I Ranked 20 Savings Accounts (Here's What's ACTUALLY Good)

Summary

This video ranks various high-yield savings accounts, evaluating options from both traditional banks and fintech companies. The speaker highlights top accounts like Basque Bank, CIT Bank, and Valley Direct, focusing on their APYs, fees, and minimum balance requirements. While some banks offer strong rates, others, like TD Bank, have complex fee structures that reduce their appeal. Additionally, the speaker discusses fintech companies offering high-yield cash management accounts, but cautions viewers about the risks associated with third-party middlemen. Overall, the video provides practical advice for finding the best savings options.

Takeaways

• 😀 **American Airlines Mileage Savings Account**: While this account offers potential for high APY when redeeming miles at a higher value, the dynamic pricing system makes it harder to justify compared to traditional high-yield savings accounts.
• 😀 **Basque Bank's High-Yield Account**: Basque Bank currently offers one of the highest APYs at 5.1%, making it an attractive option compared to mileage-based accounts and other savings accounts.
• 😀 **CIT Bank's Platinum Savings**: CIT Bank offers a competitive 5% APY for balances over $5,000, but the $5,000 minimum requirement might be a hurdle for some. Their Savings Connect account is a solid alternative with a 4.65% APY.
• 😀 **TD Bank's Signature Savings**: TD Bank offers up to 4% APY, but the complex requirements and high fees make it less appealing, ranking it in the D tier.
• 😀 **Valley Direct's High-Yield Savings**: With an APY of 4.75%, Valley Direct offers competitive rates with no fees and low minimum balance requirements, placing it in the B tier.
• 😀 **Other Notable Savings Accounts**: UFB Direct, Laurel Road, EverBank, and Barclays all offer solid APYs ranging from 4.35% to 5.25%, making them strong options for savers and placing them in the B tier.
• 😀 **Fintech Companies (e.g., Wealthfront Cash)**: While fintech options like Wealthfront offer high yields and FDIC insurance through partner banks, the speaker warns about potential risks with third-party intermediaries, as seen with the Yada incident.
• 😀 **Considerations for Fintech Accounts**: The speaker advises caution when using fintech savings accounts, as while they offer strong features, past issues with third-party middlemen highlight potential risks.
• 😀 **FDIC Insurance**: It's important to choose accounts that are FDIC insured, whether from traditional banks or fintech companies using partner banks for insurance coverage.
• 😀 **Risk Management**: The speaker emphasizes that while all financial products come with risks, accounts listed in the video, especially those with FDIC coverage, are safe and offer competitive rates without excessive fees or requirements.

Q & A

What is the primary factor affecting the value of the Basque Bank mileage savings account?

The value of the Basque Bank mileage savings account depends on how you redeem American Airlines miles. Since American Airlines uses dynamic pricing, the miles required for an award ticket can fluctuate, affecting the redemption value and the effective APY of the account.

What is the effective APY if you redeem American Airlines miles at 2 cents per mile?

If you redeem American Airlines miles at 2 cents per mile, the effective APY for the Basque Bank mileage savings account would be 5%.

How does CIT Bank's Platinum Savings account compare to other high-yield savings accounts?

CIT Bank's Platinum Savings account offers a 5.00% APY, but it requires a $100 minimum deposit and a $5,000 balance to earn the full rate. If the balance is less than $5,000, the rate drops to 0.25%. It's a solid option but may not be ideal for those with smaller balances.

What other savings account options does CIT Bank offer besides the Platinum Savings account?

CIT Bank also offers the Savings Connect account, which offers a 4.65% APY with no fees and only a $100 minimum deposit requirement, making it a more flexible option than the Platinum Savings account.

What are the disadvantages of TD Bank's Signature Savings account?

TD Bank's Signature Savings account offers up to 4.00% APY, but it comes with several conditions, such as linking another TD Bank account and maintaining a $100,000 balance. There’s also a $15 monthly fee, which can be waived by meeting additional requirements, making it a more complicated option.

Why was TD Bank's Signature Savings account ranked in the D tier?

TD Bank's Signature Savings account was ranked in the D tier due to its complex conditions for earning the highest APY, including linking another account and maintaining a large balance, as well as the $15 monthly fee that can be hard to avoid.

What is the APY and minimum deposit requirement for Valley Direct's high-yield savings account?

Valley Direct's high-yield savings account offers a 4.75% APY and requires a minimum deposit of just $1, making it a competitive and accessible option with no fees.

What is a key feature that sets fintech companies like Wealthfront apart from traditional banks?

Fintech companies like Wealthfront offer high-yield cash accounts, such as the Wealthfront Cash account, which can provide up to 5.0% APY. However, these accounts are not technically banks but partner with FDIC-insured institutions to provide coverage for deposits.

What concern was raised regarding the use of third-party middlemen in fintech accounts like Yada?

The concern raised with fintech accounts like Yada is that third-party middlemen, such as Synapse, can introduce risks. In the case of Yada, a dispute over customer balances occurred when the middleman went bankrupt, leaving customer funds in limbo, which highlighted the risks associated with non-bank financial services.

What does the video suggest is the best way to choose a high-yield savings account?

The video suggests choosing a high-yield savings account that offers competitive rates, no fees, and FDIC insurance, while considering the account's features and requirements. It emphasizes the importance of doing thorough research and avoiding accounts with overly complicated terms.