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Category: Banking

  • How to Open a Checking Account in 2026: Step-by-Step Guide

    How to Open a Checking Account in 2026: Step-by-Step Guide

    A checking account is where most people keep the money they use every day. You can pay bills, make purchases, and withdraw cash — all from one account. Opening one takes about 15 minutes if you know what to expect. Here is how to do it in 2026.

    What You Need Before You Apply

    Most banks and credit unions ask for the same basic information when you open a checking account.

    • Government-issued ID: A driver’s license or passport works at almost every bank.
    • Social Security number: Banks are required by law to verify your identity. Your SSN is how they do it.
    • Initial deposit: Some banks require a minimum opening deposit — often $25 to $100. Many online banks require $0.
    • Contact information: Your address, phone number, and email address.

    If you are under 18, most banks require a parent or guardian to co-own the account with you.

    Choosing the Right Checking Account

    Not all checking accounts are the same. Here is what to compare before you sign up.

    • Monthly fees: Many traditional banks charge $5 to $15 per month. Online banks often charge $0. Look for accounts with no monthly fee or easy fee waivers (like maintaining a minimum balance or setting up direct deposit).
    • ATM access: Check how many fee-free ATMs are available near you — or whether the bank reimburses ATM fees nationwide.
    • Overdraft policy: Some banks charge $25 to $35 per overdraft. Look for accounts with no overdraft fees or free overdraft protection.
    • Mobile app quality: If you plan to manage your account from your phone, check app store ratings before you commit.
    • Interest: Most checking accounts pay no interest. Some high-yield checking accounts pay 1% or more on your balance — worth considering if you keep a large buffer in checking.

    Traditional Bank vs. Online Bank vs. Credit Union

    You have three main options when opening a checking account.

    • Traditional banks (Chase, Bank of America, Wells Fargo): Wide branch and ATM networks. Fees are common unless you maintain minimum balances. Good if you prefer in-person service.
    • Online banks (Ally, SoFi, Chime): No branches, but often no monthly fees, higher interest rates, and better apps. Customer service is by phone or chat.
    • Credit unions: Member-owned, nonprofit institutions. Often lower fees and better rates than banks. Membership requirements vary (by employer, location, or community).

    For most people in 2026, an online bank or credit union offers the best combination of low fees and good features.

    Step-by-Step: How to Open a Checking Account

    1. Compare accounts. Use sites like NerdWallet or Bankrate to compare checking accounts side by side. Focus on fees, ATM access, and overdraft policy.
    2. Gather your documents. Have your ID, Social Security number, and initial deposit amount ready.
    3. Apply online or in person. Most banks have a simple online application that takes 5 to 10 minutes. You can also visit a branch if you prefer face-to-face help.
    4. Fund your account. Transfer money from another bank, deposit a check, or use cash at a branch. Some banks activate your account immediately; others take 1 to 3 business days.
    5. Set up direct deposit. Give your employer your new routing and account number. Direct deposit often waives monthly fees and may unlock perks like early access to your paycheck.
    6. Order a debit card. Your card will arrive in 7 to 10 business days. Activate it when it arrives.
    7. Set up alerts. Most banks let you set up text or email alerts for low balances, large transactions, or unusual activity. Turn these on from day one.

    What Happens If You Have a Bad Banking History

    If you have been reported to ChexSystems — a database of banking history that most banks check — it can make it harder to open a checking account. ChexSystems records things like unpaid overdrafts or closed accounts with negative balances.

    If this applies to you, look for “second chance” checking accounts. These accounts are designed for people with past banking problems. Banks like Chime, Wells Fargo (Clear Access Banking), and many credit unions offer them.

    You can also request your free ChexSystems report at annualcreditreport.com and dispute any errors you find.

    Bottom Line

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    Opening a checking account is straightforward. Pick an account with no monthly fees, set up direct deposit, and enable balance alerts. For most people in 2026, an online bank offers the best deal — no fees, competitive features, and a solid mobile app. Once your account is set up, pair it with a high-yield savings account to keep your emergency fund earning interest separately from your spending money.

    Heads up: This article is for informational purposes only and does not constitute financial advice. We are not licensed financial advisors. Always consult a qualified professional before making major financial decisions.

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  • Venmo vs. Zelle vs. Cash App: Which Is Best for Sending Money in 2026?

    Venmo vs. Zelle vs. Cash App: Which Is Best for Sending Money in 2026?

    Venmo, Zelle, and Cash App are the three most popular peer-to-peer payment apps in the US. They all let you send money to friends and family quickly, but they work differently and have different strengths. Here is how to choose the right one.

    How Each App Works

    Venmo

    Venmo is owned by PayPal and is built around a social feed where transactions appear publicly by default. You link a bank account, debit card, or credit card. Transfers to your Venmo balance are instant; moving money to your bank account takes 1 to 3 business days for free or a few minutes with a 1.75% fee (minimum $0.25, maximum $25).

    Zelle

    Zelle is built into most major bank apps (Chase, Bank of America, Wells Fargo, and hundreds more). When both sender and receiver use Zelle through their bank, money moves directly between bank accounts — no intermediate balance. Transfers are typically instant and always free. There is also a standalone Zelle app if your bank is not partnered.

    Cash App

    Cash App is owned by Block (formerly Square). It functions as a digital wallet, a peer-to-peer payment app, and a brokerage account where you can buy stocks and Bitcoin. Standard bank transfers take 1 to 3 days for free; instant transfers cost 0.5% to 1.75% (minimum $0.25). Cash App also offers a free debit card linked to your Cash App balance.

    Side-by-Side Comparison

    Feature Venmo Zelle Cash App
    Transfer speed 1–3 days (free) / instant (fee) Usually instant 1–3 days (free) / instant (fee)
    Cost to send Free (bank/debit); 3% fee (credit card) Free Free (bank/debit); 3% fee (credit card)
    Social feed Yes (adjust privacy settings) No No
    Built into banking app No Yes (most major banks) No
    Debit card Yes No Yes
    Investing features No No Stocks and Bitcoin
    FDIC insured No (Venmo balance) Transfers go to insured bank No (Cash App balance)

    When to Use Zelle

    Use Zelle when speed and security are your top priorities. Because money moves directly between bank accounts, there is no app balance to worry about. It is the best option for sending larger amounts (rent, splitting bills) to someone you trust. Most major banks support it, so there is no app download needed if your bank already has it.

    When to Use Venmo

    Venmo is best for splitting costs with friends in social settings — dinner, trips, events. The social feed makes it fun and easy to see activity. Just make sure to set your transactions to private if you do not want others seeing your payment notes.

    When to Use Cash App

    Cash App makes sense if you want one app that handles payments, a debit card, and basic investing. It is also popular for sending money to people who do not have Zelle-compatible bank accounts. The Bitcoin and stock features are a bonus for users who want to dabble in investing.

    Scam Warning

    All three apps are common targets for scammers. Never send money to strangers, even if the request seems legitimate. Once you send money via Venmo, Zelle, or Cash App, it is very difficult or impossible to get back. Zelle in particular has been targeted by bank impersonation scams.

    Bottom Line

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    For sending money to trusted contacts who bank at major institutions, Zelle is the fastest and cheapest option. For splitting costs with friends socially, Venmo is the most popular choice. For an all-in-one digital wallet with investing features, Cash App stands out. Most people end up using two of the three depending on the situation.

    Heads up: This article is for informational purposes only and does not constitute financial advice. We are not licensed financial advisors. Always consult a qualified professional before making major financial decisions.

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  • What Is a Certificate of Deposit (CD)? How It Works in 2026

    A certificate of deposit (CD) is one of the safest ways to earn interest on your savings. Here is everything you need to know about how CDs work, what rates look like in 2026, and when they make sense for you.

    What Is a CD?

    A certificate of deposit is a savings account with a fixed interest rate and a fixed term. You deposit a lump sum, agree not to withdraw it for a set period (the term), and earn a guaranteed return. When the term ends, you get your original deposit plus the interest earned.

    Banks and credit unions offer CDs. They are insured by the FDIC (banks) or NCUA (credit unions) up to $250,000 per depositor, making them one of the lowest-risk savings vehicles available.

    How CDs Work

    1. You deposit money into a CD — typically a minimum of $500 to $1,000, though some banks have no minimum.
    2. You choose a term: anywhere from 3 months to 5 years.
    3. The bank pays a fixed annual percentage yield (APY) for the full term.
    4. At maturity (when the term ends), you receive your deposit plus interest.
    5. You can reinvest in a new CD or move the money elsewhere.

    CD Rates in 2026

    CD rates vary by bank, term length, and the broader interest rate environment. In 2026, high-yield CDs at online banks are offering competitive rates compared to traditional savings accounts at big banks.

    Online banks and credit unions typically offer the highest CD rates. Checking comparison sites like Bankrate or NerdWallet helps you find the best current rate for your preferred term.

    As a general rule, longer terms offer higher rates — but not always. Sometimes short-term CDs (3–6 months) offer better rates when banks are expecting rate cuts.

    What Happens If You Withdraw Early?

    Most CDs charge an early withdrawal penalty if you take money out before the term ends. Typical penalties range from 60 to 180 days of interest, depending on the bank and term length.

    For example, if a 1-year CD has a 90-day interest penalty and you withdraw at 6 months, you lose 90 days of interest from your total return.

    No-penalty CDs allow early withdrawals without a fee, but they typically offer slightly lower rates. They are a good option if you might need access to the funds.

    Types of CDs

    Traditional CD — fixed rate, fixed term, early withdrawal penalty. The most common type.

    No-penalty CD — lets you withdraw without a fee, usually after an initial lockup period of 6–7 days.

    Bump-up CD — allows you to request a rate increase once during the term if rates rise. Usually offered with lower starting rates.

    Step-up CD — the rate automatically increases at preset intervals during the term.

    Jumbo CD — requires a large minimum deposit (typically $100,000+) and may offer slightly higher rates.

    Brokered CD — purchased through a brokerage account. Can be sold on the secondary market before maturity, avoiding the early withdrawal penalty.

    CD Laddering Strategy

    A CD ladder splits your savings across multiple CDs with different maturity dates. For example, instead of putting $10,000 in a single 5-year CD, you put $2,000 each in 1-year, 2-year, 3-year, 4-year, and 5-year CDs.

    As each CD matures, you either use the funds or roll them into a new 5-year CD. This gives you:

    • Regular access to a portion of your money
    • Exposure to higher long-term rates
    • Protection against locking all your money in if rates rise

    When a CD Makes Sense

    CDs are a good fit when:

    • You have a specific savings goal with a known timeline (a vacation in 18 months, a down payment in 3 years)
    • You want a guaranteed return with zero risk
    • You have more savings than your emergency fund needs
    • You are nearing retirement and want to protect principal

    When a CD May Not Be the Right Move

    • You might need the money before the term ends
    • You want to keep money accessible for opportunities
    • High-yield savings accounts are offering comparable rates without locking up funds
    • You have high-interest debt — paying that down beats CD returns

    CD vs. High-Yield Savings Account

    The main difference: a HYSA lets you access your money anytime, while a CD locks it up for the term. In exchange for the lockup, CDs typically offer slightly higher rates — though in some rate environments the gap is small.

    For an emergency fund, a HYSA wins because you need access. For money you will not touch for a year or more, a CD may offer a better guaranteed return.

    Bottom Line

    A CD is a simple, low-risk way to earn more interest than a standard savings account on money you will not need for a defined period. Compare rates at online banks, consider a CD ladder if you have a larger amount to save, and make sure you understand the early withdrawal penalty before you commit.

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  • How to Avoid Overdraft Fees in 2026: 8 Simple Strategies

    Overdraft fees averaged $26.61 per transaction in 2026. If you overdraft a few times a month, you could be handing your bank hundreds of dollars a year. Here is how to stop paying them.

    What Is an Overdraft Fee?

    An overdraft fee is charged when you spend more than your account balance. The bank covers the transaction but charges you for the service. Some banks charge up to $35 per transaction. If multiple transactions overdraft in a single day, you can be hit with multiple fees.

    1. Switch to a Bank That Does Not Charge Overdraft Fees

    The simplest fix is choosing a bank that does not charge overdraft fees in the first place. Several banks now offer fee-free overdraft or simply decline transactions that would overdraw your account.

    Banks with no overdraft fees include Ally Bank, Chime, and many credit unions. These accounts decline over-limit transactions rather than charging you for them.

    2. Set Up Low Balance Alerts

    Most banks let you set up text or email alerts when your balance falls below a threshold you choose. Set an alert at $100 or $200 — enough warning to transfer money before you overdraft.

    This costs nothing and takes two minutes to set up in your bank’s app.

    3. Link a Savings Account as Overdraft Protection

    Many banks offer free overdraft protection if you link a savings account. When you spend more than your checking balance, the bank automatically transfers funds from savings to cover it. Some banks charge a small transfer fee ($5–$10), but it is far less than a full overdraft fee.

    Check your bank’s app or call to enable this if you have not already.

    4. Opt Out of Overdraft Coverage for Debit Card Purchases

    Under federal law, banks must get your permission (opt-in) before charging overdraft fees for debit card and ATM transactions. If you never opted in, these transactions are automatically declined when your balance is too low — no fee charged.

    If you opted in previously, you can opt out at any time by calling your bank or updating your account settings online.

    Note: this does not apply to checks or ACH transactions, which can still overdraft even without opt-in.

    5. Keep a Buffer in Your Checking Account

    Treat your real minimum balance as $100 or $200 instead of $0. When your “mental zero” is higher than your actual zero, you have a cushion that prevents accidental overdrafts from small timing errors.

    6. Use a Budgeting App

    Apps like YNAB (You Need A Budget) or Monarch Money track your spending in real time and show you exactly how much is available before bills hit. When you can see your upcoming expenses mapped against your balance, you know ahead of time if something will be short.

    7. Move Your Payday to Align With Your Bills

    If your biggest bills land right before payday, you may regularly run low for a day or two. Many employers and gig platforms now offer flexible pay schedules or early direct deposit. Getting paid two days early through your bank (Chime, Ally, and others offer this) can eliminate the gap entirely.

    8. Ask Your Bank to Waive the Fee

    If you overdraft for the first time or overdraft rarely, call your bank and ask them to waive the fee. Banks do this regularly for customers in good standing. A polite 2-minute phone call can save you $30. If they say no, ask again — or switch to a bank that does not charge overdraft fees.

    What About Overdraft Lines of Credit?

    Some banks offer a formal overdraft line of credit — essentially a small loan attached to your checking account. You pay interest on what you borrow, but the rate is usually much lower than the cost of repeated flat fees. If your bank offers this, it is worth considering as a backup.

    Bottom Line

    Overdraft fees are optional expenses. By switching to a fee-free bank, setting up alerts, linking a savings account, and keeping a small buffer, you can eliminate them entirely. The steps take less than an hour and the savings add up fast.

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  • Credit Union vs Bank: Which Is Better for You in 2026?

    Banks and credit unions both offer checking accounts, savings accounts, loans, and other financial services. But they work very differently — and choosing the right one can save you money and improve your banking experience.

    What Is a Credit Union?

    A credit union is a nonprofit financial institution owned by its members. When you join a credit union and deposit money, you become a part-owner. Profits are returned to members in the form of higher savings rates, lower loan rates, and lower fees.

    Credit unions are typically organized around a shared community — your employer, a profession, a geographic area, or a religious organization. Membership requirements vary by credit union.

    What Is a Bank?

    A bank is a for-profit financial institution owned by shareholders. Its goal is to generate profit for those shareholders. Banks earn money by charging interest on loans, collecting fees, and investing deposits.

    Banks range from small community banks to large national institutions like Chase, Bank of America, and Wells Fargo. Anyone can open an account at a bank — there are no membership requirements.

    Key Differences: Credit Union vs Bank

    Ownership Structure

    Credit union: Nonprofit, member-owned. Each member has an equal vote regardless of deposit size.

    Bank: For-profit, shareholder-owned. Decisions are made to maximize profit.

    Interest Rates

    Credit unions often offer better rates than banks on both savings and loans. Because they are nonprofit, they do not need to generate profit — so they pass savings on to members.

    That said, online banks have become highly competitive. Many online banks now match or beat credit union savings rates. If you are looking for the highest savings rate, compare both credit unions and online banks.

    Fees

    Credit unions tend to charge fewer and lower fees. Monthly maintenance fees, overdraft fees, and ATM fees are often lower or waived entirely for members.

    Traditional banks often charge higher fees, though many have eliminated monthly fees for accounts that meet minimum balance requirements.

    Membership Requirements

    Credit union: You must qualify for membership. Common requirements include working for a specific employer, living in a certain area, or being a member of a particular organization. Many credit unions allow family members of existing members to join.

    Bank: Anyone can open an account. No eligibility requirements beyond passing an identity verification and ChexSystems check.

    Products and Services

    Credit union: Offers most standard banking products — checking, savings, CDs, auto loans, mortgages, and credit cards. Smaller credit unions may offer fewer products than large banks.

    Bank: Large banks offer a wider range of products, including investment accounts, business banking, international services, and specialized loans.

    Technology and Convenience

    Large banks typically have more robust mobile apps, larger ATM networks, and more branch locations. Credit unions have traditionally lagged in technology, though many have improved significantly in recent years.

    Many credit unions participate in shared branching and shared ATM networks, which can give you access to thousands of locations nationwide without fees.

    FDIC vs NCUA Insurance

    Bank deposits are insured by the FDIC (Federal Deposit Insurance Corporation) up to $250,000 per depositor per account category.

    Credit union deposits are insured by the NCUA (National Credit Union Administration) up to the same $250,000 limit. Both offer equivalent protection — so your money is equally safe at either institution.

    When a Credit Union Is the Better Choice

    Consider a credit union if you:

    • Want better rates on auto loans, personal loans, or mortgages
    • Prefer lower fees and more personalized service
    • Qualify for membership at a credit union with strong rates and technology
    • Value a nonprofit, member-owned structure

    When a Bank Is the Better Choice

    Consider a bank if you:

    • Want no-hassle account opening with no membership requirements
    • Travel frequently and need a large ATM network
    • Need advanced banking features like international wire transfers or business accounts
    • Prefer the mobile app experience of a large bank or online bank

    Can You Use Both?

    Many people use both. You might keep a checking account at a large bank for the convenience and ATM access, while using a credit union for a car loan or a high-yield savings account.

    There is no rule that says you must pick just one. Use the institution that offers the best product for each need.

    How to Find a Credit Union

    You can search for credit unions you qualify for at MyCreditUnion.gov or use the NCUA credit union locator. Enter your employer, location, or affiliation to see which credit unions you are eligible to join.

    The Bottom Line

    Credit unions often offer better rates and lower fees, but require membership eligibility. Banks offer wider product selection and convenience, but charge more. Online banks have changed the equation — many now offer high savings rates with no fees, making them a strong third option.

    Compare rates and fees based on what you actually need: a checking account, a savings account, or a loan. The best bank or credit union is the one that serves your specific situation at the lowest cost.

    Related: Best online banks for 2026 | Best high-yield savings accounts | Best CD rates

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  • Best Checking Accounts of 2026

    The Best Checking Accounts of 2026

    A checking account is where your money lives day to day. You use it to pay bills, buy groceries, and get cash from an ATM. Picking the right one can save you hundreds of dollars a year in fees.

    This guide covers the best checking accounts of 2026. We looked at monthly fees, ATM access, overdraft policies, and interest rates.

    Our Top Picks

    1. Discover Cashback Checking — Best for Earning Cash Back

    Discover pays 1% cash back on up to $3,000 in debit card purchases each month. There is no monthly fee. No minimum balance is required. You also get free access to over 60,000 ATMs.

    Best for: People who want to earn rewards on everyday spending without paying fees.

    2. Axos Bank Rewards Checking — Best for High Interest

    Axos Rewards Checking earns up to 3.30% APY when you meet monthly requirements. Those include direct deposit and a minimum number of debit card transactions. There is no monthly fee and no minimum balance.

    Best for: People who want their checking account to grow like a savings account.

    3. Chase Total Checking — Best for Branch Access

    Chase has over 4,700 branches and 15,000 ATMs across the United States. The Chase Total Checking account has a $12 monthly fee. You can waive it with a $500 direct deposit, a $1,500 daily balance, or $5,000 in combined balances.

    Best for: People who prefer in-person banking or travel frequently within the US.

    4. Ally Interest Checking — Best Online Checking

    Ally Bank is one of the most popular online banks. Its Interest Checking account earns 0.10%–0.25% APY depending on your balance. There is no monthly fee. Ally reimburses up to $10 per month in out-of-network ATM fees.

    Best for: People who are comfortable banking entirely online and want to avoid fees.

    5. Chime Checking Account — Best for No Overdraft Fees

    Chime charges no overdraft fees, no monthly fees, and no minimum balance fees. Its SpotMe feature lets you overdraft up to $200 without a fee. Chime gives you access to over 60,000 fee-free ATMs.

    Best for: People who live paycheck to paycheck and want protection from overdraft fees.

    6. SoFi Checking and Savings — Best Combo Account

    SoFi bundles checking and savings in one account. With direct deposit, you earn 0.50% APY on checking and up to 4.60% APY on savings. There is no monthly fee. SoFi also pays your direct deposit up to two days early.

    Best for: People who want to keep checking and savings together at one bank.

    7. Capital One 360 Checking — Best for Teens and Young Adults

    Capital One 360 Checking has no monthly fee, no minimum balance, and no overdraft fees. It earns 0.10% APY on all balances. Capital One has physical cafes in several cities and over 70,000 fee-free ATMs.

    Best for: Teens, students, and first-time bank account holders.

    What to Look for in a Checking Account

    Monthly Fees

    Many banks charge $10–$15 per month for a checking account. That adds up to $120–$180 a year. Look for accounts with no monthly fee or easy ways to waive it, like a direct deposit.

    ATM Access

    Check how many fee-free ATMs the bank offers. Out-of-network ATM fees average $4–$5 per transaction. If you withdraw cash often, ATM access matters a lot.

    Overdraft Protection

    Overdraft fees average $35 per transaction. Some banks charge them multiple times per day. Look for banks that offer overdraft protection or no-fee overdraft coverage.

    Minimum Balance Requirements

    Some accounts require you to keep $1,000 or more to avoid fees. If your balance drops below that, you get charged. Online banks often have no minimum balance requirements.

    Interest

    Most checking accounts pay little or no interest. But a few, like Axos Rewards Checking, pay competitive rates when you meet certain conditions.

    How We Chose These Accounts

    We reviewed over 20 checking accounts from banks and credit unions. We scored each one on fees, ATM network size, overdraft policies, interest rates, and ease of opening an account online. We also considered mobile app ratings and customer service reputation.

    Frequently Asked Questions

    Is a checking account free?

    Many checking accounts are free if you meet certain conditions, like having a monthly direct deposit. Online banks tend to offer the most no-fee options.

    Can I open a checking account online?

    Yes. Most banks let you open a checking account entirely online in 5–10 minutes. You will need your Social Security number, a government-issued ID, and an initial deposit (some accounts require $0).

    What is the difference between checking and savings?

    A checking account is for everyday spending. A savings account is for storing money you don’t plan to spend right away. Savings accounts usually earn more interest but limit how often you can withdraw.

    What happens if I overdraft my account?

    If you spend more than your account balance, most banks charge an overdraft fee. Some banks will decline the transaction instead. A few, like Chime, let you go negative a small amount for free.

    Bottom Line

    The best checking account depends on your needs. If you want cash back, go with Discover. If you want high interest, look at Axos. If you need branches, Chase is a solid pick. If you want zero fees and overdraft protection, Chime or Capital One 360 are great choices.

    The most important thing is to avoid unnecessary fees. A no-fee checking account can save you over $100 a year with no extra effort.

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    See also: Best Credit Unions of 2026

    See also: Chime Review 2026

  • What Is a CD (Certificate of Deposit)? How CDs Work in 2026

    A certificate of deposit (CD) is a savings tool that offers a fixed interest rate in exchange for keeping your money deposited for a set period of time. CDs are one of the safest ways to earn a predictable return on cash you will not need immediately.

    How a CD Works

    When you open a CD, you deposit a lump sum of money for a fixed term — typically anywhere from 3 months to 5 years. In exchange, the bank pays you a guaranteed interest rate for that period. At the end of the term (the “maturity date”), you receive your original deposit plus the interest earned.

    Key features:

    • Fixed interest rate locked in for the full term
    • FDIC insured up to $250,000 per depositor per institution (at banks)
    • Early withdrawal typically triggers a penalty (commonly 3–6 months of interest)
    • At maturity, you can withdraw the full amount or roll it into a new CD

    CD Rates in 2026

    CD rates in 2026 remain elevated compared to the near-zero rates of 2020–2022. Online banks and credit unions consistently offer the best rates. As of early 2026, competitive CD rates include:

    • 3-month CD: 4.5%–5.0% APY
    • 6-month CD: 4.7%–5.1% APY
    • 1-year CD: 4.5%–5.0% APY
    • 2-year CD: 4.0%–4.6% APY
    • 5-year CD: 3.8%–4.5% APY

    Large national banks offer far lower rates — often 0.05%–0.50% — on the same terms. Always compare online banks and credit unions before opening a CD.

    Types of CDs

    Traditional CD: Fixed rate, fixed term. The most common type.

    High-yield CD: Offered by online banks with rates significantly higher than national bank averages.

    No-penalty CD: Allows early withdrawal without a penalty. Trade-off: slightly lower rate than a traditional CD of the same term. Good for money you might need before maturity.

    Jumbo CD: Requires a higher minimum deposit (typically $10,000–$100,000) and often offers a slightly higher rate.

    Brokered CD: Purchased through a brokerage account rather than directly from a bank. Can be sold on the secondary market before maturity, but pricing depends on current interest rates.

    CDs vs High-Yield Savings Accounts

    This is the most important comparison for most savers in 2026:

    Feature CD High-Yield Savings Account
    Interest rate Fixed for the term Variable (changes with Fed rate)
    Access to funds Locked in; penalty for early withdrawal Withdraw anytime
    Best use Money you will not need for a defined period Emergency fund, short-term savings
    Rate protection Yes — rate stays fixed even if Fed cuts rates No — rate drops if Fed cuts rates

    CDs are better if you want to lock in a high rate and protect against future rate cuts. High-yield savings accounts are better for money you need to access on short notice.

    The CD Ladder Strategy

    A CD ladder is a smart strategy for maximizing both rate and liquidity. Instead of putting all your money in one CD, you split it across multiple CDs with staggered maturity dates.

    Example of a basic 5-year CD ladder with $10,000:

    • $2,000 in a 1-year CD
    • $2,000 in a 2-year CD
    • $2,000 in a 3-year CD
    • $2,000 in a 4-year CD
    • $2,000 in a 5-year CD

    Each year, one CD matures. You reinvest it at the current 5-year rate. This gives you access to $2,000 every year while capturing long-term rates. If rates rise, you reinvest at the higher rate. If rates fall, most of your money is already locked in at the old higher rate.

    Early Withdrawal Penalties

    If you need to take your money out before the CD matures, most banks charge an early withdrawal penalty. Common penalties:

    • Terms under 1 year: 3 months of interest
    • 1-2 year terms: 6 months of interest
    • 3-5 year terms: 6–12 months of interest

    In most cases, even with the penalty, you end up ahead of a regular savings account for money held close to the full term. But for money you might need soon, a no-penalty CD or high-yield savings account is safer.

    Who Should Use CDs?

    CDs make the most sense if:

    • You have cash you will not need for a specific period (6 months, 1 year, etc.)
    • You want to lock in a high rate before the Fed cuts interest rates
    • You want a guaranteed, risk-free return better than a standard savings account
    • You are saving for a specific future expense (down payment, vacation, tax bill)

    Bottom Line

    CDs are one of the safest investments available — FDIC insured, predictable, and currently offering competitive rates. In 2026, the best CD rates come from online banks, not your local branch. For money you will not need for at least 3–6 months, a CD can earn significantly more than a traditional savings account. Use a CD ladder if you want both higher rates and regular access to a portion of your funds each year.

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  • What Is a Credit Union and Should You Use One? 2026

    Disclosure: This article contains affiliate links. We may earn a commission if you apply for a financial product through links on this page. This does not affect our editorial opinions or the products we recommend. Always compare options before applying.

    Credit unions are a different kind of financial institution. They are member-owned, not-for-profit organizations that often offer better rates, lower fees, and friendlier service than big banks. This guide explains how credit unions work, how they compare to banks, and whether you should switch.

    What Is a Credit Union?

    A credit union is a member-owned financial cooperative. When you join a credit union and open an account, you become a member and part-owner. Credit unions are not-for-profit, so any earnings go back to members in the form of lower fees, higher savings rates, and lower loan rates.

    Banks, by contrast, are for-profit businesses owned by shareholders. Their goal is to maximize profit, which sometimes comes at the expense of customer fees and rates.

    How Credit Unions Are Different from Banks

    Feature Credit Union Bank
    Ownership Members (you) Shareholders (investors)
    Profit purpose Returned to members Paid to shareholders
    Deposit insurance NCUA (up to $250K) FDIC (up to $250K)
    Loan rates Usually lower Vary widely
    Savings rates Usually higher Vary widely
    Fees Usually lower Often higher
    Branch network Usually smaller Often larger
    Technology/apps Can lag behind Usually better

    Are Credit Unions Safe?

    Yes. Credit union deposits are insured by the National Credit Union Administration (NCUA), a federal agency. The NCUA insures accounts up to $250,000 per member, per ownership category — the same protection level as FDIC insurance at banks. Your money is equally safe at a federally insured credit union as at any bank.

    Benefits of Credit Unions

    Lower Loan Rates

    Credit unions tend to offer lower rates on car loans, personal loans, mortgages, and credit cards. On a $25,000 car loan, even a 1% rate difference saves you hundreds of dollars over the loan term.

    Higher Savings Rates

    Credit unions often pay higher rates on savings accounts and CDs than big banks. Not always higher than top online banks, but usually better than traditional brick-and-mortar banks.

    Lower Fees

    Credit unions typically charge lower or no monthly fees on checking and savings accounts. Overdraft fees are also often lower.

    Personalized Service

    Credit unions are community-focused. Members often report better customer service and more flexibility when they need help (like working through a financial hardship).

    Downsides of Credit Unions

    Membership Requirements

    You must qualify to join a credit union. Membership is usually tied to your employer, geographic area, military service, profession, or affiliation with a specific group. However, many credit unions have broadened their membership criteria. Some allow anyone to join by making a small donation to a partner organization.

    Fewer Branches and ATMs

    Most credit unions are smaller than national banks. They may have fewer branches and ATMs. However, many credit unions belong to shared branching networks and surcharge-free ATM networks like CO-OP, which gives members access to thousands of locations.

    Technology Can Be Behind

    Some credit unions have less polished mobile apps and online banking tools than major banks like Chase or Bank of America. This gap has narrowed, but it still exists at smaller institutions.

    How to Find and Join a Credit Union

    1. Visit MyCreditUnion.gov to search for credit unions you are eligible to join
    2. Check whether your employer, school, or military affiliation qualifies you
    3. Look for community credit unions in your area that allow anyone to join
    4. Open a share account (savings account) to establish membership — usually requires $5 to $25
    5. Apply for checking, loans, or credit cards as a member

    Top National Credit Unions Worth Considering

    Alliant Credit Union

    One of the largest and most accessible credit unions in the U.S. Anyone can join by donating $5 to a partner charity. Excellent high-yield savings rate, no fees, and strong mobile app. Fully online.

    Navy Federal Credit Union

    The largest credit union in the country. Open to military members, veterans, and their families. Outstanding rates on auto loans and mortgages.

    PenFed Credit Union

    Open to anyone. Strong mortgage and auto loan rates. Also has competitive credit cards.

    Should You Switch to a Credit Union?

    Consider a credit union if you want lower loan rates, are frustrated by bank fees, or value personalized service. Keep your bank if you need a large ATM network, prefer a polished mobile app, or use features like Zelle that require a major bank.

    Many people use both: a credit union for loans and savings, and a big bank or online bank for everyday checking. See our guide to Best Checking Accounts 2026 for top online alternatives.

    Frequently Asked Questions

    Can anyone join a credit union?

    Not all credit unions are open to everyone, but many have broad membership criteria. Alliant Credit Union and PenFed are open to anyone in the U.S.

    Are credit unions better than banks?

    Credit unions usually offer better rates and lower fees. Banks often have better technology and larger ATM networks. The best choice depends on your priorities.

    What is a share account at a credit union?

    A share account is a credit union’s term for a savings account. Opening one with a small deposit establishes your membership in the credit union.

    Rates as of May 2026. Rates change frequently. Verify current rates directly with each institution before applying.

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  • Best Online Savings Accounts 2026

    Disclosure: This article contains affiliate links. We may earn a commission if you apply for a financial product through links on this page. This does not affect our editorial opinions or the products we recommend. Always compare options before applying.

    Finding the right savings account can add hundreds of dollars to your balance each year. Online banks pay higher rates than traditional banks because they have lower costs. This guide compares the best online savings accounts for 2026 so you can pick the right one fast.

    Why Online Savings Accounts Pay More

    Online banks do not have branch offices. They pass those savings to you as higher interest rates. A top online savings account can pay 10 to 20 times more than a typical big bank savings account.

    The national average savings rate at brick-and-mortar banks hovers near 0.45% APY. Top online accounts are paying 4.5% to 5.0% APY in 2026. On a $10,000 balance, that difference is about $450 per year.

    Best Online Savings Accounts of 2026

    1. Marcus by Goldman Sachs

    APY: 4.50%
    Minimum balance: None
    Monthly fees: None

    Marcus is one of the most trusted online savings accounts. There are no minimums and no fees. You can link it to any checking account and transfer funds in one to three business days. Marcus also offers no-penalty CDs if you want to lock in a rate.

    2. Ally Bank

    APY: 4.35%
    Minimum balance: None
    Monthly fees: None

    Ally is one of the most popular online banks. It offers a full suite of products: savings, checking, CDs, and money market accounts. The savings account has no minimums and pays a competitive rate. Customer service is available 24/7.

    3. SoFi Bank

    APY: 4.60% (with direct deposit)
    Minimum balance: None
    Monthly fees: None

    SoFi pays the highest rate on this list if you set up direct deposit. Without direct deposit, the rate drops to 1.20%. SoFi also offers checking bundled with savings, and members get perks like career coaching and loan rate discounts.

    4. American Express High Yield Savings

    APY: 4.25%
    Minimum balance: None
    Monthly fees: None

    American Express is known for credit cards, but its online savings account is a solid option. No minimums, no fees, and easy transfers. Good choice if you already bank with Amex.

    5. Discover Online Savings Account

    APY: 4.25%
    Minimum balance: None
    Monthly fees: None

    Discover offers one of the most user-friendly apps in the industry. No fees, no minimums, and a clean mobile experience. Discover also has cashback checking if you want to consolidate your banking.

    What to Look for in an Online Savings Account

    APY (Annual Percentage Yield)

    APY is the most important number. It includes the effect of compounding interest. Higher APY means more money in your pocket. Compare APY, not just the stated interest rate.

    No Minimum Balance

    Some accounts charge fees or lower your rate if your balance drops below a threshold. Choose an account with no minimum so you never worry about that.

    FDIC Insurance

    Make sure the bank is FDIC-insured. This protects up to $250,000 per depositor per institution. All five accounts on this list are FDIC-insured.

    Transfer Speed

    Online savings accounts are not checking accounts. You will need to transfer money to spend it. Look for accounts that offer next-day or same-day transfers.

    Mobile App Quality

    You will manage this account from your phone. Read app store reviews before signing up. Ally, Discover, and SoFi all rank highly for mobile experience.

    High-Yield Savings vs Money Market Accounts

    Money market accounts (MMAs) often pay similar rates to high-yield savings accounts. The main difference is that MMAs may come with a debit card or check-writing ability. For most savers, a high-yield savings account is simpler and just as good. Learn more in our guide to Best Money Market Accounts 2026.

    High-Yield Savings vs CDs

    CDs (certificates of deposit) lock your money for a set term but may offer slightly higher rates. If you do not need the money for 6 to 24 months, a CD can be a good complement to a savings account. If you might need the funds, stick with a savings account. Compare options in our Emergency Fund Calculator guide.

    How to Open an Online Savings Account

    1. Pick an account from the list above
    2. Click apply on the bank’s website
    3. Enter your name, address, Social Security number, and date of birth
    4. Fund the account with an initial deposit (most have no minimum)
    5. Set up transfers from your checking account

    The process takes about 10 minutes. Most accounts are open and funded within one to two business days.

    How Much Should You Keep in Savings?

    Most financial experts recommend keeping three to six months of living expenses in a savings account. This is your emergency fund. After that, consider putting extra money into a CD or investment account where it can grow faster.

    Learn more in our guide to How to Build an Emergency Fund 2026.

    Frequently Asked Questions

    Are online savings accounts safe?

    Yes. As long as the bank is FDIC-insured, your money is protected up to $250,000. All major online banks like Ally, Marcus, SoFi, and Discover carry FDIC insurance.

    Can I have more than one online savings account?

    Yes. There is no rule against having multiple savings accounts. Some people use different accounts for different goals: one for emergencies, one for vacation, one for a down payment.

    How often do online savings rates change?

    Online savings rates are variable. They move with the federal funds rate set by the Federal Reserve. When the Fed raises rates, savings APYs tend to rise. When the Fed cuts rates, they tend to fall.

    Is there a limit on withdrawals from a savings account?

    Federal Regulation D used to limit savings withdrawals to 6 per month, but this rule was suspended in 2020. Many banks still enforce their own limits, so check your account terms.

    Rates as of May 2026. Rates change frequently. Verify current rates directly with each institution before applying.

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