The Best Savings Accounts of August 2020: Editors' Choice

The Best Savings Accounts of August 2020: Editors' Choice

Our best savings accounts consistently out-yield the national average by 1.00% or more. We've reviewed the best rates offered by thousands of banks and credit unions to make sure we're featuring the highest rates around.

Why trust us

To find the best savings accounts, we looked at nationally available offerings from over 6,500 federally insured banks and credit unions, courtesy of DepositAccounts.com, another LendingTree-owned company.

We ranked the best savings accounts by rate, from the highest to the lowest. We also took into consideration each account’s minimum deposit and monthly fee. Each bank is insured by the Federal Deposit Insurance Corporation and each credit union is insured by the National Credit Union Administration, unless otherwise stated.

We will update this list regularly to give you the most recent, best savings accounts with the highest rates.

Best savings accounts in August 2020


First Foundation Bank — 1.00% APY

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  • Minimum deposit to open: $1,000
  • Balance to earn APY: $0.01-$5,000,000
  • Monthly fee: $0

Highlights: The First Foundation Bank Online Savings account has consistently offered one of the highest savings account interest rates out there. It earns its competitive 1.00% APY on almost all balances, maxing out at $5 million. Balances above that amount will earn a 0.35% APY instead.

Plus, there are no monthly services fees or fees for transactions either to or from the account.

What to watch out for: To open an account and start earning, you must fund the Online Savings account with $1,000 in new money, meaning money not already held at the bank. If you already keep all of your money with First Foundation Bank, you may not be able to take advantage of this rate.


Nationwide by Axos Bank — 1.05% APY

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  • Minimum deposit to open: $100
  • Balance to earn APY: $0.01+
  • Monthly fee: $0

Highlights: The 1.05% APY applies to your My Savings account balance when you also have a My Checking account that receives a monthly direct deposit totaling at least $1,000. If you don’t want the My Checking account, you can still earn a 1.00% APY on your My Savings account balance.

Luckily, there’s no monthly fee or minimum balance to worry about with this account.

What to watch out for: Nationwide by Axos Bank is a “limited marketing relationship” between the two companies, so this deal may not last forever. Your deposits in a Nationwide by Axos Bank account are considered Axos Bank deposits under FDIC insurance.


Vio Bank — 1.01% APY

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  • Minimum deposit to open: $100
  • Balance to earn APY: $0.01+
  • Monthly fee: $0

Highlights: Although relatively new to the scene, Vio Bank is a common savings account rate leader with its free High Yield Savings account. You need at least $100 to open an account, but its rate applies to all balances.

What to watch out for: While there’s no monthly service fee, you’ll face a $5 monthly fee if you get paper statements. Also note that Vio Bank is a division of MidFirst Bank, so Vio Bank deposits are considered MidFirst Bank deposits under FDIC coverage.


Axos Bank — 0.90% APY

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  • Minimum deposit to open: $250
  • Balance to earn APY: $0.01+
  • Monthly fee: $0

Highlights: Once you open an Axos Bank’s High Yield Savings account with at least $250, you can start taking advantage of its great offerings. After that, there’s no minimum balance requirement to worry about, and the account earns its competitive rate on all balances.

Plus, you can request a free ATM card. You can use the Axos mobile app or website to find free ATMs near you.

What to watch out for: Axos Bank doesn’t offer reimbursements for ATM surcharges paid with the High Yield Savings account ATM card.


ConnectOne Bank — 0.90% APY

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  • Minimum deposit to open: $2,500
  • Balance to earn APY: $2,500 - $250,000.99
  • Monthly fee: $0

Highlights: Set apart from ConnectOne Bank’s traditional bank accounts, the ConnectOne Bank online-only OneConnection Savings account offers a more competitive rate to customers nationwide. You’ll need at least $2,500 to open this account. There is no monthly fee.

What to watch out for: The account’s competitive interest rate doesn’t apply to all balances. You can earn the 0.90% APY with an account balance from $2,500 to $250,000.99, while balances over that amount will earn a lower 0.30% APY.


CIBC Bank USA — 1.05% APY

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  • Minimum deposit to open: $1,000
  • Balance to earn APY: $0.01+
  • Monthly fee: $0

Highlights: The CIBC U.S. Agility Online Savings Account earns its rate on all balances. You’ll need at least $1,000 to open the account, but your opening deposit cannot exceed $250,000.

There is no maintenance fee on the account.

What to watch out for: The maximum balance you can keep in an Agility Online Savings Account is $1 million. Also note that you cannot make external transfers with CIBC NetBanking online portal for the first 30 days after account opening.


Marcus by Goldman Sachs — 0.80% APY

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  • Minimum deposit to open: $0
  • Balance to earn APY: $0.01+
  • Monthly fee: $0

Highlights: A common industry leader, Marcus by Goldman Sachs offers its competitive savings rate on all Online Savings Account balances. It doesn’t require a minimum deposit to open, nor is there a monthly fee.

Marcus also offers same-day transfers of $100,000 or less. You can access your account online and on the Marcus mobile app, which is available on the App Store and Google Play.

What to watch out for: Like most online savings accounts, the Marcus by Goldman Sachs Online Savings Account does not allow for cash deposits or withdrawals. Instead, you’ll have to turn to wire and online transfers.

Additionally, the maximum balance allowed is $1 million, which may be a damper for some.


Fitness Bank — 1.05% APY

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  • Minimum deposit to open: $100
  • Balance to earn APY: $100+
  • Monthly fee: $10, waived with $100 minimum balance

Highlights: Fitness Bank offers customers a unique — and healthy — way to grow your money. Your interest rate depends on the average number of steps you take each month; the more steps you take, the higher your interest rate. The 1.05% APY applies for those with 12,500 steps or more in a month.

You’ll need to open the Fitness Savings Account with at least $100, which is the same amount you’ll need to earn interest. Incoming wire transfers to the account are free.

What to watch out for: The account isn’t totally fee-free. There is a $10 monthly maintenance fee, which you can waive with an average daily balance of at least $100. There’s also a $10 excessive withdrawal fee for each debit transaction beyond the six allowed.

The Fitness Savings Account also caps balances to $250,000, so those with higher balances may want to check elsewhere. Also keep in mind that Fitness Bank is a division of Newton Federal Bank, so FitnessBank deposits are considered Newton Federal Bank deposits for the purpose of FDIC insurance.


Synchrony — 0.75% APY

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  • Minimum deposit to open: $0
  • Balance to earn APY: $0.01+
  • Monthly fee: $0

Highlights: Synchrony Bank offers a unique deal on its High Yield Savings account with an optional ATM card, a perk not generally included with savings accounts. Taking advantage of this offer means you can access your money more easily at Plus or Accel ATMs for free. Synchrony will also refund up to $5 per statement cycle in domestic ATM fees.

Plus, all balances earn interest at its competitive 0.75% APY, and there is no monthly fee to worry about.

What to watch out for: While you can make withdrawals with the optional ATM card provided, you cannot make deposits into the account with the card. Instead, you can deposit money through online transfers, wire transfers, mobile check deposit on the Synchrony Bank mobile app or by mailing a check to Synchrony.


Discover — 0.95% APY

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  • Minimum deposit to open: $0
  • Balance to earn APY: $0.01+
  • Monthly fee: $0

Highlights: Discover’s Online Savings Account is accessible to a variety of customers with its $0 minimum deposit and balance requirements. In other words, you can take advantage of its rate no matter your balance.

In addition to its high rate, the Online Savings Account is pretty fee-friendly, too. There are no fees for monthly maintenance, bank checks, deposited items returned, excessive withdrawals, insufficient funds and more.

What to watch out for: Discover Bank operates entirely online, which means you won’t be able to make cash deposits or withdrawals directly from this account. You can, however, open a Discover online checking account and transfer funds in for access through ATM withdrawals. Both accounts can managed through the same online banking interface. Discover's Online Savings Account also allows you to deposit checks through its Mobile Check Deposit feature.

Summary of the best savings accounts

Here's a summary of all the savings accounts we looked at above, listed with their most relevant features and fees.

BankAPYOpening minimum
First Foundation Bank1.00%$1,000
Nationwide by Axos Bank1.05%$100
Vio Bank1.01%$100
Axos Bank0.90%$250
ConnectOne Bank0.90%$2,500
CIBC Bank USA1.05%$1,000
Marcus by Goldman Sachs0.80%$0
Fitness Bank1.05%$100
Synchrony0.75%$0
Discover0.95%$0

More best savings accounts

  • Ally Bank - 1.00%
  • American Express National Bank - 1.00%
  • Barclays Bank - 0.80%
  • BrioDirect - 0.95%
  • Capital One - 0.80%
  • CIT Bank - 0.75%
  • Citizens Access - 0.80%
  • Live Oak Bank - 0.85%
  • Prime Alliance Bank - 1.01%
  • SFGI Direct - 1.01%
  • SmartyPig - 1.25%

What is a savings account?

A savings account is an interest-bearing account typically used to hold and grow extra cash, whether for a specific goal or for a rainy day.

To get more technical, savings deposits are defined by the Federal Reserve’s Regulation D as those that traditionally have a cap on the number of “convenient” transfers or withdrawals out of the account you can make each month, and that reserve the right to require advance notice before making a withdrawal from your account.

In light of the coronavirus pandemic, the limit on “convenient” transfers is temporarily lifted. “Convenient” includes transfers and withdrawals that are preauthorized, automatic and telephonic, and made by check, debit card or similar by the depositor and payable to third parties.

How do savings accounts work?

Savings accounts earn interest on your balance in the account. Depending on the bank and the account, it can earn interest daily, monthly, quarterly, semiannually or even annually. Savings account rates are variable, which means they can change at any time.

Some savings accounts may require a minimum balance or qualifying transactions to earn its APY. But many — as shown in our list above — earn interest on all balances.

You can access your savings account funds at any time. Just remember that savings accounts are still usually held to the six “convenient” transfer and withdrawal limit mentioned above. While the reservation of rights to require advanced notice of withdrawals also technically applies, banks rarely exercise this right.

What are the different types of savings accounts?

There are a few different labels attached to savings accounts based on certain features, but they all generally function in the same way. A couple of common savings account types are:

Online savings account

A standard savings account that is available only online.

High-yield savings account

A savings account that earns a high interest rate.

A money market account is a type of savings account under Regulation D, although they’re often marketed differently by banks. Money market accounts tend to include a debit or ATM card and check-writing abilities, and often earn at higher rates than savings accounts.

Savings accounts may also vary by ownership type. This usually does not change the basic function of the savings account, though it may change the maximum FDIC insurance available on the account. Here are a few different available ownership types for savings accounts:

  • Individual savings account: A savings account for one person. The standard approach to savings accounts, this makes you the sole owner and manager of the account unless you authorize someone else to have access.
  • Joint savings account: A joint savings account is one in which two or more people share equal access to the account.
  • Custodial account: This type of savings account has a designated custodian who manages the funds for a minor. The minor assumes account ownership when they turn 18 or 21 years old, depending on the state. Common custodial accounts include UGMA (Uniform Gift to Minors Act) and/or UTMA (Uniform Transfer to Minors Act) accounts.
  • Payable on Death (POD) account: A savings account where the owner has designated beneficiaries who inherit the funds saved in the account after the owner dies.

Important savings account terminology

Annual Percentage Yield (APY): Often the main focal point of a savings account, the APY is the rate of growth based on compounding over the course of a year.

Compound interest: Not all savings accounts grow your money at the same pace. Compounding is how often your money earns interest and rolls over to earn even more interest. Compounding can happen daily, monthly, quarterly or annually, depending on your account and institution.

Interest rate: The simple interest rate is the rate at which your money would grow. Unlike APY, interest rate is not calculated for a specific period of time.

Minimum balance requirement: Many savings accounts require you to maintain a minimum balance in the account. This may be to simply keep the account open or to earn a certain interest rate.

Monthly maintenance fee: This is a fee for simply owning the account. You may be able to waive the monthly fee on some accounts by meeting certain requirements, often a minimum balance.

Liquidity: Liquidity refers to the accessibility of your money. Savings accounts offer some liquidity, as you can access your cash relatively quickly and easily. However, some liquidity is lost due to the FDIC transaction limits.

Yield: A savings account’s yield is the amount that it earns at a given rate. For example, an account would yield about $5 in six months on a $1,000 deposit at a 1.05% APY.

Savings account FAQs

Why are savings rates important?

Savings rates are important because they indicate how much growth you could see on your account. When shopping for rates, you’ll want to look for the highest rates first, as you’ll earn more there than with a lower rate account.

For example, say you have $2,000 to deposit into a savings account. If you choose a high-yield savings account at 1.05% APY, you’ll earn $21 and some change in a year, assuming you don’t make any additional deposits into the account, which would boost your savings even more. Compare that with the yearly earnings of just $0.20 on a savings account with a 0.01% APY.

Do savings rates change over time?

Yes, savings account rates are variable. They can change at any time, and depending on the issuing institution, they may change without warning.

However, you can often tell when savings account rates are changing if you pay attention to the signs. If the economy is doing well, there’s a chance that savings account rates are on the rise

of course, the opposite is true, too.

If you really want to dive into what affects savings account rates, you can watch the federal funds rate set by the Federal Open Market Committee. When the Fed makes a change to the federal funds rate, savings accounts — and other deposit accounts — rates soon follow.

What are the typical fees associated with my savings account?

  • Monthly maintenance fee
  • Paper statement fee
  • Overdraft fee
  • Nonsufficient funds fee
  • Excessive transaction fee

A common savings account fee to watch out for is the monthly service fee, or monthly maintenance fee. This is a fee charged by institutions for owning the account. Luckily, many of the best savings accounts don’t charge a monthly service fee. Other accounts may offer a way to waive the fee, often by requiring a minimum deposit amount or certain monthly transactions.

Fees for overdrafts, nonsufficient funds and excessive transactions are other common — but easily avoidable — fees. Overdrafts occur when you pull more money from the account than you actually have in there. Some institutions may also charge a nonsufficient funds fee, penalizing you for not having enough money in the account. An excessive transaction applies when you go over the typical six-transaction limit set for savings accounts. Not all savings accounts charge this fee.

You also could end up facing a monthly fee if you opt for paper statements instead.

Do I pay taxes on my savings account?

Yes, you will owe taxes if you make $10 or more in interest. In that case, your institution will send both you and the IRS a copy of tax form 1099-INT, which documents the interest you earned. You must report that earned interest on your tax return, even if you don’t receive a 1099-INT from your bank.

If you’re lucky enough to have earned $1,500 or more in interest, you also must detail the sources of that income on Schedule B of the 1040 Form.

Your earned interest is taxed at the same federal tax rate as your other earned income.

Is my money protected in a savings account?

If you have a savings account that is FDIC-insured or NCUA-insured, then your money is protected in your savings account.

The Federal Deposit Insurance Corporation (FDIC) regulates and insures most banks, while the National Credit Union Administration (NCUA) regulates and insures most credit unions. You can check whether your bank or credit union is insured by these institutions on the bank’s or credit union’s website, through the FDIC’s Bank Find tool or through the NCUA’s Research a Credit Union tool.

The FDIC and NCUA insure deposit accounts up to legal limits. For an individual’s account, this typically amounts to $250,000.

Savings accounts may also be protected by a bank’s own technological security measures. This often includes firewalls, encryption, two-factor authentication, antivirus and malware protection and anti-fraud alerts.

When should I use my savings account?

  • Catch-all savings account
  • Emergency savings fund
  • Specific savings goals

You can use savings accounts for a few different purposes. For one, you can use a savings account as the main place to stash the cash you don’t need immediately. You might even consider keeping most of your liquid funds in a high-yield savings account instead of in your checking account to earn the most interest you can. You can also use a savings account to house your emergency fund.

Luckily, you can have several savings accounts open at one time, often at the same institution. That way, you can set up each account with a specific purpose and more easily keep your savings pots separate.

Should I open a savings account at a bank or credit union?

If it’s the best savings account rates you’re after, your best bet is an online bank. Without the cost of branches to maintain, online banks often offer the highest savings account rates in the industry. Online savings accounts are also more likely to charge less in fees, if at all.

Generally though, the decision between a bank and credit union comes down to personal preference. At credit unions, you are a member rather than a customer, which means you can be involved in the decision-making processes of the institution. Credit unions can also offer a community, as their memberships are often based on existing organization affiliations and geographic locations. Of course, local banks can also offer a community feel.

Should my savings and checking accounts be at the same bank?

Keeping your savings and checking accounts at the same bank will certainly offer a level of convenience that you might value. This arrangement should make for easier and faster transfers between the two accounts.

However, where you keep your checking account may not offer the best savings account option. If you’re looking to really grow your money at the best possible rate, consider splitting up the two accounts so you can take advantage of the best accounts for your situation.

Lauren is a Deposits and Investing Writer for ValuePenguin, with years of experience chasing the best savings account rates out there. She also covers deposits and investing for MagnifyMoney and DepositAccounts. Lauren’s work has been covered by the New York Times, Wall Street Journal, MSN, Univision, Acorns and more. Lauren graduated from the University of Rochester, where she majored in English. Prior to joining LendingTree, she was a writer at SmartAsset.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.