Guide to the Best High-Interest Savings Accounts
Most savings accounts are great for holding money for future occasions or emergencies. But a savings account with high interest can help you meet your financial goals faster.
Do you know what qualifies savings accounts as high-rate savings accounts? When you search for savings accounts, you probably approach the terms “high-interest savings account” and “high-yield savings account” frequently. It there a difference, and what interest rates equate to “high” interest rates?
This guide will explain the current high-interest savings account rates so you can begin to save your money faster. We will also point you in the right direction to find the best high-interest savings account for you while offering some of our own suggestions for the best high-yield savings accounts this year.
What Is a High-Interest Savings Account?
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A high-interest savings account is a subjective term to define a savings account with the best interest rates. What one person considers a high interest rate, another may not consider high. However, we will define a savings account with high interest to be one with the best current market interest rates.
A high-interest savings account and a high-yield savings account are interchangeable terms that refer to the return on a savings account. You may encounter both terms in your search for high-rate savings accounts, but they are essentially the same.
How does a high-interest savings account differ from other forms of savings, like a money market account? The differences mostly lie in the way the bank handles your deposits.
With a high-yield savings account, you have the most control over what happens with your money. You deposit it, collect interest, and withdraw it when you need it. A money market account, in contrast, is controlled more by the bank. Your bank can place your deposits into investments, like stocks and bonds.
What Are the Best High-Interest Savings Account Rates?
The market interest rate for savings accounts fluctuates as the economy fluctuates. For 2017, the average interest rate for savings accounts hovered around 0.6%.
According to financial experts, savings account interest rates are not expected to rise significantly during 2017, although they may increase slightly. Therefore, savings accounts with high interest in 2017 will be those with interest rates higher than the 0.6% average rate.
Our choices for best high-interest savings account for this year all have interest rates close to, or over, the 1.0% interest rate mark, which significantly exceeds the average savings account interest rate.
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Where to Find Savings Accounts with High Interest
Fortunately, there are several financial websites that help people like you find the best financial products, like high-rate savings accounts, to move them closer to their financial goals.
In addition to our suggestions, consider searching for the best high-yield savings accounts on authoritative comparison websites, like The Simple Dollar and NerdWallet. These websites update frequently and can provide you with personalized information based on your location.
From their lists of savings accounts with high interest rates, you can visit each bank’s website to check out the fine print and exact terms. But the initial comparison is a handy feature that helps you quickly weed out the high-interest savings account that may not be right for you.
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Then, take a few of your top choices for a test run with a free high-interest savings account rates calculator. This lets you see how much different interest rates can affect your final total for your savings goals. CNN Money’s simple savings calculator is an excellent free tool to gauge your possible earnings from a savings account.
The Best High-Yield Savings Accounts for this Year
We based our suggestions for the best savings account with high interest on a few important factors, in addition to high interest rates:
- Minimum deposit amount: Where some high-rate savings accounts require a minimum deposit of $1,000 or more, we consider the best high-yield savings accounts to be those affordable to most people. Our suggestions require a minimum deposit of $500 or less.
- Maintenance or other fees: Your high-interest savings account will not help you reach your savings goals if it bombards your deposits with maintenance fees each month. The best accounts are those with little or no fees.
- FDIC protection: Your high-yield savings account deposits should have FDIC insurance or other protection to ensure the safety of the money held by your bank.
- How interest is compounded: Any type of interest helps since it is money that does not come from your pocket. However, high-interest savings account rates that are compounded daily, rather than monthly or quarterly, give you the best return on your investment.
The following five savings accounts with high interest rates are those we believe to be excellent choices for your savings needs this year, based on these important factors.
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Salem Five Direct High-Interest Savings Account
If you apply for an online high-interest savings account from Salem Five Direct before January 1, 2017, you will lock into a 1.10% APY interest rate, one of the highest available rates for the coming year.
The Salem Five Direct eOne Savings account requires just $100 to open with no minimum balance requirements. So, even if you drop below your $100 opening deposit, Salem Five Direct will not charge your high-interest saving account any fees. You can withdraw or deposit money whenever you want.
Image Source: Salem Five Direct
Salem Five Direct’s high-interest savings account has no monthly maintenance fees either, and you can use its online and mobile banking systems for free.
eOne Savings is a best high-interest savings account because it protects your savings with both Federal Deposit Insurance Corporation (FDIC) and Depositor’s Insurance Fund (DIF) protection. If your balance is more than the FDIC limit, which is currently $250,000, DIF will kick in to protect the rest.
Salem Five Direct offers an even better high-yield savings account rate when you open an eOne Combo checking and savings account. You will benefit from an increased 0.25% interest rate and can transfer money easily between your accounts for free.
Synchrony Bank High-Interest Saving Account
Synchrony Bank offers a high-interest savings account with an interest rate of 1.05% for any account balance. At this interest rate, a $1,000 deposit with monthly additional deposits of $100 will give you an ending balance of $2,829 after 18 months of consistent savings.
Image source: Synchrony Bank
Synchrony Bank protects your investment through FDIC insurance up to $250,000. It offers a free online banking portal for you to check your balance, transfer, or deposit money, and view the details of your high-yield savings account. Synchrony Bank also offers a convenient mobile deposit feature when you use its mobile app.
There are no maintenance fees, fees for withdrawals, or minimum balances to worry about. There is no minimum amount required to open a Synchrony Bank high-interest savings account, so you can begin to save as little as you can afford.
When you maintain your high-yield savings account and remain a loyal Synchrony Bank customer, you will become eligible for its Loyalty Perks, featuring exclusive travel and hotel discounts.
Barclays High-Yield Savings Account
Barclays is unique in that it offers two options for a savings account with high interest, depending on your savings goals.
The Online Savings Account is one of its high-rate savings accounts. This account gives you 24/7 access to your account through its online banking system to make deposits, transfers, or check your account information.
With a 1.00% interest rate, Barclays Online Savings Account can earn you a good return on investment because it has no maintenance fees or minimum balance penalties.
Barclays’s other high-interest savings account is its Dream Account. The Dream Account is for savers who can deposit up to $1,000 per month in their account with no withdrawals for six months.
The initial APY for this high-yield savings account is 1.05%, but the longer you continue to deposit money without withdrawing any from your account, you will qualify for Barclays bonuses. For the first two 6-month periods of consecutive deposits and no withdrawals, you are eligible for a 2.5% bonus on interest earned for each 6-month period.
Additionally, Barclays is one of the best high-interest savings account options because it features Savings Assistant, a handy tool to help you reach your savings goals faster.
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Ally Bank High-Yield Savings Account
Ally Bank’s high-interest savings account gives you a 1.00% interest rate for all daily balances, which is significantly higher than the average rates of other savings accounts.
Ally Bank also does not believe in maintenance fees on your high yield savings account, so you can get the most return from your investment. The only fee Ally Bank imposes is a $10 fee per transaction over a 6-transaction limit for each statement cycle. This is due to Federal limits on the number of transactions for savings accounts.
Ally Bank’s high-interest savings account rates compound daily for the best possible savings. And, your deposits and savings are protected by FDIC insurance up to $250,000.
With your high-interest savings account, you will benefit from Ally eCheck Deposit, which allows you to deposit money using a mobile app. Ally Bank also offers free mobile and online banking services so your account information is always at your fingertips.
If you have other Ally Bank products, like a checking account, you can easily transfer money between it and your high-yield savings account from Ally Bank.
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Discover High-Interest Savings Account
Discover’s savings account with high interest requires the highest minimum initial deposit of our suggestions for best high-yield savings accounts. At $500, those who are looking to start small may not choose to open a Discover savings account.
However, for those who have a high initial deposit to begin significant savings, the Discover high-interest savings account is a good choice. Remember, the more you can save initially, the higher your interest saved will be long-term.
Discover offers one of the best savings account interest rates at 0.95%. There are no minimum balance or monthly maintenance fees, and you can deposit and withdraw money for free from your high-yield savings account.
If you have other Discover accounts, you can quickly transfer money from or to them with your high-interest savings account. Discover offers free online and mobile banking for convenient access to your account information.
Conclusion
When you look for a high-yield savings account, be sure to look beyond just the interest rate. Other factors can significantly decrease your earnings, like maintenance and withdrawal fees, or interest compounding quarterly rather than daily.
Our suggestions for the best high-yield savings accounts for this year excel in several areas, in addition to having the best interest rates on the current market. Be sure to use a free online interest rate calculator to further compare your top choices based on how much you can afford to save.
Take into consideration the additional features of each high-interest savings account, like convenient mobile and online banking, loyalty rewards, and bonuses. Then, you can make an informed decision on what savings account will best meet your needs.
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