Best Savings Accounts - December 2019
Certain savings accounts consistently offer the highest interest rates. Could you be earning more?
Finding a good savings account is one of the simplest ways you can make more money.
The best savings accounts pay several times more interest than average accounts. Plus, banks with the best savings account interest rates tend to stay among the leading banks for a long time, so choosing one of these banks can pay off for you year after year.
MoneyRates.com makes it easy to start earning more money. We continually monitor the banking industry to identify consistency among the best savings accounts. Read more to see how you can use this information to your advantage.
Compare featured savings & MMA accounts: Picks of December 2019
Best Online Savings Accounts for November 2019
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O Bee Credit Union
Northern Bank Direct
Ultima Bank Minnesota
All America Bank
Cadence Bank, N.A.
Western State Bank
First Internet Bank
Salem Five Direct
CIBC Bank USA
Sallie Mae Bank
Live Oak Bank
Dollar Savings Direct
Colorado Federal Savings Bank
Sallie Mae Bank
Marcus by Goldman Sachs
Mutual of Omaha Bank
Beal Bank, USA
Alliant Credit Union
Quorum Federal Credit Union
Editorial Reviews - Best Accounts with Consistently High Rates
A high-interest rate is great - if you can count on it remaining at that level. That's why we keep track of banks that offer consistently high rates on savings accounts.
Rather than rank savings accounts based on a single snapshot in time, MoneyRates.com measures rates throughout the calendar quarter and compares accounts based on the average rate offered throughout the quarter. This approach rewards accounts that not only offer higher rates, but do so consistently.
MySavings Account from MySavings Direct
Average APY, third quarter 2019: 2.39%
Account minimum: None
Type of account: Online high-interest savings
About the bank: MySavings Direct is a division of Emigrant Bank, which is based in New York City and was established in 1850. As of June 30, 2019 Emigrant Bank had $4.3 billion in total deposits.
Key features: Having the top rate in the third quarter rate survey was no fluke for the MySavings Direct, as it has had the best savings account rate in each of the last four surveys. A MySavings Account can be linked to your existing checking account to facilitate automated saving.
Salem Five Direct eOne Savings
Average APY, third quarter 2019: 2.34%
Account minimum: $100 to open, with no ongoing balance minimum
Type of account: Online high-yield savings account
About the bank: Salem Five Direct is the online division of Salem Five Cents Savings Bank. Salem Five Cents Bank is based in Salem, MA and has 36 physical locations. It was established in 1855 and had $3.8 billion in deposits as of June 30, 2019.
Key features: With online availability and a low $100 threshold to open an account, the Salem Five Direct eOne Savings account gives consumers around the country access to a top-10 America's Best Rates savings account. While the top interest rate only applies to balances up to $1 million, in reality that won't be a limitation for the vast majority of customers.
UFB Direct Savings Account
Average APY, third quarter 2019: 2.28%
Account minimum: None to open an account, but a $10,000 minimum balance required to earn interest
Type of account: Online savings
About the bank: UFB Direct is a division of Axos Bank, which had $9.0 billion in deposits as of June 30, 2019. Axos Bank was founded in 2000.
Key features: The UFB Direct Savings Account offers one of the 10 highest APYs in the America's Best Rates survey with the convenience of online banking, including access anywhere you can go online and 24/7 service.
How We Picked
MoneyRates.com continuously monitors rates from hundreds of banks, and tracks banking trends by measuring rates in a representative cross-section of the banking industry through its America's Best Rates survey. This cross-section includes 50 of the largest deposit institutions in the United States and represents nearly three-quarters of all deposits in U.S. banks.
Between measuring a large cross-section of the banking industry and putting the emphasis on banks that offer consistently high rates, the MoneyRates.com bank rankings point you toward several choices of leading savings accounts.
What We Compared
MoneyRates.com looks for consistency when it puts together its list of the highest savings account rates. Savings account rates are subject to change at any time; so rather than listing rates based on a single snapshot in time, MoneyRates.com measures the average rate each bank offered during the entire calendar quarter.
Interest Rates (Annual Percentage Yield) Over an Entire Quarter
During the third quarter of 2019, the average savings account rate was just 0.439%. Worse, the four retail deposit institutions in the United States, which together hold more than 40% of all deposits, offered interest rates of 0.04% or lower. This means millions of savings account customers are earning very little interest on their savings.
However, some people are doing much better. MoneyRates.com identified 10 accounts that offered an average rate above 2% during the second quarter, including a top rate of 2.39%.
In dollar terms, this means that the average savings account customer would earn $43.90 in interest per year on a $10,000 account. A customer at one of the four largest banks would earn $4 or less in interest on that size account.
In contrast, customers who chose the leading bank could earn $239 a year in interest on a $10,000 account. That's better than five times what a customer at an average bank would earn, and nearly 60 times what customers at the best of the mega banks would earn.
Best Savings Accounts with Consistently High Rates over 2019 Q3
2019 Q3 Avg. APY
MySavingsDirect (ABR platinum medal winner)
Salem Five Direct (ABR gold medal winner)
UFB Direct (ABR silver medal winner)
SFGI Direct (ABR bronze medal winner)
Marcus by Goldman Sachs
Sallie Mae Bank
American Express Bank
Online banks vs. traditional banks
MoneyRates' study also looked at online banks vs. traditional banks - and found that online savings accounts were one of the best places to look for a higher interest rate. The top 20 accounts in the latest rate survey were all online accounts.
Online savings accounts averaged a 1.377% interest rate over the entire third quarter of 2019, compared to just 0.077% for traditional, branch-based savings accounts.
The average online savings account customer earned nearly 18 times as much interest as the average traditional savings account customer in the second quarter of 2019.
If you are comfortable banking online, online savings accounts offer both the convenience of 24/7 access and demonstrably higher rates than traditional, branch-based accounts. While some banks offer only online banking, more and more traditional banks are now offering a choice between online and branch-based accounts.
Trends in Savings Accounts
After two years of steady rise, savings account rates have dipped slightly in each of the last two calendar quarters.
This may mark a turning point for rates, which makes it all the more important to choose one of the leading savings accounts if you want to earn more interest.
Finding a more competitive savings account rate could allow you to earn more interest even in a falling-interest-rate environment.
When rates generally stop rising, it means the only way to earn more interest is to switch to a savings account with a higher yield.
Interest rates amid fears of recession - what you can do
In the last two Federal Open Market Committee meetings, the Federal Reserve made the first two cuts in the federal funds rate since 2008. Does this mean that bank deposit customers should expect to see their interest rates start to fall as well?
While some bank rates have started to slip, it is important to recognize that the Fed does not directly control the rates that banks offer their customers.
You may see this falling rate trend reflected in the interest your bank pays on your deposits. Still, you don't have to sit back and simply accept earning less on your savings. Here are a couple options you have:
- Shop for better rates
The gap between the top bank rates and average rates is huge. So, unless you are already earning one of the top rates, there could be a big opportunity for you to earn more.
- Consider a longer commitment
Rates for checking, savings and money market accounts are subject to change at any time; so if rates are falling, you are likely to see the impact pretty soon.
In contrast, certificates of deposit (CDs) allow you to lock in rates for a set period of time, which can protect you in a falling-rate environment. As an added benefit, the longer the term of the CD you invest in, the higher the CD interest rate you are likely to get.
What to Consider Before Opening a Savings Account
You might find accounts with attractive yields through either online savings accounts or your local bank branch. Naturally, the idea of a high-interest savings account sounds good, but here are four things you should check on before you open one:
Legitimacy of the financial institution
Is your bank or credit union well-established and does it have a great reputation for customer service?
Extent of FDIC insurance coverage
Make sure the institution is covered; and if you qualify for a high-yield savings account because you are making a very large deposit, ensure it does not put you over FDIC insurance limit, which is currently $250,000 per depositor, per institution.
Any restrictions on your access to the money
A high-interest savings account may limit how often you can access your money. If you can live with those limitations, take advantage of that strong yield. But if not, look for a savings account that offers looser restrictions.
Should you get an ATM card?
Some accounts also offer the option for an ATM card, including online savings accounts. This may sound like a nice perk; but before you opt for one, ask a couple of questions:
- Would easier access result in more spending?
If this account is for savings, is having easier access to your money going to hurt your savings habits?
- Are you sacrificing a higher interest rate for the ATM card?
If so, you might be better off with a conventional checking account for your short-term funds, while finding a high interest savings account or money market account for your longer-term savings.
A savings account is money on deposit that earns interest. Savings accounts may be offered by banks or credit unions. Savings accounts are not designed for frequent transactions like bill payments, but represent a way to keep your money safely earning interest and available when you need it.
While you may use a checking account for paying regular expenses, a savings account is a good place to start accumulating money for future needs.
The advantage of having a savings account is that they typically earn more interest than checking accounts. Also, when you are trying to save money it can help to have your savings kept separate from an account you are accessing regularly for living expenses.
Savings accounts are guaranteed by an insurance fund operated by the Federal Deposit Insurance Corporation (FDIC), an agency of the U.S. government. Credit unions are also federally insured by the National Credit Union Administration (NCUA), not by the FDIC.
In each case, the insurance limit for each depositor at a given bank is $250,000 for individual accounts and $500,000 for joint accounts. You can increase your deposit insurance coverage above these amounts by having money on deposit at multiple banks.
You can take money out of a savings account at any time, but you are limited to six withdrawals per month.
A savings account is a good place to set aside money for needs you expect to arise within the next year or so, such as buying a car or making a down payment on a house. For long-term needs, you may want to consider a long-term CD because they typically offer more interest. For very long-term goals like saving for retirement, an investment account may be more appropriate because the opportunity for investment growth gives you a better chance of staying ahead of inflation.
Because you can access money in a savings account at any time, they are also a good place to put an emergency fund. An emergency fund is money you have set aside for unexpected needs.
Money market accounts have many of the same features as savings accounts, so it is a good idea to compare interest rates between savings and money market accounts to see which offers the highest rates. Another alternative is a CD, which could pay higher interest if you are confident you won't need to access your money for a specific period of time.