If you are looking for the best place to put your savings, you should reconsider going to a brick and mortar bank. Right now, the best interest rates for a savings account are actually found with online financial institutions. These are FDIC-insured institutions, which means your money will be safe up to $250,000. Here is a list of some of the online financial institutions that have great rates right now:

Keep in mind that rates are always fluctuating. However, according to “Savvy Savings: 4 Ways to snag the highest interest rates,” it appears the current trend is in the upward direction. According to Greg McBride, senior vice president and chief analyst of Bankrate.com, “interest rates have been drifting upward for about six months as banks and credit unions anticipate more rate increases by the Federal Reserve.” Make it a habit of checking in on your savings account at least once a year to make sure you are getting a good rate. Sometimes banks will offer really good rates to attract new customers, but after those customers have opened an account, that great rate that they thought they had ended up spiraling downward significantly over the course of a year.

You can also consider a CD versus a savings account or a money market account. Bankrate.com has a great table that details the general guidelines for each one so that you can determine which one fits your needs. Here is the gist:

  • CDs: time deposits, cannot withdraw money typically before it has matured, rates are typically higher, good for those who know they won’t need access to the money until it has matured.
  • Savings Account: lower interest rates, limited to six “convenience” withdrawals, banks can require seven-day notice for withdrawals if it was included in the account agreement, perfect for those looking to put a little cash away.
  • Money Market Account: usually comes with debit cards and checks, may require a minimum balance for certain rates and to avoid maintenance fees, limited to six “convenience withdrawals,” can end up getting higher rates with a higher required balance in comparison to a savings account.

Even though the savings account may seem like a weak option, don’t overlook the fact that you are able to access and move your money around with greater ease than with other accounts. This provides greater flexibility to you if you want the freedom to move your money around so that you can get a better rate at a different institution.