Best Savings Account Rates - December 2018
Choosing a savings account is a major financial decision, so finding the best savings account rates is a critical task. Here’s how to evaluate what banks offer.
MoneyRates.com regularly monitors more than 300 savings account products, featuring some of the best interest rates for easy comparison. Here’s our methodology.
Choosing a savings account is one of the first and longest-lasting financial decisions a person makes. Before you simply walk into the nearest bank branch and settle for the latest offer, know more about your options.
After all, you would probably do a little research before shopping for a car, and over time you are likely to put more money into your savings account than into your car. So choosing a new savings account is not a decision you should make randomly.
Savings Account To Fit Your Life
A savings account should play an intermediate role between a checking account that you might access on a daily basis, and a long-term retirement account, which you shouldn't touch for many years. The following are some examples of how to best use these savings accounts:
- Getting started with savings
- Saving for emergencies
- Building funds for large purchases
To understand what else you might need from your savings account, it’s important to understand what part savings accounts should play in your finances.
Best savings & MMA accounts for December 2018 : Summary of our picks
As you can see in the table below, MoneyRates.com regularly monitors bank rates from more than 200 banks to highlight the best savings account rates. But as important as rates are – they are likely to be one of the central factors in your choice of bank – they are still only one component of a savings account.
What makes a savings account suited to these uses is that it can pay higher interest than a checking account because you won't be drawing from it as regularly, but at the same time, it will allow you ready access to the money when it’s needed. Remembering the role of a savings account is important when evaluating the facets of a prospective savings account.
Types of savings accounts
Compared to a regular savings account, there are many different types of savings accounts you can open to prepare for future expenses or help grow your wealth.
- College savings (529 plans)
- Individual retirement accounts
- Rewards savings
- Jumbo savings
- Joint savings accounts
- Health savings
- High-yield savings accounts, also known as high interest savings accounts
Plans like 529 plans or IRAs are meant for particular purposes, such as saving for college or retirement.
Many accounts may qualify for tax-free savings, including health savings accounts. The IRS defines a health savings account as an account that is designed to pay or reimburse you for medical expenses. Having a health savings account has several tax benefits, including tax-free interest or other earnings in the account.
Depending on the tax savings or interest rate associated with the savings account, consider using a savings goal calculator to determine how much to deposit each month to achieve a particular financial target.
High interest savings account questions to ask
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 three things you should check on before you open one:
Legitimacy of the financial institution
- Is your bank or credit union well-established or 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 limits, 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:
Will 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.
Evaluating your savings account options should start with understanding how you intend to use the account, and based on that, what features are most important.
Look at the table above and select the best savings account for you to get your finances on track.
Best savings account and money market account rates found by users:
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