Earning the highest interest rate possible means determining what kind of savings account is best suited for your needs. Savings accounts, CDs, checking accounts, and money markets each offer very different benefits, and very different interest rates - read more about the differences here. All banks listed are federally insured by the FDIC, so rest assured your money will be earning the highest possible interest rates in the safest environment. Use the filters below to find the best high yield account for you!
A bank account is an essential financial tool. It allows you to securely store cash, easily transfer money and make payments, and even grow your money for the future. That last benefit is one of the most important because it means that you can actually earn money on the cash you deposit.
Not all banks and credit unions offer the same interest rates, and not all kinds of bank accounts are equal when it comes to their yield potential. Take a quick look at the national average rates to get an idea of just how much rates can vary. This means that in order to make the most of your savings, you shouldn't choose a bank or a type of account without first comparing yields to find the highest interest rates.
What types of accounts are available?
You can generally group bank accounts into 4 different categories. There are of course some exceptions and overlaps, but we like to keep things simple, so we've highlighted the pros and cons of each.
Checking accounts - You probably know this one as your account meant for day-to-day transactions. It's usually tied to a debit card and sometimes paper checks. You probably use it to deposit paychecks or pay bills as well. A checking account is perfect for these types of banking transactions because there are generally no limits on the number of transactions you can make. You may make many debit card purchases every day, for example. The downside to this freedom of access is that most banks pay very little, if any, interest on their checking accounts. Rewards checking accounts and high interest checking accounts at online banks are some exceptions.
Savings accounts - These are some of the most basic accounts you can find. Savings accounts are typically a place for small, short-term savings goals such as an emergency fund. Most have no or very small minimum balances, which makes them perfect for younger people who may just be starting to save. Almost all savings accounts earn interest, but as you'll learn later on, not as much as other types of accounts. Also, savings accounts do place some restrictions on accessing your money. Due to federal regulations, banks and credit unions require that customers make no more than 6 withdrawals per month (sometimes less). Go over that limit and you'll face a fee.
Money market accounts - These accounts, sometimes called "money market deposit accounts" (MMAs or MMDAs), are very similar to savings accounts in that you are restricted to 6 withdrawals per month. However, the major differences come into play with the minimum balance. Money market accounts usually require customers to maintain a minimum balance to avoid a monthly fee. In return, you can earn much higher interest rates than regular savings accounts.
Certificates of deposit (CDs) - In order to find the highest interest rates at a particular bank or credit union you'll probably have to check out CDs. These accounts specify a time frame (a maturity) during which you must keep out of the account, or else risk being knocked with a fee. CDs come with a variety of different maturities, each with it's own interest rate. Typically, the longer the term the more interest you'll earn, so unless you're willing to part with your money for months or even years at a time, they may not be for you. Usually, CDs also pay a fixed interest rate, which can be good or bad depending on which direction you expect rates to go in the near future.
In summary, think about this one simple general rule when comparing bank account interest rates: you'll earn higher rates the longer you can refrain from touching your money.
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