Best Savings Accounts of 2021
Throughout this segment, we have consistently discussed the best and most convenient ways for you all to safely and efficiently utilize your money, but today, we will be discussing what you can do if you DON’T want to spend it. There are countless ways to save your money, you can keep it stashed away in a drawer, keep it in your bank account, you can invest it in an asset that holds its value, or you can put it into a high yield savings account.
A high yield savings account is a bank account that stores your money for you, either at an online or traditional bank, and pays a higher interest rate than a normal savings account. This means that if you deposit $1000 into a high yield account that pays back a 2% interest rate, you will have gained a total of $20 at the end of the year, just by having your money stored in an account; making this an incredibly convenient way to store your money so that it can gain interest and still make it accessible for you to use.
Before we get started on some of the best banks with currently high-paying interests, always remember that if your money is sitting there, it is not working. This means that by storing your money in your drawer or under your mattress, your money is losing value! The reason for this is inflation. Inflation refers to the decline of your money over time; this can be seen when the government is overprinting money and when the prices of goods and services are increasing.
Over the last decades, the annual inflation rate in the United States is 2.24%, meaning that if you have $1000 stored in your drawer, you will be losing $22.40 a year. In addition, it is projected that the inflation percentage for 2021 is 2.2%. This is why it is always said to invest your money into something that will outperform the national average of inflation, so you can always be gaining some money, instead of losing it.
Although high-yielding savings accounts are nothing crazy compared to stock market investing, real estate, and others, it will still help if you need to keep some money in the bank or want to keep some sort of emergency fund, in case of anything occurring. Now that we have discussed the principles of high-yielding savings accounts, let’s dive into what are the current best savings accounts with the highest paying interest rates (Always remember that these percentages fluctuate depending on the economy).
- Discover Bank
Jumping into the number one name on this list, Discover. You might have heard of Discover before since I mentioned them in my previous article, Best Credit Cards for Starters, where they were ranked number one! The Discover Bank savings account is one of, if not the best high-yield savings accounts out there. Discover Bank currently has a 0.40% annual interest rate, meaning that if you invest $1000, at the end of the year you will have gained $4.01. Although this may sound a bit low, they have had a whopping 1.2% over the past seven years. The Discover Online Savings account is a top choice for customers looking for quality online savings accounts with a high annual interest rate. Discover takes the no-fee approach to the next level with none of the monthly fees or hidden fees that you might see with other banks. Discover offers a top-rated mobile app that lets customers stay connected to their savings from almost anywhere. Although these are some great perks, one of the downsides is that Discover does not offer any ATM withdrawals with this Savings Account, but you can still withdraw money into your checking account. These are simply a few reasons why Discover Bank is rated number one on this list!
- Marcus by Goldman Sachs Bank
Heading into number two on this list, Marcus by Goldman Sachs. This is an up-and-coming bank that has recently been introduced to the saving market. Goldman Sachs currently has a 0.50% annual interest rate, meaning that if you invest $1000 into your account, you will have an extra $5.00 added into your account. Although this amount may sound low, Goldman Sachs has a historical annual percentage yield of 1.34% over the past five years. As well as these percentages, the Marcus by Goldman Sachs savings account also has countless positives. This bank offers a generally higher annual percentage rate than other brick and mortar banks (traditional streetside business) and other online banks. They offer no minimum balance requirement, meaning that you can open an account and fund it at any time within the first 60 days to still earn the wanted interest rate. They have a no monthly maintenance fee, which is a common consumer pain point when it comes to traditional bank savings accounts. On top of this, they also offer an incredible customer service team that is available at all times to assist you with any issues. Although these positives are offered, there are a few things that can be fixed. Goldman Sachs makes it a bit difficult to deposit money since a mobile deposit option is not available, additionally; this bank also does not offer quick ATM access. All in all, Marcus by Goldman Sachs is a great bank that offers a phenomenal savings account.
- Ally Bank
Last but not least, we have the Ally Bank savings account. Ally Bank has been around for about the same time as Discover Bank and they have historically matched their saving rates. Ally Bank currently has a 0.50% annual interest rate, meaning that if you invest $1000 into your account, you would have received a total of $5.00 at the end of the year. Although this may be low, over the past seven years, Ally Bank has historically maintained a 1.2% annual interest rate. On top of this historically high-interest rate, Ally Bank has countless positives. For starters, there is no minimum balance required to open an Ally Online Savings account, meaning you can open one for free! They have no monthly maintenance fee since they don’t think you should have to pay a fee to maintain an online saving account for routine needs. They also have this awesome feature called the “savings bucket”, where the Ally Online Savings account enables you to divide your money into up to 10 different savings buckets, each one nicknamed for the goal you’re saving toward, meaning you can have a bucket for emergencies, vacation, college, and more without having to worry about splitting it up in your mind. Additionally, Ally Bank’s mobile app is feature-rich, which is key for an online bank. Account-holders can use the app to electronically deposit checks, make free electronic transfers, and pay bills, which is incredibly convenient for those on the go users. Although this account is filled with positives, the negatives would be that they also do not allow ATM access and that they have a withdrawal limit fee where they charge you $10 per transaction after making six transactions per month. Although these cons are present, Ally Bank still offers an incredible savings account that can be used for all types of users.
All in all, having a savings account can be incredibly beneficial for anyone. They can be used for an emergency fund, saving for college, planning a once-in-a-lifetime vacation, and even saving for holiday gifts. Many people confuse having a savings account with something negative, but truthfully, having a savings account will help your money gain compound interest and will help you save money as a result of inflation. This article helped to compile the top three savings accounts out and available at the moment, but there are still countless others that may be worth looking into. It is important to conduct your own research and make the selection for yourself. I wanted to thank you all for tuning into today’s topic and join me next time on #AskBryant, where we discuss financial literacy topics and explain the unexplained.
