What type of account earns the most interest

Click through to the full review to learn more. The Discover Online Savings account is a top choice for customers looking for a quality online savings account with a high APY. Discover takes the no-fee approach to the next level with none of the monthly fees or hidden fees that you might see with other banks. Discover offers a top-rated mobile app that lets customers stay connected to their savings from almost anywhere. The Marcus by Goldman Sachs Online Savings account is a newer entrant to the market, but it's already proven that it's here to stay with a competitive APY, low fees, and no minimum balance requirements.

You probably know American Express as a popular credit card issuer, but its savings account is garnering a lot of positive attention because of its low fees and high APY.

It also allows customers to make up to nine withdrawals or transfers from their savings account every month without paying a fee, which is more than what most of its competitors offer. The latter qualification is likely what most savers can maintain, making the highest APY tier widely available. This makes it a great fit for anyone hoping to grow savings over time. Importantly as well, the account doesn't charge monthly maintenance fees or have a minimum balance requirement.

It also comes with a free debit card for those who request it, so you can quickly withdraw funds directly from your savings account. Not to be overlooked, it also includes no monthly maintenance fees, no minimum balance requirements, and includes useful desktop and mobile tools to make hitting your savings goals easier.

Synchrony's banking products share a common thread: Each tends to be among best-in-class, all while cutting fees. Synchrony High-Yield Savings is no different. Beyond a high APY and no monthly maintenance fee, account holders can access a somewhat rare savings account perk: ATM access.

A savings account is a type of bank account that pays you interest. You'll earn more interest than you would with a checking account in exchange for limited access to your funds.

You can put as much money as you'd like into a savings account, but by federal law regulation D , you can only make up to six free withdrawals per month. Exceeding this amount could result in extra fees. Banks use your savings to fund loans for their customers. Borrowers then pay interest on the loan, and your bank sends some of that interest to your savings account. A larger balance or a higher savings account interest rate results in more interest. Some savings accounts may charge monthly maintenance fees.

They're unlikely to include ATM cards or check-writing capabilities. So if you want to withdraw money from the account, you must do so via automatic bill pay or transfer the funds to a linked checking account. Like other deposit accounts, traditional savings accounts and online savings accounts are usually backed by the Federal Deposit Insurance Corporation FDIC. So you won't lose your hard-earned cash even if your bank closes its doors. A high-yield savings account is a savings account with an APY that's far higher than a traditional savings account.

There is no clear boundary separating high-yield accounts from their lower-earning peers. But the APY on the best high-yield savings accounts can be up to 16 times higher than the national average.

High-yield savings accounts are most commonly found at online banks. Without a large branch network to maintain, they're able to pass their savings on to you in the form of higher APYs and lower fees.

Most online savings accounts carry the same FDIC insurance as a traditional bank. But because these banks don't have branches, you often have fewer options for accessing your funds. This shouldn't pose a serious issue for most people, though, as these accounts are intended for saving, not frequent spending.

Traditional savings accounts are usually offered by brick-and-mortar banks. Online savings accounts don't have the overhead of running physical branches and so can offer higher interest rates. As such, the best online savings accounts are often high-yield. Early on, many bank customers were concerned that hackers might gain access to their information.

As a result, online banks attracted deposits by offering interest rates that brick-and-mortar banks couldn't match. Now, the banking world has turned upside down.

Many people prefer the convenience of online banking. Indeed, traditional brick-and-mortar banks have created online systems to give their customers the same online services. Here are some of the key differences between savings accounts at online and brick-and-mortar banks:.

The type of bank that's best for you depends on which features are most important to you. Unless you really need to be able to visit a branch and speak to a live person, an online bank should be able to satisfy your needs most of the time.

Plus you can earn a higher APY in the process. Keep those things in mind as you compare your savings account options. Every good savings account has to have deposit insurance from the FDIC.

Most online banks, including those that offer the best online savings accounts, are covered by the FDIC. Here are a couple of key terms you should know before you open a savings account. These are important terms for online savings accounts, traditional savings accounts, and high-yield savings accounts.

APY: This stands for "annual percentage yield. APY takes into account the actual interest rate as well as how often that interest compounds. A higher APY means more interest for you. Monthly maintenance fee: A monthly maintenance fee is a fee your bank charges to maintain your savings account.

Some banks, especially online banks, don't charge this fee, and others will waive it if you meet certain requirements. Liquidity: Liquidity refers to how easy it is to turn your money into cash. Highly liquid accounts make this simple, while low-liquidity accounts make it a lot more challenging to get cash when you need it. The best high-yield savings accounts, both online and traditional, will meet the following criteria:. Spreading the funds across depositors and account categories increases coverage within a single bank.

A savings account is a good place for money you don't need for everyday spending but aren't willing to risk on the stock market. You should keep your emergency fund in a savings account, as well as money you're saving towards a large purchase in the next few years.

Tip: use our emergency fund calculator to help determine how much you should have saved. Investing these funds is not usually a good idea. There's a chance you could earn a higher rate on your money, but there's also a risk your investments could lose money, particularly over the short term. You could be forced to sell your assets at a loss when you need money, and even then, it can take time to get the funds. With a savings account, your money's always right there when you need it.

Savings accounts aren't good places for cash you need to access on a day-to-day basis, because withdrawals in excess of six per month could bring fees. They're also not the best choice for money you don't plan to use for decades. That's because savings account interest rates are usually lower than the return you can get on the stock market. One of these other bank accounts might suit you better if one of our best savings accounts doesn't sound like a good fit.

CD accounts : A certificate of deposit CD is a special type of savings account that offers a higher interest rate than a high-yield savings account. But it doesn't allow you to access your deposit plus earnings for a set number of months or years your CD term. There is no minimum balance requirement, no monthly fees and a strong 0. But what makes this account stand out is its convenient withdrawal options.

Synchrony Bank offers an optional ATM card to its savings account holders. You can access your money by ATM, wire transfer up to three free per statement cycle or through an electronic transfer to or from accounts you have at other banks.

Though you are limited to the six free withdrawals or transfers per statement cycle limit waived during the coronavirus outbreak under Regulation D , Synchrony Bank allows you to conduct unlimited transactions at an ATM. Just going to the ATM twice in one month would already put you over the refundable amount.

To deposit money into your savings account at Synchrony Bank, you can make an electronic transfer from an external bank account that you've linked, do direct deposit, make a wire transfer, mail a check or use the bank's mobile app to deposit a check. Additional customer perks include complimentary identity theft assistance, travel discounts and free webinars.

Account holders are given the six free withdrawals per month as required by law limit waived during the coronavirus outbreak under Regulation D. Vio Bank does not offer a checking account nor ATM network, but if you want to stash your cash and watch it grow, this high-yield savings account is a smart choice with its generous APY. Account holders can reach customer service easily by phone seven days of the week or through the live chat available on the bank's site.

Varo Bank is a San Francisco-based online bank that was founded in It is an all-mobile national bank, so for those looking to save and don't mind banking completely over the phone or online, the Varo Savings Account makes a good option. Varo offers a high APY of 0. Neither accounts require minimum balances to open and neither charge monthly maintenance fees. Varo stands out because of its uniquely tiered APY program that encourages you to save more.

While you can take advantage of a 0. For those who want extra help saving, the online bank offers two programs that automatically transfer money from your Varo bank account to your savings account: Save Your Pay, which transfers a percentage of your paycheck into your savings, and Save Your Change, which rounds up your checking account transactions to the nearest dollar and transfers the difference to your savings.

For any cash deposits, note that Varo only makes these available through third-party services, which may charge a fee.

While online savings accounts offer some of the highest APYs, it is also harder to access your money than when you bank at a brick-and-mortar institution. This is arguably a good thing if you're trying to grow an emergency savings, as you won't have as many opportunities to withdraw cash from the account. Online savings accounts, by law, limit the number of times you can access your cash each month. High-yield savings account holders can only withdraw or transfer money including electronic transfers, checks and wire transfers out of their account up to six times per month without having to pay a penalty fee or risk having their account closed.

This is a federal law, known as Regulation D. It has been temporarily lifted during the coronavirus outbreak as people may need more urgent access to their money. At this time, customers can "make an unlimited number of convenient transfers and withdrawals from their savings deposits," according to a statement by the Federal Reserve Board.

Although it might seem nerve-wracking to have limited access to your savings, it can also help prevent you from frequently dipping into your savings. One of the big reasons to put your emergency fund into a high-yield account is to watch it grow, not constantly withdraw it. The higher your account balance is, the more money you will earn in compound interest over time so it's a good thing that there's a federal withdrawal limit.

To determine which high-yield savings accounts offer the best return on your money, Select analyzed dozens of U. We narrowed down our ranking by only considering those savings accounts that offer an above-average APY, no monthly maintenance fees and low or no minimum balance requirements.

While the accounts we chose in this article consistently rank as having some of the highest APY rates, we also compared each savings account on a range of features, including ease of use and account accessibility, as well as factors such as insurance policies and customer reviews when available.

Some banks might even make you forfeit the reward if you close the account soon after getting the bonus. Certificates of deposit CDs offer higher interest rates than traditional savings accounts in exchange for reduced withdrawal flexibility.

When you put money in a CD, you have to agree to leave the money in the account for a set period of time, called the term. For example, if you open a one-year CD, you have to leave the money in the account for a full year. One benefit of CDs is that you lock in the interest rate when you open the CD.

Once the CD term ends, you can withdraw your money or roll it into a new CD. If you roll the balance into a new CD, you have to wait for that CD to mature before having another chance to make a penalty-free withdrawal.

CD ladders combine the higher rates of CDs with some of the flexibility of savings accounts. To build a CD ladder, you need to open multiple CDs, with each maturing on a fixed schedule. For example, you could spend a year opening twelve, equally sized, one-year CDs. If you open a one-year CD each month for a year, one will mature each month the following year. That means you can access a portion of your savings each time one of your CDs matures.

In this example, instead of locking up all of your money in a single one-year CD, you can get access to portions of it at regular monthly intervals to avoid having to pay a penalty for early withdrawals in the event you need your money. Some banks offer special, high-interest savings accounts that can offer much higher rates than traditional accounts.

One of the best places to look for high-interest savings accounts is online banks. Online banks, which benefit from lower costs due to not having to operate brick-and-mortar branches, rarely charge monthly fees—and offer rates that are often ten times higher or more compared to traditional banks.

Another benefit of working with online banks is that it keeps your savings out of sight and out of mind, which can make it easier to resist the temptation to spend your savings. Some banks have started offering rewards checking accounts , which can offer higher interest rates, with a catch.

Usually, the balance that earns the elevated rate is limited, and you have to jump through some hoops to earn the bonus rate. For example, Consumers Credit Union offers interest rates as high as 4. However, to earn that rate you need to meet all the following requirements:. If you choose to use a rewards checking account, make sure that the requirements to earn the elevated interest rate are easy for you to meet.

Credit unions, unlike banks, are owned by the people, or members, who hold accounts at the credit union. This means that they work for the benefit of accountholders instead of shareholders. In some cases, that can translate into lower fees, better account perks and higher interest rates.

If you have a credit union near you, check the rates it offers, as you might be able to get a good deal. Buying a bond is like making a loan to the company or government that issues it. When the bond matures, you get your principal back plus any interest you earn.

You can buy U. Savings or Treasury bonds, or bonds issued by major companies. Each has different interest rates and repayment terms, with riskier bonds tending to offer higher rates.

Typically, yields are higher on bonds with longer terms and corporate bonds that have higher default risk. One thing to keep in mind with bonds is that they can drop in value if market rates increase. The price of a bond moves inverse to its interest rate.

As a result, if you wind up selling your bond to someone else before it matures, you might have to sell it for less than you paid.