5 Things to Know Before You Open a Savings Account
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Everyone knows interest rates matter. But what less obvious factor could make or break your savings goals? Learn more below.
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Interest rates are high right now, so it's a great time to be saving. A high-yield savings account is a great option if you're looking to grow your funds while keeping them accessible.
High-Yield Savings Premier - 4.46% APY
- No account activity or maintenance fees
- $500 minimum opening deposit
- FDIC insured
But, before you jump in, let's talk about some important things to know. This way, you can avoid common pitfalls and make the most of your money.
#1: The best rates might be hiding in small places
It might be easy to stick with your current bank for a new savings account - familiarity breeds comfort, right? But traditional banks often don't have the best rates. In fact, the average national rate for savings accounts is only 0.42% APY.
Now consider this: many smaller banks and credit unions are currently offering rates over 5% APY. That's a massive difference that will help your money grow a lot faster.
These smaller institutions are just as secure as the big banks, thanks to FDIC insurance (or NCUA for credit unions).
To give you a head start, here are the current best savings rates available:
- Mission Valley Bank:
High Yield Savings Account - 4.50% APY - Western Alliance Bank:
High Yield Savings Account - 4.50% APY - mph.bank:
High-Yield Savings Account - 4.45% APY - Continental Bank:
High Yield Savings Account - 4.41% APY - Prism Bank:
High-Yield Savings Account - 4.40% APY - DR Bank:
High-Yield Savings Account - 4.40% APY - Liberty Savings Bank:
High Yield Savings Account - 4.36% APY - CIT Bank Platinum Savings:
4.35% APY - Dayspring Bank:
High-Yield Savings Account - 4.30% APY - Paprika Capital Bank:
High-Yield Savings Account - 4.29% APY
Here's a quick calculator to see the difference in earnings between traditional and high-yield savings accounts.
#2: Read the fine print
Got your eye on an account with a sky-high APY? Double check the details.
That enticing rate could be a short-time promotional offer, or applicable only for specific balance tiers. Some accounts might even have deposit requirements to secure the higher rate.
Knowing these details is important. It helps you gauge the true long-term value of the account.
#3: Explore beyond regular savings accounts
There may even be better options than a regular savings account.
For example, if you can set aside money for a longer period, a Certificate of Deposit might be a better fit. The benefit of CDs is that they lock-in your APY. So even if the market dips, your rate won't.
CDs can be as short as just 1 month. Or if you're saving for far off goals, you can find long-term CDs and lock-in your rates for up to 10 years.
| Term | Bank and Yield Rate |
|---|---|
| 3 Month | Ponce Bank: |
| 6 Month | Western Alliance Bank: |
| 1 Year | SkyOne Federal Credit Union: |
| 18 Month | SkyOne Federal Credit Union: |
| 2 Year | Always.bank: |
| 3 Year | mph.bank: |
| 4 Year | SkyOne Federal Credit Union: |
| 5 Year | mph.bank: |
#4: You might not be able to get your money out at any time
Many savings accounts cap you at 6 withdrawals per month. After all, the goal is to save money, not spend.
Some banks remove this limitation. For example, Western Alliance Bank's savings account lets you make unlimited transactions. If quick access to your funds is important to you, you might want to look for that kind of option.
But if you're focused on growing your savings, a less accessible account might help curb the temptation to dip into your savings often.
#5: Some savings accounts might have fees
Some savings account (particularly at larger banks) may have a monthly fee if you don't maintain a certain balance. Fees can easily eat into any interest earned.
Besides monthly fees, there may also be other fees like overdraft fees and excess withdrawal fees.
Fortunately, most online banks don't impose monthly service fees. This lets you keep more of your money where it belongs—in your account, working for you and collecting interest.
Anything else to know?
One more tip: check the opening deposit requirement. Some banks ask for a large upfront sum, which might not be practical if you're just starting to save.
There are plenty of savings accounts with no, or very little, opening deposit. So just go for one of those instead.
And remember, you can open as many savings accounts as you need. Consider having separate accounts for different savings goals, like for an emergency fund, upcoming vacation, or home remodel. This not only organizes your finances, but also keeps you focused on your saving targets.
| APY | Minimum Deposit | ||
|---|---|---|---|
| Mission Valley Bank: High Yield Savings Account | 4.50% | $1 | Learn More |
| Western Alliance Bank: High Yield Savings Account | 4.50% | $1 | Learn More |
| Western Alliance Bank: High-Yield Savings Premier | 4.46% | $500 | Learn More |
| mph.bank: High-Yield Savings Account | 4.45% | $1 | Learn More |
| Continental Bank: High Yield Savings Account | 4.41% | $1 | Learn More |
| Prism Bank: High-Yield Savings Account | 4.40% | $1 | Learn More |
| DR Bank: High-Yield Savings Account | 4.40% | $1 | Learn More |
| Liberty Savings Bank: High Yield Savings Account | 4.36% | $1 | Learn More |
| CIT Bank Platinum Savings | 4.35% APY with a balance of $5,000 or more | $100 | Learn More |
| Dayspring Bank: High-Yield Savings Account | 4.30% | $1 | Learn More |
| Paprika Capital Bank: High-Yield Savings Account | 4.29% | $1 | Learn More |
| Adda Bank: High-Yield Savings Account | 4.25% | $1 | Learn More |
| First Community Bank: High-Yield Savings Account | 4.22% | $1 | Learn More |
| Live Oak Bank: Personal Savings | 4.20% | $0 | Learn More |
| CFBank National Association: High-Yield Savings Account | 4.20% | $1 | Learn More |
Bottom Line
It's time to put your money to work! If you're still using a low-interest savings account, that's literally letting free money slip through your fingers. So why wait? Start comparing your options today and grow your savings effortlessly.
High-Yield Savings Premier - 4.46% APY
- No account activity or maintenance fees
- $500 minimum opening deposit
- FDIC insured
Discover® Online Savings - $200 Cash Bonus
To qualify for Bonus: Apply for your first Discover Online Savings Account, enter Offer Code CY924 at application, deposit into your Account a total of at least $15,000 to earn a $150 Bonus or deposit a total of at least $25,000 to earn a $200 Bonus. Qualifying deposit(s) may consist of multiple deposits and must post to Account within 45 days of account open date. Maximum bonus eligibility is $200.
What to know: Offer not valid for existing or prior Discover savings customers, including co-branded, or affinity accounts. Eligibility is based on primary account owner. Account must be open when bonus is credited. Bonus will be credited to the account within 60 days of the account qualifying for the bonus. Bonus is subject to tax reporting. Offer ends 03/13/2025, 11:59 PM ET. Offer may be modified or withdrawn without notice. Due to new customer funding limits, you may wish to initiate fund transfers at your other institution. For information on funding your Account, see FAQs on Discover.com/Bank. See advertiser website for full details.
CIT Bank Platinum Savings - 4.35% APY
- 4.35% APY with a balance of $5,000 or more
- 0.25% APY with a balance of less than $5,000
- $100 minimum opening deposit
- No monthly maintenance fee
- Member FDIC
High Yield Savings Account - 4.50% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
High-Yield Savings Account - 4.40% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
High-Yield Savings Account - 4.30% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
High-Yield Savings Account - 4.29% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
High-Yield Savings Account - 4.22% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
High-Yield Savings Account - 4.20% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
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