Best savings accounts for December 2023
Updated December 04, 2023
A savings account can be a great place to set aside money that you’re saving and want to earn a competitive APY on, even if you aren’t sure on the time horizon for the money.
Bankrate’s top savings rates are much higher than the current national average savings yield of 0.61 percent.
Bankrate provides you with timely news and rate information on the top savings yields from some of the most popular and largest FDIC banks and NCUA credit unions. This way you don’t have to spend time searching many bank and credit union websites. Since 1976, Bankrate has been a trusted source of banking information to help you make well-informed decisions on your finances.
The following accounts can be found at most banks and credit unions. They’re federally insured for up to $250,000 and offer a safe place to put your money while earning interest.
Certificate of Deposit (CD)
CDs are best for individuals looking for a guaranteed rate of return that’s typically higher than a savings account. In exchange for a higher rate, funds are tied up for a set period of time and early withdrawal penalties may apply.
Checking accounts are best for individuals who want to keep their money safe while still having easy, day-to-day access to their funds. ATM and other transactional fees may apply.
Savings / Money Market Accounts (MMA)
Savings and MMAs are good options for individuals looking to save for shorter-term goals. They’re a safe way to separate your savings from everyday cash, but may require larger minimum balances and have transfer limitations.
Best savings accounts and rates in December 2023
Marcus by Goldman Sachs
American Express National Bank
Recent news on savings account rates
The Fed’s next scheduled rate decision is Dec. 13. Anything’s possible, but as of Nov. 15, it’s unlikely that the Fed will raise rates again in 2023.
Returns on savings accounts will remain at attractive levels for some time. If the Federal Reserve is done raising rates, savings yields will stay elevated until the prospect of Fed rate cuts becomes clear.— GREG MCBRIDE, CFA | BANKRATE CHIEF FINANCIAL ANALYST
Generally, the Fed’s rate decisions can impact the savings account yields at competitive FDIC-insured online banks.
It’s possible these days to find a savings account with a rate that outpaces the current inflation rate of 3.2 percent. Top-yielding savings accounts are earning APYs above 5 percent. Such competitive accounts are commonly found at online banks.
One factor that influences savings account yields are the changes to the federal funds rate made by the Fed. Savings account rates at competitive banks tend to fluctuate along with the fed funds rate, while savings account rates from large brick-and-mortar banks often remain at near-zero. The national average savings account rate is currently 0.61 percent, according to Bankrate’s survey on Dec. 04, 2023.
How to choose a savings account
Savings accounts are a good option for achieving your money-saving goals. You’ll want to choose a savings account that offers a competitive annual percentage yield (APY) on your money. It can pay to choose one that either doesn’t have a monthly service fee or that has a minimum balance requirement you can meet to waive the fee.
Here are some steps to follow as you look for the best place to stash your savings:
- Determine what the money will be used for.
- Figure out when you’ll need to access the funds. Money to purchase a car in the next year might be best kept in a savings account, for example.
- Shop around. You’ll want to research banks and credit unions and compare rates. Check to see if there are any minimum balance requirements or monthly maintenance fees that could negatively impact you down the line. Generally, rates are highest at online banks, but it’s possible for a brick-and-mortar bank or a credit union to offer competitive yields.
- Determine your risk tolerance. Money that needs to be safe should be in a Federal Deposit Insurance Corp. (FDIC) account that’s within FDIC limits and guidelines.
- Open the savings account and deposit the funds into your account.
- Consider setting up a split direct deposit to automatically add to your savings.
What is a savings account and how does it work?
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, a savings account is a good spot to park your emergency fund. A CD isn't a good place for emergency savings since withdrawing your money before the CD term ends will likely result in a potentially costly fee.
What fees are associated with a savings account?
Savings accounts may charge a service 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 at least 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. An overdraft fee is what a bank charges you any time you withdraw more money from your account than what you have in it. Banks may also charge fees for sending wire transfers, or purchasing cashier's or official bank checks, utilizing funds in a savings account.
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 the more frequently it is done, the faster your savings can grow.
- 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 (APYs) 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 are the best money market accounts right now.
Who should get a savings account?
Most consumers would benefit from having an emergency fund and additional savings. Most 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 could also include 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 principal. CDs are generally better suited for money that can be left untouched for one, three or five years, because CDs typically charge penalties for early withdrawals.
You’ll also want to make sure all of your savings accounts, money market accounts, checking accounts and CDs are at FDIC-insured banks, that your money is within FDIC limits and that you’re following the FDIC’s rules.
Some people may not be good candidates for savings accounts, including those who aren't able to maintain any minimum balance requirement that may result in fees. That said, some savings accounts at online FDIC-insured banks don’t have any minimum opening deposit requirements, minimum balance requirements or monthly service fees.
Here are a few categories of people who may benefit from opening a savings account:
- College savers: Saving for college is one of the biggest expenses parents face. Saving for students should be a marathon, not a sprint. An FDIC-insured savings account is a safe place to save for your child’s college education. Eventually, you might want to consider moving some money into a CD — depending on when your child is starting college.
- Future retirees: A savings account is one of the vehicles that should be used to prepare for retirement and should be a part of your retirement plan.
- Disciplined planners: It's critical to have an emergency savings account. This account should be able to cover at least six months' worth of expenses. You never know what the future will hold.
- Travelers: Planning a trip can be a fun part of traveling, and you can use your savings account to create a travel budget. Set up a recurring transfer from your checking account into your savings account so you don’t forget to save for your vacation.
- Future homeowners: A savings account at an FDIC-insured bank is the perfect place for your future downpayment on a home. Automate your savings to make sure you achieve your goal of homeownership.
What is needed to open a savings account?
Whether opening an account online or in a bank or credit union, you'll likely be asked for similar information. That's because all banks have to comply with certain rules and regulations for new account openings.
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. You might also need to lift any credit freezes you have set in order to open the savings account.
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 requires information provided on an ID.
- Wells Fargo: ID information needs to be entered into Wells Fargo’s online application. You’ll need to go into a branch to open the account if your ID isn’t currently available on Wells Fargo’s online application, according to Wells Fargo.
Do you need to lift a credit freeze/security freeze? (If you have one)
- Bank of America: No.
- Chase: Yes.
- Wells Fargo: Yes.
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 it will be closed if not funded within 60 days.
Wells Fargo: Yes, a deposit of at least $25 is required.
Online banks generally will have you input information from your drivers' license or government issued photo ID. You'll likely have to enter your social security number and you might have to lift a credit/security freeze, if you have one. Since online banks generally don't have physical locations, you likely won't have to provide this information in person.
Pros and cons 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.
FDIC protection: Savings accounts at an FDIC-insured bank are federally insured for up to $250,000, per depositor, per FDIC-insured bank, per ownership category, according to the FDIC.
Liquidity: You can generally access your savings in your account when needed.
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: Most 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.
Low interest: A CD – or other investments – might earn a higher yield/return.
Accessibility: Unlike checking accounts, savings accounts often have a limit on the number of withdrawals and transfers you can make each monthly statement cycle.
Fees: Some banks charge minimum balance fees. Those maintenance fees can eat into interest earned – and even your principal.
Variable APY: Yields for savings accounts can change based on fluctuations in interest rates made by the Federal Reserve.
Limited purchasing power: Economic factors such as long-term inflation could exceed the APY on a savings account.
Alternatives to savings accounts
A savings account might be the right account for you. But there are other options that you should consider — depending on your savings goals and time horizon for using your money.
Savings accounts vs. money market accounts
Money market accounts are savings deposit accounts that may allow limited check-writing privileges or access to a debit card.
Savings accounts and money market accounts are very similar. They're both savings deposit accounts. A money market account is a better choice if you'd like to write checks from your savings account, in which case you’ll want to make sure the bank offers that option.
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. Some interest checking accounts may have high yields, but they might have caps and rate tiers limiting the balance that offers that competitive yield.
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.
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. Savings accounts do, though the yields might not be as robust as those found on CDs.
Savings accounts vs. CDs
Savings accounts are intended to be liquid — you can add money to the balance or make a withdrawal whenever you want. Savings accounts generally earn a variable APY.
CDs (or Certificates of deposit) are for money that you'd like to earn a fixed APY on. Generally, CDs have a term that you need to keep your money in the CD for. Your bank will likely charge an early withdrawal penalty if you take your money out before the CD's term ends.
A no-penalty CD can be the best of both worlds as generally you can withdraw your money from a no-penalty CD anytime after your first six days with the CD.
Savings accounts vs. money market mutual funds
With a savings account, you deposit your money into an account and earn an APY. Your money is insured by the FDIC — up to at least $250,000 — if the bank is an FDIC bank.
Money market mutual funds (not to be confused with money market accounts) aren't FDIC insured, and you purchase shares when you deposit money into this product.
Savings account FAQs
Bankrate’s editorial team regularly updates rates featured on this page about every two weeks. We mainly look for the highest APYs and break ties using the minimum balance to open a CD. Bankrate’s editorial team has reviewed nearly all of the banks and credit unions that it tracks, and researches rates weekly for more than 70 popular banks and credit unions. These institutions were selected because they offer competitive APYs, are larger (based on the amount of deposits or assets), frequently appear in internet searches or other possible factors. These banks and credit unions typically offer accounts that are available nationwide. All of these banks are insured by the Federal Deposit Insurance Corp. (FDIC) and all of the credit unions are National Credit Union Administration (NCUA) credit unions, insured by the National Credit Union Share Insurance Fund (NCUSIF). Choosing an FDIC-insured bank or NCUA-backed credit union ensures your money is safe as long it’s within insurance limits and guidelines.
Bankrate's experience on financial advice and reporting
At Bankrate, we regularly survey over 500 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.