A savings account is a great way to put aside a portion of the money that you earn. The best savings account rate helps you earn a competitive APY even if you are not sure about the time horizon for the money. Bankrate’s top savings rates are much higher than the current national average savings yield of 0.58%

If you have an extra amount of money in your pocket be it for any emergency, choosing the best savings account rates can be a great option that provides you an effortless way to build your savings with lesser risk.

Best savings accounts for February 2024

Since 1976, Bankrate has been a trusted source of banking information to help you make well-informed decisions on your finances. Bankrate provides timely news and rate-related information on the top savings yields from some of the most popular and largest FDIC banks and NCUA credit unions allowing you not to spend time searching.

For more than a decade, though, the trade-off for keeping that cash safe and at your fingertips was a paltry interest rate—or no return at all. It meant the difference between various savings accounts was negligible, and it was hard to keep up with inflation.

Recently the scenario has been changing. Many savers indeed continue to earn meagre returns. The average savings account still is at 0.47%, the Federal Deposit Insurance Corp. states. It is not that hard to find banking institutions paying 10 times that amount. Today’s top savings accounts offer APYs of 5%.

Looking at today’s interest rates, moving your money can cause a big difference that equals $500 a year for every $10,000 you have saved, according to Michael Finke, professor of wealth management at the American College of Financial Services. “If you’re not paying attention, you’re leaving a lot of money on the table,” he says.

Look at more than just the advertised rate, so that you choose the best savings account considering how you plan to use the account, how you prefer to bank and how much you plan to keep in savings. 

What is a high-yield savings account?

The most common account most of us use on a day-to-day basis is a checking account. This is the best place to put the money you plan to use for spending on everyday expenses, and the checking accounts with the best account rates make it easy to make transactions and bill-paying and budgeting.

A savings account is a place for money you do not spend at the moment rather save it for future use if the need arises. Many savings accounts have a limited number of withdrawals that you can make every month and may also charge a fee if you go over that limit. 

You can find the best account rates at high-yield savings accounts offered by banks as well as credit unions. The FDIC and other bank regulators do not recognize these accounts as distinctive from conventional savings accounts.

According to Derousseau, is that the term means different things to different banks. You can find accounts labelled “high-yield” offering APYs that differ by a percentage point or more.

How to choose a high-yield savings account

If you’re looking for the best account rates, it is obvious that you would start with the interest rate, but this is not just it. There are a few other important variables that make high-yield savings accounts distinguishable from one another.

Look for a good interest rate

Over the past year the APY, or annual percentage yield, has risen sharply and can be earned from the most competitive online savings accounts. Today, one can find a handful of accounts in the 5% interest range, and there are dozens of other accounts with APYs of 4% or higher.

Online banks and credit unions tend to compete with several offers. The traditional brick-and-mortar banks allow them to offer higher rates. Banking experts advise checking out smaller banks and credit unions that have regional and, not national footprints depending on consumer deposits.

Rising interest rates have forced banks to compete much harder for savers deposits, according to Joseph Mevorah, senior managing director at Empire Valuation Consultants. With so much attention focused on rates, as soon as one bank becomes the interest rate leader, competitors feel like they must match or beat the new top offer. 

The best savings rates for February 2024

It has been a bumper year for the Savers, the Federal Reserve has been holding short-term interest rates at 15-year highs resulting in high-yield savings accounts, which a few years ago paid next to nothing yet yielded 5% or more. 

Inflation in the current scenario is uncontrollable, and the Fed’s policymakers are all set to lower the rates towards the end of this year. The probability of savings rates is more likely to come down too, finding the right account can still be a great financial move for everyone.

The expected benchmark federal funds rate, for Wall Street investors, is currently set at 5.25% which is likely to increase to 5.5%, to decline only 1 percentage point before the year wraps up. This implies that the best high-yield savings accounts could still yield 4% or more, way higher than the national average for savings as well as checking accounts.

Given below are the best saving states according to the data extracted from the December survey of the best savings account rates.

Look for convenience

While interest rates are important, savings account interest rates are variable in comparison to CDs etc. Make sure you select a bank you will be satisfied with even when earning a lower rate of return in the future.

A great rate is less appealing if you have to pay a lot of fees that acquire a huge portion of your earnings. If you plan to use a high-yield savings account to hold a part or all of your emergency funds, then prioritise an account making it easier for you to make transactions when you need to.

Online banks offer very competitive savings rates, for a first-time experience, it can be more challenging though possible to find a high-yield savings account with a great rate.

Some banks advertise high savings APYs with strings attached. These can include maintaining a high balance or paying monthly maintenance fees that can eat into the interest income you earn.

All in all, you usually need to do more than just blindly pick the rate at the top of an online list, says Derouseau. “You’re going to want to understand what’s required to get the rate that you’re seeing on-screen,” he adds.

Make sure it has FDIC insurance

The collapses of Silicon Valley Bank, Signature Bank and First Republic Bank in March 2023 highlighted how important it is to make sure that the bank you entrust with your savings is a member of the Federal Deposit Insurance Corp., the government agency tasked with protecting customer deposits if a bank fails. 

FDIC deposit coverage is for up to $250,000 per bank, per depositor and per “ownership category,” which refers to different account types, including singly-held and joint accounts, certain trust accounts, corporate accounts and government accounts, as well as some types of benefit and retirement accounts. 

The proliferation of online banks and nonbank fintechs that offer banking services can make it tough to determine your coverage. Some high-yield savings accounts are offered by online brands of brick-and-mortar banks, so it’s important to check the name of the “parent” institution. 

For instance, if you have one individual high-yield savings account with a traditional bank and a second one with that bank’s online brand, your FDIC coverage limit would be inclusive of both accounts.

If you open a high-yield savings account at a credit union, make sure it belongs to the National Credit Union Administration, the government agency that oversees credit unions and offers equivalent deposit protection to customers.

Typically, institutions display their membership in the FDIC or NCUA on their websites, but you can also check on the agencies’ respective websites to verify their participation. 

Look at online banks

Online banks also offer many of today’s best savings account rates. These banks have lower overhead costs as compared to brick-and-mortar banks. They pass those savings on to you by offering high-interest rates and other perks, such as low or no fees.

Top accounts typically start with a $1 minimum, which is not much for those who think they are behind in saving. Additionally, they do not have any monthly fees, even if someone were only looking to save less than $100 a month in an online savings account,” says Shane Cummings, CFP, CEPA, AIF, wealth advisor and director of technology/cybersecurity at Halbert Hargrove.

Online accounts are also quick to set up and easy to use. The procedure to open an online account is quite easy which can be done in a few minutes, much better than walking towards a bank itself.

Compare different accounts

Online banks that offer the best saving account rates are your best bet. There are multiple varieties among these options. Take your time, and compare products keeping in mind not only the interest rates but also various costs that could take away a portion of your income.

It might take a bit extra time to choose the best account, but once that initial research is done, you can sit back and watch your savings grow.

Some of the best savings account rates are given below

UFB Priority Savings

It has a strong APY at 5.25%, which is the highest rate on the list. Some additional perks to it are, such as you do not have to worry about fees eating up your hard-earned money, the bank offers no monthly maintenance fees, and it also has no minimum deposit requirements.

Another perk that comes with the UFB Priority Savings account is an ATM Card. It provides a 24/7 customer service hotline, including an online chat function and text messaging. You can reach UFB Preferred Savings over their mobile application and deposit checks regardless of where you are.

Savings Account

5.05% APYMinimum Opening Deposit: $1

Pros

• $1 minimum deposit to open
• No monthly maintenance fees
• Interest is compounded daily

Cons

• Weak branch presence

Valley Direct Savings

The Valley Direct Savings Account has a 5.05% APY, placing it near the top of the market. The minimum opening balance is $1, with only a $1 minimum needed to receive this strong APY. No monthly maintenance fees in their online savings account are offered.

The Valley Direct Savings Account does have a downside for those looking for physical locations. It’s part of a regional bank called Valley Bank, meaning the institution has much less reach across the country than the major banks. You can, however, find Valley locations in New York, New Jersey, Alabama, and Florida.

High Yield Savings

4.75% APYMinimum Opening Deposit: $0

Pros

• Good APY
• No minimum deposit or monthly fees

Cons

• No physical locations

Synchrony High Yield Savings

This bank offers one of the best savings accounts with the best rates as of the current scenario. The main feature of the bank is the 4.75% APY which it offers and is the highest in the market. Anyone can begin with the account as there is no requirement of a minimum balance. Additionally, there are no monthly fees that are charged.

It also provides additional services like an ATM card and fee-free ATM access throughout the U.S. The online bank provides an online application with various special features making it easy and convenient for everybody to use.

Savings Account

5.15% APYMinimum Opening Deposit: $100

Pros

• Great APY
• No monthly fees

Cons

• Fees for checks and outgoing wire transfers
• $100 minimum to open
• No physical locations or ATMs

Capital One 360 Performance Savings

Capital One Bank’s 360 Performance Savings Account sports offers a 4.35% APY ranking among the highest rates. It comes with a lot of perks like, you don’t need to make a minimum deposit to open the account. In addition, the account comes with no monthly fees, which means more money stays with you.

High-Yield Savings

4.35% APYMinimum Deposit: $0

Pros

• Solid APY
• $0 minimum opening deposit and $0 monthly fees 
• Can be linked with outside bank accounts 
• Min to earn APY = $1

Cons

• Weak account selection outside of savings

American Express High Yield Savings

American Express is a well-known credit card company. It offers a high-yield savings account boasting an annual percentage yield of 4.35% with a minimum deposit of $0 to open the account along with that a minimum of $1 is required to receive the APY. It has no monthly fees for the account.

Its mobile application and web banking platforms help you manage your account anywhere and everywhere as it is branchless.

Savings Account

5.00% APYMinimum Opening Deposit: $1,000

Pros

• High APY
• No monthly maintenance or service fees

Cons

• $1,000 minimum to open an account
• Small branch network

First Foundation Bank Online Savings Account

The First Foundation Bank is spread across 31 locations in California, Florida, Texas, Nevada and Hawaii. It offers an attractive 5.00% APY, helping you save plenty of money over time. But in comparison to other accounts, opening a savings account with First Foundation Bank requires at least a $1,000 deposit.

The account comes with several different advantages such as no monthly maintenance fees or transaction fees related to transfers, not to mention the fact that an external bank or another third party could charge a transfer fee.

First Foundation Bank is quite user-friendly for mobile customers. Their mobile app allows users to easily access their banking information through their iPhone and Android devices. But despite this level of digital access, First Foundation Bank branches are available in less than 10 states.

Savings Account

4.35% APYMinimum Opening Deposit: $0

Pros

• Good APY 
• High-end customer service 
• No monthly fees or minimum deposits

Conclusion

Having a savings account is a necessity in your financial journey. A savings account is a wise decision towards your financial health. Not only this, but you owe it to yourself in order to live up to your savings by getting the highest rate possible. The journey starts with the knowledge about today’s average rates, choosing a high-yield savings account with an online bank and discovering various options. Having a strong financial backup sets you at ease knowing you’re better prepared to make the most of the money in your savings.

You can also read: https://moneyjax.com/best-rate-for-savings-accounts/

Divyanshi Krishan