Saving money is one of the most important financial habits that you can develop. Whether you are saving for a specific goal, such as buying a house or a car, or for an emergency fund, having some money set aside can give you peace of mind and security. But where should you keep your savings? How can you make your money work for you and grow over time?
One of the best options is to open a high-yield savings account. A high-yield savings account is a type of bank account that pays you a higher interest rate than a traditional savings account or a checking account. This means that you can earn more money on your savings without taking any risk or losing access to your funds.
In this article, we will explain the benefits of a high-yield savings account, how to choose the best one for your needs, and how to open one online in minutes. By the end of this article, you will have all the information you need to start saving money and earning interest with a high-yield savings account.
Benefits of a High-Yield Savings Account
A high-yield savings account is a great way to save money and earn interest. Here are some of the advantages of opening a high-yield savings account:
- You can earn more interest than with other accounts. The average interest rate for a traditional savings account in October 2023 was 0.06% APY, while the average interest rate for a checking account was 0.04% APY. This means that if you had $10,000 in a traditional savings account, you would earn only $6 in interest in a year. On the other hand, if you had $10,000 in a high-yield savings account with an interest rate of 1.5% APY, you would earn $150 in interest in a year. That’s 25 times more than with a traditional savings account and 37.5 times more than with a checking account.
- You don’t have to pay any fees or maintain any minimum balance. Many high-yield savings accounts have no monthly fees, no minimum balance requirements, and no transaction limits. This means that you can save as much or as little as you want, without worrying about any extra charges or penalties.
- You can access your money easily and securely. Most high-yield savings accounts offer online banking, mobile app, ATM access, and phone support. This means that you can check your balance, transfer money, withdraw cash, and get help anytime and anywhere. Plus, your money is protected by the Federal Deposit Insurance Corporation (FDIC), which insures up to $250,000 per depositor per bank.
- You can save for different goals and purposes. A high-yield savings account is a versatile tool that can help you save for various reasons. For example, you can use it to build an emergency fund that covers three to six months of living expenses, to save for a vacation or a wedding, to save for retirement or education, or to save for any other short-term or long-term goal.
Best Savings Accounts of October 2023
There are many high-yield savings accounts available in the market, but not all of them are created equal. To help you find the best one for your needs, we have selected the top five savings accounts that offer the highest interest rates and meet our criteria. Our criteria are:
- The annual percentage yield (APY) must be at least 1% or higher.
- The minimum deposit and balance must be $100 or less.
- The fees and charges must be minimal or none.
- The customer service and online features must be reliable and user-friendly.
Here are the top five savings accounts of October 2023, based on these criteria:
Bank | APY | Minimum Deposit | Minimum Balance | Fees | Customer Service | Online Features |
Ally Bank | 1.5% | $0 | $0 | None | 24/7 phone, chat, email | Online banking, mobile app, ATM access |
Marcus by Goldman Sachs | 1.4% | $0 | $0 | None | Mon-Fri 8am-10pm ET, Sat-Sun 9am-7pm ET phone | Online banking |
Discover Bank | 1.3% | $0 | $0 | None | 24/7 phone, online messaging | Online banking, mobile app |
Capital One | 1.2% | $0 | $0 | None | 24/7 phone, chat, social media | Online banking, mobile app, ATM access |
American Express | 1.1% | $0 | $0 | None | 24/7 phone | Online banking |
Let’s take a closer look at the pros and cons of each account:
Ally Bank
Ally Bank is one of the most popular online banks in the US, with over 10 million customers. It offers a high-yield savings account with a competitive interest rate of 1.5% APY, which is compounded daily and paid monthly. There are no fees or minimums to open or maintain the account, and you can make up to six withdrawals or transfers per statement cycle without any charge. You can also access your money through over 43,000 fee-free ATMs nationwide.
Some of the pros of Ally Bank are:
- Excellent customer service. Ally Bank has a reputation for providing friendly and helpful customer service, available 24/7 by phone, chat, or email. You can also use the Ally Skill on Amazon Alexa to check your balance, transfer money, or get tips.
- User-friendly online features. Ally Bank has a sleek and intuitive website and mobile app that let you manage your account easily and securely. You can also use tools like the Savings Boosters to set goals and track your progress, or the Buckets feature to organize your money into different categories.
Some of the cons of Ally Bank are:
- No physical branches. Ally Bank is an online-only bank, which means that you cannot visit a branch to deposit or withdraw cash, or to get in-person assistance. However, you can use the mobile app to deposit checks, or use the ATM network to withdraw cash.
- Limited product offerings. Ally Bank does not offer some products that other banks do, such as certificates of deposit (CDs), money market accounts, or individual retirement accounts (IRAs). However, you can open other types of accounts with Ally Bank, such as checking accounts, auto loans, mortgages, or investment accounts.
Marcus by Goldman Sachs
Marcus by Goldman Sachs is an online banking platform launched by the prestigious investment bank Goldman Sachs in 2016. It offers a high-yield savings account with an attractive interest rate of 1.4% APY, which is compounded daily and paid monthly. There are no fees or minimums to open or maintain the account, and you can make up to six withdrawals or transfers per statement cycle without any charge. You can also access your money through wire transfers or electronic transfers.
Some of the pros of Marcus by Goldman Sachs are:
- High interest rate. Marcus by Goldman Sachs offers one of the highest interest rates in the market, which can help you grow your savings faster and reach your goals sooner.
- Simple and transparent product. Marcus by Goldman Sachs has a straightforward and easy-to-understand product that does not have any hidden fees or charges. You can also use tools like the Savings Calculator to estimate how much interest you can earn, or the Savings Optimizer to get personalized recommendations on how to save more.
Some of the cons of Marcus by Goldman Sachs are:
- No ATM access. Marcus by Goldman Sachs does not have any ATM network that you can use to withdraw cash from your account. You have to use wire transfers or electronic transfers, which may take longer or incur fees from other banks.
- No mobile app. Marcus by Goldman Sachs does not have a dedicated mobile app that you can use to manage your account on your smartphone or tablet. You have to use the website, which may not be as convenient or user-friendly as an app.
Discover Bank
Discover Bank is an online bank that is part of the Discover Financial Services company, which is best known for its credit cards. It offers a high-yield savings account with a competitive interest rate of 1.3% APY, which is compounded daily and paid monthly. There are no fees or minimums to open or maintain the account, and you can make up to six withdrawals or transfers per statement cycle without any charge. You can also access your money through over 60,000 fee-free ATMs nationwide.
Some of the pros of Discover Bank are:
- Generous cashback rewards. Discover Bank offers a cashback program that lets you earn 1% cashback on up to $3,000 in debit card purchases each month. You can also earn cashback bonuses when you shop online through the Discover Deals portal.
- Reliable customer service. Discover Bank has a reputation for providing excellent customer service, available 24/7 by phone or online messaging. You can also use the Discover Mobile app to check your balance, transfer money, deposit checks, pay bills, or freeze your card.
Capital One
Capital One is a well-known bank that offers a variety of financial products and services, including credit cards, loans, and investments. It offers a high-yield savings account with a decent interest rate of 1.2% APY, which is compounded daily and paid monthly. There are no fees or minimums to open or maintain the account, and you can make up to six withdrawals or transfers per statement cycle without any charge. You can also access your money through over 39,000 fee-free ATMs nationwide.
Some of the pros of Capital One are:
- Flexible account options. Capital One offers two types of high-yield savings accounts: the 360 Performance Savings and the 360 IRA Savings. The 360 Performance Savings is a regular savings account that you can use for any purpose, while the 360 IRA Savings is a retirement savings account that offers tax benefits. You can choose the one that suits your needs and goals.
- User-friendly online features. Capital One has a modern and easy-to-use website and mobile app that let you manage your account effortlessly and securely. You can also use tools like the Automatic Savings Plan to set up recurring transfers, or the My Savings Goals to create and track your savings goals.
Some of the cons of Capital One are:
- Lower interest rate than some competitors. Capital One offers a lower interest rate than some other high-yield savings accounts in the market, which means that you may earn less interest on your savings over time.
- Limited product offerings. Capital One does not offer some products that other banks do, such as money market accounts, certificates of deposit (CDs), or individual retirement accounts (IRAs). However, you can open other types of accounts with Capital One, such as checking accounts, credit cards, loans, or investment accounts.
American Express
American Express is a global financial services company that is best known for its credit cards and travel services. It offers a high-yield savings account with a competitive interest rate of 1.1% APY, which is compounded daily and paid monthly. There are no fees or minimums to open or maintain the account, and you can make up to six withdrawals or transfers per statement cycle without any charge. You can also access your money through electronic transfers or wire transfers.
Some of the pros of American Express are:
- Reputable and trusted brand. American Express has a long history and a strong reputation in the financial industry, with over 100 million customers worldwide. You can trust that your money is safe and secure with American Express, which has an A+ rating from the Better Business Bureau (BBB).
- High customer satisfaction. American Express has a high customer satisfaction rating, with over 4 out of 5 stars on Trustpilot and Consumer Affairs. Customers praise American Express for its fast and easy account opening process, its friendly and helpful customer service, and its reliable and consistent interest rates.
Some of the cons of American Express are:
- No ATM access. American Express does not have any ATM network that you can use to withdraw cash from your account. You have to use electronic transfers or wire transfers, which may take longer or incur fees from other banks.
- No mobile app. American Express does not have a dedicated mobile app that you can use to manage your account on your smartphone or tablet. You have to use the website, which may not be as convenient or user-friendly as an app.
Also Read: 10 Best Stocks To Buy Now
How to Choose the Best Savings Account for You
As you can see, there are many high-yield savings accounts available in the market, each with its own features and benefits. How do you choose the best one for you? Here are some factors to consider when comparing different savings accounts:
- Interest rate. The interest rate is the most important factor that determines how much money you can earn on your savings. The higher the interest rate, the more interest you can earn. However, keep in mind that interest rates may change over time depending on market conditions and bank policies.
- Fees and charges. Fees and charges are the costs that you have to pay to use a savings account. Some common fees and charges include monthly maintenance fees, withdrawal fees, transfer fees, overdraft fees, or wire transfer fees. These fees and charges can reduce your earnings and affect your savings goals.
- Minimum deposit and balance. Minimum deposit and balance are the amounts that you have to deposit or maintain in your savings account to open or keep it active. Some savings accounts have no minimum deposit or balance requirements, while others may require a certain amount to avoid fees or earn interest.
- Customer service and online features. Customer service and online features are the aspects that affect your convenience and experience when using a savings account. Some important customer service and online features include phone support, chat support, email support, online banking, mobile app, ATM access, and online tools.
Based on these factors, you can choose the best savings account for your needs and preferences. For example, if you want to earn the highest interest rate, you may choose Marcus by Goldman Sachs or Ally Bank. If you want to avoid fees and charges, you may choose Discover Bank or Capital One. If you want easy access to your money, you may choose Ally Bank or Capital One. If you want extra perks or bonuses, you may choose Discover Bank or Capital One.
Conclusion
A high-yield savings account is a smart and simple way to save money and earn interest. By opening a high-yield savings account, you can enjoy the following benefits:
- You can earn more interest than with other accounts, which can help you reach your savings goals faster and easier.
- You don’t have to pay any fees or maintain any minimum balance, which can save you money and hassle.
- You can access your money easily and securely, which can give you peace of mind and flexibility.
- You can save for different goals and purposes, which can help you plan for your future and achieve your dreams.
To help you choose the best high-yield savings account for your needs, we have reviewed the top five savings accounts of October 2023, based on their interest rates, fees, minimums, customer service, and online features. You can compare these accounts and decide which one suits you best. Alternatively, you can use our [savings account comparison tool] to find the best savings account for you based on your preferences and criteria.
If you are ready to open a high-yield savings account, you can do so online in minutes. All you need is some basic information and documents, such as your name, address, social security number, and a valid ID. You can also transfer money from your existing bank account or another source to fund your new savings account.
Don’t wait any longer. Open a high-yield savings account today and start saving money and earning interest. You will be glad you did.