Top 10 Best Savings Accounts for 2020

Updated: Feb 2


Credit: Adobe Stock


Cassie Schwartz

Blog Contributor

@deadlineaccounting



As the age-old saying goes, you should always pay yourself first.

It is important to save money because the future knows no limits. One day your car dies, and the next day your credit card is maxed.


Establishing a savings account before that happens will remove the financial insecurity in your life; but, with all of the options available it may be hard to know where exactly to put your hard-earned money.


Did You Know? Banks transfer funds from savers to borrowers which is known as financial intermediation.


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When searching for a savings account, there are a few things you need to know that you will thank me for later.


APY (annual percentage yield) – This term refers to the amount of compounded interest you will earn over the course of one year. When speaking of how much money an account earns, it’s common to use the term interest. However, banking regulations require banks to disclose the APY if they pay interest more than once per year.


The APY is usually one of the biggest factors evaluated when selecting an account because you want to get the most bang for your buck! It is also important to note that APYs are variable and change with the market.


Withdrawal limits – Thanks to Regulation D, savings accounts have limits on how many withdrawals you can perform a month (six). If you do more than six, there could be a fee, they can freeze your account, or they can convert the account to a checking account.


If the account is converted, your APY will more than likely change to a lower rate. The rules for each account will be outlined in the deposit agreement signed when the account is opened.


Minimum balance requirements – This requirement can be sneaky because the account could have a minimum balance to open and a minimum balance maintained.


FDIC Insurance – All of the accounts that made the cut are FDIC Insured. This means that in the event something happens to the bank, up to $250,000 of your money will be insured and returned to you.



Now that you know what to look for, here is a list of the Top 10 Savings Accounts for 2020


1. HSBC Direct Savings


APY: 2.05%

Interest Compounds: Monthly

Minimum Amount to Open: $1.00

Fees: None


It is important to note that HSBC Direct is an online bank version of HSBC. If you go into an HSBC branch, they cannot service you as a normal customer, and you cannot deposit cash.


HSBC Direct also offers checking accounts and other lending options to streamline your banking needs. There is a mobile app available, but it is not the most user-friendly on the market.



2. Capital One’s 360 Performance Savings Account


APY: 1.70%

Interest Compounds: Monthly

Minimum Amount to Open: $0.00

Fees: None


This is another fantastic option if you’re trying to start savings with nothing to save just yet. Remember the six withdrawal limit we talked about? If you exceed that Capital One will not charge you, but if it is a reoccurring situation, they will close the account..



3. Vio Bank’s High Yield Online Savings


APY: 2.02%

Interest Compounds: Daily

Minimum Amount to Open: $100

Fees: $5 paper statement fee; $10 excessive transaction fee


Vio is an up and coming online bank geared specifically towards saving product options. After opening, your balance is allowed to dip below $100 with no negative consequences.


4. Comenity Direct High Yield Savings Account


APY: 1.90%

Interest Compounds: Daily

Minimum Amount to Open: $100

Fees: $5 paper statement fee, fee for excessive transactions applicable but amount not stated


Comenity Direct is a subsidiary of Comenity Bank. This online savings bank offers a higher than average APY for savings, but does require a minimum balance to open.



5. Marcus by Goldman Sachs’ High-Yield Online Savings


APY: 1.70%

Interest Compounds: Daily

Minimum Amount to Open: $0

Fees: None


Marcus by Goldman Sachs is a Goldman Sachs brand that offers lending and savings deposit accounts. Goldman Sachs caught on that people want online-based flexibility and hit the nail on the head with this one. With no fees, $0 to open, and 1.70% APY, you can’t go wrong!



6. Ally Bank’s Online Savings


APY: 1.60%

Interest Compounds: Not Stated

Minimum Amount to Open: $0

Fees: $10 excessive transaction fee


Ally Bank is known mostly for lending but is branching out into the deposit account world. Ally only offers savings products at the moment but is an established online bank you can trust.



7. Web Bank


APY: 1.95%

Interest Compounds: Daily

Minimum Amount to Open: $1,000

Fees: None


What I liked about Web Bank is how simple and clean their website is – with that being said, I could not locate a mobile app. The APY is great, but the minimum amount to open is what landed them a spot at #7.


Another odd feature is that Web Bank does not accept checks. Online banks cannot accept cash, but they will usually have an option for mobile deposits or mailing of checks. Not Web Bank!



8. Citizen Access’ Online Savings Account


APY: 1.85%

Interest Compounds: Daily

Minimum Amount to Open: $5,000

Fees: None


The APY is appealing at 1.85% for Citizen Access, but if the account balance drops below $5,000, then the APY decreases as well. If the balance remains below $5,000 Citizen Access with close the account, which should throw some red flags for those who don’t think they can maintain $5,000.


Additionally, they don’t play around with excessive transactions and may close the account if more than 6 transactions are made in one month.



9. Citi Bank’s Savings Builder Account


APY: Tiered – 1.16%*

Interest Compounds: Daily

Minimum Amount to Open: $100

Fees: None listed


Not to be confused with Citi Bank (who didn’t make the list for their unusually low APYs), Cit Bank is an online bank that offers a tiered APY schedule.


*For balances less than $25,000 the APY is 1.16%. However, if you can commit to saving $100 monthly, the APY increases to 1.80%.



10. Popular Direct’s Ultimate Savings Account

APY: 1.90%

Interest Compounds: Daily

Minimum Amount to Open: $5,000

Fees: The King of All Fees


Although Popular Direct offers a great rate, there is a laundry list of fees to be aware of. If you close the account within 6 months there are:

  • $25 fee

  • $5/month fee for no activity within 12 months

  • Statement requests will run you between $5 - $10

  • $5 excessive transaction fees

  • And lastly, if your account balance is less than $500, there is a monthly service fee of $4.


The minimum amount to open is also a deterrent because if you’re just starting to save money, the $5,000 may be hard to swing.


Something you may notice from this list is that big-name banks are not holding the court. The bigger the name, the smaller the APY. The trade-off is that these big-name banks also have branches that you can deposit cash into and generally have a higher level of support.


#savingsaccount #savingsgoals #savingmoney

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