Best Banks with the Highest Interest Rate for Savings Account
Are you earning the most from your savings and money market deposit accounts? These accounts are the main pillars of a strong financial foundation, providing you with financial stability and helping you achieve your financial goals. Many banks and credit unions offer these accounts, and this article aims to help you find the highest interest rate for this type of deposit accounts. Of course, a high interest rate is not the only factor to consider when selecting a savings or a money market account, and here is an article to help you choose the best deposit account for your specific needs.
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How to Find the Best Money Market and Savings Interest Rates
Finding the best savings account rate is a simple matter of looking in the right places for the answer you’re looking for. However, looking at individual bank site or visiting physical branches could be time consuming. The good news is that there are some sites that aggregate interest rate data to help you find the best rate.
- Bankrate.com – Bankrate.com is a major player in this space. For your convenience, we’ve partnered with Bankrate.com to provide you with their live data feed. Click here to see the top 50 savings and money market accounts.
- MoneyAisle – MoneyAisle is a search engine that helps you find the best-matched bank based on your initial deposit amount and where you live — simply, visit the site and enter your information to get a recommendation.
- Recommended Banks – You can check out various recommendations, such as the ones below. These are typically online banks that can provide higher interest rates than their brick and mortar counterparts.
- Alternative Options – Last but not least, there are alternatives to traditional savings and money market accounts that could provide competitive interest rates. Just remember that they are not your typical savings account and you have to understand how they work before you decide to put your money there.
However, remember that the best interest rate is not the only factor; you should consider the fees and make sure that you maximize your earnings and convenience with your savings.
High Interest Online Savings Banks
The following information was last reviewed and updated on May 20, 2012. Rates and conditions change constantly, so please review the information at the bank’s website carefully before you open an account. All banks are FDIC insured.
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The CIT Savings Account offers 1.05% APY interest rate when you maintain a daily balance of $25,000 or more (0.90% otherwise). No account-opening or monthly maintenance fees. Your interest is compounded daily to maximize your earning potential.
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Ally Bank High Yield Savings Account offers competitive rate of 0.84% APY and easy access with no minimum balance and no monthly fees. The bank was rated “Best Savings Account” by Money Magazine in May 2010.
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ING Orange Savings Account offer a high 0.80% APY and it is very popular among savers. You can access your account around the clock via ingdirect.com, and open your account online in under 5 minutes. The best feature is the ability to open sub-accounts to help you save for specific goals.
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Discover Bank Online Savings is a product from the same reputable organization that offers the Discover Card credit 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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FNBO Direct Online Savings Account offers 0.65% APY. Open an account with as little as a dollar. No monthly fees. No balance minimums.
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Alternative Options to Savings and Money Market Accounts
In addition to high yield savings and money market accounts, here are some alternatives that may work for you.
| Option | Description |
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Prosper is another peer-to-peer a social lending network where you can invest in individual loans with as little as $50. Currently, the site claims an average return on investment of 10.69% APY. |
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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 advertises an average return of 9.6% APY. To learn more about peer lending, please read Introduction to Peer-to-Peer Lending. To learn more about peer lending, please read Introduction to Peer-to-Peer Lending.
IMPORTANT: Please note that there are special risks associated with social lending. |
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SmartyPig is an FDIC-insured online savings bank where you set up savings goals, and set up automatic deposits to reach your goals. You can also invite family and friends to contribute to your goals. While your savings accumulates, it earns a competitive interest rate of 0.70% APY. Lastly, you can get an 11% boost by trading your money for a gift card from one of the participating retailers. |
High Yield
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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, ING Electric Orange offers a high yield checking account that pays up to 0.90%. Please visit Best High Yield Online Checking Account Rates for more checking options. |
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. Please visit Best CD Rates for more CDs options. |
Frequently Asked Questions and Answers
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 follow: high interest rates, good customer service, low fees structure, and good reputation.
Are online savings accounts better than a traditional one?
An online savings account is becoming more popular each day. Typically, you have to do most of your transactions online or using the ATM. In exchange, you get to 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 offer 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 account, money market account, certificate of deposit (CD), and checking account.
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.
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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.
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.
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.
@Bernz – Thank you.
@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.
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.
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,
Wow! What a great article! I currently have an ING Account, but am thinking about checking into the Discover Bank Money Market Account, thanks to your information!
It is interesting to note that most of the banks with high interest rate are the lesser known banks. How are the big banks competing with these rates? Or are they too complacent because of the clout of their brand?
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.
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.
About a year ago, BB&T (a bank mostly in the southeastern states) was offering a special interest rate: if you keep a minimum balance of $10,000 in your savings, you can earn 3% in interest. Not sure if they are still offering this deal…
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.
um People??? Netspend.com has a free savings account with no min balance and has a 5% quarterly interest rate yield and a 5% annual interest rate yield??? The Best In The Business. I’ve shopped around and dealt with numerous online banks and have been happy with netspend for over 3 years now. Free direct deposits,visa credit card, ATM, no fees at all, no overage fees, if you go over you just payback what you went over, there’s no Bullsh*t Overage fee like there is with so called well established banks. Try it out for yourself, I’ve turned 7 of my electrical co workers on to them already, there’s no check holding like other banks, my other buddies had direct deposit at other banks, and me with netspend, there checks wouldn’t hit till Friday, mine would be in Tuesday by noon. as soon as they send money, it post, just like it should be, but please, don’t take my word for it, see for yourself, http://www.netspend.com
I just opened an American Express High Yield Savings account and the current interest rate is 1.3%.
yeah netspend rocks. im getting signed up for the 5 % a year interest plan today! I’m 19, and im saving, saving, saving. Make sure you watch out for me- im an actor/comedian. woohoo!!!!!!
Netspend may rock in your opinion, but be C-A-R-E-F-U-L with them. Follow the url and see a history of problems:
http://www.consumeraffairs.com.....spend.html
These days, you must be extremely careful where you put your assets. Sometimes, all that glitters is not gold.
Good luck all!
An informative list and the compilation is quite comprehensive. The lists of accounts are good as all of them have FDIC insurance coverage. Benefits like no minimum balance and free online transfer should be considered while zeroing upon any of the bank accounts.
every bank/card account has problems. but i’ve had netspend for years- and it’s been faultless for me. what you say is actually irrelevant.
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.
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
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!
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.
I have been all over the capital bank website trying to find out what interest rates that pay on saving, cd’s and checking. I guess I am going to have to give them a call tomorrow and see what I can find out.
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 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).
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.)
Love SmartyPig. Have invested over 50K in the past year with no problems getting my money out when I need it. Great way to save!
Smarty Pig may be fine in conjunction with purchases–for a straight savings account I use Sallie Mae Bank, paying 1.4% interest. Have had NO problem with them, either opening the account or adding to it.
Sallie Mae is at 1.30 savings $1.00 to open.
For those of you interested on smartypig and how they can offer such a high interest rate, you may find this article interesting and worth reading.
http://cashmoneylife.com/how-d.....est-rates/
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.
Your post is very helpful. It was well-researched and full of information. Thanks for sharing!
@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.
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?
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.
@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.