But is that still true?

More importantly, is it still true if we don’t feel like it’s true?

Several surveys have been conducted over the years to ask people whether they believe the American dream is still achievable.

As you’d expect, how you feel about the American dream has a lot to do with your age, where you came from, and what you’ve accomplished already. The older and richer you are, the more likely you are to believe it's possible.

Let's take a look at how income, age, and race can play a role in how you’re likely to feel about the American Dream. 

What is the American Dream?

The phrase “the American Dream” first appeared in the book The Epic of America by James Truslow Adams where he stated that it is:

“Not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

In other words, the American Dream is not about individuals getting rich but about having a society that allows for social mobility and achieving one's full potential. 

Over time, the definition of the American Dream became more individualistic. It came to mean earning a comfortable income, homeownership, and having an enjoyable life. It was something for individuals to attain rather than for society to build. 

However, both definitions come to the same end. The American Dream is the ability for anyone to live a happy, comfortable life. For most, that means a good income, a comfortable home, and enough money to cover the bills easily, with some left over for enjoyment. 

Is it Still Possible to Achieve?

Whether or not the American Dream is possible depends on who you ask. Most recently, Pew Research found that 53% of people believe it is still possible.

A YouGov survey conducted in 2023, showed that 44% of those surveyed felt the American Dream was either very or somewhat attainable for them. 

In 2019, Gallup conducted a survey and found that 70% of people felt it was achievable. 

A CNN poll conducted in 2014 asked whether people agreed or disagreed that the American Dream is impossible to achieve. In this poll, 40% said it was possible to still achieve the American Dream. 

CNN conducts this poll every few years, going back as far as 1995. The most pessimistic year was 1996, when only 34% of those polled believed the American Dream was possible for most people.  

Income: How It Affects Our Belief

Unsurprisingly, how much someone earns affects their belief in the American Dream. The more someone earns, the more likely it is that they feel it is within their reach. 

According to Pew, only 39% of low-income earners believe the American Dream is within their grasp. However, just over half of low-income respondents feel the American Dream used to be possible but is no longer, showing quite a bit of pessimism among the lower-income group. 

Meanwhile, 64% of upper-income earners believe it is currently possible.  (The actual income amounts were not defined.)

The 2023 YouGov survey found similar results. Only 35% of those who earn under $50,000 felt the American Dream is attainable, while 46% of those who earn over $100,000 felt it was. 

Neither Gallup nor CNN's polls categorized responses by income level. 

Age: How It Affects Our Belief

Age also affects whether or not someone feels it's possible for people to achieve the American Dream. The older you are, the more likely you are to believe it is attainable. 

According to Pew, only 39% of adults under age 30 feel it's possible, while 68% of those over 65 believe it is. Interestingly, only 2% of those over 65 feel the American Dream was never possible. 

The YouGov survey found the same pattern but more pessimistic results. This survey found that 27% of adults under 30 and 44% of those over 65 feel the American Dream is attainable. 

The 2019 Gallup poll split the data a bit differently. They found that 73% of men under the age of 50 believed it was possible to achieve the American Dream, while only 58% of women under the age of 50 believed so. 

For those over 50 in the Gallup poll, the results were similar for men and women. 74% of men and 73% of women over 50 believed it possible to achieve. 

Race: How It Affects Our Belief

Your race also plays a part in whether you believe the American Dream is possible; however, the survey results from Pew and YouGov have different results. Pew found those who identify as White to be the most optimistic, while YouGov found Hispanic people to be. 

Pew Research's poll found that 55% of white people believe the American Dream is still possible. Black people were the second most optimistic, with 52% believing it's still possible. Exactly half of Asian people and only 47% of Hispanic people believe it's possible. 

YouGov had slightly different results. It found that 50% of Hispanic people believe it's possible to achieve the American Dream. White people followed closely with 44% believing it's possible. However, only a third of Black people (32%) believe the American Dream is achievable. YouGov did not have data on Asian people.  

Neither Gallup nor CNN categorized responses by race. Race was determined through self-reporting. 

Was the American Dream ever Possible? 

Pew asked if the American Dream was ever possible.

Overall, only 6% believe it was never possible to achieve, and 41% believe it was once possible but no longer is. 

Results for age and income groups are as you would expect. The younger you are and the lower your income, the more likely you are to believe the American Dream was once possible but no longer is. 

Those under 30 and those with a low income have the same results with 51% believing it is no longer possible, but once was. However, only about a third of those over 65 and those with a high income believe it was once possible. 

The results, when split by race, may or may not be what you would expect. The largest percentage of those who believe the American Dream was never possible is Black people, at 11%, while 35% of Black people believe it was once possible but no longer is. 

Asian people are the next most pessimistic, with 6% feeling it was never possible and 42% believing it once was but is no longer. 

Hispanic and White people are the most optimistic, with 5% of Hispanic people and 4% of White people believing it was never possible. 47% of Hispanic people believe it was once possible and 41% of White people believe it once was. 

The YouGov survey asked this question a bit differently. It asked if the American Dream exists, and 20% of overall respondents said it does not and 19% were unsure. 

In this survey, 18% of both Hispanic and White people believe it does not exist. Meanwhile, almost a third of Black people (31%) believe the American Dream does not exist.

Do you believe the American Dream is still possible?

The post Is the American Dream still possible in 2024? appeared first on Best Wallet Hacks.

YNAB breaks the paycheck-to-paycheck cycle while also ending surprise expenses. This will reduce your financial stress tremendously, which in my mind, is the main point of a budget.

At a Glance

• Breaks the paycheck-to-paycheck cycle by living on last month's income
• You can only budget the money you have on hand, which gives you a very clear view of your situation
• On the expensive side

YNAB Alternatives

Web and app	Yes	Yes	No
Import transactions	Yes	Yes	Yes
Pricing	$2.99 per month	$108 per year or $12 per month	$100 per year or $10 per month
	Learn more	Learn more	Learn more

How YNAB is Different

YNAB works like many other budgeting tools in that it uses an envelope-type system. You decide how much you want to spend in each category, then when money is spent, the funds are removed from that category, and the budget displays what is left for spending. You can link your accounts so the transactions populate automatically, and there is both an app and a desktop version.

However, YNAB uses a few concepts that other budgeting software doesn't. The first thing to know is that with YNAB, you can only budget the money you have on hand. You can't fund accounts ahead, which is a big switch in thinking and where a lot of people get hung up on this software.

The next concept is to live on last month's income. So the income you receive in January actually goes to fund February's budget. This means on February 1st, you have all the money you will be spending for the month – and you'll have it all planned out as to exactly how you intend to spend it. Don't worry if you aren't there on day one; YNAB will help you work towards this goal.

The last unique feature is the liberal use of sinking funds. Sinking funds are piles of money that you regularly add to that are intended for spending as needed. Gift funds are a common example. You may save $100 a month into an account with the intention of using that money for the holidays.

These features break the paycheck-to-paycheck cycle and stop financial surprises without having to increase your income.

The Four Rules

1. Give Every Dollar a Job

YNAB is a zero-based budgeting tool. This means that every dollar that comes in is assigned to a category when it comes in.

When you get paid, the money will show up in a “Ready to Assign” category and you can then decide exactly how you plan to use that money by assigning it to different categories.

Let's say you get a paycheck for $2,000. You might assign $700 to pay next month's rent, then $400 for groceries, $100 for gas, and so on until the entire $2,000 is accounted for.

The idea of a zero-based budget is that all your money is assigned to a category.

2. Embrace Your True Expenses

This rule is where the sinking funds come in. A lot of people don't really know what they actually spend in a year. Sure, they know rent/ mortgage and their other monthly bills but get surprised when the car registration rolls around again or the hot water heater goes out.

Embracing your true expenses means budgeting for these things every month. If you know your car registration is $500 a year, then you can create a line item for $42 a month. That way, when the bill comes, it's not a big deal at all. You have the money sitting in your budget ready to go. What used to be a budget buster is now a non-event.

I have sinking funds for several things, the main ones being house and car. We budget $100 each month for both house and car repairs. Then, when something breaks around here, we have a pile of money we can draw from that is specifically intended for home or car repairs. These funds are intended for smaller repairs — a leaky faucet or new tires. We would dip into the emergency fund for larger repairs.

You can see here that we budgeted $100 for each category. Then, for “home maintenance,” we have spent $59.85, leaving us $40.15 cents left. If we don't spend anything else this month from this category, the $40.15 will roll over to next month.

If you look at the “auto maintenance” line, you can see this more clearly. We budgeted $100 and haven't spent anything from that category this month. But we have $300 we could spend. The extra has $200 rolled over from previous months. We will continue to put $100 a month into this category, and the amount available to spend will grow—until we have a car repair, of course.

We have to plan for these things because they are our true expenses. Things break. If we don't plan ahead for such times, then we have a much better idea of what it actually costs to live. Some other common sinking funds could be:

• Gifts/ holidays
• Any annual subscriptions
• Medical expenses
• Car registration
• Vacations
• New cell phones
• and on and on…

3. Roll with the Punches

Life does not go as planned. You can create a perfect plan for your money and then something happens that blows up the whole thing. When you first start budgeting this happens all the time, but as you go, you'll get better at predicting upcoming expenses.

Sometimes, you go over budget. That's life. When this happens, YNAB prompts you to move money from another category to cover the overage. The YNAB community calls this “wack-a-mole,” or WAM for short.

For example, just last month, we went over budget in our “home maintenance” category.

As I mentioned above, we budget $100 for this category each month, but as you can see, we budgeted $165.05 for this particular month. That is because we went over budget and had to move $65.05 from another category. We spent a total of $265.05. We had $100 saved from last month, plus this month's $100, but then I had to pull $65 from someplace else.

That happens and it's not a failure of budgeting. Rolling with the punches is just part of it, and YNAB is flexible enough to handle it when things don't go as planned.

4. Age Your Money

Aging your money is another way of saying “live on last month's income.” The ultimate goal of YNAB is to get to a point where when money comes in, it is used to fund next month's budget. Income that hits the account in January is spent in February.

When you reach this point, you've broken the paycheck-to-paycheck cycle. You start the month with all the money you will need for the entire month. Due dates stop mattering. You never have to wait until payday.

This gives you a very realistic idea of your financial situation.

YNAB Pricing

YNAB is on the expensive side of budgeting software. It's $99 a year if you pay annually or $8.25 if you pay monthly.

They also offer a 34-day free trial, and you don't have to enter your credit card to start, so you don't have to cancel if you decide it's not for you.

YNAB Together: YNAB allows you to share your membership with up to five people. Those people can create their own budgets and will not have access to your budget. However, you will have access to their budgets, so they should be aware of that. I've invited both my kids to my YNAB account and we just have an agreement that I won't look at their budgets without permission.

YNAB Student: College students can get a YNAB for free for one year. Proof of enrollment is required.

The YNAB Community

Probably the biggest drawback of YNAB is the learning curve to get started. It's unlike most budgeting software, and it forces you to think differently about your money, which can be a big barrier for people.

However, there is a very engaged community that is excited to help new and experienced users figure it out. There are several active Facebook groups (and probably groups on other platforms) that will help new users get started, answer budgeting questions, and just generally give support.

This is not something you typically find with budgeting software. As far as I'm aware, the company itself doesn't maintain a group; these are all set up and managed by users. Which gives you an indication of how popular the software is among users.

Tips for Successful Budgeting

Give it Time: Anytime you try a new budgeting system, you should give it three months to settle in. That's just how long it takes to learn how to budget, whether it's your first budget or your 100th.

I've been a budgeting nerd for decades, and it still took me three months to get into the groove with YNAB. So don't feel bad if you don't find immediate success.

Lean into the Community: While you are trying it out, take the time to learn the software's features. Watch all the onboarding videos and ask questions in the community. Use the resources available to you!

Start simple: It's tempting to create categories for every little thing in your budget, but it's probably not necessary. The fewer categories you have the easier it will be to manage, especially while you are learning. Start with broader categories and then break those up if you feel it's necessary.

Budget for the unexpected: It's a good idea to have a category that is specifically for taking money out of when you go over in a budgeted category. You'll likely need this category less and less as time goes on and you get a better understanding of your spending. But in the early days, this category will save you a lot of fiddling with your budget.

YNAB vs Alternatives

Simplifi by Quicken

Simplifi is an easy-to-use budgeting software that is much cheaper than YNAB. So, if the price of YNAB is scaring you away, Simplifi would be a good alternative at just $2.99 a month.

With YNAB, you can only budget what you actually have on hand, whereas Simplifi works more like a traditional budgeting software. You can budget ahead for the month and then record your transactions as they come in.

The Simplifi dashboard lets you quickly see your money at a glance, and you can set up real-time alerts for your money. There is also an area specifically for subscriptions, which makes it very easy to keep track of all these recurring charges.

Here's our full review of Simplifi.

Visit Simplifi

Qube Money

Qube works differently than YNAB in that it follows the envelope system much more closely. To use Qube, you'll have to open a bank account with them and you'll receive a debit card that you control with an app.

You allocate the money in your Qube account into envelopes. When you need to spend money, you open the app and select which envelope you'll spend from before running the debit card. When the transaction goes through, the money is spent from the selected envelope.

This can be used in conjunction with a traditional bank account, where you transfer your spending money into a Qube account while leaving the money you need for bills in your regular checking.

It's a stricter way of budgeting, but it might be exactly what some of us need. You can get started for free, but if you want unlimited categories, you'll need to upgrade to a paid plan.

Here's our full review of Qube Money.

Visit Qube Money

LunchMoney

LunchMoney works as expected, you set spending goals for your various categories and connect your bank account. As transactions come in, you can assign them to your categories, and you can see how much you have left for spending.

One feature it has that YNAB doesn't is tags. You can tag transactions and then pull reports for specific tags. For example, let's say you are planning a birthday party and want to know exactly how much it cost, but the transactions are spread out among different categories. You might have some in food, some in gifts, maybe some from the entertainment category.

With tags you can tag the birthday transactions (#birthday) and then assign them to their designated category, but then later pull a report and see what the birthday party actually cost you.

Pricing is $100 a year or $10 per month.

Here's our full review of LunchMoney.

Visit LunchMoney

Summary

YNAB is a great budgeting tool that breaks the paycheck-to-paycheck cycle and ensures that you always know exactly where you stand. It's based on “the four rules,” which help users gain control of their finances in ways they never have before.

However, it works differently than most budgeting software, which is its superpower, but it can also create a big learning curve for new users.

The post YNAB Review: Break the Paycheck-to-Paycheck Cycle appeared first on Best Wallet Hacks.

Budgeting is the foundation of your finances. It’s about control, security, and freedom. A budget isn’t about restriction, even though it may seem like that at first.

A budget allows you to see where you are currently spending your money, which allows you to make changes so that your spending aligns with your values. You can start spending money on the things you love — guilt-free — while still preparing for the future.

It’s not always easy, though, especially at first. A budget might make you come face to face with some unpleasant realities.

1. Know Where Your Money Is Going

This is the first benefit of budgeting that you’ll come across. You’ll start to realize just how much you are spending in the various categories.

There’s no way I’m spending that much on Doordash!

We tend to underestimate how much we spend on small things, not realizing that those small things are the reason we can’t meet our larger goals. We reject advice such as “make coffee at home” because it feels pointless. We roll our eyes every time we hear it, thinking, “When am I going to get some real advice?” but the reason that type of advice (whether it’s coffee or avocado toast) keeps getting brought up is because it’s often true. People just don’t realize it.

I had a friend who drank a lot of coffee. “It’s only $6!” she would say. This is true — each coffee was only $6, and $6 isn’t going to make a dent financially. But she was getting coffee twice a day… and so was her husband.

That’s $720 a month in coffees. And $720 a month will make a dent.

She ended up buying a coffee subscription from a local convenience store, which was $20 a month for unlimited coffee. She and her husband still get their twice-daily coffee, but they save $700 a month.

So, understanding where you are actually spending your money is a huge step in the right direction.

✨ Related: What is the Average Household Budget?

2. Make Your Money Match Your Priorities

Before you come for me for the “give up your daily coffee” advice, let me say that if you love your coffee, keep it. It’s not about the coffee. It’s about priorities.

Understanding where you spend your money is step one in budgeting.

Step two is making adjustments so that your spending matches your priorities.

You may not know your priorities right away, and that’s perfectly okay. They may start to come to the surface over time as you work with your budget. You never have to feel guilty about how you are spending your money. Never. It’s your money, and you can spend it however you like.

The problem is that most people aren’t happy with their money. They wish they could save for retirement, go on vacation, or live in a nicer neighborhood, not realizing that they could do those things if they stopped spending money on things they don’t care about.

So decide what is important to you and allocate your money so that you spend more where it matters and less where it doesn’t. Budgeting is about making conscious, deliberate choices with your money — not following someone else’s rules about money.

✨ Related: Best Free Budgeting Software

3. Prepare You for the Future

A very common theme when people start budgeting is that they realize they are spending too much money on convenience items, often restaurants, and not enough on preparing for the future. How many people are literally eating their retirement?

Once you stop spending money on things that aren’t important to you, you can start spending money on things that are. This often means building a safety net and saving for retirement.

You can’t work forever. Even if you love your job right now and can’t imagine quitting, that can change at any moment. You could get a new boss. The industry could change. Your health could deteriorate and prevent you from working.

Saving for retirement and building wealth is imperative, and it starts with budgeting.

4. Reduce Your Money Anxiety

Knowing you are spending your money in a way that is in line with your priorities and saving for your future can be a huge relief.

Good budgeting means you know exactly what money you have and the job it needs to do. You will have fewer financial emergencies and actually be able to help out those you love more than before and do it without resentment or guilt.

It can guide your decisions and allow you to spend guilt-free on things you love. A budget isn’t about restriction but about freedom. However, it does require you to take a hard look at the unvarnished truth of your current situation.

5. Force You to Face Uncomfortable Truths

One reason some people don’t like budgeting is that it forces them to confront some things in their lives that they aren’t ready to face. Money is so much more than dollars and cents; our emotions drive a lot (if not all) of our choices, and a spreadsheet does not leave many places to hide.

If we aren’t entirely happy with our choices, then seeing them in a budget can force us to acknowledge some hard truths.

It could be something as simple as not being where you want to be in life. For example, if you feel like you should own a house or have a certain income, then seeing that you aren’t anywhere near those goals can be stressful.

Or you might have a family member who always seems to need financial help. The budget will let you see exactly what you are sacrificing to help them, which might make you feel resentful for helping but also guilty for not helping.

Or, toughest of all, maybe you have a spouse who is irresponsible with money, and a budget puts that fact in sharp relief.

It’s understandable to want to avoid a budget in cases like this. It’s not about the budget itself but the fact that it doesn’t allow us to avoid dealing with these difficult problems. It’s easier to just pretend they don’t exist.

The problem is that they do exist, and you will have to deal with them in some way. And if a budget forces you to deal with them now rather than later, it might actually be the biggest benefit of all.

Summary

Budgeting seems like a simple task, but when you really think about it, it’s no wonder that many people struggle with it. But even if budgeting is something that you’ve tried before

The post 5 Benefits of Budgeting appeared first on Best Wallet Hacks.

When you are living paycheck to paycheck, breaking out of that cycle seems impossible.

You’re always playing catch up or you’re one emergency away from being sent back to the start. Or worse.

But it is doable, and believe it or not, you don’t even have to find ways to earn more money to do it. Making more can help but there are plenty of people who make sky high incomes and still live paycheck to paycheck. Your income isn’t actually a factor here.

Think of it this way… you are already living on your current income. Living paycheck-to-paycheck is sometimes only about the timing of our cash flow.

Get Serious about Budgeting

Understanding where your money is going is step one. In this Reddit thread, people shared what helped them break the cycle, and a lot of them mentioned budgeting.

You’ll need to build a buffer between getting your paycheck and spending it. And the way to do that is to spend a little less than your whole check each pay period. You don’t have to save much, even $5 a paycheck will be a step in the right direction.

One budgeting tool that is extremely useful for breaking the paycheck-to-paycheck cycle is YNAB. The key theory of YNAB, and one of it’s secrets to success, is to live on last month’s income by giving every dollar a job.

The paychecks you receive this month go towards next month’s budget.

This means that on the first of the month, you have the money you will need for the whole month sitting in your checking account with a plan for how it will be used.

When you reach this point, the timing of your paychecks arriving and your bills being due will no longer matter. You’ll have everything you need to get through the month.

Here’s our full YNAB review if you want to learn more.

Another benefit of budgeting that I don’t feel is discussed very often is that a budget allows you to take advantage of any boons or windfalls you receive. Being able to take full advantage of these opportunities to get ahead will only make things easier going forward.

Without a budget, it’s easy to use a bonus or tax return to splurge a little and miss the opportunity to get ahead simply because you don’t see the benefit laid out clearly before you.

OK – all of this sounds too handy wavy and simple – how do you execute this in real life?

✨ Related: 4 Different Budgeting Strategies to Try this Year

Build a One Paycheck Buffer

While getting a full month ahead is the ultimate goal, it may feel a bit daunting. So, first, set out to get one paycheck ahead.

Set aside whatever you can, even if it’s a small amount, and build up a one-paycheck buffer in your checking account. Rely on your budgeting to ensure that this stays as a buffer and doesn’t get spent without being replenished on your next check.

Just this small-ish buffer will give you some wiggle room in the timing of your spending, and you will start to feel more in control of your finances.

If you get paid weekly or bi-weekly, there are some months when you get an extra paycheck. That is the perfect time to build this buffer. If you want to build it more quickly, consider things like selling some of the stuff you no longer use, canceling some subscriptions you don’t need, and picking up some odd jobs or overtime at work. Again, every little bit helps.

Once you have a one-paycheck buffer, start working on getting a full month ahead in your budgeting.

✨ Related: How to Organize your Bills: 8 Helpful Tips

Start Paying Down Debt

Once you are budgeting one month ahead, you can focus on paying down debt.

Paying down debt is one of the most powerful things you can do. Add up all your monthly payments and imagine if you had that money in your budget every month. You can see that it would be a powerful tool.

The debt snowball is a great way to pay down debt, and combine that with the power of YNAB and you are well on your way to getting ahead. Here are some debt snowball tools to help get you started.

Find a Support Group

This can be online, such as a Facebook group or Reddit, or be with one or two of your local friends. The important part is finding someone you can trust to talk to because the journey will be difficult. You’ll need some support when things don’t go your way and someone cheerleaders to help you celebrate when they do.

Breaking the cycle isn’t easy but it’s doable, especially if you have important people around you to help.

Summary

It is possible to break the paycheck-to-paycheck cycle, even without increasing your income. You’ll want to start by budgeting so you have a clear view of how you are spending your money and then start putting something aside, no matter how small, to begin to build a buffer.

Aim to build a buffer of one paycheck and then build that up to being able to fund next month’s budget with this month’s income. Once you have done that, you can start paying off debt and really begin to make an impact on your finances.

The post How to Break the Paycheck to Paycheck Cycle appeared first on Best Wallet Hacks.

	Bank Name	Interest Rate on Savings Account
Western Alliance Bank	Western Alliance Bank	4.81% APY	Read More
	CIT Bank	4.35% APY	Read More
	Barclays Bank	4.35% APY (with minimum balance requirements)	Read More
	Discover® Bank	4.00% APY	Read More
	American Express® Personal Savings	4.25% APY	Read More
	Capital One 360 Performance Savings	4.00% APY	Read More
	Marcus by Goldman Sachs	4.10% APY	Read More
	Ally Bank	4.00% APY	Read More

With interest rates at highs we haven’t seen in years, you are probably wondering which savings account will earn you the most money.

If you have money in savings, it makes sense that you’ll want to earn as much money as possible on those funds, especially if they will be in the account for a long period of time, such as your emergency fund.

How We Created This List

First, we looked for savings accounts that earn well above the national average annual percentage yield (APY).

Next, we looked for accounts with no monthly account fees and low minimum balance requirements. Because a high interest rate isn’t enough if there are also fees or a bunch of hoops to jump through to qualify.

Of course, all the banks on the list are reputable, and all are FDIC-insured.

CIT Bank – 4.35% APY

CIT Bank offers 4.35% APY with its Savings Connect account.

There are no monthly service fees, and a minimum deposit of $100 is required to open the account. You don’t need to go through Raisin to get this APY. It is available directly on the company’s website.

If you have more than $5,000 to deposit, you can get the Platinum savings, which offers a slightly higher APY.

CIT Bank has a variety of bank accounts available on its site, including checking, savings, money market, CDs, and home loans.

Here’s our full review of CIT Bank.

👉 Learn more about CIT Bank

Barclays Bank – 4.35% APY

Barclays’s Online Savings Account earns 4.35% APY with minimum balance requirements. It does not require a minimum deposit to open and does not have a monthly fee.

Barclays was founded in London and continues to be a British bank. They have a U.S. component but the only other banking products Barclays offers are CDs, which also have high interest rates. They operate completely online, so there are no physical locations.

Here’s our full review of Barclays.

👉 Learn more about Barclays

Discover Bank – 4.00% APY

You are probably familiar with Discover’s credit cards, but did you know they also offer a fantastic savings account? Their Online Savings Account is currently earning 4.00% APY and has no minimum opening deposit or monthly fees.

Wallet Hacks readers can often get a welcome offer, so be sure to see our full review for details about that.

Discover also offers checking, CDs, money market accounts, and retirement savings options.

Here’s our full review of Discover’s Online Savings Account.

👉 Learn more about Discover Bank

American Express® Personal Savings – 4.25% APY

American Express is another company you primarily know from its credit cards, but it has a high-yield savings account that is currently earning 4.25% APY. As with most other accounts on this list, there is no minimum deposit required to open and no monthly fees.

Amex actually offers a full-service banking experience. It has checking, savings, CDs, personal loans, investment management, and, of course, credit cards.

👉 Learn more about American Express Personal Savings

Capital One 360 Performance Savings – 4.00% APY

The Capital One 360 Performance Savings earns 4.00% APY with no minimum opening deposit and no monthly fees.

This is the only bank on this list with physical locations. So, if you want a high-yield savings account with a bank where you can meet with a banker face-to-face, here’s your chance.

Capital One offers a wide range of banking accounts, including checking, savings, credit cards, and auto loans.

Here’s our full review of Capital One 360.

Marcus by Goldman Sachs – 4.10% APY

Winning the award for the strangest bank account name, Marcus by Goldman Sachs earns 4.10% APY with no fees and no minimum deposit requirements.

One thing this account offers that most don’t is same-day transfers on amounts under $100,000, even to other banks. Transfers to third-party banks from online savings accounts typically take 2-3 days. So if you like to move your money around quickly, this might be the account for you.

Goldman Sachs is probably best known as an investment bank, but it also offers savings, CDs, personal loans, and even a few credit cards.

Here’s our full review of March by Goldman Sachs.

👉 Learn more about Marcus

Ally Bank – 4.00% APY

Ally’s savings account earns 4.00% APY. It doesn’t require a minimum deposit or have any monthly fees.

If you also have an Ally checking account, you can also set up what Ally calls “boosters” to help you save more. You can set up “round-ups,” which automatically round up any purchases you make in your Ally checking account and transfer the change into your savings. Another booster you can activate is called “surprise savings”. Ally will monitor your Ally checking account and automatically transfer excess funds into savings.

You can also set up recurring transfers from checking to savings.

Here’s our full Ally Bank review.

👉 Learn more about Ally Bank

How to Choose The Right Savings Account

Often times it isn’t about which savings account will earn you the most money. Yes, how much you’ll earn is important, but there are a few other factors to consider as well.

Here’s what you’ll want to consider when choosing a savings account.

Ease of access: If you are going to be transferring money back and forth between checking and savings frequently, then you’ll want to make sure that transfers are quick and easy to do. That might mean going with the same bank where you have your checking account, even if it means giving up some interest.

APY: If your savings are being held for longer term goals, say as an emergency fund, you’ll want to look for a high-yield savings account where your money can earn some interest. A traditional savings account typically has fairly low annual percentage yields, so looking for an online savings account is usually your best bet.

Fees: Paying monthly maintenance fees on your savings account isn’t necessary. Any fee you pay will likely wipe out any interest earned during the month. Avoid an account with monthly fees unless they can be waived by meeting requirements you’d meet naturally. For example, if the fee can be waived with a $500 balance and you rarely dip below $1,000, that is probably fine. But look for a different account if you’ll have to struggle to meet a requirement to have the fee waived

Minimum balance requirement: A lot of savings accounts have minimum balance requirements to earn the advertised annual percentage yield. None of the accounts on this list have this requirement, but if you are considering an account that does, ensure you can easily meet it. Otherwise, you’ll be leaving money on the table.

How Do Online Savings Accounts Work?

Online savings accounts work almost the same as traditional ones, except they tend to pay a higher APY.

The main difference is that you’ll usually transfer the money into, and out of, the savings account from your existing checking account. The checking account doesn’t need to be at the same bank as your online savings account. You’ll link the two accounts together and will be able to easily transfer money back and forth.

What About Money Market Accounts?

Money market accounts are very similar to savings accounts. The main difference is that you have easier access to the money in a money market account.

With money market accounts, you are typically offered a debit card to withdraw money from an ATM. You may also be given checks that you can write against the account. These features are rarely, if ever, found on savings accounts.

The easy access could be a good thing or a bad thing depending on your savings and spending habits. If you know that being able to access the ATM and withdraw money will impair your ability to save, then it’s probably not the best choice.

However, if you easily save money and having easy access isn’t an issue, then you could earn a bit more interest with a money market account.

What About CDs?

There are definitely CDs out there that are earning high interest rates right now. However, unlike savings accounts, CDs require you to lock up your money for a specified amount of time. If you break the CD you are typically charged a penalty of a few months’ interest. This isn’t a huge deal, but if you think you’ll need to break the CD, then it defeats the purpose of getting the higher APY.

Here are our best 12-month CDs if you think this might be the best choice for you.

✨ Related: MaxMyInterest Review

Why Are Most High-Yield Savings Accounts Online Only?

Traditional savings accounts often don’t have high-interest savings accounts. I’m talking about the savings accounts from the big brick-and-mortar banks you have in your city. Why they don’t offer high-yield savings accounts? Maybe it’s because they have high costs, such as buildings and many in-person employees. Or maybe it’s simply because they don’t have to offer high rates because they have so much name recognition and can get customers without them.

But no matter the reason, online banks and credit unions tend to offer better savings account rates. But you don’t have to worry about the safety of your money. All the banks on this list are FDIC-insured, meaning that if a bank fails, the government will step in and ensure everyone’s money is returned to them.

Credit unions are also federally insured but under a different program called NCUA insurance, and it essentially works the same.

Will I Have to Pay Taxes on Interest Earned?

You will have to pay taxes on the interest that is earned in your savings accounts. If you earn over $10 in interest, you’ll receive tax form 1099-INT from the bank or credit union.

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