Are you earning the most from your savings and money market deposit accounts?
Deposit accounts are the pillars of a strong financial foundation, providing you with financial stability as you work to achieve your financial goals. Many banks and credit unions offer a variety of savings and money market accounts, and this article aims to help you find the highest interest rate for this type of deposit account.
Of course, a high interest rate is not the only factor to consider when selecting an account. This article will help you choose the best deposit account for your specific needs.
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Finding the best savings account rate is a simple matter at first glance: Just look in the right place for what you want. Looking at individual bank site or visiting physical branches is time consuming, so skip the individual search and look online for sites that aggregate the best deposit account rates.
Remember that the best interest rate is not the only factor to consider; you should also consider the fees and make sure that you maximize your earnings and convenience with your savings.
The following information was last reviewed and updated on June 10, 2013. Rates and conditions change constantly, so please review the information on the bank’s website carefully before you open an account. All banks are FDIC insured.
| Bank | Rate | Review |
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0.89% | Everbank Yield Pledge® Money Market Account offers 1.10% bonus rate for the first 6 months, or 1.01% APY for the first year on a balance up to $50,000. $1,500 minimum opening balance required. Their fee structure was recently improved. |
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0.75% | Capital One 360 Savings(TM) offer a high 0.75% APY and it is very popular among savers. You can access your account around the clock and open your account online in under 5 minutes. |
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1.00% | SmartyPig is an FDIC-insured online savings bank where you set up savings goals and put money toward your goals. You can get up to 11% boost by trading your money for a gift card from one of the participating retailers. |
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0.90% | Barclays Online Savings. No minimum balances. No monthly maintenance fees. Daily compounding. Also offers CDs. |
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0.85% | FNBO Direct Online Savings Account offers 0.85% APY. Open an account with as little as a dollar. No monthly fees. No balance minimums. |
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0.85% | American Express Personal Savings. No Fees. No Minimums. 24/7 Account Access. Also offers CDs. |
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0.85% | SallieMae High-Yield Savings Account. No minimum balance. No monthly fees. Easy online account management, 24 hours a day. |
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0.84% | Ally Bank Online Savings Account offers competitive rate of 0.84% APY and easy access with no minimum balance and no monthly fees. Ally was rated “Best Bank” by Money Magazine in 2012. |
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0.80% | Discover Bank Online Savings is a product from the same reputable organization that offers the Discover Card. In addition to competitive online savings rate of 0.80%, Discover Bank also offers money market account (0.70% APY), CDs, and IRA CDs. |
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0.80% | CIT Savings Account offers 0.80% APY interest rate with a $100 minimum to open. You can increase the APY to 0.85% when you maintain a daily balance of $25,000 or more. No account-opening or monthly maintenance fees. Your interest is compounded daily to maximize your earning potential. |
| See Top 50 Banks Table | ||
In addition to high yield savings accounts and money market accounts, here are some alternatives that may work for you:
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Lending Club is a SEC-registered social lending site where you can invest in 3-year and 5-year loans with as little as $25 per loan. The interest rate you earn depends on the quality of the loan (based on borrower’s credit rating, loan amount, loan length, etc.) Currently, Lending Club claims 93% of lenders earn between 6 to 18% APY. To learn more about peer lending, please read Introduction to Peer-to-Peer Lending. You can also check out a similar service from Prosper.
IMPORTANT: Please note that there are special risks associated with social lending. |
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Discount Brokers: Many discount brokers offer a money market account that acts as the default account for fund deposited into your brokerage account. It usually pays some interest (not as high as an online savings account), but a brokerage account also gives you access to other investment opportunities, e.g., income investing in dividend paying stocks. |
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High Yield Checking Accounts: Generally, there are more restrictions around high yield checking to be eligible for the best rate. However, it may be worthwhile if you can meet the requirements. Currently, Capital One 360 Checking offers a high yield checking account that pays up to 0.85% plus a $50 sign up bonus. |
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Certificates of Deposit: Another option to high interest savings is certificate of deposits. There are CDs with term as short as 3 months and as long as 10 years. Generally, longer term CDs pay more than savings, but require long-term commitment. |
If you know a bank that offers a higher rate than the ones above, we’d love your insight in the comments.
What is the best way to choose a savings account?
When selecting a savings account, determine the features that are most important to you. For example, you may order the features as follows: high interest rates, good customer service, low fees, and good reputation.
Are online savings accounts better than a traditional one?
Online savings accounts are more popular each day. Typically, you have to complete most of your transactions online or using the ATM, since there may not be brick and mortar locations in the “real” world. In exchange, you enjoy a higher interest rate than normal and pay lower fees.
How does FDIC insurance protect savings accounts?
When selecting a bank, make sure that it is FDIC insured. The federal government offers this insurance to participating banks and it protects your money (up to $250,000 per depositor at each banking institution) against loss in the event that the bank goes out of business.
What does FDIC deposit insurance cover?
FDIC insurance covers all deposit accounts, including savings accounts, money market accounts, certificates of deposit (CDs), and checking accounts.
Please review information associated with each offer before you sign up. Rates and conditions change constantly and I have reported what I believe to be the most accurate information at the time the article was updated.
I visited Bank of America, Chase, TD, Capital One, and Astoria Federal for checking or savings accounts with good i retest rates. I also have an amount larger than $25,000. The best rate I found just to earn interest was Capital One with 1% with their High Yield Free Checking account. I’m suprised that there werent any better offers. Did I miss any good opportunities Pinyo?
@Bobby, that sounds about right that you get the best rate from Capital One (thanks mainly due to their acquisition of ING Direct). If you’re looking at national banks 1% for savings is about where it tops off right now. Local banks and credit unions may offer slighly higher rate, but you have to look around for them.
Some online banks restrict the amount you can withdraw during a time period. For example, Discover limits to $100,000 per 30 day rolling period. The Bank may change these limits at any time with notice if required by law. You may want to keep your deposits below these limits.
Thanks for sharing this list. With so many banks out there, it is really hard to compare one from the other.
My current APY at my bank is .50% and it hasn’t gotten me much of anywhere in these past few years. Thanks for sharing this information. I actually chose my savings account because I already have a checking account with this bank (TCF Bank). I will definitely be looking into Ally & Discover.
Pinyo,
It is great that you also expose your readers to some of the Alternatives such as Lending Club and Prosper. These are fantastic assets but certainly not an equivalent to a bank savings account. It is a very active strategy that can pay far higher rates of return quite safely IF:
1) You put in the research (there is a lot of data to crunch- DO NOT RELY on someone’s analysis of risk especially the guys selling you the loans (Good advice when you are buying ANYTHING but especially investments). LC and Prosper are great companies but their credit models are not infallible)
2) have enough money to diversify broadly (at least $20-$50K)
3) Do not need liquidity (These are 3 Yr or 5 yr loans )
4) Are comfortable with income volatility and a “laddering” approach where you are continually rolling money delivers smoothest returns.
Consumer credit is a great asset (hell its what banks do with your deposits to pay you the little bit of interest on the account!) but it is an investment not a bank account and should be approached as such.
I want to make the best financial decisions for my family. I began using the Upromise card about a year ago and have now accumulated some savings (not much) … is it a good idea to open a savings or Certificate of Deposit with SallieMae, or is there a better option.
Remember the highest interest rate is not always the best deal, there can be fees to cancel which can eat up all of your profit.
How much does $30,000 make a difference in terms of choosing a savings account versus a money market account? This is really just my emergency fund in case anything happens?
@Gloria – The interest rate won’t be that big of a difference. You’ll be protect by FDIC insurance, so you should pick a bank that you’re most comfortable with and that doesn’t charge you any fee for keeping your money there.
Tried American Express which as a very competitive rate and a good customer service. Plan to try Smarty Pig. Is there somebody who have tried their service? It offers the highest rate in the market so far this month.
Capital One is potentially #1 on your list (or at least #2 with an asterisk). In addition to the 1.35% base rate, they pay a quarterly bonus of 10% of interest earned on accounts with a minimum balance of $15,000. This raises the effective rate on such accounts to 1.485%. (I’ve just switched over from HSBC, after confirming with them that they have no current plans to meet this very strong competition.)
Pinyo, I would like your opinion. I’ve got quite a bit of money from selling my house. Currently, like Ann McD, my credit union offers only .10% for my savings account but a high 4.51% interest on my checking account. Is it safe to move over $10,000 into my checking account just to receive the good interest? Are there any downsides to doing this? I would sincerely appreciate your advice. Thank you.
@Lorri – It’s hard for me to say without knowing more about your CU and the checking account offer. $10,000 is certainly covered by NCUA (the equivalent of FDIC) insurance, so you’re covered there. But you have to read the fine print to understand how much money in your checking will actually earn the 4.51% — some banks cap the amount that could earn high interest.
Also, if you have a lot of money and is not planning to do anything with it for a while, you may want to consider investing what you could in TIPS. It pays a little bit of interest on top of the guarantee that you will beat inflation (so that means a lot more than what your savings/checking could offer you), and it’s backed by the U.S. government (fairly safe).
Great list of savings accounts! For those starting to save with very little money, SallieMae is a great choice. They have no minimum initial deposit and no minimum deposit thereafter. That’s nice for those who want to save, but don’t have an initial $1500 and can’t put $25 or more in on a monthly basis.
Pinyo, just wanted to say what a great site you have! I’m SO glad I came across it. You have lots of info that other comparison sites don’t have. BTW, we opened an AMEX savings account and are very pleased. We were with ING for years, but the continual drop in interest rates prompted us (well, me, since I do the finances
to change. Also, this is the first place I’ve heard about Sallie Mae. Don’t want to chase rates, but their Upromise deal is interesting. Maybe open a second account? Sorry to babble, just wanted to say good work!
awesome site.im finding a lot of useful info.im 29 and taking the plunge into the investment world.im mainly considering the brokerage houses (scottrade,tradeking,etc.) but things in this article such as peer2peer, and particularly everbank, really caught my attention
I am a little confused with how much ill have in a savings account at ally after one year with depositing 3k. From the calculator on the site it says ill have 3,038? What about the the daily compounding why dont they calculate that?
@eric, $3,038 is correct. 1.29% APY takes into account compounding, so you simply multiply $3,000 to 1.29% to get $38.70 interest. Add that back to your $3,000 deposit and you get $3,038.
Just as an FYI- The credit union I belong to has a special checking account that offers 3% interest up to $25,000. There are a few requirements, direct deposit, debit card use and online bill pay, all of which I had already been using. At the moment, I keep more money in my checking than my savings just to rack up the interest.
And where do you live that your credit union has such a great rate?
I’m just wondering what bank offers this “12% & 18% annual compound interest rate for savings” that Dave Ramsey glorifies? Highest I’ve found is 4.51apy, big difference from 12 or 18 percent? What’s he talking about, what bank???
@Shay – Dave is too optimistic on the ROI end.
@Shay – Dave Ramsay has no idea what he is talking about. Not when it comes to debt (his snowjob method is point PROVEN — he’s a better lobbyist for the credit card companies than they are themselves!) and not when it comes to ROI. Just a snake oil salesman who sells overpriced, overmarketed “programs” to people who are already drowning in debt.
Thanks for the updates. I’ve been with gmac/now ally for a year and luckily it’s almost always near the top of the list.
This was great to know the details about online Banking. They give details about interest rate about various banks. So that it is easy to know the highest interest rate. Beyond that if they give about extra information about the bank. It was helpful everyone.
Thank you,
Pinyo, You have amazing details on savings, cd and credit information. I also love your tables. Simply great! That is why I keep coming and learning so much from you, always.
Great roundup.
Not sure if I’m the only one, but I’m willing to go with a bank that doesn’t have the highest rate if it’s easy to use, trustworthy, and has the features I need.
@Jason – You’re not the only one. Those are good attributes to consider. Unfortunately, I don’t have information on them and the best you can do is start from the highest paying banks and move your money if you’re not satisfied.
Wow…this is really great, up to date list of the best online savings information. I will surely bookmark all these sites. Again thank you for this well thorough researched work.
Man this was a really good compilation of guides towards interest rates. The only time I chase rates is when helping people fund CDs since online account rates change so much. This one is going to delicious.
Thank you. I was debating whether or not to put this one together. But now that I read your comment, I’m glad I did.