Best Savings Accounts for June 2023

Savings accounts are a safe place to store money that you don't need right away. Your money earns interest on its balance and is liquid in case you need it in an emergency. Interest rates adjust based on economic conditions, so their rates go up as inflation increases. However, unlike other investments, a savings account is fully guaranteed up to FDIC limits. Many households have numerous savings accounts set up for different goals, like a family vacation or a down payment on a home.

Additionally, the specific goals you have in mind will play a crucial role in determining the types of savings accounts that align with your needs, which can fall into six different categories: regular savings accounts (ranging from low to high yield), online savings accounts, certificates of deposits, money market accounts, savings accounts for kids, and student savings accounts.

We have conducted the research to provide you with the best savings accounts available in each of these categories.

Top savings accounts rates by category

More alternatives for best savings accounts

How to choose a savings account

Evaluating different accounts is key to understanding their fees, interest rates and other requirements. Here's how to choose a savings account that matches your goals.

Shop around

Interest rates, fees, minimum deposits and other factors vary widely among banks and credit unions. It pays to shop around to find the best savings account that matches your goals and budget.

Understand your goals

When selecting a savings account, you should first think about what your goals are for the account. Is this short-term money for an upcoming vacation or are you saving for a down payment for a home? Do you need an account to serve as overdraft protection on your checking account? The reason for the account determines where you open it and how much you need to set aside.

Opening balance requirements

Some banks require customers to deposit a minimum amount in order to open an account. This primarily affects traditional brick-and-mortar banks, since many online savings accounts can be opened with no money or as little as $1.

Monthly minimum balance requirements

To avoid monthly service fees, banks often require that you maintain a minimum balance. This minimum balance could be based on the minimum daily balance or average daily balance. The minimum daily balance is the lowest balance throughout the month, while the average daily balance is the average balance throughout the month. Think about how you'll use the account and whether your balance may fluctuate based on deposits and withdrawals. Online savings accounts typically do not have minimum balance requirements.

Monthly service fees

If you don't meet the minimum balance requirements, some banks charge a monthly fee. These fees could not only wipe out your interest earnings, but they could also reduce your deposit balance. Customers that have smaller deposits should look for the best savings accounts that do not charge monthly fees.

Interest rates

The interest rate determines how much interest you'll earn throughout the year. Higher interest rates are better. Review the fine print because the bank may require larger balances to earn the best rates, or they may only pay higher rates on a portion of your balances. For example, the best rate for the first $10,000, then a lower rate on all balances above that amount.

Compounding period

A big factor of interest is how often it compounds. When interest compounds, it is added to your balance to start earning interest on the interest earned. Focus on accounts that accrue interest daily and compound monthly.

Withdrawal limits

Ask how often you can withdraw money and if there are limits to how much you can withdraw at a time or per month. You want to make sure that you can have access to your savings whenever you need it.

How can you access your account?

Review the methods for accessing your account to add or withdraw money and to monitor your balances. Will you receive an ATM card or will it require an electronic transfer to another bank account? If you get an ATM card, determine if there are fee-free ATMs near where you work or live so you don't have to pay to access your money. Does the bank have a mobile app or website to monitor balances and activity?

Other accounts offered by the bank

Many consumers find it convenient to have all of their bank accounts in one place. In some cases, your combined balances between accounts can waive fees, qualify for higher rates or earn additional benefits. Compare the bank's other products to determine if it makes sense to consolidate your bank accounts under one roof.

How to open a savings account

If you're ready to open a savings account, there are multiple ways that you can make it happen. Traditionally, you would visit a local branch of your desired bank, but that is no longer necessary. Almost every bank allows customers to open an account online or through its mobile app.

No matter which method you choose to open an account, most banks require the following information.

• Full name
• Address
• Social Security Number
• Driver's license or other government-issued identification
• Citizenship
• Phone number
• Email address
• Opening deposit

Additionally, you may want to link your existing checking account to your new savings account to transfer money between them. This can usually be done after you've opened your account.

Open a savings account

Types of savings accounts

While a savings account is a wise choice for many consumers, it isn't the best option for every situation. Consider these alternatives before opening your savings account.

• High-yield savings account. A high-yield savings account is a savings account that offers a much higher interest rate. These accounts are typically only available online, and monthly fees, opening balance and monthly minimums vary by bank.
• Interest checking account. Many checking accounts now earn interest on balances. For some consumers, it is easier to manage one account instead of having a separate savings account.
• Certificate of deposit (CD). A certificate of deposit offers a state interest rate that is guaranteed for a specific term. CD terms often range from 30 days to five years, with the higher CD rates generally being offered on longer terms. You can pick a term that matches your goals based on the interest rates offered.
• Money market account. A money market account is a hybrid savings account that offers a high interest rate. These accounts generally aren't limited to six transactions per month, and some include check-writing capabilities. Banks and brokerage companies both offer these types of accounts, so consumers have more choices of where to open an account. CIT Bank Money Market Account, is a highly recommended option for those looking for a competitive interest rate on their savings. It is a type of money market account offered by CIT Bank that provides a high yield on deposits and has no monthly maintenance fees. With CIT MMA, customers can enjoy check-writing privileges and up to six transactions per statement cycle, making it a flexible and convenient savings option.
• Investment accounts. As an alternative to traditional savings accounts, investment accounts cater to individuals who want to grow their wealth over the long term by investing their money in stocks, bonds, mutual funds, and other financial instruments. Unest, for example, offers a tax-advantaged investment account designed specifically for parents who want to save for their children's future by investing in a diversified portfolio of ETFs and mutual funds.

Frequently asked questions (FAQs)

What is a savings account and how does it work?

A savings account is a bank account that offers interest on your balance. They are guaranteed by the FDIC up to $250,000, so they are a safe place to keep your money. Consumers use savings accounts for many reasons, including emergencies, saving for large purchases and overdraft on their checking accounts.

What do savings accounts have in common?

Savings accounts are liquid bank accounts that you can access without penalty while earning a modest amount of interest. These accounts are protected by FDIC insurance, have no maturity and values do not fluctuate based on market conditions. Under Federal law, they have a maximum of six "convenient" withdrawals per month, such as overdraft protection and automatic transfers.

What monthly fees do savings accounts usually have?

Monthly fees for savings accounts vary by bank, but the most common is $5 per month. Many banks have eliminated monthly fees or have low minimum balance requirements to avoid being charged. If your bank charges a monthly fee, consider switching to another bank that won't charge you a fee based on your balance and activity levels.

How often do interest rates on savings accounts change?

Banks typically change interest rates on savings accounts when the Federal Reserve changes rates. Additionally, banks adjust rates based on their need for deposits. If they need more, they'll raise the rate and lower them if their deposit balances are too high.

*APY as ofJune 7, 2023. APYs vary, so check with your financial institution to get the most up-to-date information.