Which Savings Account Will Earn You the Most Money?

Consider popular options like money market accounts, certificates of deposit (CDs) and high-yield savings accounts to earn the most money with your savings. Money market accounts offer competitive rates and convenient access to funds. CDs often provide higher rates for fixed terms. High-yield savings accounts combine good returns with accessibility.

Terry Turner, Financial writer for Annuity.org
  • Written By
    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner is a senior financial writer for Annuity.org. He holds a financial wellness facilitator certificate from the Foundation for Financial Wellness and the National Wellness Institute, and he is an active member of the Association for Financial Counseling & Planning Education (AFCPE®).

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    Lamia Chowdhury
    Lamia Chowdhury

    Lamia Chowdhury

    Financial Editor

    Lamia Chowdhury is a financial editor at Annuity.org. Lamia carries an extensive skillset in the content marketing field, and her work as a copywriter spans industries as diverse as finance, health care, travel and restaurants.

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  • Financially Reviewed By
    Timothy Li, MBA
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    Timothy Li, MBA

    Business Finance Manager

    Timothy Li, MBA, has dedicated his career to increasing profitability for his clients, including Fortune 500 companies. Timothy currently serves as a business finance manager where he researches ways to increase profitability within the supply chain, logistics and sales departments.

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  • Updated: August 16, 2023
  • 10 min read time
  • This page features 6 Cited Research Articles
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APA Turner, T. (2023, August 16). Which Savings Account Will Earn You the Most Money? Annuity.org. Retrieved June 20, 2024, from https://dev.annuity.org/personal-finance/banking/which-savings-account-will-earn-you-the-most-money/

MLA Turner, Terry. "Which Savings Account Will Earn You the Most Money?" Annuity.org, 16 Aug 2023, https://dev.annuity.org/personal-finance/banking/which-savings-account-will-earn-you-the-most-money/.

Chicago Turner, Terry. "Which Savings Account Will Earn You the Most Money?" Annuity.org. Last modified August 16, 2023. https://dev.annuity.org/personal-finance/banking/which-savings-account-will-earn-you-the-most-money/.

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Key Takeaways

  • Rising interest rates have made savings accounts more competitive.
  • Online banks offer higher interest rates on high-yield savings accounts than what traditional brick-and-mortar banks offer on traditional savings accounts.
  • Different types of savings accounts have different interest rates and may be better suited for different financial goals — even if they offer lower rates.
  • When choosing a savings account, consider more than just interest rates; compare fees, minimum balance requirements, customer service and convenience.
  • Consider your risk tolerance and savings goals when choosing a savings account.

Which Banks’ Savings Accounts Will Earn You the Most Money in 2023?

Rising interest rates are making savings accounts far more competitive. Each time the Federal Reserve hikes the rates, banks have room to raise the rates they pay you for opening a savings account with them.

Online banks tend to offer much higher interest rates on high-yield savings accounts than what brick-and-mortar banks offer on traditional savings accounts.

In early 2022, the best interest rates on high-yield savings accounts were around 0.50%. By February 2023 — just a year later — some online banks were offering 5% interest rates or higher.

But you may find even better rates on certificates of deposit if you’re willing to lock in your money for a longer period of time.

However, this requires you to shop around for the best deal — and for the account that best suits your savings goal.

Traditional savings accounts, money market accounts, high-yield savings accounts, CDs, and fixed annuities are great ways to safely store your funds for a rainy day. Each option has different features, so contact a financial professional who can guide you to pick one that would work best for your financial situation.

What Types of Savings Accounts Earn You the Most Money?

There are several different types of savings accounts, as well as other options for saving money. Each tends to have their own range of interest rates — meaning, some types will let you earn more than others.

Highest earning to least earning savings type pyramid graph

It’s important to note that higher interest rates alone aren’t necessarily the best way to shop for a savings plan. Each type can address different financial goals.

You should compare all options — and consider talking with a professional financial advisor — to decide which is best for you.

Traditional Savings Accounts

Traditional savings accounts typically offer the lowest interest rates, but they also have the lowest fees and often provide the most convenience. These are available at traditional, brick-and-mortar banks and other financial institutions.

A traditional savings account is best suited for people who value quick access to their savings over higher interest rates. They are an option for people who want to grow their money long-term or to save money for a specific goal — such as a vacation or major purchase.

Money Market Accounts

Money market accounts usually offer higher interest rates than traditional savings accounts while combining features of both savings and checking accounts.

They allow you to save for a specific goal — such as buying a house or creating a college fund — while earning a higher return than with a traditional savings account, but still allow you access to your money.

A money market account typically requires you to keep a minimum balance.

High-Yield Savings Accounts

High-yield savings accounts are typically available through online banks and online credit unions. These offer steeply higher interest rates — as much as 12 times the average of traditional savings accounts and earn more than money market accounts.

A high-yield savings account is designed for someone wanting to build short-term savings quickly. These may be a good way to build an emergency fund or save for a major expense. 

Compound interest allows a high-yield savings account to earn quickly. But the interest rate is variable, meaning if interest rates drop, so does the interest you earn on the account.

Certificates of Deposits

Certificates of deposit — also known as CDs — typically have higher interest rates than high-yield savings accounts. But you will have to pay a penalty for early withdrawals

The interest rate is fixed and won’t decrease or fluctuate over the term of the CD. And CDs purchased through an FDIC-insured bank or NCUA-insured credit union are guaranteed up to $250,000 per account holder. 

CDs also use compound interest, so check the APY — annual percentage yield — to compare the actual annual return. Typically, the longer the term of the CD, the higher the interest rate.

These are an option to consider if you want your savings to earn but don’t need access to your money for a while.

Fixed Annuities

Fixed annuities typically have the highest interest rates. These are insurance contracts that allow you to save for retirement or as part of your overall retirement plan. 

They feature a fixed rate that is locked in for the duration of the annuity.

While fixed rate annuities are not well-suited for short-term goals, they can be structured to provide you with a steady income stream once you retire.

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What Should I Consider When Choosing a Savings Account?

You should consider more than just interest rates when choosing a savings account. Compare fees, minimum balance requirements, customer service and convenience to find an account that’s the best fit for you.

What To Ask Yourself When Choosing a Savings Account

How much risk is too much?

Consider your risk tolerance — how comfortable are you with taking risks? This can help you decide whether to stick with a guaranteed fixed interest rate or go with a variable rate — which can decrease if the Fed lowers interest rates.

What is your savings goal?

Different savings options are better suited for different financial goals. For example, if you’re building an emergency fund, you’ll need an option that allows you to get quick access to your money. A traditional savings, high-yield savings or money market account would be a better option than a CD, which may charge you a steep penalty if you take the money out before the CD matures.

Interest Rates and APY

Banks and other financial institutions typically highlight the APY — annual percentage yield — over the interest rate on savings accounts. The APY is the actual amount the account will earn in a year and is typically higher than the actual interest rate. 

This is due to compound interest on your savings, which allows you to earn interest on your interest over time. Ideally, you want the highest APY or interest rate to earn the most from your savings account.

Fees

Account fees can eat into your savings account earnings. Be aware of how much low-balance fees, monthly or annual maintenance fees and ATM fees will cost you.

Also understand how to avoid them and whether that works for your personal financial situation.

Minimum Deposit and Balance Requirements

Financial institutions may require a minimum initial deposit to open an account. Often, accounts offering the best interest rates require larger initial deposits. But for traditional savings accounts, these may be as little as a few dollars.

Banks may also require you to keep a minimum balance in your savings account. The bank measures your balance daily, and if the balance falls below the minimum, you may have to pay a penalty or fee.

Banks may also require you to have a checking account with the bank to open a savings account. Check all the requirements and compare them with those at other banks or financial institutions.

But if these rules don’t bother you, you may be able to get higher interest rates for keeping a higher balance, signing up for direct deposit or other services the bank offers.

Accessibility and Convenience

Traditional brick-and-mortar banks typically offer the greatest convenience and ease of access to your money. But it can come at the price of settling for lower interest rates than what online banks offer.

Traditional banks will give you nearly immediate access to your cash if you need it, whereas it may take up to 48 hours to access cash from some online banks. 

Also consider the overall customer service experience — are you more comfortable with online banking or do you prefer in-person customer service?

FDIC Insurance Coverage

Traditional brick-and-mortar banks and credit unions are federally insured — banks are insured by the Federal Deposit Insurance Corporation (FDIC) and credit unions are insured by the National Credit Union Administration (NCUA).

Online banks may or may not be federally insured, so it’s important to always ask.

If your institution is federally insured — and it fails — then your savings account is guaranteed up to $250,000 per account holder.

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How Do You Maximize Your Savings More Generally?

In addition to finding the best earning savings accounts, there are steps you can take to maximize the savings you deposit into your account.

These include steps from lifestyle changes to automation — and can add up to substantial savings over time.

Automatic Savings Plans

Once you open a savings account, set up automatic deposits. These can include direct deposit from your paycheck or automatic transfers from your checking or other bank accounts. This makes it easier for you to continue putting money into savings.

Also, consider apps that allow you to track your savings and spending. You can download your bank’s online apps and tools. These can alert you to issues with your account while allowing you to have real-time views of how your savings are performing.

Saving for a Specific Goal

Consider opening different savings accounts for specific goals. This can help you stay on track to save for a down payment on a house in one account while saving for a vacation in another.

For some people, this allows them to judge exactly where they are on both goals without setting back either goal’s savings.

Creating a Budget

Creating a budget allows you to “pay yourself first” by putting money into savings before all your money’s spent.

One idea is the 50/30/20 strategy:

  • 50% for needs — rent or mortgage, monthly bills and food.
  • 30% for wants — shopping sprees, entertainment and trips.
  • 20% for savings.

By paying yourself first with the 20% into savings, you simply must budget for the other items. Your saving becomes a habit.

Pay Off High-Interest Debt

If you have high-interest debt, it may be smarter to pay down your debt rather than putting money into savings. 

The interest rate on credit card debt can be four times what you earn on any savings account. Paying off the debt will free up more money to save when the debt is gone.

Frequently Asked Questions About Highest Earning Accounts

What is a savings account and how does it work?

Savings accounts are basic financial products that allow you to save money while earning interest. The Federal Deposit Insurance Corporation insures your account up to $250,000 if it is in an FDIC-insured bank. The National Credit Union Administration provides the same level of protection if your account is in an NCUA-insured credit union.

What are the different types of savings accounts?

There are a wide variety of savings accounts designed to meet different savings goals. These include traditional savings accounts, high-yield savings accounts, money market accounts, certificates of deposit — or CDs — cash management accounts for investors and speciality savings accounts such as Christmas clubs or student savings accounts.

What is a high-yield savings account and how does it differ from a traditional savings account?

High-yield savings accounts pay much higher interest on your savings than traditional savings accounts. High-yield savings account rates may be as much as 20 times as much as the average rate for savings. They may require minimum balances and limit the number of withdrawals you can make.

What is a money market account and how does it differ from a savings account?

A money market account is similar to a savings account, offering a variable interest rate on the money in the account. But the money market account allows you to pay bills, write checks or use a debit card with your account.

What factors should I consider when choosing a savings account?

In addition to the best interest rates, you should also consider costs and convenience. Consider things such as an initial deposit or minimum balance requirement, account fees, rate tiers based on your balance and how easy it is to use and access your money.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: August 16, 2023

6 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

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  2. Folger, J. (2023, March 10). Americans Could Be Earning Billions More in Interest. Here’s How. Retrieved from https://www.kcra.com/article/fed-rate-hike-online-bank-interest-rates/42939207
  3. Bendig, E. (2023, February 27). What Is a High-Yield Savings Account? Retrieved from https://www.kiplinger.com/personal-finance/banking/what-is-a-high-yield-savings-account
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  5. Barnes, B. (February 15). Interest on Bank Accounts Too Low? Consider Changing Banks. Retrieved from https://www.kiplinger.com/personal-finance/low-interest-on-bank-accounts
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