Savings Account for Bad Credit

Over 50% of Americans in the United States would not have enough money in their savings to cover a $1,000 emergency. According to a Bank Rate survey from January 2020, most people would use other means to cover the expense such as; taking out a loan, using a credit card, and borrowing from friends or family members. This is why having a savings account for bad credit, and putting money into it can help you be ready for these situations. That’s why we put together a guide for opening a savings account with bad credit.

How a Savings Account Can Improve Your Bad Credit

It is essential to have a savings account while rebuilding your bad credit. Emergencies that involve money are inevitable, and the last thing you want to do is be in a bind to borrow more money that will include more monthly payments with your bad credit. When you open a savings account with bad credit, it can help you improve your situation by:

  • Having money for emergencies to avoid more debt and monthly payments
  • Avoiding stress and hassle when applying for a loan or credit card with a bad credit score
  • Earning interest on your savings which will build you more money
  • Having money for significant purchases and paying with cash rather than credit

Top Savings Account for Bad Credit

saving accounts for bad credit

Savings accounts with high interest and no monthly fees will be the best option allowing you to keep all of your hard-earned money and build wealth faster, even with bad credit. To assist with your search for the best savings account for bad credit, we put together a list of the top 5. Here are banks that open accounts online:

1. CIT Bank Savings Builder

CIT Bank has multiple savings accounts, and one of them is the Savings Builder, which is an interest-bearing account. You have to meet specific requirements based on either a minimum balance or a monthly commitment to generate earnings on your money.

Why Choose the Savings Builder?

A great feature of the Savings Builder is the option to be a high balance saver or a monthly saver even with poor banking history or bad credit.

  • Maintain a $25,000 account balance as a high balance saver.
  • The other option is to commit to a minimum of $100 a month.
  • The highest rate offer at this time is 0.95% APY, and both options allow for interest to compound daily and deposit into your account monthly.

Other Highlights of the Account:

  • Your money is FDIC insured up to $250,000
  • The minimum opening deposit is $100
  • No monthly service fees
  • Free online banking transfer deposits to another account at another bank
  • Limit of 6 withdrawals per month with online and mobile banking

2. CIT Bank Money Market Account

CIT Bank opens multiple savings accounts online. The Money Market offers faster access to your money with online banking features. There are no major requirements to meet to earn interest on your cash even with poor credit.

Why Choose the Money Market Savings?

The Money Market comes with a higher interest rate of 1.00% APY at this time, with no commitment.

  • You can access your money with electronics funds transfer direct deposit, by mail, or telephone.
  • There is no monthly balance requirement or monthly deposit required

Other Highlights of the Account:

  • No monthly fees
  • Minimum of $100 opening deposit is required
  • Your money is FDIC insured up to $250,000
  • Use their award-winning online and mobile banking features to transfer money and deposit checks
  • Limit of 6 withdrawals per month with online and mobile banking

3. Sallie Mae High-Yield Savings

A High-Yield Savings with Sallie Mae allows you to earn money to reach your goals at a faster rate, even with poor credit. High-Yield savings offers higher interest rates than regular savings accounts.

Why Choose the Sallie Mae Savings?

The Sallie Mae Savings has a competitive interest rate of 0.90% APY at this time.

  • The interest is compounded daily and deposited into your account every month.
  • They were chosen as one of the best savings accounts for 2020 by GoBankingRates.

Other Highlights of the Account:

  • No monthly balance requirements or monthly maintenance fees
  • Limit of 6 withdrawals per month with online banking
  • Your money is FDIC insured up to $250,000
  • Manage your banking online
  • No minimum opening deposit required.

4. Varo High-Yield Savings

The Varo High-Yield Savings offers two percent APY opportunities to earn more money, faster. To enroll, you have to apply for a regular second chance checking account with no regard for your bad credit.

Why Choose the Varo SavingsAccount?

You can earn an APY of 1.21% or 2.80% at this time based on the amount of money you have saved and by their checking account requirements.

  • Earn 2.80% APY by making at least 5 debit card purchases each month, direct depositing at least $1,000 or more a month, and keeping a daily balance at or below $10,000.
  • If you can’t meet these requirements, then you will benefit from 1.21% APY.
  • Enroll in savings tools such as “save your pay” to automatically transfer a percentage of your direct deposit into your savings account or “save your change” by rounding up each debit transaction to deposit the difference into your savings.

Other Highlights of the Account:

  • No minimum balance requirements or monthly charges
  • Opening deposit can be as little as $0.01
  • Your money is FDIC insured up to $250,000
  • Manage your banking online and with mobile banking

5. Capital One 360 Performance Savings

The 360 Performance Savings with Capital One is one of the High-Yield savings accounts that takes less than 5 minutes to apply for and includes top-rated online features to help you manage and save your money.

Why Choose the 360 Savings?

The 360 Savings earns an APY of 1.00% at this time, no matter how much is in your account while you are rebuilding your credit.

  • Earn interest with a savings balance as low as $1
  • No minimum balance requirements or monthly charges

Other Highlights of the Account:

  • Easily make deposit transfers to other banks.
  • Limit of 6 withdrawals per month with online banking
  • Your money is FDIC insured up to $250,000
  • Deposit checks using their top-rated mobile app
  • No opening deposit is required.

Trust that Your Money is Safe in a Savings Account for Bad Credit

You may worry about the safety of your money in a savings account, especially with poor credit, but almost all bank accounts are FDIC-insured up to $250,000. So you can have peace of mind if something were to happen, you would be guaranteed that amount at least.

Build a Savings Habit

We all know that saving money is a good habit. Having a decent amount of money in savings can bring peace of mind in case of emergencies related to job loss or house repairs. It also brings financial freedom by saving for items we want to buy without going into debt to do it, especially while rebuilding credit. Although we know it is a good thing to do, it can be challenging to build the habit by disciplining ourselves to put the money away and leave it alone. See more recent posts on our homepage.

Here is some information to help you create a savings habit:

Save Money Without Thinking About It By Using Automatic Transfers

Does a month pass by after getting paid make you realize that you didn’t save a portion of your paychecks? One of the simplest ways to save money is to set up an automatic transfer from your checking to your savings accounts. You can set up a weekly amount, a monthly amount, or whatever you prefer. You can choose how much you want to transfer as little as $5 to $200. Whatever the amount or the frequency, look into setting up a transfer with your online bank account to start saving now.

Consider Moving Your Savings Accounts

It is one thing to start saving your money; it is another to be tempted to spend the money. Consider moving your savings accounts to another bank. Moving your accounts will avoid readily available same-day transfers between online accounts and constant visibility if you view your checking account transactions often. See how to open a bank account online with no deposit and bad credit here.

Be Mindful of What You Spend Your Money On

To start reaching your savings goals or if you need extra money to save, it is essential to pay attention to every dollar you spend. A budget can help you keep track of purchases or just think about what you would rather have than the coffee you’re about to buy. For example, the new house or dream vacation you want to take. Add up your daily expenses and see how much you could be saving if you give up a few things. If you like this post, then check out the banks for bad credit.