When you think about regular savings accounts, it’s important to note that there’s quite a difference in how they’re structured, especially when comparing traditional banks with online alternatives. Typically, brick-and-mortar banks offer savings accounts with very low interest rates, typically ranging from 0.01% to 0.5%.
In contrast, online banks have introduced something called high-yield savings accounts (HYSAs), which have really transformed the landscape of personal savings. Take Ally Bank, for example—they frequently provide interest rates around 4.05% or even higher. These attractive rates can be either fixed or variable, so it’s worth checking with your chosen institution to see what they offer.
The great thing about HYSAs is that they’re designed to make growing your savings easy, even if you don’t have a large initial deposit. This accessibility makes them a fantastic option for anyone interested in building their savings without unnecessary hassle.
If you’re unsure about how much to deposit into these accounts each month, we’ve got you covered. Our guide, “How Much Should You Save Per Month,” provides a comprehensive breakdown of calculating your ideal monthly savings. By considering your income, lifestyle, and financial goals, you’ll discover effective strategies like the 50/30/20 budgeting method, along with specific savings targets tailored to various aspects of your life.
