 1.00% APY
$0
Yes
American Express Review
Capital One 360 Performance Savings 1.00% APY
$0
Yes
Capital One Bank Review
Marcus by Goldman Sachs High Yield Savings 1.00% APY $0 Yes Marcus by Goldman Sachs Review
CIT Bank Savings Builder 0.70% APY $25,000* Yes CIT Bank Review
Vio Bank High Yield Online Savings 0.60% APY $100 Yes Vio Bank Review
PurePoint Financial Online Savings 0.40% APY $10,000 Yes PurePoint Financial Review

*Minimum balance of $25,000 or a monthly deposit of $100 required for APY.

Note: Annual percentage yields (APYs) shown are as of June 30, 2022. Bankrate's editorial team updates this information regularly, typically biweekly. APYs may have changed since they were last updated and may vary by region for some products. Bankrate includes only FDIC banks or NCUA credit unions in its listings.

Best Overall Rate: Bread Savings (formerly Comenity Direct) - 1.65% APY, $100 minimum to open account (no ATM access)

4.1

Overview

Bread Savings (previously known as Comenity Direct) is FDIC insured through Comenity Capital Bank. The Bread Savings high-yield savings account offers a competitive yield, requires just $100 to open and has no monthly service fee.

Invest Rate
1.65% APY
Loan
$100 minimum opening deposit

High Rate: Citizens Access - 1.25% APY, $5,000 minimum balance to earn APY (no ATM access)

3.5

Overview

Citizens Access is the online bank division of Citizens Bank. It offers a high-yield online savings account and CDs with terms between six months and five years. The online savings account doesn’t have a maintenance fee.

Invest Rate
1.25% APY
Loan
$5,000 minimum opening deposit

High Rate: Barclays Bank - 1.10% APY, $0.01 minimum balance needed for APY (no ATM access)

Barclays logo
3.9

Overview

Barclays is often known for its credit cards, but it also offers a consistent high yield on its savings products. Products from Barclays are only available online in the U.S. Barclays offers a competitive, high yield on its savings account.

Invest Rate
1.10% APY
Loan
$0 minimum opening deposit

High Rate: Discover Bank - 1.10% APY, no minimum balance needed for APY (no ATM access)

Discover logo
4.8

Overview

Discover Bank has been offering deposit products online since 2007. Discover is best known for its credit cards. But it also offers a savings account, money market account, checking account and CDs.

The Discover Online Savings Account isn’t the highest-yielding account. But it offers a very competitive APY and it has no minimum opening deposit and no monthly fee.

Invest Rate
1.10% APY
Loan
$0 minimum opening deposit

High Rate: Synchrony Bank - 1.10% APY, no minimum balance needed for APY (ATM access)

4.3

Overview

Synchrony Bank provides a range of depository products for consumers, including savings and money market accounts and a number of CDs. As an online bank, it has limited overhead cost, which means it can return those savings to customers in the form of higher rates. Indeed, its savings account and other depository products are consistently among the top-paying accounts. Synchrony also has a highly rated customer service department available by online chat or by phone seven days a week.

Invest Rate
1.10% APY
Loan
$0 minimum opening deposit

3.4

Overview

A Popular Direct High-Rise Savings account is opened through Popular Bank. Popular Bank is an FDIC-insured bank that was established in 1999, according to the FDIC.

Invest Rate
1.05% APY
Loan
$5,000 minimum opening deposit

High Rate: Citibank - 1.01% APY, $1 minimum for APY (ATM access)

Citi Bank logo
4.3

Overview

Citibank, the retail banking arm of Citigroup, launched a high-yield savings account called Citi Accelerate in 2019. The account pays well above the national average as well as higher than many of the savings rates offered by some of the nation’s largest banks. There’s no minimum balance requirement to earn the APY and no minimum to open an account. But the APY is only available in select markets.

Invest Rate
1.01% APY
Loan
$0 minimum opening deposit

High Rate: Ally Bank - 1.00% APY, no minimum balance needed for APY and a free checking account (no ATM access)

5.0

Overview

Ally Bank started in 2004 and is headquartered in Sandy, Utah. In 2009, GMAC Bank was transformed into Ally Bank. It has 2.3 million deposit-account customers, according to its 2020 annual report.

Invest Rate
1.00% APY
Loan
$0 minimum opening deposit

High Rate: American Express National Bank - 1.00% APY, no minimum balance needed for APY (no ATM access)

3.9

Overview

American Express is best known for its credit cards. But it also offers a competitive savings account. The account also has no fees and lets you link your external bank account. The company also offers a variety of CDs.

Invest Rate
1.00% APY
Loan
$0 minimum opening deposit

High Rate: Capital One - 1.00% APY, no minimum balance needed for APY (no ATM access)

4.6

Overview

In addition to its credit cards, Capital One also provides a range of banking and lending products. Besides the 360 Performance Savings account, which debuted in September 2019, Capital One also offers CDs, a savings IRA and a checking account.

Invest Rate
1.00% APY
Loan
$0 minimum opening deposit

High Rate: Marcus by Goldman Sachs -  1.00% APY, no minimum balance to earn APY (no ATM access)

Marcus logo
4.2

Overview

The well-known investment firm Goldman Sachs opened Marcus as its consumer banking arm. Marcus has built a reputation for having a competitive APY. In addition, Marcus has an easy account opening process and it’s also simple to transfer money to accounts at other banks.

The savings account option from Marcus requires no minimum deposit to open and no minimum to earn the APY. In addition to savings products, Marcus also offers a range of personal loan options, from debt consolidation to home improvement.

Invest Rate
1.00% APY
Loan
$0 minimum opening deposit

High Rate: CIT Bank - up to 0.70% APY, $25,000 minimum balance or $100/month deposit to earn APY (no ATM access)

4.6

Overview

CIT Bank, an online-only bank, is now a division of First Citizens Bank, following the completion of a merger in January 2022.

Invest Rate
Up to 0.70% APY
Loan
$100 minimum opening deposit

High Rate: Vio Bank - 0.60% APY, no minimum balance needed for APY (no ATM access)

4.1

Overview

Vio Bank, established in 2018, is the national online division of MidFirst Bank, which was founded in 1911 and has been an FDIC-insured bank since 1934. Vio Bank offers both a High Yield Online Savings account and CDs.

Invest Rate
0.60% APY
Loan
$100 minimum opening deposit

High Rate: PurePoint Financial - 0.40% APY, $10,000 minimum balance to earn APY (no ATM access)

3.6

Overview

PurePoint is a division of MUFG Union Bank NA. PurePoint Financial is consistently among the top-APY savings accounts. The Online Savings account isn’t meant for those who are just starting to save, since it has a higher minimum balance requirement compared with other savings accounts.

Invest Rate
0.40% APY
Loan
$10,000 minimum opening deposit

What is a savings account?

A savings account is a type of financial account found at both banks and credit unions. These federally insured accounts typically pay interest, but often at lower rates than other interest-bearing financial products insured by the government, like certificates of deposit (CDs).

In exchange for lower rates, savings accounts offer more liquidity, allowing for up to six types of withdrawals or transfers per statement cycle (and potentially more). That makes savings accounts ideal for stashing money you may need access to if unexpected costs arise.

Savings accounts can play a crucial role in your financial health. Unlike a CD, which forces you to lock up your money for a specified period of time, there’s no set term for maturity with a savings account. So, it’s a good spot to park your emergency fund.

Savings accounts are insured up to at least $250,000 at banks backed by the Federal Deposit Insurance Corp. (FDIC) and at credit unions backed by National Credit Union Administration (NCUA), which operates and manages the National Credit Union Share Insurance Fund (NCUSIF).

How do savings accounts work?

Savings accounts are liquid bank accounts that usually offer a higher APY than checking accounts and can be accessed at any time. Easy access sets them apart from certificates of deposit, which require account holders to lock up savings for a specified term, typically months or years, and which usually charge an early withdrawal penalty for taking money out prematurely.

Though it's possible to withdraw cash from a savings account, doing so diminishes the amount of interest earned. The higher the account balance and longer it remains, the more the power of compound interest will work in your favor. Compound interest — or earning interest on top of interest — allows even small deposits to add up to bigger amounts over time.

That feature makes it crucial to compare APYs when choosing a savings account (because APYs include compound interest you earn during the year). APYs are the best way to compare how much interest you're currently earning or could be earning.

Use Bankrate’s compound interest calculator to calculate potential earnings on a savings account.

Making purchases or withdrawals from a savings account isn’t as easy as from a checking account. Unlike checking accounts, savings accounts typically won't come with a debit card to make point-of-sale transactions in person or online, for example.

Savings terms to know

  • Compound interest: Method of calculating interest where interest earned over time is added to the principal. Compounding is usually done on a daily or monthly basis and more frequently it is done, the faster your savings can grow.
  • Interest: Money that you earn for having your funds deposited with a bank.
  • Interest rate: A number that doesn't take into account the effects of compounding.
  • Annual Percentage Yield (APY): A rate that takes into account the effects of compounding during the year. It’s best to compare yields rather than interest rates.
  • Minimum balance requirement: The minimum amount needed in a savings account to avoid a monthly maintenance fee.
  • Money market account: A type of savings account that may offer checks, and/or an ATM or debit card for teller machine withdrawals. Here’s more on the best money market accounts.

What are the different types of savings accounts?

Generally speaking, there is only one type of savings account. Some savings accounts may be called high-yield savings accounts but that doesn’t necessarily mean that they offer higher yields. Money market accounts also fall under the official definition of savings deposit accounts.

Some banks may also offer special savings accounts for children, while other institutions may one one account for everyone but allow accounts to be titled as custodial savings accounts.

Here are some possible titling options to designate the owner(s) of a savings account:

  • Individual account: An account owned by a single person. No one else is allowed to access this account. (An exception can be if someone has a power of attorney for the individual account holder.)
  • Joint account with rights of survivorship: If two people have a joint savings account — with no other beneficiaries on the account — and one of the joint owners dies, the account is paid to the living account holder.
  • Payable on death (POD): If an individual savings account has one or more beneficiaries listed and the account owner passes away, these beneficiaries will receive the balance of the account. Appropriate proof, generally a death certificate, is needed. A beneficiary on a joint account, listed as POD, wouldn’t obtain a right to this account until the last account owner passes away.
  • Uniform Transfers to Minors Act/Uniform Gifts to Minors Act (UTMA/UGMA): Typically, these types of accounts stipulate one custodian and one minor. The custodian manages the account for the minor until the child reaches age 18 or age 21, depending on the state.

Not all savings accounts are created equal. Many online banks, for example, pay higher yields than their brick-and-mortar counterparts. When choosing a savings account, consider APY, minimum deposit requirements and your financial goals. The best savings accounts should provide a competitive APY, but also give you the flexibility to securely withdraw or transfer money each statement period.

Online savings accounts vs. traditional savings accounts

One big difference between savings accounts offered by online banks and those offered by traditional banks is the APY offered. Online banks usually offer much more competitive yields. Brick-and-mortar banks tend to offer something closer to the national average, which is currently 0.10% APY, or they offer something that’s nearly nothing — 0.01% APY.

Another difference is branch access. Online banks offer savings accounts that give customers the ability to bank from anywhere at any time, but these online institutions typically don’t have any branches — so customers can’t visit them in person to perform basic banking tasks. Here's how to make deposits into an online savings account:

  • Direct deposit
  • Mobile check deposits
  • ATM deposits
  • Mailing in checks
  • Electronic funds transfers
  • Wire transfers

In addition to offering branches for conducting bank business, some banks may provide an ATM card and/or a debit card for ATM access. Depending on the bank, you may be able to electronically transfer the money to an account that you hold at another bank. Other possible options for accessing money are cashier’s checks or official bank checks or by initiating wire transfers, which, generally, are more expensive methods.

Here are some of the ways withdrawals can be made from an online savings account at a traditional bank:

  • ATM withdrawals
  • Debit cards
  • Checks
  • Electronic funds transfers
  • Wire transfers
  • Requesting a mailed check

Savings accounts are limited by Regulation D, which limits the number of transfers or withdrawals from the account to six per calendar month or statement cycle of at least four weeks.

Transfers, which are similar to withdrawals, made online, via check or some other method made by the depositor and payable to third parties apply toward your six-transaction limit. Withdrawals from ATMs are not counted toward the six-transaction limit, and many banks offer ATM access for savings accounts.

In late April 2020, the Federal Reserve Board announced an interim final rule to amend Regulation D so that consumers can make an unlimited amount of withdrawals or deposits from savings accounts. Banks aren’t required to suspend the rule, however, so the six-limit rule may still apply.

Requirements for opening a savings account online

Banks will likely have some slightly different requirements for opening a savings account online, though most require U.S. citizens to provide a form of ID and a social security number.

Here are sample requirements at three of the largest banks in the U.S. for opening a bank account:

Do you need to scan/submit your driver’s license/photo ID?

  • Bank of America: No.
  • Chase: The online application required information provided on an ID.
  • Wells Fargo: ID information can either be entered on the website or a photo of the ID can be taken and submitted.

Do you need to lift a credit freeze/security freeze? (If you have one)

  • Bank of America: Yes.
  • Chase: Yes.
  • Wells Fargo: Maybe. A visit to a Wells Fargo branch may be required.

Do you need to fund the new account immediately using an existing routing number/account number?

  • Bank of America: No for checking and savings accounts, but yes for CDs.
  • Chase: No. You have 60 days to fund the account and will be closed if not funded within 60 days.
  • Wells Fargo: Yes, a deposit of at least $25 is required.
 

Online banks vs. brick-and-mortar banks

 

Online Banks

Brick-and-Mortar Banks

Pros
  • These banks tend to offer higher yields than the national average.
  • Since these banks usually don’t operate their own ATMs, they might be more likely to be a part of a large network of ATMs. Online banks might also be more likely to have a policy for reimbursing out-of-network ATM fees.
  • Online banks tend to not have minimum balance requirements or charge monthly service fees.
  • Choosing a local bank means you’ll be able to visit that location for in-person customer service.
  • Withdrawals from your savings account can be made in person.
  • There might be quite a few ATM locations in your neighborhood and when you travel.

Cons

  • Usually an online bank won’t operate a branch that you can visit to solve problems or make an in-person withdrawal.
  • Deposits and withdrawals often require digital or mobile access.
  • It’s rare for a brick-and-mortar bank to offer a competitive APY.
  • In-person hours might not work for your schedule.

Why do online banks pay more interest?

In some cases, the biggest banks still pay their savings account customers less than 0.10% APY — the national average. Online banks, on the other hand, typically pay much more because they don’t have the costs associated with physical branches, giving them the opportunity to pay customers higher yields. Though online banks offer higher savings rates and charge fewer fees than traditional banks, consumers should also consider their individual financial needs, such as the need or desire to bank in person at a branch, when weighing where to open an account.

Benefits and risks of a savings account

Savings accounts, like all financial tools, come with benefits and risks. It's wise to weigh the pros and cons to see if one of these accounts is ideal for your financial situation.

Benefits

  • Security: Savings accounts at an FDIC-insured bank are federally insured up to at least $250,000, making them great places to stash cash.
  • Liquidity: You can access your savings in your account when needed. Savings accounts only allow for up to six withdrawals or transfers per statement cycle, but you won't have to sell investments in order to get your money out.
  • Earnings: The money you keep in a savings account earns interest over time and compounds, offering a return on the principal.
  • Higher interest: The best savings accounts usually earn more interest than a checking account – and some even have a higher yield than money market accounts.
  • Low-fee options: There are many savings account options that either have a $1 minimum balance or no minimum. With these options, it’s easy to avoid a maintenance fee.
  • Access: Many savings accounts allow you to access your savings at ATMs with an ATM card. Just make sure the ATM is in the network to avoid any fees. Also, ATM withdrawals don’t count toward your monthly/statement cycle limit of six.

Risks

  • Low interest: Savings accounts do pay interest, but it's often much lower than can be earned with other savings vehicles like certificates of deposit or even some money market accounts. That can lead to a big opportunity cost — you may find higher returns elsewhere.
  • Accessibility: Unlike checking accounts, savings accounts have a limit on the number of withdrawals and transfers you can make each month. Withdraw more than six times during a month, and you could get hit with a withdrawal penalty.
  • Fees: Some banks charge minimum balance fees. Those maintenance fees can eat up any interest earned and your principal very fast, especially with low interest earnings.

Who should have a savings account?

Most consumers would benefit from having an emergency fund and additional savings. Some banks make it easy by allowing consumers to open multiple savings accounts for different savings goals.

A savings account should be a part of a diverse portfolio that also includes CDs for locking away money for longer terms, as well as the best investments to build your retirement nest egg. As a general rule, savings accounts are for money that you may need in the short term and that you don’t want to expose to any risk that could cause you to lose any principal. CDs are generally better suited for money that can be left untouched for one, three or five years, since CDs typically charge penalties for early withdrawals.

Savings accounts aren’t for everyone, including those who aren’t able to maintain any minimum balance requirement that may result in fees.

When should you open a savings account?

Savings accounts are an ideal way to establish an emergency fund, but the money can be used for any financial goal, such as a downpayment on a house, a vacation or cash for retirement. Rates now at online banks are much lower than they were in early 2020 and 2019, and though there are expectations for rate increases, they might not be significant. Consumers have no control over low interest rates, but it pays to secure a competitive yield even when the difference seems minimal. For instance, $10,000 for a year in a savings account at 0.55 percent APY would earn $54 more than it would at 0.01 percent, assuming money is not withdrawn from the account.

Bankrate's experts have compiled these reasons for opening a savings account:

Should you open a new savings account in 2022?

Savings accounts are a smart way to set money aside, no matter what the yield is. But earning a competitive yield makes a difference over time. For instance, $10,000 in a savings account at 1 percent APY would earn $99 more in a year than it would at 0.01 percent. Savings yields are usually variable, which means the APY offered today may be different in the future.

How much money do you need to open a savings account?

To start, it’s best to set aside three to six months’ worth of living expenses in a savings account. Ideally, that amount should be the minimum stashed away in your emergency fund, to cover such things as job loss, or unexpected health bills or home repairs. After that, you can start saving for more specific goals, such as saving for a down payment on a house, buying a car, going on a vacation or anything else worth saving for.

Consider keeping your emergency savings in a separate savings account to prevent inadvertently spending it on non-emergency purchases. Also, if your emergency savings is earning a competitive APY, there’s little downside to saving more than needed to cover basic expenses. In an emergency, you’ll be glad you have a cushion.

Some banks may limit how much you can deposit into a savings account. There may be limits on your initial deposit, how much you can deposit at one time or how much money you can keep in the account.

Bankrate's experts compiled these articles, customized by age, to help you save:

  • Saving in your 20s: Early adulthood is an ideal time to develop good saving habits and set a solid foundation for the future.
  • Saving in your 30s: The 30s are an eventful stage of life when many adults experience important life events.
  • Saving in your 40s: Approaching middle age is a time to assess how well you’ve saved and whether changes are needed.
  • Saving in your 50s: As consumers age it’s important at this stage to begin planning for how to pay medical costs in later years.

Are there fees associated with a savings account?

Savings accounts may charge a maintenance fee if the minimum balance requirement isn’t maintained. Some savings accounts, however, don’t require a minimum balance or only require a nominal amount — and still pay competitive APYs. If the account’s minimum balance requirement is too high, consider finding a bank offering a similar APY with no minimum balance requirement — or a lower one. Finding a savings account with no monthly fee is the easiest way to avoid having surcharges eat into your interest earnings or principal.

Out-of-network ATM fees are another charge to watch out for, as are fees for closing a savings account before a specified period, typically three to six months. Banks may also charge fees for sending wire transfers, or purchasing cashier’s or official bank checks, utilizing funds in a savings account.

What do the best savings accounts have in common?

A low minimum opening balance requirements, competitive APY, and low or no fees are common traits among the best savings accounts. Monthly maintenance fees are an especially important consideration, because they can eat into any earned interest, principal or a high-interest savings account that pays a particularly high yield.

The good news is it’s easy to find an account that pays a high APY without getting hit with costly fees. Here’s what to consider when shopping for a savings account.

  • High APY: Aim for the best APY that will generate the most payout on your savings. Usually, the best rates are offered by online banks, which have lower overhead than brick-and-mortar banks.
  • Low fees: Accounts that charge no fees or make it easy to waive any monthly fees, by maintaining a minimum monthly balance, for example, offer the best value.
  • Easy withdrawals and deposits: A savings account is meant for growing your money, but it should also be accessible in case of emergencies. Look for accounts that offer an ATM card or a mobile that allows peer-to-peer payments or account transfers.
  • FDIC insured: Choose a bank that’s backed by the FDIC to keep your savings safe — and be sure your account is within FDIC limits and guidelines.
  • Bank account bonus: Some banks offer new customers a cash bonus for opening an account, providing a boost to help to grow your savings. 
  • Safety: Savings and money market accounts at an FDIC-insured bank are insured up to at least $250,000.
  • Liquidity: Savings accounts and money market accounts are liquid accounts, so you can withdraw from them at any time — there are no early withdrawal penalties. Savings and money market accounts may limit withdrawals and transfers to six a month.

Complements and alternatives to savings accounts

  • Money market accounts: Money market accounts are savings deposit accounts that may allow limited check-writing privileges or access to a debit card.
  • Checking accounts: Checking accounts usually don’t offer competitive yields. There are some high-yield checking accounts, but they usually require you to meet certain requirements beyond a minimum balance, including having direct deposit or a minimum number of debit card transactions. Also, the high yield may be limited to a certain amount of money.
  • Certificates of deposit: A fixed-APY CD provides the same yield for the term of the CD. Most savings accounts have variable yields, so a CD is a way to earn a fixed APY during a term. CDs usually have an early withdrawal penalty, however, if money is taken out prematurely.
  • No-penalty CDs: No-penalty CDs may offer a lower APY than a regular CD in exchange for greater flexibility: They typically don’t charge a fee when money is withdrawn before the term concludes.
  • Money market mutual fund: Money market mutual funds pay interest and may permit check writing, but they aren't federally insured.

Savings accounts vs. money market accounts vs. mutual funds

 

Savings

Money Market Accounts

Mutual Funds

Liquidity

Money can be withdrawn from a savings account at any time, but transfers and withdrawals are limited to six each month/ statement cycle. ATM withdrawals don’t count toward the limit.

Money can be withdrawn at any time, but transfers and withdrawals are limited to six each month/statement cycle. ATM withdrawals don’t count toward the limit.

Shares can be redeemed at any time at the current net asset value.

Access

Some banks provide an ATM or debit card for easy withdrawals.

Some banks provide an ATM or debit card for easy withdrawals. Limited check writing may also be offered.

Shares can be redeemed at any time at the current net asset value.

Earnings

Usually more than a checking account, but rates may be lower than some money market accounts.

On average, money market accounts have higher rates than savings accounts.

Pay less than the best-yielding money market and savings accounts.

Security

Accounts at FDIC-insured banks are federally insured by the government up to at least $250,000.

Accounts at FDIC-insured banks are federally insured by the government up to at least $250,000.

Mutual funds are not insured by the federal government.

Fees

Some accounts have no minimum balance required to avoid a maintenance fee.

MMAs traditionally have higher minimum balance requirements than savings accounts.

Theser funds typically have fees, known as expense ratios.

Savings accounts vs. checking accounts

Checking and savings accounts serve different roles, but it’s important to have both. Generally, checking accounts are used for ongoing cash flow needs, permitting as many transactions as needed. A checking account is typically where paychecks are deposited and where money to pay bills is kept. However, many pay very little interest or none at all.

Savings accounts, on the other hand, are meant for stashing cash and typically don’t offer check-writing abilities. Their liquidity is more limited, but they typically carry a higher APY. There are, of course, exceptions. Some checking accounts offer higher APYs than high-yield savings accounts, but they usually come with stricter rules to earn the interest rate, such as balance caps or transaction minimums. Also, money market accounts, a type of savings account, typically offers limited check-writing abilities.

Here are some of the biggest differences between checking and savings accounts:

  • Purpose: Checking accounts are meant to be transactional — money can be taken out frequently with few restrictions. Savings accounts aren’t as liquid; they are meant to house your cash for longer periods.
  • Fees: Though there are exceptions, checking accounts often carry fees for services and slip-ups, such as maintaining too low of a balance or spending more than what’s in the account. Savings accounts typically charge few, if any, fees.
  • Interest: Many traditional checking accounts don't pay interest, while savings accounts do, though the yields might not be as robust as those found on CDs.

Whether you maintain a savings account at the same bank where you have a checking account depends on your goals.

One upside to keeping both accounts at the same bank is that it makes it convenient to transfer money between accounts. It also may be cheaper to keep multiple accounts at one financial institution — some banks waive fees when accounts are connected.

The disadvantage of keeping your savings and checking at the same institution is that you may miss out on higher yields. Not all banks offer both checking and savings products, and some banks that offer higher yields on savings may not provide a checking option.

Savings account FAQs

Recap: Bankrate's best online savings accounts and rates for July 2022

To recap, here are top online banks offering the best online savings accounts for July 2022:
  1. Best Overall Rate: Bread Savings - 1.65% APY
  2. High Rate: Citizens Access - 1.25% APY
  3. High Rate: Barclays Bank - 1.10% APY
  4. High Rate: Discover Bank - 1.10% APY
  5. High Rate: Synchrony Bank - 1.10% APY
  6. High Rate: Popular Direct - 1.05% APY
  7. High Rate: Citibank - 1.01% APY
  8. High Rate: Ally Bank - 1.00% APY
  9. High Rate: American Express National Bank - 1.00% APY
  10. High Rate: Capital One - 1.00% APY
  11. High Rate: Marcus by Goldman Sachs - 1.00% APY
  12. High Rate: CIT Bank - up to 0.70% APY
  13. High Rate: Vio Bank - 0.60% APY
  14. High Rate: PurePoint Financial - 0.40% APY

Banks we monitor

These financial institutions are featured in our savings rate research: Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank 5 Connect, Bank of America, Bank of the West, Barclays, BB&T, BBVA, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO Harris Bank, Bread Savings (formerly Comenity Direct), BrioDirect, Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens Access, Citizens Bank (Rhode Island), Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, E-Trade Bank, Emigrant Direct, Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, Marcus by Goldman Sachs, HSBC, Huntington National Bank, Investors Bank, Investors eAccess, KeyBank, Limelight Bank, Live Oak Bank, M&T Bank, MySavingsDirect, Navy Federal Credit Union, PenFed Credit Union, PNC Bank, Popular Direct, Purepoint Financial, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, State Employees' Credit Union, Suncoast Credit Union, Suntrust Bank, Synchrony Bank, TD Bank, TIAA Bank, UFB Direct, Union Bank (California), U.S. Bank, USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.