The Best Savings Account Rates for December 2022 Can Help You Earn Over 3.00% APY

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A high-yield savings account is one of the best tools available for savers, whether you’re building an emergency fund or putting cash toward another short-term goal. 

As the Federal Reserve keeps raising interest rates, savers can take advantage of higher earnings on high-yield savings account balances. Already, the average high-yield savings account rate is around 3.20% APY — and some could reach 4% APY this year.

Here’s more about the best rates right now:

There’s never been a better time to save
Another rate hike from the Federal Reserve means savings account interest rates will continue to climb. These are some of some of our best rates available right now.
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Why we think online savings accounts are the most competitive:

Online savings accounts offer very high interest rates on your savings, and enforce few monthly fees or minimum balance requirements, if any at all. Online banks use these features to compete with large, traditional financial institutions. And because they don’t have the same overhead costs as those brick-and-mortar institutions, customers can benefit from savings in the form of higher APYs.

Before you open any new account, make sure you compare rates and features at different online banks to find the account best suited for you.

Today, savings account interest rates are growing in a big way.

Since the Federal Reserve began raising interest rates earlier this year, many banks have, in turn, increased APYs on consumer savings accounts. The national average currently still sits at 0.24%, but many online banks have high-yield savings accounts with rates more than 10 times above that. The highest savings account rates today offer more than 3.50% APY.

And while a 2% or even 3% yield isn’t as much as you can earn by taking on more risk with an investment portfolio, it can help you maintain a bit of your money’s spending power within a safe, risk-free account — whether you’re looking for a place for your emergency fund or other short-term savings.

Best Savings Account Rates

BankAPY
UFB Direct3.91%
Bask Bank3.85%
TAB Bank3.64%
CIT Bank3.60%
DollarSavingsDirect3.50%
Bread Savings3.50%
Salem Five Direct3.50%
Lending Club Bank3.25%
Prime Alliance Bank3.25%
Synchrony3.25%
Live Oak Bank3.10%
Varo Bank3.00%
FNBO Direct3.00%
Ally Bank3.00%
American Express National Bank3.00%
Barclays3.00%
Discover Bank3.00%
Goldman Sachs Bank USA3.00%
Capital One3.00%

The APYs shown above are as of Dec. 2, 2022. They are the APYs available for the smallest balance and/or opening deposit possible. The NextAdvisor editorial team updates this information regularly, though it is possible rates have changed since they were last updated. Some APYs may vary based on where you live.

This Week in High Yield Savings Rates

Savings account rates keep rising, and this week the average savings account rate moved from 3.18% to 3.27% APY.

Ahead of the Fed’s final meeting of 2022 (and expected final rate hike of the year), banks are still raising savings rates. This week, only a few banks upped their rates, but several accounts are inching past 3.50% and closer to the 4.00% threshold. The highest savings account rate among banks we track right now is UFB Direct, with 3.91% APY.

It’s a great time to make sure your money is earning a competitive variable rate so you can maintain the best value long-term as rates rise. The chart below shows what these rate increases look like over time, from late September to today. Banks are listed in alphabetical order:

Here’s a detailed view of the rate changes we saw this week:

  • UFB Direct: 3.83% to 3.91% APY
  • Varo Bank: 2.00% to 3.00% APY
  • CIT Bank: 3.25% to 3.60% APY
  • Bask Bank: 3.60% to 3.85% APY

NextAdvisor’s Picks: Best Savings Accounts in December 2022

Ally Bank

Ally Bank is one of the most popular online banking options on the market, with products ranging from checking, savings, money market accounts, CDs, and more. If you’re comfortable with online-only banking, Ally’s portfolio of products could suit all your banking needs and help you earn some of the best available interest. Just keep in mind that you won’t be able to deposit cash since the bank has no physical branches. Ally has a robust online and mobile app experience, so you can organize and maximize your savings as well as make transfers and access account information easily.

American Express National Bank

American Express’ consumer banking branch offers high-yield online savings and CD options with good rates for savers. Though it doesn’t offer ATM access, you can easily link multiple accounts with different banks to your American Express savings for transfers. American Express has no mobile app to access your online banking account information; the American Express mobile app features are for credit cardholders only. 

Barclays

Barclays’ online personal banking division in the U.S., Barclays Bank Delaware, offers both a high-yield savings account and CD options. Like other online banks on this list, Barclays has no checking account product and doesn’t allow ATM access, which may not be conducive for one-stop banking. But it does have consistently competitive rates and easy access for those who don’t mind online-only banking.

Bask Bank

Bask Bank is the online banking division of Texas Capital Bank, and offers both aninterest savings account and a mileage savings account that earns AAdvantage miles for American Airlines flyers, in addition to CD options. The interest-earning savings has no fees and no minimum balance requirement.

Bread Savings

Bread Savings was formerly known as Comenity Bank. Bread Savings offers CDs in addition to its high yield savings, and is a part of Bread Financial, which offers financial products like loans, a cash back credit card, and more. You will need to deposit at least $100 in your account to earn interest with Bread Savings.

Capital One

Capital One’s online banking division builds upon its credit card offerings with CDs, checking, and savings accounts, including the 360 Performance Savings. Along with its full product suite, Capital One has branch locations throughout the U.S. in addition to its Capital One Cafés. If you’re not quite ready to commit to an online-only bank, Capital One’s Performance 360 account may be a good way to venture into online banking.

CIT Bank

CIT Bank is an online division of First Citizens Bank. It offers savings accounts, checking accounts, and CDs, as well as loans. You’ll need $100 to open CIT’s Savings Connect account and earn interest, and you can access your account online or via mobile.

Discover

Discover may be best-known for its credit card business, but the bank’s online banking options are plentiful and offer competitive rates—its products include checking, savings, money market accounts, and CDs. You can access your account information via mobile app or online, and see all your accounts with Discover in one place. Discover Bank is a great option for someone who prefers all their accounts in one place.

Dollar Savings Direct

Dollar Savings Direct is the online division of New York-based Emigrant Bank, offering both high-yield online savings and CDs. You cannot open a checking account with Dollar Savings Direct or access your money through an ATM. And while it doesn’t offer the savings and tracking online features of other banks or a mobile app, Dollar Savings Direct could be a solid choice for someone looking for a simple online-only experience. Link your current checking account upon account opening and that becomes the default account money will transfer to and from; after 60 days from account opening, you can add a second external checking account.

FNBO Direct

FNBO Direct is an online bank and division of First National Bank of Omaha. It offers a small portfolio of accounts including its high yield savings option and an interest-earning checking account. You can access your account online or via mobile app.

Lending Club Bank

Lending Club Bank is an online bank that started in 2007, and offers a wide range of products including high yield savings, CDs, rewards checking accounts, loans, and more. You can access your account online and through Lending Club’s mobile app.

Live Oak Bank

Live Oak Bank is an online bank founded in 2008 and based in Wilmington, North Carolina. It offers both high-yield savings and CD accounts, but no checking option or ATM access. Live Oak’s product offerings are minimal for personal banking, but they do consistently offer rates in line with the top APYs on the market. You can even view your external bank accounts in the Live Oak app, which can simplify your day-to-day banking.

Marcus by Goldman Sachs

Marcus is the online consumer banking division of Goldman Sachs, and frequently qualifies among the top interest offers for its high-yield savings and CD products. Marcus also offers personal loans. Marcus introduced a mobile app in 2020 which has standard features such as viewing account activity and making transfers, and also offers a tool to visualize your savings over time. Marcus doesn’t currently offer a checking option, but it can complete same-day transfers of less than $100,000 to other banks.

Prime Alliance Bank

Prime Alliance Bank began in 2004. It’s based in Utah but open to online consumers nationwide, and its full-service deposit account offerings include checking, savings, money market accounts, and CDs. Prime Alliance has one branch in Utah, but personal savings account customers are served via online or mobile banking.

Salem Five Direct

Salem Five Direct is the online division of Massachusetts-based Salem Five bank. Along with its high yield savings account, the bank also offers a checking account and CDs. You’ll need to deposit at least $10 to open your savings account and earn interest.

Synchrony

Synchrony is an online bank that offers a range of savings products: high-yield savings, money market accounts, and CDs, all at competitive yields. Synchrony is online-only, and you can access your Synchrony account information via mobile app or online. Synchrony doesn’t include a checking account among its deposit products, so you’ll need to ensure you have an outside account for transfers.

Synchrony offers an optional ATM card for high-yield savings customers. There are no ATM fees for withdrawing your cash, and you can get reimbursed for any ATM fees from other institutions up to $5 per statement cycle.

TAB Bank

TAB Bank, or Transportation Alliance Bank, formed in Utah in 1998. The bank began in service to truck drivers, and operated primarily inside truck stops before expanding to offer a number of personal banking products for clients outside the industry, including savings, checking, money market accounts, and CDs. You can use the bank’s mobile platform and online reporting tools to track your earnings and activity.

UFB Direct

UFB Direct is an online bank and division of Axos Bank. Its only deposit offerings are a high yield savings account and money market account. There are no monthly maintenance fees, no minimum deposit, and no minimum balance requirements for the high yield savings.

Varo Bank

Varo Bank is a digital bank that offers a bank account with debit card rewards in addition to its high yield savings. The savings account from Varo has a tiered interest rate, and you must meet certain conditions to qualify. To be eligible for the interest rate above, you must maintain at least a balance of $4.95 in each 31-day month and $5.12 each 30-day month in your account.

NextAdvisor’s Guide to Choosing the Best Savings Account and Rate

How to Find the Best Online Savings Account

Finding a competitive interest rate and terms that agree with your financial plan are important aspects of choosing a savings account. But there are a few more important details you should confirm about any new savings account you’re considering: 

First, always make sure your account is insured by the FDIC or NCUA and your savings total complies with insurance limits and guidelines set by those organizations (any amount up to $250,000 should be protected). 

Familiarize yourself with any monthly maintenance fees that may eat away at your interest earnings. Do your research into the fine print of your account’s terms so you can do your best to avoid fees as much as possible. 

Finally, look into other benefits that may help you get the most out of your account, such as new account bonuses, ease of withdrawals and transfers, balance requirements, and of course APY.

Online Savings Account Terminology You Should Know

  • Annual percentage yield (APY): The amount of interest your account earns over the course of a year. This percentage is calculated using the account’s interest rate and how often interest compounds annually.
  • Compound interest: The amount you can earn on both your principal, or the money you put directly into your account, and on interest as it accumulates. As you earn interest, it’s added to your principal and itself earns interest the next time interest accrues. Many savings accounts compound interest monthly.
  • Minimum required deposit: Some banks require a minimum deposit to open an account. There may be a time limit in which to deposit, so make sure you have the minimum up front before opening your account.
  • Minimum required balance: Some banks may also set a minimum threshold at which your account balance must remain. If you fall below this minimum, you may be charged a fee or take on a lower interest rate.

What Is a Savings Account?

Savings accounts are secure accounts in which you can store your money. They may be offered by large, brick-and-mortar institutions or smaller online banks. 

You can use a savings account (or multiple accounts) to save money toward future purchases or to put money away in case of emergency. Savings accounts usually offer some amount of interest earned on your balance, so your money can grow over time, and they’re also relatively liquid, meaning you can move money in and out easily.

What Are the Different Types of Savings Accounts?

There are many different types of bank accounts, from checking accounts to savings and even investment accounts. When it comes to low-risk savings, there are two primary account types to look for:

  • Traditional savings accounts: You’ll typically find these accounts at standard brick-and-mortar financial institutions. Traditional savings accounts are convenient if you already have a relationship with the bank, but you’ll earn very little interest on your savings.
  • High-yield savings accounts: These accounts are most often found at online banks or online-only branches of larger banking brands — but offer much more interest value. High-yield accounts with some of the best rates today still offer more than 10x the average traditional savings account.

How are Online Savings Accounts and Traditional Savings Accounts Different?

There are two main differences between an online savings account and a traditional savings account: access and interest rates. 

You can typically open a traditional savings account with a brick-and-mortar bank or credit union, so it’s easy to go into a bank branch and withdraw, transfer, or deposit funds as you need. Most online banks have no in-person branches, so you’ll need to conduct all of your account activity online or via mobile app.

But because they save money on overhead costs associated with bank branches, online banks can pass along their savings to customers as higher interest. As a result, online savings accounts generally offer much higher yields on savings than traditional savings accounts.

Another big difference between these accounts is fees. In most cases, it’s easy to avoid fees with online savings accounts (and they often charge no monthly fees at all), while traditional savings accounts may charge several different fees if you don’t meet certain account requirements or minimums.

How Online Savings Accounts Work

Savings accounts are secure accounts in which you can store your money. They may be offered by large, brick-and-mortar institutions or smaller online banks. 

Savings accounts usually offer some amount of interest earned on your balance, so your money can grow over time, and they’re also relatively liquid, meaning you can move money in and out easily. But keep in mind you’re limited to six withdrawals or transfers per month, or you could be hit with a fee.

Because they don’t have physical locations and other costly expenses, you’ll generally find the best interest rates with online banks. But you’re less likely to have access to an in-person branch or representative.

Unlike checking accounts, you shouldn’t rely on your savings account to make regular transactions. Savings accounts may limit withdrawals and transfers out of the account.

In addition to making these transfers online, many banks offer ATM access for savings account withdrawals. Money market accounts, which are a type of savings account, usually even offer check-writing abilities or debit card access. 

What To Consider Before Getting a Savings Account

Whether you’re debating whether you should open a savings account or trying to find the right one for you, here are some factors to keep in mind when deciding:

  • Fees. Look for a savings account without lots of fees that could eat away at your funds over time. For example, a bank might charge a monthly fee for not maintaining a minimum balance.
  • Access. Online banks may offer the highest rates on savings accounts these days, but be sure that they are accessible enough for you. Many online banks offer a network of fee-free ATMs where you can withdraw money. Are there any in your vicinity? Getting funds deposited into your account won’t be a problem if you set up direct deposit, but that might not work for someone earning cash regularly. If you regularly want to deposit cash into your account, be sure there’s a way to do that with your online bank before signing up.
  • Your time horizon. Before you put all your cash in a savings account, consider how long you want to sock money away first. While savings accounts can be a great place to store money you might need to access in a hurry, you’re probably better off using other options for long-term savings goals. For long-term goals like retirement, you’re much more likely to beat inflation and see substantial returns on your funds if you invest in the stock market

When Should You Use an Online Savings Account?

Online high-yield savings accounts are great outlets to store any cash you don’t need immediate access to (keep that in your checking account) and aren’t investing for the long-term (stow that in a retirement fund or brokerage account).

Because high-yield savings accounts are highly liquid, they’re suitable for a range of savings needs. You may even choose to open multiple accounts for different purposes.  

A high-yield savings account can hold everything from your emergency savings fund to the money you’re putting aside for a future down payment. You can open a savings account to make contributions toward next year’s vacation or a big-ticket item you’ve had your eye on. It can even be a space to stash any extra cash you’d like to keep safe and earn a few dollars on in interest.

Previously, CDs or money market accounts may have been better options for longer-term, non-retirement savings because of higher interest potential, but in the current low rate environment, high-yield savings offer similar if not better APYs. For most savers today, a flexible, secure, high-interest online savings account is likely the best option for the majority of your savings needs. 

How much money should you keep in your savings account?

Only you can properly judge the amount you feel most secure having stashed away in savings.

When it comes to emergency funds, experts typically recommend keeping three to six months worth of expenses in an accessible, interest-earning account. However, after the pandemic-induced recession and resulting financial uncertainty, many experts have tweaked their recommendations—now, you’ll find advice ranging 6 months, 8 months, 12 months, and even more than one year’s worth of expenses.

Your emergency savings should be reserved for times of financial hardship, such as job loss or furlough, or unexpected expenses that occasionally arise—such as medical bills and home repairs. Look back at your expense history over the past several months and consider how secure you feel in your current financial situation to help you determine the savings total that makes most sense for you.

What are the Typical Fees Associated with a Savings Account?

Lack of fees from online savings accounts can be a major benefit for savers unable to meet minimum balance or deposit requirements. When you’re looking for a new savings account, here are some fees to look out for:

  • Monthly maintenance fees: Monthly fees are standard among traditional savings accounts, and typically cost a few dollars each month. You may be able to waive monthly maintenance fees by maintaining a minimum daily balance or setting up automatic transfers/deposits. They are much less common among online banks, and none of our picks for best savings accounts charge a monthly maintenance fee.
  • Withdrawal fee: Some banks charge a fee if you go over the monthly withdrawal limit. Check your limit in your account’s fine print and track your monthly withdrawals and outgoing transfers to ensure you’re not charged.
  • Paper statement fee: You may be charged a fee to receive your monthly savings statement via mail. If your bank charges a paper statement fee, you can opt out and receive your statement electronically to avoid the cost.

Pros and Cons of Online Savings

Pros

  • Highly liquid and easily accessible

  • Competitive interest rates

  • No risk (choose an FDIC-insured account to secure up to $250,000 in savings)

  • Low or no minimum deposit or balance requirements

  • Low or no monthly fees

Cons

  • Rates are variable and can quickly fluctuate (a potential concern when rates fall)

  • CDs or money market accounts may offer higher interest rates (though they’re largely comparable today)

  • Some banks may limit the number of withdrawals allowed each month

  • Some accounts have certain requirements to earn advertised APY

Are Online Savings Accounts Safe?

Online savings accounts are a safe place to store your money

To start, make sure the banks or credit unions you consider for your savings account are insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCAU). Accounts protected under either organization are insured up to $250,000. 

The money you keep in a savings account is also safe from market fluctuations. You won’t get the same return from savings as you would contributing to an index fund, for instance, but you also won’t take on any investment risk. That’s why savings accounts are a safe place to store an emergency fund or any money you plan to use in the near future. But they’re not a great place to build wealth or keep long-term savings like retirement — in that case, a 401(k) or Roth IRA is much more useful.

Opening a Savings Account for Your Kids

Opening a savings account for your child can help jumpstart their financial health, whether they’re earning wages at a part-time job or looking to save a portion of cash birthday gifts each year. They can even be a starting point for eventual college savings.

Savings accounts for minors do typically require a parent or guardian to be joint owners on the account, which means you can also contribute and help manage the account. To open the account, you’ll likely need to provide some personal information for both you and your child, such as full name, address, contact information, and more.

Just like any other account, consider details like accessibility, fees, and the account’s APY before you open. High interest rates and no monthly or annual fees can help you ensure you get the most from your account. And choosing an online bank with easy account access through an online account or mobile app can help you and your child manage the account more efficiently.

Other High-Yield Savings Options

In addition to high-yield savings accounts, two comparable high-yield savings options include money market accounts and CDs. 

Money market accounts can offer even more liquidity than savings accounts since they typically come with check-writing or debit card access for withdrawals. In years past, when interest rates were higher overall, a major perk of opening a money market account was the opportunity to earn a more competitive yield than savings accounts offered. Today, though, the difference in APY between money market accounts and high-yield savings is marginal. Money market accounts often have higher minimum balance requirements and can charge higher fees, which limits the pool of savers who they make sense for.

Certificates of deposit, or CDs, are generally not as liquid as a high-yield savings account, but they can offer higher interest rates. To open a CD, you must agree to deposit a principal sum into the account at a fixed rate for a fixed term (six months, one year, five years, etc.). When that term reaches maturity, you’ll receive both your principal and the interest earned. But if you withdraw your money before maturity, you’ll face an early withdrawal penalty.

Historically, CDs offered the best interest rates among high-yield deposit accounts: in exchange for locking up your money with the bank, you earned more over time. But as rates have fallen, and especially following the Fed’s rate cut in response to the coronavirus pandemic, APYs for both short- and even long-term CDs now look similar to those offered by both money market and high-yield savings accounts.

Savings AccountsMoney Market AccountsMoney Market Mutual Funds
RatesGenerally higher than checking accounts but might be lower than money market accountsCan be a little higher than savings accounts but compare to get the best optionsGenerally the same rate as money market accounts, and a bit higher than savings accounts
Ability to withdraw fundsSome accounts limited to 6 withdrawals/transfers per month or fees may applySome accounts limited to 6 withdrawals/transfers per month or fees may applyYou can cash out at any time you want but the institution may temporarily prevent investors from cashing out funds depending on market performance
Check-writing Banks rarely offer checks or debit cards linked specifically to savings accountsYou’ll have limited monthly check-writing privileges You may have check-writing privileges but you might need to meet a minimum check amount
FeesCan usually avoid account fees if you maintain a minimum balance Sometimes require higher minimum balances than savings accountsDepending on the fund’s performance, there may be a fee applied if you want to cash out
Security FDIC insured FDIC insuredGenerally not insured, which means there’s a chance you could lose some of your principal balance

How Savings Account Interest Rates Change Over Time

Savings rates are closely tied to the federal funds rate set by the Federal Reserve, but individual banks decide for themselves when to make changes to their variable interest rates. That means the rate at which you open your account is not the guaranteed amount you’ll earn over time. However, you shouldn’t necessarily anticipate your APY changing weekly or even monthly. Savings account rates generally remain steady for a few months at a time.

Rarely, changes may occur more rapidly, such as following the Fed’s emergency decision to lower rates to near zero at the start of the COVID-19 pandemic in March 2020. As the Fed continues to raise rates in 2022, many banks are also reacting with quick rate hikes today, too. Just this year, some banks have increased APYs from around 0.5% to 3.00% or more.

Many banks also make changes to their interest rates around the same time, so if you have multiple accounts and one makes an interest rate change, don’t be surprised if another follows suit soon after. 

Savings Account Frequently Asked Questions

Why do online banks pay more interest?

Because they have no bank branches, online banks have fewer overhead expenses than brick-and-mortar financial institutions. As a result, these banks can pass along those savings to customers (and add incentive for new customers) in the form of higher interest rates and lower fees.

Do I have to pay taxes on my savings account?

You don’t have to pay taxes on the money you deposit into your savings account, but the interest you earn on your balance is taxable. Before tax season begins, your bank will issue a Form 1099-INT, which you can use to report any interest you earned throughout the year on your tax return.

How many savings accounts should you have?

The number of savings accounts you have will depend on your savings goals and how many accounts you’re able to maintain. You should have at least one account for your emergency savings. But you may choose to keep savings for different purposes in separate accounts (emergency savings and money you’re saving for a wedding, for example). Multiple accounts can help distinguish savings goals so you don’t spend money saved for one purpose on another.

Can I make payments and purchases from my savings account?

In general, you cannot make purchases directly from your savings account. In some cases, you may be able to set up direct debits from your savings account. But in most cases, if you wish to use your savings to make a purchase, you should withdraw the money or transfer it to another account (like your checking account) where you can use a check or debit card to transact.

Can you lose money in a high yield savings account?

There is no risk associated with a high yield savings account; you can withdraw your full deposited savings at any time. As long as you choose an account with a bank that’s FDIC-insured, you can deposit up to $250,000 without worrying about losing it, even if the bank closes.