Best Free Savings Accounts of 2021 - Investopedia

Best Free Savings Accounts
Best Free Savings Accounts
  • Ally Bank Online Savings Account
  • Axos Bank High Yield Savings
  • Synchrony Bank High Yield Savings
  • Betterment Cash Reserve
  • Capital One 360 Performance Savings
  • Final Verdict
  • Compare Providers
  • How to Choose
  • Free vs. Traditional
  • FAQs
  • Methodology

Best Overall : Ally Bank Online Savings Account


Ally Bank

 Ally Bank

  • Minimum deposit: $0
  • Fees: None
  • APY: 0.50%
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Why We Chose It

Ally Bank wins as the best overall free savings account thanks to its high APY, minimal fees, and extra features that help you boost your savings rate.

Pros & Cons
Pros
  • High APY

  • No fees or account minimums

  • Savings boosters and buckets help you increase your savings rate

Cons
  • No ATM card

  • No physical branches

  • $20 fee for outgoing domestic wire transfers

Overview

Ally Bank's Online Savings Account comes with no minimum opening deposit requirement, no minimum balance requirements, and no monthly service fees. On top of that, you'll earn a generous 0.50% APY to help you build your savings account balance. 

Ally Bank has a few unique features that encourage you to increase your savings rate. Rather than having to open multiple accounts for different savings goals, Ally Bank lets you create "savings buckets" within your account that you can nickname and distribute your money across. Their savings boosters include recurring transfers, round-ups, and the ability to link a checking account to let Ally analyze where you have a little wiggle room in your budget to save more.

This bank is fully online, which means they're able to offer products with lower fees and higher returns. However, it also means you won't be able to visit any physical branches. Finally, this savings account doesn't come with an ATM card, but you can open a linked Ally checking account if you want to have immediate access to your savings. Funds kept with Ally Bank are FDIC-insured on up to $250,000.

Read the full Ally Bank review.

Best for High-Yield : Axos Bank High Yield Savings


Axos Bank

Axos Bank

  • Minimum deposit: $250
  • Fees: None
  • APY: Up to 0.61%
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Why We Chose It

No other free savings account offers an APY that's this consistently high. Plus, you don't have to maintain a minimum balance to earn it, which is why Axos Bank's High Yield Savings wins for best high-yield.

Pros & Cons
Pros
  • High APY

  • No monthly fees or account minimums

  • Free ATM card upon request

Cons
  • $250 minimum opening deposit

  • Lower APY on balances of $25,000 or more

  • No physical branches

Overview

If you're looking for high yields on your savings, it's hard to beat 0.61%, so Axos Bank is the best option for high-yield free savings. You don't have to pay any monthly fees or maintain a minimum balance to earn interest, and while there is a minimum opening deposit, $250 is still doable for many. You'll also get a free ATM card upon request so you can access your funds easily.

That said, the APY goes down to 0.25% if your account balance is $25,000 or higher. If you have more than $100,000 in your account, you'll only earn 0.15%. Thus, this account is best for balances below $25,000. Once you've leveled up past $25,000, you can keep additional funds in another savings account or consider other high yield products like a certificate of deposit (CD) or money market account.

Axos is FDIC-insured, so your funds are protected on up to $250,000. This bank is online-only, so it's best for people who are comfortable using online and mobile banking.

Read the full Axos Bank review.

Best for ATM Access : Synchrony Bank High Yield Savings


Synchrony

Synchrony

  • Minimum deposit: $0
  • Fees: None
  • APY: 0.50%
Learn More
Why We Chose It

Synchrony Bank has one of very few high-yield savings accounts that come with the option to get a free ATM card. You can use it at Accel's network of 400,000+ surcharge-free ATMs, and you'll even get up to $5 per statement cycle in ATM fee rebates, which is why Synchrony's savings account is the best for ATM access.

Pros & Cons
Pros
  • High APY

  • No fees or account minimums

  • Optional free ATM card

  • Up to $5 in domestic ATM fee rebates per statement cycle

Cons
  • No checks

  • No checking account

  • No physical branches

Overview

With Synchrony Bank's savings account, you can opt to get a free ATM card so you have easy, instant access to your funds at all time. You can use one of Accel's 400,000+ surcharge-free ATMs, and if you use an out-of-network ATM once in a while, you'll get up to $5 in domestic ATM fee rebates per statement cycle. These features make Synchrony the right choice for anyone who prioritizes ATM access.

Synchrony Bank doesn't offer any checking accounts, but with the ATM access this savings account offers, you might not need one. You'll also earn a competitive APY regardless of your balance, and the account has no fees and no minimum balance requirements. 

Your deposits with Synchrony are FDIC-insured on up to $250,000. This bank is online-only, so it's best for folks who don't need to bank at a physical branch.

Read the full Synchrony Bank review.

Best for Long-Term Savings : Betterment Cash Reserve


Betterment logo

Betterment logo

  • Minimum deposit: $10
  • Fees: None
  • APY: 0.30%
Learn More
Why We Chose It

Betterment has the ultimate set-up when it comes to easily investing your money based on various goals, and you can link up their Cash Reserve savings account to your various investing goals. This allows you to seamlessly transfer funds back and forth between savings and investment accounts, making it ideal if you're saving for the long term.

Pros & Cons
Pros
  • No fees or account minimums

  • FDIC insurance on up to $1 million for eligible accounts

  • Up to five transfers daily between savings and investment accounts

Cons
  • Not the highest APY

  • Minimum deposit is $10

  • No physical branches

Overview

If you're looking for a place to park your long-term savings, you'll want to earn a better rate than what most savings accounts can offer. While Betterment's Cash Reserve account only earns a 0.30% APY (which is good, just not as good as some of the best free savings accounts), you can also open investment accounts with Betterment based on various investing goals, such as saving for a house or retirement.

Once you do this, it's easy to transfer money between your savings and various investing goals, which should help you earn more on money that'll stay put for a while. This makes it the best option for anyone looking to stash long-term savings.

You won't have to pay any fees with Betterment, and you can open a Cash Reserve account with as little as $10. You can also be FDIC-insured on up to $1 million, which is substantially more than the standard $250,000. However, this depends on whether your funds are appropriately spread across at least four different Program Banks, each of which offers up to $250,000 in FDIC insurance.

While Betterment doesn't have any brick-and-mortar locations, its mobile app is very user-friendly and makes it easy to complete all your banking and savings tasks from your phone.

Read the full Betterment review.

Best for Customer Experience : Capital One 360 Performance Savings


Capital One
  • Minimum deposit: $0
  • Fees: None
  • APY: 0.40%
Learn More
Why We Chose It

Not only does Capital One offer a 24/7 customer service line, but it also has hundreds of Capital One Cafes across the country where you can get in-person support and even free one-on-one financial coaching. No other online bank or free savings account offers this perk, making Capital One the best choice for customer experience.

Pros & Cons
Pros
  • High APY

  • No fees or account minimums

  • Capital One Cafe branch locations with free money coaching

Cons
  • No ATM card

  • Capital One Cafes only in major cities

Overview

Capital One's 360 Performance Savings account offers the top customer experience of all the best free savings accounts thanks to its combination of 24/7 remote support and a long list of physical branch locations. You can even drop into any Capital One Cafe location to have a coffee and get some free one-on-one financial coaching. You'll get three sessions, and by the end of it, you should have a comprehensive financial plan for your future without having spent a penny.

This savings account also comes with a high APY, no monthly fees, and no minimum balance requirements. You'll get the competitive 0.40% APY regardless of what your balance is. Your funds are FDIC-insured on up to $250,000, and automatic transfers can help you boost your savings rate.

Read the full Capital One review.

Final Verdict

When it comes to the best free savings accounts, you want an account that charges minimal fees while earning a high APY—and ideally, it comes with some extra bells and whistles that encourage you to save more too. Ally Bank's Online Savings Account has all of this, which is why it wins as best overall.

Anyone can open a free savings account with Ally and grow their savings faster thanks to the bank's 0.50% APY and savings boosters like the ability to round up purchases into your savings or have Ally analyze a linked checking account for missed savings opportunities. The online and mobile banking experience is flawless, and you know your money is protected thanks to this account's FDIC insurance.

Compare the Best Free Savings Accounts

Company  Minimum Deposit  APY  Fees  Maximum Monthly Withdrawals  ATM Access 
Ally Bank
Best Overall
$0 0.50% None 6 43,000+ Nationwide
Axos Bank
Best for High Yield 
$250 Up to 0.61%  None 6  91,000 Nationwide 
Synchrony Bank
Best for ATM Access 
$0  0.50%  None  6  400,000+ Nationwide 
Betterment
Best for Long-Term Savings 
$10  0.30%  None  No limit  No network, unlimited ATM fee reimbursements for checking 
Capital One
Best for Customer Experience 
$0  0.40%  None   No limit 70,000+ Nationwide 

How to Choose the Best Free Savings Accounts

The best free savings accounts should make it easier for you to save money. Here are some key features to pay attention to:

  • APY: This is the interest you earn on your savings. The higher the APY, the more you'll earn, which will help you pad your savings.
  • Opening deposit: Make sure you have enough money for the required opening deposit. For many free savings accounts, this is $0, but some may require $10, $25, or even $250. 
  • Monthly fees: Avoid savings accounts that charge monthly maintenance fees, even if you can have them waived by maintaining a minimum balance. These fees will eat away at your savings instead of helping them grow.
  • ATM access: Some free savings accounts come with an ATM card while others don't. An ATM card isn't a necessary feature if you don't need immediate and easy access to your savings. But without one, you'll need to transfer money from your savings to a checking account to access your funds, and this can take a couple business days.
  • Savings boosters: If you want some extra help growing your savings, look for an account that offers savings booster features. This can include recurring automatic transfers, savings buckets, or the ability to round up your purchases and put the change in your savings.

Free Savings Accounts vs. Traditional Savings Accounts

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