Best savings accounts for July 2024

• How Bankrate calculates the national average

  In June 2023, Bankrate updated its methodology that determines the national average savings account rates. More than 500 banks and credit unions are surveyed to generate weekly national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks. 

• Finding a competitive yield

  You want to make sure you’re earning a competitive yield that’s a lot higher than the national average. You’re even able to outpace inflation with a top savings yield in 2024.

• Not paying monthly service fees

  Paying fees cuts into any interest you’re earning. You don’t want any fees to take away from your interest earnings.

• Being able to access your money in an emergency

  Savings accounts are ideal for an emergency fund. But you need to be able to access your money if an emergency ever happens.

A savings account is a type of deposit account found at both banks and credit unions that generally offers a variable yield and it allows withdrawals generally when you need to make them without incurring a penalty.

What is needed to open a savings account?

Whether opening an account online or in a bank or credit union, you'll likely be asked for similar information.

Learn more

• Is my money safe in a savings account?

  Money deposited in a savings account at an FDIC-insured bank, or at an NCUA-insured credit union, is safe as long as you are within FDIC or NCUA limits and following their guidelines.
  
  The standard FDIC deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category.

  You can use the FDIC’s Electronic Deposit Insurance Estimator (EDIE) to make sure your accounts are within FDIC limits. That tool relies on the information that you provide. The FDIC also has a phone number, (877) ASK-FDIC, that you can call to ask questions. 

  The FDIC Bank Find tool is how you can verify your bank is an FDIC-insured bank, or you can call the FDIC’s phone number (877-275-3342) for assistance. 

  At NCUA credit unions, the standard share insurance amount is also $250,000 per share owner, per insured credit union, for each account ownership category.

• Should I have more than one savings account?

  How many accounts you should have will vary. Though some savers are better off keeping all their funds in one account, others may benefit from having multiple savings accounts for different goals. Putting money into different buckets can be a more effective strategy for those looking to save for specific purposes or who want to keep emergency funds separate from other savings. And some banks help by encouraging customers to create multiple accounts for specific saving purposes.

  Regardless of how many accounts you decide to open, avoiding accounts with monthly maintenance fees or minimum account balance requirements that may result in fees is one of the most effective ways to grow your savings.

• Do I have to pay taxes on my savings account?

  Generally, any interest you earn on a savings account is considered taxable income. Even if you don’t receive a 1099-INT tax form because the amount of interest you’ve earned for the year is small (less than $10), you’re still expected to include the earned interest on your tax return. The IRS considers any interest earned on a savings account to be taxable. If you earn interest from your savings account, you'll be required to submit a 1099-INT form to the IRS.

  If you’re concerned about your tax liability and you’re saving for a long-term goal, consider keeping your extra funds in a different type of savings or investment vehicle. Money you’re setting aside for your kids’ college fund, for example, can be saved in a 529 plan where it grows tax-free. The savings in that account won’t be taxable either when your child’s ready to withdraw them to pay for tuition. Qualified withdrawals for education expenses from a 529 account are not taxable.

• How often do interest rates on savings accounts change?

  Savings rates are usually variable, which means banks can change them whenever they want. Competition for deposits as well as banks’ business needs play a role in where banks set savings rates, but regulation plays a part, too.

  Savings-account yields closely follow the federal funds rate, which is the interest rate banks charge each other for overnight loans and is guided by the Federal Reserve. Top-yielding banks have raised savings rates in response to recent Fed rate hikes.

  The best savings accounts are federally insured. Money deposited in savings and money market accounts at an FDIC bank or NCUA credit union is safe and insured for up to at least $250,000 by either the FDIC or NCUA.

• How much money does the average person have in savings?

  Only 4 in 10 U.S. adults (43 percent), say they could cover the cost of a $1,000 car repair or emergency room visit using savings, according to Bankrate’s January Financial Security Index survey.

  The Federal Reserve's October 2023 survey of consumer finances, the latest available, found that the median value of the American family's transaction accounts (savings, checking, money market, prepaid debit cards, call accounts) is $8,000.

  A savings account can help you weather unexpected expenses, such as job loss, medical bills resulting from sudden illness, or unforeseen home or automobile repairs. Savings can also help you achieve financial goals, such as purchasing a home. If you start saving now — or add to existing savings — you’ll be better positioned to reach your financial goals even if they change.

• Why do online banks pay more interest?

  In some cases, the biggest banks still pay their savings account customers less than today's national average APY of 0.6. Online banks, on the other hand, typically pay much more because they don’t have the costs associated with physical branches, giving them the opportunity to pay customers higher yields. Though online banks offer higher savings rates and charge fewer fees than traditional banks, consumers should also consider their individual financial needs, such as the need or desire to bank in person at a branch, when weighing where to open an account.

• Banks we monitor

  These financial institutions are featured in our savings rate research: Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank5 Connect, Bank of America, Barclays, Bask Bank, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO, Bread Financial (formerly Comenity Direct), BrioDirect, Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank (Rhode Island), Credit One Bank, Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, Emigrant Direct, EverBank (formerly TIAA Bank), Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, Huntington National Bank, KeyBank, Limelight Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Morgan Stanley Private Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, PenFed Credit Union, PNC Bank, Popular Direct, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, SoFi Bank, State Employees' Credit Union, Suncoast Credit Union, Synchrony Bank, TD Bank, Truist Bank, U.S. Bank, UFB Direct, USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.