Some savings accounts are now offering 4.5% with no minimum deposit

“With interest rates rising, the most competitive savings accounts offer yields last seen in 2009 and they continue to climb,” says says Greg McBride, chief financial analyst at Bankrate. “The top-yielding, nationally available savings accounts are paying above 4% … Not only are these accounts available nationwide, but many of the accounts yielding above 4% require no minimum deposit, so they’re literally available to everyone” says Greg McBride, chief financial analyst at Bankrate. 

That said, your average savings account still isn’t paying a ton. Indeed, below are the latest average rates on savings accounts, according to data from Bankrate released on March 29.

Of course, you may be wondering whether you need savings when inflation is so high? But pros say the answer is yes, and keeping anywhere from 3-12 months of essential income in an emergency fund is advised. If you’re a dual income household with each partner in a different field, you might get away with less, while a single parent might want more.

The idea here is to shore yourself up for a layoff or financial emergency. “People dip into retirement plans for withdrawals or 401(k) loans as a stop gap measure but those choices usually end up with more negative consequences,” says certified financial planner Derieck Hodges at Anchor Pointe Wealth.

Savings account vs. money market account

The emergency fund should go somewhere safe like a high-yield savings account, which is “accessible but just far enough out of reach that you’re less tempted to raid it for discretionary spending,” says McBride. (See the highest savings account rates you may get now here.)

While savings accounts are flush with perks, like flexibility, ease of saving, earning interest and knowing your money is protected, there can be drawbacks of having your money in high-yield savings accounts too. These include withdrawal limits that incur fees when you’ve exceeded the number of withdrawals in a month.

What’s more, over the long run, these accounts may not always pay as much as other vehicles. “Once you’ve reached your target amount, you can shift the saving amount to something else like an investment account to begin building wealth,” says certified financial planner Mark Humphries at Sentinel Financial Planning.

Another account-type to consider is a money market account (MMA); they’re savings accounts that have debiting and check-writing abilities accompanied by higher interest rates than traditional savings accounts.

That said, MMAs frequently have higher minimum balance requirements and usually have subpar interest rates compared to high-yield savings accounts. But if having the option to spend directly from a savings account is something that’s important for you, a MMA offers decent rates with the flexibility of writing checks or using a debit card attached to the account.

No matter which account you pick, always read the fine print and take note of any balance limitations on earning a higher yield, any direct deposit or monthly transaction requirements to earn that yield and any geographic limitations or membership requirements, according to McBride. And always “make sure you’re dealing directly with a regulated, federally-insured financial institution and not a third-party solution,” says McBride.