Which Savings Account Will Earn You The Most Money?

Definition of "Which savings account will earn you the most money?"

Laura Teichman real estate agent

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Laura Teichmanelite badge icon

Coldwell Banker Realty

For many, life doesn’t revolve around money. Still, suppose you can save a specific amount for future use and earn a modest interest. Why wouldn’t you benefit from it? These are the primary perks of opening a savings account in the United States. However, there are numerous alternatives and options to choose from. 

We’re here to help you choose the most befitting savings account for your financial needs. Note that individual banks and credit unions throughout the States offer wildly different interest rates on savings accounts. For this reason, we advise shopping around and consulting with the lending institution of your choice before opening a savings account! Let’s examine the most popular savings accounts available and which offer the most interest on your deposit!

Traditional Savings Accounts

By all means, traditional savings accounts are widely available and very fashionable! These accounts provide a safe place to park your money. In addition, they typically offer a competitive interest rate, albeit lower than other options (on average, under one percent.) However, it gets better from here on! You must also know that the interest earned on a traditional savings account is subject to federal income tax.

Certificates of Deposit

Certificates of Deposit (CDs) are time-based accounts that lock your money for a specified period (from months to several years.) Certificate of Deposits will give you higher interest rates than regular savings accounts. 

However, you must anticipate penalties if you withdraw your funds before the CD matures! Plus, you won’t get away without paying federal income tax after your income. The good news is that you benefit from a maturity bonus if you keep your funds untouched for longer. APYs on CDs can go as high as 0.25 percent. Also, you must have a minimum deposit of $500!

Money Market Accounts

The catchy money market accounts are a hybrid between savings and checking accounts. Generally, these liquid short-term accounts offer higher interest rates than traditional savings accounts. Secondly, they regularly come with outstanding perks like check-writing capabilities and credit or debit cards. Nonetheless, MMAs require a higher minimum balance from you and restrict the number of monthly transactions. You must pay tax after your income! 

Money market accounts are safe because the Federal Deposit Insurance Corporation (FDIC) protects each depositor up to $250,000! Federal Funds, Banker’s Acceptance, Repurchase Agreements, and Negotiable Certificates of Deposit (NCD) are the most widespread MMAs. In July 2023, PNC, SoFi, and CIT Bank provided the best APYs (Annual Percentage Yield) on money market accounts, ranging between 4.95 and 4.40 percent!

Money Market Mutual Funds

Money market mutual funds (MMMFs) are dependable financial instruments. MMMs invest in short-term debt securities like Commercial Paper and Treasury Bills. Did you know these funds target to maintain a stable net asset value (the value of a fund’s assets without its liabilities’ worth) of $1 per share? Technically, MMMFs don’t qualify as a savings account. Still, they potentially offer higher returns on investment than traditional savings accounts or MMAs. 

The catch is that you might expose yourself to a certain level of financial risk. Plus, MMMFs aren’t FDIC-insured! According to Forbes, Fidelity Money Market Fund and Schwab Value Advantage Money Fund Investor provided a 7-day yield ranging between 4.76 and 4.95 percent.

High-Yield Savings Accounts

High-yield savings accounts were created to offer a more significant profit on your savings compared to traditional savings accounts. Typically, these accounts will gain a higher compound interest rate and come with lucrative APYs, so your passive income can grow faster. 

The interest earned is also subject to federal income tax, but your overall returns can be more substantial. For the best APYs in the US banking world, check Barclays, Citizens, SoFi, and CiT Bank!


Why don’t you maximize your provisions with a savings account? First, you must analyze your financial objectives, risk tolerance, and liquidity requirements before opening a savings account. We recommend high-yield and online savings accounts because these two offer profitable interest rates. At the same time, they’re genuinely accessible. 

Suppose you have a higher minimum balance and can limit your daily and monthly transactions. In that case, we advise opening a money market account and certificates of deposit! On the other hand, if you are willing to undertake some risk but seek to benefit from higher returns, consider investing in money market mutual funds!

Analyzing the associated expenses, interest rates, and minimum balance requirements is crucial before finalizing your decision!

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