Where to Open a Free Savings Account

Savings accounts don’t need to cost an arm and a leg. Free savings accounts often have the same features as expensive accounts—with competitive rates. It's smart to keep cash in a savings account, so you have cash accessible when you need it. But paying fees and watching your savings lose ground may cause you to use savings accounts less than you should.

So, where is the best place to open a free savings account?

Local or Online?

You can find fee-free savings accounts at a variety of places, including online banks and brick-and-mortar institutions. If you prefer to have banking in person, a brick-and-mortar bank is your best choice. 

Small institutions are your best bet when it comes to brick-and-mortar savings accounts. Big banks might offer free accounts, but they’re harder to find and to get qualifying accounts. You might need to keep a substantial account balance or set up automatic deposits to the account to avoid fees. If you’re having trouble finding what you need, look for local banks and credit unions that are not national brands.

Online Banks

Online banks are an excellent source for free savings accounts. They’ve been offering low-cost savings and checking accounts for years, while traditional banks have been stubborn to offer free accounts. If earning a high interest rate (APY) is important to you, you should certainly focus on online banks. Rates are typically (but not always) better online. 

The accounts listed below will give you an idea of available no-fee, online savings account. Try the accounts below. There is no minimum to use these accounts, there are no monthly maintenance fees, and you can open an account entirely online.

Capital One 360: Capital One 360 is a well-established bank and the successor of ING Direct (a pioneer in the world of free online savings accounts). With competitive rates and a variety of account types, Capital One 360 Performance Savings makes it easy to earn interest and dodge fees. Note that you need a “linked” brick-and-mortar checking account to open a savings account with Capital One 360.

Ally Bank: Ally Bank is another online bank that’s been at it for a while. Ally is unique because you don’t need a brick-and-mortar account to open an account. You can just set up a standalone Ally account and fund it with check deposits, electronic transfers, and deposits, mobile deposit, or wire transfers.

Discover Bank: Discover offers a variety of accounts for potential one-stop shopping. In addition to a competitive savings account, you can open checking accounts (with a cashback debit card), money market accounts, and more.

The three banks above are among the most popular online banks, but they aren’t the only ones, and they’re not necessarily the best. Most major online banks are similar, so choose the bank that has free savings accounts with the specific features that you need. 

Business accounts: If you run a business, it's wise to separate your business and personal accounts. You may need to open a business checking account to get a no-fee business saving account, but checking anyway. Also, some checking accounts pay interest—possibly eliminating the need for a savings account altogether. Several options for free business checking accounts include US Bank "Silver" and Capital One "Spark," but it’s also worth contacting local credit unions and community banks. 

Plan Ahead

As you decide where to open an account, think about which account features are most important, and verify that those services are part of the free savings account. A few questions to research include:

• Will you receive an ATM card?
• Are fee-free ATMs available in your area?
• Is banking face-to-face important? If so, are branches conveniently located and open when you need them?
• Does the bank offer a variety of CD terms?
• Can you deposit checks with your mobile device?
• Do you have any need for wire transfers? How much do they cost, and what’s the process for completing a transfer?

You may also need services besides a savings account. Other needs may include a mortgage, a safe deposit box, or a checking account soon, and it might make sense to have everything in one place. You can keep life simply by choosing a bank that handles multiple needs—you’ll get fewer statements (or emails), and you won’t need to keep track of as many online accounts. Banks are also more likely to waive fees on checking and savings accounts if you use multiple products.