Penny’s favorite savings accounts

Photo Credit: Fabian Blank

Which bank is holding on to your savings? Is it Chase, Bank of America, or Wells Fargo? You may not know this, but these banks and many others have an interest rate that is basically zero. You could be doing a lot better.

You could start making a little extra💰 every month just by switching to a savings account that pays you meaningful interest.

Case in point: most banks offer an unimpressive 0.01% to 0.05% APY on your balance. That means that for every $10,000 in your savings account, you only get $1 per year. Compare that to a high interest savings account, which pays up to 100 times that amount.

Let’s look at a quick example to put things in perspective. Say that you have $2,000 in a Chase savings account. Right now, you make $0.20 per year from keeping that money in your savings account — almost enough for a down payment on a Snickers bar 🍫

If you move that $2,000 to a savings account with a higher interest rate (often known as a high yield savings account), you’ll start earning $20 per year. For something that only takes a few minutes of effort on your part, that’s not a bad deal.

The only tricky part is finding the right savings account. Luckily for you, we did all the leg work!

First, we cast a wide net for accounts with high interest rates (around 1.00%). That list included banks such as Ally, American Express, Capital One, Discover, MySavingsDirect, and Synchrony Bank. We then signed up for savings accounts at all of them, transferred money, and waited for our free toaster to arrive in the mail 😆

The Best Savings Accounts

Here are the results. We included a comparison to some popular banks at the bottom for your reference.

Note: we are in no way affiliated with these banks; we are not getting paid for this.

Ally — 1.00% APY

Penny Grade: A

  • $0 initial deposit requirement
  • No monthly fee
  • No minimum balance

Ally often ranks as one of the best online savings accounts, not only because of its incredibly high interest rate but also because of its user-friendliness. For example, their website and mobile app are way better than most banks’, and they offer customer support by online chat when you don’t want to jump on a time-consuming phone call.

Barclays — 1.00% APY

Penny Grade: A

  • $0 initial deposit requirement
  • No monthly fee
  • No minimum balance

Barclays may come as a surprise for you. Aren’t they a British bank? Yup, but in 2003 they bought a US bank so that they can bring their services stateside. Their application process is beautiful and easy to follow (adjectives I’d rarely apply to bank websites), and they also have a mobile app.

Discover — 0.95% APY

Penny Grade : A-

  • $500 initial deposit requirement
  • No monthly fee
  • No minimum balance

Discover checked all the boxes: the setup process was easy; their website is awesome and easy to follow; they have no minimum balance or monthly maintenance fees; and they have a great mobile app. Their only miss? They require a minimum initial deposit of $500. If that’s not an issue for you, then Discover could be your best choice!

GS Bank — 1.05% APY (Not supported by Penny)

Penny Grade: B

  • $0 initial deposit requirement
  • No monthly fee
  • No transaction fees
  • No minimum balance

Goldman Sachs’ GS Bank had one of the highest interest rates we could find at 1.05% APY. Unique to most banks, GS Bank doesn’t charge any fees for doing more than six transfers in a month. That’s nice, but unless you’re opening up eight different accounts for research purposes (I mean really, who does that? 😉), it’s unlikely you’ll need those extra transfers.

The account signup process was easy, but Goldman hasn’t quite caught up with technology. There’s no mobile app for their savings account and you can’t connect the account to services like Penny 😒

Savings Accounts Worth Avoiding

For comparison, here’s an overview of the savings accounts offered by several major banks. You’ll quickly find that the basic savings accounts at each bank are almost identical. They all have a $25 minimum initial deposit (except for Citibank) and a monthly fee between $4 and $5, unless you meet certain requirements. And most importantly, they’re all sub-par compared to the offerings listed above.

Chase — 0.01% APY

  • $25 minimum initial deposit
  • $5 monthly fee
  • $300 minimum balance or linked Chase Premier checking account to avoid monthly fee

Bank of America — 0.01% APY

  • $25 minimum initial deposit
  • $5 monthly fee
  • $300 minimum balance or linked BoA checking account to avoid monthly fee

Wells Fargo — 0.01% APY

  • $25 minimum initial deposit
  • $5 monthly fee
  • $300 minimum balance to avoid monthly fee

Citibank — 0.01% APY

  • $500 minimum initial deposit
  • $4.50 monthly fee
  • Need a linked Citibank checking account to avoid monthly fee

US Bank — 0.01% APY

  • $25 minimum initial deposit
  • $4 monthly fee
  • $300 minimum balance to avoid monthly fee

That’s a wrap! Our aim was to provide a complete list of great savings accounts, but if we missed one — let us know! We’ll sign up for an account and consider adding it to the list.


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