I know I need to save more money. I also know one way to save is to make sure my saved funds are earning interest. Yet I have to admit, the interest my current savings account is paying is, well, abysmal. So as part of my financial goals, I decided to investigate my savings account options. I hope what I’ve learned helps you too!

Types of interest-bearing savings accounts

The first thing I learned is that there are different types of savings accounts.

  • Regular: A regular (also called "day-to-day" or "goal") savings account is the standard savings product most banks offer. You can typically link it to your checking account. It’s usually free (so long as you adhere to any minimum balance requirements). Expect very low interest rates around 0.1%.
  • Online: For tech-savvy savers, online savings accounts can make it harder to withdraw funds—a plus if you struggle to save. Also, interest rates tend to be higher (0.85 – 1.05+%).
  • High-interest: A high-interest (also called "high yield") savings account is all about interest rates. Some of the highest interest rates for these accounts are offered online.

The best savings account for your age bracket

Experts offer helpful recommendations for selecting the right account for your savings stage.

  • Toddler to teen: Regular.
  • 20s: Online/high-interest.
  • 30s: Online/high-interest.
  • 40-50s: Online/high-interest savings account.
  • 60+: Online/high-interest (or an IRA-based savings account).

How to select an interest-bearing savings account

It won't take long to realize you have plenty of options when choosing a high-interest savings account. Use these guidelines to select the best one for your needs.

  • Interest rate: Obviously, it would be great to get the highest interest rate possible!
  • Type of interest rate: "Simple interest" is the daily interest paid on the account. APY (annual percentage yield) is the total interest the account would earn if you don't make any withdrawals for 12 months.
  • Required initial deposit: This is the amount you must initially deposit in order to qualify to open a high-interest savings account.
  • Minimum balance: Once you have opened the account, this is the amount you must keep in the account at all times (or you’ll incur fees).
  • Account links: Are you permitted to link other accounts (within or outside the bank) to your high-interest savings account?
  • Additional fees: What, if any, additional fees are there, and how are they assessed?
  • Transactions: How many transactions are you permitted per month/year (typically deposits are unlimited, but withdrawals may be limited).
  • Withdrawing funds: How can you withdraw your funds? Typical options are via ATM (there may be an extra fee), by writing a check against the account, or via electronic funds transfer.
  • How can you make deposits: The more options here, the better—look for ATM, online transfers, in-person, by mail, wire transfer, etc.
  • Additional requirements: Are you required to have another account with the bank to open a high-interest savings account?

The 5 best high-interest savings accounts

These savings accounts are widely considered to offer the best interest rates and terms as of January 2015.

1. GE Capital Bank

  • APY interest rate: 1.05%
  • Website: https://www.gecapitalbank.com/savings-products/online-savings.html
  • Type: Online-only
  • Restrictions: No minimum initial deposit or regular balance, no account or transaction fees; by law only six withdrawals can be made per month.
  • Linked accounts allowed: Yes
  • How to open: You can open an account online and transfer funds in via electronic transfer, direct deposit, wire transfer or mailing a check.

2. My Savings Direct (Emigrant Bank)

  • APY interest rate: 1.05%
  • Website: https://www.mysavingsdirect.com/MySavingsDirectWeb/index.jsp
  • Type: Online-only
  • Restrictions: No minimum initial deposit or regular balance, no account or transaction fees; by law only six withdrawals can be made per month.
  • Linked accounts allowed: Yes
  • How to open: You can open the account online and transfer in funds by snail mail check or from a linked checking account.

3. Barclays Bank

  • APY interest rate: 1.00%
  • Website: https://www.banking.barclaysus.com/online-savings.html
  • Type: Online
  • Restrictions: No minimum initial deposit or regular balance, no account or transaction fees; by law only six withdrawals can be made per month.
  • Linked accounts allowed: Yes
  • How to open: You can open the account online and transfer in funds by snail mail check, direct deposit or from a linked checking account. Future deposits can also be made by computer or smart phone scan.

4. Synchrony Bank

  • APY interest rate: 1.00%
  • Website: https://www.myoptimizerplus.com/banking/products/high-yield-saving/index.htm?UISCode=0000000
  • Type: Online
  • Restrictions: No minimum initial deposit or regular balance, no transaction fees, $5 monthly account fee can be waived if you keep $30 in the account at all times; by law only six withdrawals can be made per month.
  • Linked accounts allowed: Yes
  • How to open: You can open the account online and transfer in funds by snail mail check, wire transfer or from a linked checking account. From here, you can also make deposit and withdrawals with a Synchrony Bank ATM card or mobile banking.

5. Ally Bank

  • APY interest rate: 0.99%
  • Website: http://www.ally.com/bank/online-savings-account/
  • Type: Online
  • Restrictions: No minimum initial deposit or regular balance, no account or transaction fees; by law only six withdrawals can be made per month.
  • Linked accounts allowed: Yes
  • How to open: You can open the account online and transfer in funds by snail mail check, wire transfer, direct deposit or from a linked checking account.
Ways to Gain Interest: Open an Interest-Bearing Savings Account