For the first time in years, you can earn a decent return on your rainy day fund. You’ll have a tough time finding such a deal from Charles Schwab Bank, though, which offers a pedestrian yield compared to what you can find elsewhere.
Account details and annual percentage yields (APYs) are accurate as of June 3, 2024.
Is the Charles Schwab savings account worth it?
The Charles Schwab Bank Investor Savings™ account offers a 0.48% APY. While that isn’t a terrible rate, and basically in line with the national average, it is much less than what you can earn from the best high-yield savings accounts on the market. Customers looking for the highest rates available, then, should continue their search.
Existing Schwab investing customers who don’t want to go through the hassle of switching savings accounts will enjoy unlimited refunds on ATM withdrawals fees and no maintenance fees. While the Schwab savings account won’t earn you much interest income, you won’t shell out a lot in fees, either.
How much can you earn?
How much you stand to earn off a Charles Schwab savings account depends on how much money you keep in it and how long you keep it in the account. Here’s what your balance will look like if you deposit $10,000 at 0.48% APY for both 10 and 20 years.
| ACCOUNT | DEPOSIT AMOUNT | APY | BALANCE AFTER 10 YEARS | BALANCE AFTER 20 YEARS |
|---|---|---|---|---|
Schwab Bank Investor Savings account | $10,000 | 0.48% | $10,492 | $11,007 |
How Charles Schwab compares
Before opening a savings account with Charles Schwab — or any savings account for that matter — you should do your research.
You want to seek out a savings account that offers the best interest rates and lowest fees. You may also want to work with a bank or credit union that offers the other banking services or financial products you need to manage your financial life effectively.
Charles Schwab offers similar savings rates to many other financial institutions, but let’s take a look at competitors who are blowing their rates out of the water with their high-yield savings account offers.
| ACCOUNT | DEPOSIT AMOUNT | APY | BALANCE AFTER 1 YEAR | EARNED INTEREST |
|---|---|---|---|---|
Schwab Bank Investor Savings account | $10,000 | 0.48% | $10,048 | $48 |
SoFi Online Savings Account | $10,000 | Up to 4.60% | Up to $10,470 | Up to $470 |
Citizens Access® Savings | $10,000 | 4.50% | $10,459 | $459 |
CIT Bank Platinum Savings | $10,000 | 5.00% | $10,517 | $517 |
Upgrade Premier Savings | $10,000 | 5.21% | $10,521 | $521 |
Other savings options at Charles Schwab
Charles Schwab certificates of deposit (CDs)
You stand to earn a lot more interest by keeping your savings in a Charles Schwab Brokered CD instead of a savings account. You can earn a CD rate anywhere from 4.40% to 5.51% APY, depending on how long you commit to keeping your savings in the CD.
CDs offer a lot less flexibility than a savings account. You won’t be able to remove your savings until the end of the CD term without risking a penalty fee. On the flip side, by agreeing to that set term, you lock in an APY for the entirety of that term.
Moreover, brokered CDs are slightly different from traditional CDs in a few ways, including you’ll have to sell your CD on the secondary market should you want your cash back early — rather than accepting an early withdrawal penalty from a CD offered by a bank.
Charles Schwab Money Funds
You can also earn a higher interest rate with a Schwab Money Market Fund than with a traditional savings account.
Charles Schwab’s Money Market Funds provide a way for investors to maintain stability, liquidity and income in their portfolios. These funds are designed to preserve the initial investment while offering potentially higher yields on cash compared to some other low-risk options.
Keep in mind these are investment products, which are distinct from savings accounts and come with more risk.
Investors have the flexibility to choose from a range of taxable and tax-exempt money funds — allowing them to optimize their investments based on their tax situation.
The most common options, though, are the Prime Money Funds, of which there are two. The Schwab Value Advantage Money Fund® Investor Shares (SWVXX) offers a seven-day yield (with waivers) of 5.15% APY and has no investment minimum; while the Schwab Value Advantage Money Fund® Ultra Shares (SNAXX) offers a seven-day yield (with waivers) of 5.30% APY, but requires a minimum investment of at least $1 million.
About Charles Schwab
Founded in 1963, Charles Schwab began his company as an investment advisory firm called Investment Indicator, which provided a newsletter for $84 a year. In 1971, it began conducting trading services as a broker-dealer under the name First Commander Corporation — finally changing its name to Charles Schwab & Co. two years later.
Today it is a behemoth investment services firm that has nearly $8 trillion in assets under management and two million banking accounts.
Frequently asked questions (FAQs)
The Schwab Bank Investor Savings account has a 0.48% APY.
While the Schwab Bank Investor Savings account offers a slightly higher APY (0.48%) than the national average savings rate of 0.45% (as of May 20, 2024), it is not considered to be a high-yield savings account.
To open a Charles Schwab savings account, you will download an application. From there, you will choose the type of account you want to open (such as joint or individual) and then will provide basic account information such as your name, Social Security number, mother’s maiden name and address.
You will then have to mail it to Schwab or upload it to the message center in your online Charles Schwab account.
BLUEPRINT
During college, Jacqueline DeMarco interned at a retirement plan advisory firm and was tasked with creating a presentation on the importance of financial wellness. During her research into how money can affect our health, relationships and career, Jacqueline realized just how important financial education is. Today, Jacqueline has worked with more than two dozen financial brands, including LendingTree, Capital One, Credit Karma, Fundera, Chime, Bankrate, Student Loan Hero, SoFi, and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school.
BLUEPRINT
Ashley Barnett has been writing and editing personal finance articles for the internet since 2008. Before editing for USA TODAY Blueprint, she was the Content Director for an international media company leading the content on their suite of personal finance sites. She lives in Phoenix, AZ where you can find her rereading Harry Potter for the 100th time.
BLUEPRINT
Taylor Tepper is the lead banking editor for USA TODAY Blueprint. Prior to that he was a senior writer at Forbes Advisor, Wirecutter, Bankrate and Money Magazine. He has also been published in the New York Times, NPR, Bloomberg and the Tampa Bay Times. His work has been recognized by his peers, winning a Loeb, Deadline Club and SABEW award. He has completed the education requirement from the University of Texas to qualify for a Certified Financial Planner certification, and earned a M.A. from the Craig Newmark Graduate School of Journalism at the City University of New York where he focused on business reporting and was awarded the Frederic Wiegold Prize for Business Journalism. He earned his undergraduate degree from New York University, and married his college sweetheart with whom he raises three kids in Dripping Springs, TX.
