Money·6 min read

Want Your Money to Work Harder? Hint: Choose the Right Savings Account

A woman considering different savings account options
Design: theSkimm | Photo: Getty Images
April 22, 2022

While they might have the same name, not all savings accounts are the same. Some really are better than others. If you’re comparing your options, here are a few things to consider to make sure you choose the best one for you. 

Remind me. How does a savings account work?

A savings account is pretty straightforward. You put money in, and it earns interest over time.There’s no minimum amount of time needed (like there would be with a certificate of deposit, aka a CD). And the money won’t be invested (like it would be in a brokerage account.) You also probably won’t get a debit card or be able to write checks (like you would with a checking account). 

A savings account is a great place to park money you’d like to see grow while also being able to access it easily. And that shouldn’t be anywhere that requires more time to grow (see: an investment account) if you plan to tap into those funds soon. Think: Your emergency fund, wedding savings, or cash for a new car

Got it. And what’s the difference between a checking vs. savings account again?

A savings account can help you earn interest on your money. (Psst…most checking accounts don’t earn interest.) According to the Federal Deposit Insurance Corporation (aka FDIC), a standard savings account earned 0.06% in March 2022. Now compare that to a checking account, which when it does earn interest, gets about 0.03%. Not ideal. Especially when you consider a high-yield savings account can earn up to 0.5% interest. 

Another difference: Savings accounts have limited withdrawals per month. Checking accounts generally don’t. The Federal Reserve Board’s Regulation D is a law that regulates savings accounts and only allows six withdrawals (or outgoing transfers) per month. Checking accounts aren’t bound to this rule. If you need to take money out often, you might want to keep money in a checking account. But if not, a savings account could be right for you.

Now, what’s the difference between a money market account vs. a savings account?

Money market accounts might have higher interest rates than savings accounts. But they may come with more restrictions. And you might be able to access a money market account through checks and a debit card, just like you would with a checking account. But, you may find that they have higher deposit or balance minimums than a savings account would. 

Okay, break it down. How do I choose the right savings account for me?

To settle on the best savings account for you and your money, there are a few questions to consider… 

1. How will you use it?

Start with the end in mind. How do you want to use your savings account? If you need quick access, you might want to open a savings account at a bank you already work with. If you’ve got your eye on higher rates, opening a high-yield savings account at a credit union or other institution might be right for you. 

2. What features are you looking for?

Want a savings account where you can save for goals in different buckets? If so, you might want to look for a savings account that offers this feature. Plenty of online banks do, including Ally and Betterment. 

Also consider: 

  • Service fees. Plenty of savings accounts don’t have them.

  • Minimum deposit or balance requirements. Make sure these fit your needs. Oh, and see if the interest rate changes based on the amount you’ll deposit, and factor that into your decision. 

  • App accessibility or ease of use. Want to be able to save from your phone? Keep this in mind as you comparison shop.

  • FDIC insured. The FDIC backs money deposited into savings accounts, generally up to $250,000. Make sure that yours does, too. 

  • Direct deposit or automation capabilities. Want to be able to automate your savings? Make sure your new account can handle it.

3. What interest rate options are available to you?

See what interest rates are out there for the balance you’re planning on saving. Compare how often the interest compounds, too. (Hint: The more often it compounds, the more you’ll earn.) 

4. What are your money goals?

You might not find a savings account that ticks every box. But, it’s highly likely that you’ll find one that ticks most of them. If all else fails, prioritize the one with the highest interest rates, and lowest fees. You can also consider savings accounts that take certain needs into account. Such as…  

Wanting to save for your child’s future

If you recently had a baby and want to start saving for their future, a child savings account could be the way to go. For this type of account, consider any minimum balance requirements, monthly fees, and how the account can grow with them as they get older.

Sharing funds with your significant other

Are things getting serious in your relationship? Thinking about combining your finances with your partner? It might be time to get a joint savings account. Either person can add (or withdraw) funds. Make sure that you’re both able to easily access the accounts the way you’d like to. 

Looking to get in on the crypto craze

Consider bitcoin or crypto savings accounts. Heads up: They’re only savings accounts in name. While they might offer interest rates in the single digits, they won’t be able to safeguard your crypto the way the FDIC can back your cash. (Read: If the company holding your crypto goes out of business, so does your crypto.) 

How many savings accounts should I have?

There’s no set number that works for everyone, but you can definitely have more than one. And sometimes it’s helpful to have more than one. Like if you want to keep your savings at a separate bank from your checking account. Because out of sight and out of mind. (And out of reach for you to tap into to fund your Doordash habit.) Or if you want to save for lots of different goals. (Hello, new car fund and summer vacay savings.)


There’s no one savings account that’s perfect for everyone, but there is one out there that’s perfect for you. Look at interest rates, fees, ease of use, and how you intend to save money to find the right fit for you.

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