BEST OF
11 Best Savings Accounts of January 2021
Our list of the best savings accounts.
Savings accounts are federally insured financial products that can help your money grow. The best savings accounts have high annual percentage yields, or APYs. The higher the APY, the more money you'll earn over time.
The Federal Reserve emergency rate cuts of March 2020 encouraged many financial institutions to lower their APYs. Some made minor changes while others made more significant cuts. The accounts featured in this article are among those with the consistently highest rates; they can help you bolster your emergency fund faster than an account with an average APY. (The national average is just 0.05%.)
NerdWallet staff analyzed, compared and rated dozens of banks, credit unions and nonbank providers (often apps that partner with a bank for FDIC insurance) before selecting the savings accounts that offer the best combination of above-average rates and consumer-friendly features.
Savings accounts are federally insured financial products that can help your money grow. The best savings accounts have high annual percentage yields, or APYs. The higher the APY, the more money you'll earn over time.
The Federal Reserve emergency rate cuts of March 2020 encouraged many financial institutions to lower their APYs. Some made minor changes while others made more significant cuts. The accounts featured in this article are among those with the consistently highest rates; they can help you bolster your emergency fund faster than an account with an average APY. (The national average is just 0.05%.)
NerdWallet staff analyzed, compared and rated dozens of banks, credit unions and nonbank providers (often apps that partner with a bank for FDIC insurance) before selecting the savings accounts that offer the best combination of above-average rates and consumer-friendly features.
Summary of Best Savings Accounts of January 2021
| Bank/Institution | NerdWallet Rating | APY | Learn More |
|---|---|---|---|
 American Express® High Yield Savings Account at American Express National Bank, Member FDIC | 0.50% With $0 minimum balance | at American Express National Bank, Member FDIC | |
0.50% With $0 minimum balance | at Marcus by Goldman Sachs, Member FDIC | ||
 Alliant Credit Union High-Rate Savings at Alliant Credit Union, Federally insured by the NCUA | 0.55% With $100 minimum balance | at Alliant Credit Union, Federally insured by the NCUA | |
0.45% With $0 minimum balance | Read review | ||
0.50% With $0 minimum balance | Read review | ||
0.45% With $0 minimum balance | Read review | ||
0.50% With $0 minimum balance | Read review | ||
0.60% With $0 minimum balance | Read review | ||
0.60% With $0 minimum balance | Read review | ||
0.60% With $0 minimum balance | Read review | ||
0.65% With $0 minimum balance | Read review |
at American Express National Bank, Member FDIC
American Express® High Yield Savings Account
APY
With $0 minimum balance
Bonus
at American Express National Bank, Member FDIC
at Marcus by Goldman Sachs, Member FDIC
Marcus by Goldman Sachs Online Savings Account
APY
With $0 minimum balance
Bonus
at Marcus by Goldman Sachs, Member FDIC
at Alliant Credit Union, Federally insured by the NCUA
Alliant Credit Union High-Rate Savings
APY
With $100 minimum balance
Bonus
at Alliant Credit Union, Federally insured by the NCUA
Barclays Online Savings Account
APY
With $0 minimum balance
Bonus
Ally Bank Online Savings Account
APY
With $0 minimum balance
Bonus
TIAA Bank Basic Savings
APY
With $0 minimum balance
Bonus
Chime High Yield Savings
APY
With $0 minimum balance
Bonus
PenFed Credit Union Premium Online Savings
APY
With $0 minimum balance
Bonus
Live Oak Bank High-Yield Online Savings
APY
With $0 minimum balance
Bonus
Comenity Direct High Yield Savings Account
APY
With $0 minimum balance
Bonus
TAB Bank High-Yield Savings Account
APY
With $0 minimum balance
Bonus
What do the best savings accounts have in common?
The best savings account interest rates are around 0.50%. At a brick-and-mortar bank, you'll often find savings rates closer to the national average, which is currently 0.05%.
If you have a $5,000 savings balance, choosing an account that pays 0.50% will earn you about $25 in a year, while an account paying you the average would earn less than $5. The difference increases the more you deposit and the longer you keep it in the account.
Why should I care about the best savings account rates?
If you have money left in your checking account each month — or you can adjust your budget so that you do — you should have a savings account with a high rate. (Again, think around 0.50%.) It's always helpful to have money set aside for emergencies, and it'll earn you much more in an account that pays one of the best savings account rates than in a checking account.
Just make sure you can keep enough in your savings account to avoid monthly fees. Most online savings accounts don't charge these, but many traditional accounts do.
What monthly fees do savings accounts usually have?
The best savings accounts typically don’t charge monthly fees. You make your deposit and watch your balance grow as your money earns interest.
» Find out how your savings could add up with NerdWallet’s compound interest calculator.
Why are all of NerdWallet's picks for best savings accounts online?
It's easy to find a savings account at your local bank, but if you want to earn a high rate and pay the lowest fees, you should consider storing your savings online. Without the added expenses of large branch networks, online banks and nonbank providers are able to offer more favorable returns than national brick-and-mortar banks.
» Learn more about NerdWallet's favorite high-yield online savings accounts.
Is my money safe in a savings account?
Yes. Unlike investment accounts, savings accounts are guaranteed not to lose money — provided your money is insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. Whatever you put in an FDIC- or NCUA-insured account will stay there, unless your account charges fees (and, of course, unless you withdraw money).
Do the best savings account interest rates change over time?
Yes, rates are variable and can change over time. If you are looking for a fixed rate account, and can set aside funds for a specific time period without making a withdrawal, consider opening a certificate of deposit. NerdWallet's list of best CD rates features top options.
How often do interest rates change?
Financial institutions generally don’t change savings rates on an hourly, daily or even monthly basis. In fact, under normal circumstances, it’s common to see APYs remain the same for several months.
It’s important to note, however, that rates are variable and theoretically can change at any time. In addition, many providers will change their rates based on what their competitors are doing. You will often see groups of providers increase or decrease their APYs at around the same time, especially if the Federal Reserve recently hiked or cut rates, as with the emergency rate cuts of March 2020 in response to the coronavirus pandemic.
To get the best yield for your money, it’s a good idea to check out the best savings rates on a regular basis — at least once a month.
»Find high rates among different types of deposit accounts in NerdWallet's list of high-interest accounts.
Savings account terms you need to know:
Savings account: A deposit account from a financial institution that earns interest.
Interest: Money a financial institution pays into an account over time.
Compound interest: Compound interest is the interest you earn on both your original money and on the interest you keep accumulating. In an account that pays compound interest, the return is added to the original principal at the end of every compounding period, typically daily or monthly. Each time interest is calculated and added to the account, the larger balance earns more interest.
Annual percentage yield: The annual percentage yield, or APY, is the amount of interest an account earns in a year. The calculation is based on the account’s interest rate and the number of times interest is paid during the year.
» Read more about 10 essential banking terms you need to know.
How can I earn high interest rates besides a savings account?
Here are a few options:
Money market accounts: These accounts are a type of savings account, but they might have higher minimum balances and offer perks such as check-writing, which not all savings accounts do.
Certificates of deposit: These accounts lock your balance away for a specified period of time — often between one year and five years — in exchange for a higher interest rate. But if you withdraw any money during the term, you'll typically have to pay a penalty. CDs are also covered by FDIC insurance.
Mutual funds: If you have a 401(k) through your job or an individual retirement account, or IRA, odds are you are putting some of your money in mutual funds. These are a type of investment that holds a little bit of many different types of stocks. Mutual funds are not covered by FDIC or NCUA insurance, and you can lose money on them — but you'll also typically earn a higher rate of return than you would on a savings account. They're best for long-term savings goals, such as retirement.
» Find out more about your savings account options.
Is savings account interest taxable?
Yes. Technically, all savings account interest is taxable, but your provider probably won't send you a form reporting it unless you've earned more than $10. So if you have a high-yield savings account, you're much more likely to pay taxes on your interest. You'll pay at your normal tax rate.
More top choices for the best savings accounts
When you're shopping for the account that fits you best, these options are worth a look.
Synchrony, 0.60% savings APY with no minimum to open account (see full review), Member FDIC.
Capital One 360, 0.40% savings APY with no minimum to open account (read full review), Member FDIC.
Varo, 0.40% savings APY with no minimum to open account (read full review), Member FDIC.
Vio Bank, 0.66% savings APY with $100 minimum to open account (read full review), Member FDIC.
Axos Bank, 0.61% savings APY with $250 minimum to open account (read full review), Member FDIC.
Sallie Mae Bank, 0.80% savings APY with no minimum to open account (read full review), Member FDIC.
» Interested in getting money from banks? See NerdWallet's best bank account promotions and bonuses
Last updated on January 1, 2021
Methodology
We took a close look at over 70 financial institutions, including the largest U.S. banks based on assets, internet search traffic and other factors; the nation’s largest credit unions, based on assets and membership; and other notable and/or emerging players in the industry. We rated them on criteria including annual percentage yields, minimum balances, fees, digital experience and more.
Financial institutions surveyed are: Alaska USA Federal Credit Union, Alliant Credit Union, Ally Bank, America First Credit Union, American Express National Bank, Associated Bank, Axos Bank, Bank5 Connect, Bank7, Bank of America, Bank of the West, Barclays, BB&T, BBVA, BMO Harris, Boeing Employees Credit Union, Capital One 360, Charles Schwab Bank, Chase, Chime, CIBC U.S., CIT Bank, Citibank, Citizens Access, Citizens Bank, Comenity Bank, Comerica Bank, Commerce Bank, Connexus Credit Union, Consumers Credit Union, Discover Bank, E*TRADE Bank, Fifth Third Bank, First Foundation Bank, First National Bank, First Tech Federal Credit Union, Flagstar Bank, FNBO Direct, GoBank, Golden 1 Credit Union, Goldman Sachs Bank USA, HSBC Bank, Huntington Bank, KeyBank, Live Oak Bank, M&T Bank, Nationwide Bank, Navy Federal Credit Union, NBKC Bank, Pentagon Federal Credit Union, PNC, Popular Direct, PurePoint Financial, Radius Bank, Redneck Bank, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, Service Credit Union, State Employees' Credit Union of North Carolina, Suncoast Credit Union, SunTrust Bank, Synchrony Bank, TAB Bank, TCF Bank, TD Bank, TIAA Bank, U.S. Bank, UFB Direct, Union Bank, USAA, Varo, Vio Bank, Wells Fargo, Woodforest National Bank and Zions Bank.
To recap our selections...
NerdWallet's Best Savings Accounts of January 2021
- American Express® High Yield Savings Account: 0.50% APY
- Marcus by Goldman Sachs Online Savings Account: 0.50% APY
- Alliant Credit Union High-Rate Savings: 0.55% APY
- Barclays Online Savings Account: 0.45% APY
- Ally Bank Online Savings Account: 0.50% APY
- TIAA Bank Basic Savings: 0.45% APY
- Chime High Yield Savings: 0.50% APY
- PenFed Credit Union Premium Online Savings: 0.60% APY
- Live Oak Bank High-Yield Online Savings: 0.60% APY
- Comenity Direct High Yield Savings Account: 0.60% APY
- TAB Bank High-Yield Savings Account: 0.65% APY
Frequently asked questions
A savings account is a deposit bank account that lets you securely store funds while also typically earning interest. You can deposit your money at your financial institution through cash, check or bank transfer, and it will safely earn interest while it is in your account. With savings accounts, money is insured up to $250,000 per depositor, so your funds are safe.
Yes. Most savings accounts are insured by the Federal Deposit Insurance Corporation and others are insured by the National Credit Union Administration. Both cover up to $250,000 per depositor, per institution and per account type, in case your bank fails. All of the best savings accounts in NerdWallet's analysis are insured, just like bank accounts at national institutions.
A savings account holds money that you don’t need for daily spending. It can be a great spot to park your emergency fund or money that you're setting aside for a specific purchase, like a vacation or a down payment on a house. Since everyone's savings goals are different, the amount of money that you should keep in your savings account varies depending on your situation. Unlike most checking accounts, savings accounts earn interest — that’s money you receive in your account just for keeping it with the institution. The higher your savings account interest rate, the faster your balance will grow. You can find accounts with the highest rates in NerdWallet's list of the best savings accounts.
