How to find your next savings account in 5 steps
- To find a new savings account, start by thinking about what you're saving for, where you'd like your account to be, and what type of bank or institution you'd like to use.
- Then, do your research. Find a fee-free savings account that offers a high interest rate, FDIC insurance, and has a minimum deposit that fits your budget.
- Ultimately, the best savings account for you is one you're happy with and excited to use.
- See Business Insider's picks for the best high-yield savings accounts »
If you've started to search for a new savings account, you've probably noticed that there's no shortage of options available.
As you start looking, it's worth noting that savings accounts aren't long-term commitments, so your money can easily be moved or accessed if needed, and you can have multiple savings accounts open.
Choosing a savings account is a relatively low-pressure financial decision, so don't be too worried as you start the process.
How to find a savings account
1. Know what you're saving for
You'll be able to find a savings account that better fits your needs if you know exactly what you're saving for.
If you're saving for several goals at the same time, you might want to find a savings account like the one from Ally Bank, which allows you to earmark funds for different purposes. Having a goal in mind can help narrow down the wide field of choices you have when picking a savings account.
Or, in this process, you might find that a savings account isn't the right thing for you at all. If you're working towards a long-term goal, investing could be a better fit. Savings accounts are great for things like emergency funds, or home down payment savings if you're planning to buy in the next five years.
2. Do you want to keep all your accounts at the same bank?
If you're afraid that you'll be tempted to use your funds, looking for a savings account at the same bank where you have your checking account probably isn't ideal. Keeping them at two separate banks can keep your saved money out of sight and out of mind.
If you're not worried about spending and you want to be able to make easy transfers into and out of your savings account, it might be worth looking into options with a bank you already use.
3. What's important to you? Look into banks that match your wants or needs to narrow your search
There's almost certainly a savings account that matches your values, whether you want to earn the highest interest rate possible or want to keep your savings at a bank that values sustainability. Or, maybe you just can't stand using a mobile app that's not well-designed.
Identify a factor that's important to you, and it can help you eliminate accounts and banks that don't line up with your needs.
4. Research banks, credit unions, and online banks to compare them
Once you know what you want to save for, and have an idea of the type of bank or institution you'd like to use, start researching banks and credit unions online. Here are a few of the factors that you'll want to look for:
- Find a high interest rate: The typical savings account earns .09% interest, but you can earn much more by looking for a high-yield savings account. The only difference between these two types of accounts is the fact that high-yield savings accounts earn more, so it's worth opting for one of these over a traditional savings account.
- FDIC or NCUA insured: The Federal Deposit Insurance Corporation, or FDIC, and its credit union equivalent, the National Credit Union Administration, both keep your money protected up to $250,000. This adds an extra level of security, and any reputable bank will offer this coverage.
- No fees: There are plenty of options for no-fee savings accounts, so there's no reason to pay a monthly maintenance or service fee.
- A minimum deposit that fits your budget: If you're not planning to open your account with much money, find an account with a low minimum deposit. There are many options available with a minimum deposit of $10, and many that also have no minimum.
Choose the bank that has most or all of these qualifications and the highest interest rate, and that meets the criteria you outlined above.
5. Open your account, and make sure to use it
Once you've followed the steps to find the right account, it's time to open it. Make your initial deposit and get familiar with it.
After that, you can set up automatic deposits to grow your account. This can help you stay on track to meet your goals, and kick-start a savings habit without thinking about it.
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