Top Savings Accounts January 2025

We're here to simplify picking the right savings account for you. Unlock and compare some of the best savings accounts to grow your money.

What is a savings account?

A savings account is designed to store your money and help it grow over time. Unlike keeping cash at home, a savings account offers a reward: interest on your deposit.

Interest rates can vary depending on the market and your financial institution's offerings. Savings accounts are meant for storing money for the short or long term, rather than frequent transactions like a checking account.

While it's not for frequent transactions like a checking account, savings accounts are great for short or long-term goals. Some banks may require a minimum balance or limit monthly withdrawals, but savings accounts are generally much more flexible than options like certificates of deposit (CDs) or retirement accounts like 401(k)s, which lock up your money for significant periods.

What to know about savings accounts

At first glance, savings accounts seem simple. But once you dig deeper, there's more to consider.

Interest rates for a savings account

Interest rates on savings accounts vary by bank and market conditions. In 2024, the national average interest rate for a savings account is around 0.46%, meaning you'd earn about $0.46 in interest for every $100 you save in a year.
Online banks often offer more competitive rates than traditional brick-and-mortar banks. And remember—with compound interest, your savings grow faster over time. Your interest earns interest, boosting your savings balance in the long run.

What are the fees associated with a savings account?

While some savings accounts can have fees, you can often avoid them by meeting certain criteria. Here are some of the most common fees that come with savings accounts.

Monthly maintenance fees: Charged each month to keep your account open, but usually waived if you maintain minimum balance in your savings account.
Excessive withdrawal fees: Some banks limit monthly withdrawals, charging a fee if you exceed the limit.
Account closing fees: You might get charged if you close your account too soon after opening.

Access to funds

Savings accounts are for storing money, not frequent transactions, so there are some limits on access to your funds. That said, they're more flexible than retirement accounts. Federal rules used to cap monthly withdrawals under Regulation D, but this was relaxed in April 2020. Some banks still have their own limits, ranging from six to unlimited withdrawals per month. Be sure to check with your bank to understand its specific withdrawal policy.

FDIC insurance

FDIC insurance protects up to $250,000 per depositor, per insured bank, for each ownership category, ensuring your money is safe if the bank fails.
If your bank closes, the FDIC would reimburse you for the insured amount in your account, giving you peace of mind that your savings are secure and accessible. For joint savings accounts, like one with a spouse, the total insurance coverage doubles to $500,000. This safety net ensures your savings is protected, even in unexpected circumstances.

4 different types of savings accounts

The best savings account for you depends on your needs—consider how often you'll access your funds, how much you'll save, and what interest rate you want.

Basic savings accounts: Most common type and offer a simple way to store money securely while earning interest. They may have lower interest rates, and may provide more flexibility for withdrawals, making them a good option for everyday savings or emergency funds.
High-yield savings accounts: Offer higher interest rates, helping your money grow faster. Often found online, some accounts may have minimum balance requirements to qualify for the best rates.
Money market accounts: Blend features of checking and savings accounts. Money market accounts typically offer higher interest rates than traditional savings accounts and allow limited withdrawals or check-writing privileges each month. Typically have minimum balance requirements or transaction fees. May be a good fit if you want check-writing capabilities while still earning interest.
Specialty savings accounts: Designed for specific goals, like vacations or education savings. These accounts may offer higher interest rates or bonus features when you meet savings milestones.

Who should get a savings account?

A savings account is ideal for almost anyone looking to store money securely while also earning interest. Take a look at some scenarios where opening a savings account may be particularly beneficial.

Creating an emergency fund: Many financial experts recommend having 3-6 months of living expenses saved to cover unexpected costs like car repairs, medical bills, or job loss. A savings account is perfect for this, offering easy access and FDIC insurance up to $250,000.

Parents or guardians saving for a child's future: Whether for a child's education, first car, or any other future goals, a savings account helps parents build savings early.

People with upcoming large expenses: If you're planning a major purchase—like a home down payment, dream vacation, or renovation.

Retirees and those living on fixed incomes: For retirees and those with fixed incomes, a savings account provides a safe, liquid place to store cash reserves. Unlike the stock market, savings accounts provide stability, giving you peace of mind.

Risk-averse investors: If you have a low tolerance for risk and prioritize preserving your capital, a savings account is an excellent option. While the interest rates may be modest, they guarantee your principal remains secure while generating some growth.

Individuals trying to develop a savings habit: Building a consistent savings habit is key to financial stability. Opening a savings account, even with a small initial deposit, is the first step to kick starting this journey.

Pros and cons of savings accounts

Savings accounts offer benefits and potential drawbacks. Understanding the pros and cons allows you to make an informed decision as to what you should do with your money.

Pros of savings accounts

Savings accounts offer many advantages. Let's delve into some of the key benefits.

Earn interest: Savings accounts allow your money to grow over time through compound interest.
Liquidity: Savings accounts offer guaranteed returns but are also much more accessible than CDs or retirement accounts that may have restrictions on withdrawals. Easy access makes savings accounts ideal for emergency funds or short-term savings goals.
FDIC-insured: The FDIC protects your deposits up to $250,000 per depositor, per insured bank for added security and stability.
Separate savings pool: Having a dedicated savings account separate from your checking account can be a powerful tool for managing your finances. It allows you to separate funds for specific goals or emergencies, reducing the temptation to spend everyday purchases.
Potential to automate savings: Many banks offer the convenience of automatic transfers from your checking account to your savings account. You could set up a consistent, automated savings plan without manual effort.

Cons of Savings Accounts

While savings accounts offer a bunch of benefits, there are also some drawbacks to consider.

Modest interest rates: Savings accounts offer security, but the trade-off is a lower potential return on your investment. They tend to feature lower interest rates compared to the possible gains you could earn with other investment options like ETFs.
Withdrawal limits: There may be limits on the number of withdrawals/transfers you can make per month from a savings account. Going over this limit can result in fees.
Minimum balance requirements: Some savings accounts have minimum balance requirements, often around $300 or more.

Alternatives to savings accounts

While savings accounts might be the right option, it's important to explore alternatives before making your choice. Here are two other great options:

1. Certificates of deposit (CDs)

CDs are a type of savings account that offers a guaranteed fixed interest rate, typically higher than a regular savings account. This higher rate comes with a trade-off: you agree to lock your money away for a predetermined term, ranging from 6 months to several years.

While the guaranteed rate can help grow your savings, withdrawing money rarely can result in penalties that reduce your earnings. CDs are ideal for long-term savings goals, but not for emergency funds or short-term needs.

2. Investment account

Investment accounts are for those with a long-term outlook and a higher risk tolerance. Unlike savings accounts, investments can carry the potential for both higher gains, but also the potential for losses.

By building a diversified portfolio of assets like stocks, bonds, mutual funds, and exchange-traded funds (ETFs), you can aim for greater returns over time compared to a traditional savings account.

However, investment accounts may require active management to navigate the stock market and are best suited for long-term financial goals.

Pro-tip: Explore how to start a retirement fund and prepare for comfortable golden years.

Comparing savings accounts

Shopping around for the best savings accounts is one of the smartest financial moves you can make. With rates varying widely across banks and credit unions, you don't want to settle for just any bank or interest rate.

So, how can you find some of the best savings accounts? Use MoneyLion for easy comparison. Look at annual percentage yields (APYs—the amount of interest you earn on investments and savings in a year), monthly fees, withdrawal policies, minimum balance requirements, and overall liquidity of different offers.

The right savings account can help you achieve your financial goals, whether it's building an emergency fund, saving for a down payment, or boosting your retirement savings. Take time to explore and choose an account that will let your money grow!