The best rate depends on what you're willing to do, not which bank has the biggest name
The bank with the highest savings rate is almost never the one where you have your checking account. Big national banks like Chase, Bank of America, and Wells Fargo typically offer savings rates between 0.01% and 0.05% annually. Online banks and credit unions often pay 4% to 5.35% on the same money—sometimes more. The catch is that the highest rates change weekly, so there is no permanent winner, only the bank offering the best rate this week.
Where you should keep your savings depends on three things: how much you have, how often you need to move it, and whether you want to talk to a person or handle everything online. A rate that looks best on paper might come with withdrawal limits, account minimums, or a website that frustrates you. The real best rate is the one you'll actually use.
Key Takeaways
- Online banks and credit unions typically pay 4% to 5.35% on savings accounts, while national banks pay closer to 0.01% to 0.05%.
- The highest rate changes weekly, so checking a rate-comparison site before opening an account takes five minutes and can save you hundreds of dollars per year.
- Some banks require a minimum deposit (often $1,000 to $25,000) or limit how many times you can withdraw money each month.
- Credit unions may require membership in a specific group or employer, but often pay rates as high as online banks with lower minimums.
Online banks offer the highest rates because they have no branches
Online banks have lower overhead than brick-and-mortar banks, so they pass the savings to depositors through higher interest rates. Banks like Marcus (owned by Goldman Sachs), Ally, American Express Personal Savings, and Discover Bank regularly compete for the top rate, with current offerings ranging from 4.5% to 5.35% depending on the week. These rates are real—you can open an account and start earning that rate immediately.
The tradeoff is that you cannot walk into a branch or talk to a teller in person. Everything happens online: opening the account, depositing money, moving it to another bank, and handling problems. If you are comfortable with a mobile app and email support, online banks are usually the fastest way to earn a higher rate. If you need to deposit cash or speak to someone on the phone, you will need a different option.
Most online banks have no monthly fees and no minimum balance requirements, though a few require $1,000 or $2,500 to open. Check the terms before you sign up—a 5% rate with a $25,000 minimum is not better than 4.8% with no minimum if you only have $10,000 to save.
Credit unions often match online bank rates with lower minimums
Credit unions are member-owned financial institutions that sometimes pay rates equal to or higher than online banks. The National Credit Union Administration (NCUA) insures deposits up to $250,000, just like the FDIC does for banks. Some credit unions are offering 5% or higher on savings accounts right now, with minimums as low as $500 or no minimum at all.
The catch is membership. You cannot simply open an account at any credit union—you have to belong to the group it serves. Some credit unions are open to anyone who lives or works in a certain county. Others require you to work for a specific employer, belong to a union, attend a particular church, or be related to a current member. A few allow you to join by making a small donation to a nonprofit they sponsor.
If you already belong to a credit union through your employer or community, call and ask what rate they are currently offering on savings. If the rate is competitive and you like the idea of a local institution, it may be worth staying. If you do not belong to one yet, websites like CO-OP and Shared Branch let you search for credit unions by location or employer to see if you are may be able to access.
National banks pay low rates but offer convenience
Chase, Bank of America, Wells Fargo, and Citibank have thousands of branches and 24/7 phone support. If you need to deposit cash, speak to someone in person, or move money quickly across multiple accounts, a national bank is simpler. The downside is that their savings rates are typically 0.01% to 0.05% annually—meaning $10,000 earns $1 to $5 per year.
Some national banks offer slightly higher rates on savings accounts if you maintain a large balance (often $100,000 or more) or link the account to a checking account with direct deposit. Even then, the rate rarely exceeds 1%. If you have $10,000 in savings, keeping it at a national bank instead of an online bank costs you roughly $400 to $500 per year in lost interest.
National banks make sense if you are already using them for checking and you value the ability to walk into a branch. They do not make sense if your only reason for staying is habit or brand recognition. Moving money to an online bank takes about 10 minutes and a few days for the transfer to clear.
How to compare rates and find the current best offer
Interest rates on savings accounts change constantly. A bank offering 5.3% this week might drop to 4.9% next month if rates fall or competition eases. Before opening any account, check a rate-comparison site like Bankrate, DepositAccounts, or DepositRates to see what multiple banks are offering on the same day. These sites update daily and let you filter by minimum deposit, account type, and whether you want an online or in-person bank.
When you find a rate you like, read the account terms before opening it. Look for: the minimum deposit required, whether there are monthly fees, how many withdrawals you can make per month (some accounts limit you to six), and whether the rate is promotional (meaning it might drop after a few months). A promotional rate is fine if you plan to move the money anyway, but if you want to keep it there long-term, choose an account with a regular rate that is not advertised as temporary.
Once you have narrowed it down to two or three banks, open the account with the highest current rate that meets your needs. You can always move the money later if a better rate appears. Most online banks make it easy to transfer money in and out using your existing bank account information.
Money market accounts and CDs pay more if you can lock up your money
If you do not need to touch your savings for a set period, a certificate of deposit (CD) or money market account often pays more than a regular savings account. CDs lock your money away for a fixed term—typically three months to five years—in exchange for a higher rate. If you withdraw early, you pay a penalty, usually equal to a few months of interest.
Money market accounts work like savings accounts but pay a higher rate in exchange for a larger minimum deposit (often $2,500 to $10,000) and sometimes a limit on how many withdrawals you can make per month. The rate on a money market account can change, whereas a CD rate is locked in for the entire term.
Right now, online banks are offering CD rates from 4.5% to 5.5% depending on the term, and money market accounts from 4.5% to 5.3%. These rates are higher than regular savings accounts because the bank knows it can use your money for longer without you pulling it out. If you have money you will not need for at least six months, a CD or money market account is worth comparing alongside regular savings accounts.
Frequently Asked Questions
Is my money safe in an online bank?
Yes, as long as the bank is FDIC-insured. The FDIC (Federal Deposit Insurance Corporation) protects deposits up to $250,000 per account holder per bank, whether the bank has branches or not. Check the bank's website or call to confirm it is FDIC-insured before opening an account. Credit unions are insured by the NCUA up to the same limit.
Can I move my money out of an online bank if I change my mind?
Yes. You can transfer money out to another bank account at any time, and the transfer usually takes one to three business days. There are no penalties for closing a savings account or moving your balance. The only exception is CDs, which charge an early withdrawal penalty if you take the money out before the term ends.
What if the interest rate drops after I open the account?
Banks can lower rates at any time, and they often do when the Federal Reserve cuts rates. Your existing balance will earn whatever the new rate is. You are not locked into the rate you saw when you opened the account unless you have a CD. If rates drop significantly, you can move your money to a bank offering a higher rate.
Do I need a minimum deposit to open a savings account?
Most online banks have no minimum deposit—you can open an account with $1. Some require $500 to $2,500 to earn the advertised rate, or they offer a lower rate if your balance is below the minimum. Check the terms for each bank before opening. Credit unions vary widely, from no minimum to $1,000 or more.
How much more money will I actually make with a higher interest rate?
On $10,000, the difference between 0.05% (a national bank) and 5% (an online bank) is roughly $495 per year. On $50,000, it is roughly $2,475 per year. The higher your balance and the longer you keep it there, the bigger the difference. Even small rate differences add up over time, which is why comparing before you open an account matters.