Study: The Easiest and Hardest States to Save Money in 2025

When it comes to saving money, where you live matters.

Back in 2022, I wrote a story about remote workers who relocated to cities that provided financial incentives to move, with some cities providing cash incentives as high as $12,000. I interviewed folks around the country that were taking a chance to maximize their budget in a post-COVID world, no longer tied to a particular area as they transitioned to working remotely.

Doing so allowed these folks to meet new people, buy a house, and, for one individual, even start their own business. Cities such as Tulsa, Oklahoma, are still offering a cash incentive to move there if you work remotely.

But you don’t need a relocation bonus to save money by moving to a new state. Indeed, moving cities is how I’m personally saving $24,000, moving from Boston to Washington, D.C.

If you’re contemplating a similar move, but don’t know where to start, a new Bankrate study ranked all 50 U.S. states based on how easy — or difficult — it is for residents to grow their savings.

Bankrate’s Easiest and Hardest States to Save Money study examined several factors within each state, including the cost of living, state and local tax rates, employment growth and interest rates on certain deposit accounts to determine which states offer the best (and worst) environment for building savings.

Here are the top five easiest and hardest states to save money.

SOURCE: Bankrate Easiest and Hardest States to Save Money study

The easiest states to save money

The top five easiest states share three characteristics:

• Lower-than-average tax burdens
• Affordable living costs
• Stable employment growth

A lower cost of living and taxes mean residents can put more of their earnings into savings accounts rather than daily expenses. And a stable or growing job market means it may be easier for workers to secure employment and earn higher wages.

In terms of taxes, the southern states in the top five feature a state and local tax burden of 7.6 percent to 9.3 percent, all of which are below the national median of 10.2 percent, according to Bankrate’s study. The tax criteria in the study were originally gathered by the Tax Foundation, which included all taxes reported by the U.S. Census Bureau’s State and Local Government Finance division, the most comprehensive resource on state and local tax collections data. This includes items such as property taxes, general sales taxes, and individual and corporate income taxes.

Moreover, each of the top five states ranked in the top 20 for employment growth over the past five years in the study. Employment growth suggests the local economy offers residents more job opportunities, providing more avenues to earn money. The local economy category in the study also takes into account a state’s cost of living, which includes housing and food costs, in addition to the household debt-to-income ratio.

Lastly, Bankrate’s study took into account the average annual percentage yield (APY) on two types of deposit accounts — certificates of deposit (CDs) and money market accounts (MMAs) — available to each state. It’s worth mentioning that interest rates on deposit accounts don’t vary dramatically from state to state.

Top-yielding accounts tend to be offered by online-only banks with nationwide availability. However, if you’re interested in banking at a local bank or credit union within a state, it could make a difference.

1. Tennessee

The Volunteer State ranks as the easiest state to save money in the U.S., thanks primarily to a low local tax burden and a significantly low cost of living.

Tennessee ranked third in the tax category, with a combined state and local tax burden of 7.6 percent. Only Alaska and Wyoming offer lower tax rates than Tennessee.

In terms of the local economy, Tennessee ranked 10th among all states, tying with Indiana, signaling a low cost of living in the state. Total nonfarm employment grew 6.2 percent and inflation-adjusted household income grew 20.6 percent in Tennessee over the last five years.

Lastly, Tennessee has the fifth-highest average MMA rate among U.S. states (1.7 percent APY), which means consumers may earn a higher yield opening an MMA account in Tennessee than in other U.S. states. Tennessee landed in the bottom half of average CD rates, coming in 36th place, also with an average rate of 1.7 percent APY.

2. Missouri

Missouri’s overall rank came right under Tennessee as the second-best state to save money, thanks to ranking highly in both the local economy and interest rate categories.

The state took eighth place in the local economy category, which included a seventh-place ranking in the cost of living, signaling that everyday expenses in Missouri are among the lowest in the country.

In terms of taxes, Missouri ranked last among the top five states on this list, signaling that the state has a slightly higher tax burden, with a state and local tax rate of 9.3 percent, according to the study.

Although MMA and CD savings rates vary mildly from state to state, Missouri also ranked well for its interest rate environment for CD and MMA accounts. It ranked ninth best in the average MMA rate compared with other U.S. states (1.6 percent APY), and seventh best for average CD rates (2.2 percent APY).

3. Texas

Coming in as the third-easiest state to save money is the Lone Star State. A low tax burden and growing employment numbers are the chief reasons for Texas’s placement.

Texas ranked fifth in the tax category — with a state and local tax rate of 8.6 percent — and second-best in the local economy category, propelling the state towards the top of this list.

Although the state ranked 16th in cost of living, Texas’s local economy ranked so highly because it took fourth place in the employment growth subcategory, as the number of employed workers (full-time and part-time) in Texas rose 10.8 percent over the past five years, according to the study. A growing job market can help make it easier for residents to earn higher wages and increase their savings.

Moreover, Texas came in 10th place for its household debt-to-income ratio, tying with a couple of other states, including Massachusetts, Oklahoma, Pennsylvania, West Virginia and Wisconsin.

Of all categories, the Lone Star State ranked lowest in the deposit account yield category, among the top five easiest states to save money. In fact, it ranked in the lower half of all U.S. states in that category, indicating that Texas deposit accounts generally offer subpar rates.

4. Oklahoma

Oklahoma came in fourth overall among the top five easiest states to save money, primarily due to a low cost of living.

While the Sooner State only ranked 10th best in the tax category — with a state and local tax rate of 9 percent — it ranked second-best in the cost of living subcategory among all U.S. states, according to Bankrate’s study, indicating that everyday goods and services are cheaper there than in the majority of the country.

In terms of deposit accounts, Oklahoma ranked 13th for its interest rate environment for CD and MMA accounts, including third best for its average MMA rate of 1.7 percent APY.

5. Florida

Rounding out the top five easiest states to save money is the Sunshine State.

A large portion of that standing is due to Florida’s ranking as fifth best in the U.S. for employment growth, which increased by 10.5 percent from 2019 to 2023 for part-time and full-time non-farm workers, according to Bankrate’s study. Moreover, the state saw a significant increase in inflation-adjusted household income, rising 23.8 percent from 2019 to 2023, placing it sixth best in the country.

But Florida didn’t score higher on this list because of its higher cost of living compared with other states — ranking 34th overall — which brought down its local economy category rank.

Florida experienced a population boom during the COVID-19 pandemic, contributing to the state’s skyrocketing housing costs in recent years. The state has also had a significant increase in home prices, homeowners’ insurance rates and property taxes, according to Bankrate’s study.

Lastly, deposit account APYs tend to fare better in Florida compared with most other states, coming in fifth place overall.

The hardest states to save money

The five hardest states to save money feature two Western states and three Northeastern states.

These five states have a cost of living significantly higher than the national average, with Hawaii topping the list as the hardest state to save money. This shows that the residents of these states may be spending more on housing, health care, transportation and other day-to-day expenses than others, and may have less money left to contribute to a savings fund.

The five states featured below feature a combined state and local tax rate of between 13.2 percent and 15.4 percent, all higher than the national median of 10.2 percent. This added cost could cut into consumers’ take-home pay and budgets, leaving less opportunity to save money.

What’s more, many of the bottom five states have declining job growth. A slower-growing job market can make it more difficult for residents to find work and earn higher wages, limiting opportunities to build their savings.

These are the five hardest states to save money in descending order.

5. New Jersey

New Jersey is the fifth-hardest state to save money in the U.S., with high taxes and a costly local economy.

The state took 45th place in the tax category among all U.S. states, with a state and local tax rate of 13.2 percent, according to Bankrate’s study.

New Jersey also has a high cost of living, coming in at 44th place among all states. Higher everyday expenses contribute to that ranking as the seventh-worst state in the local economy category.

The state’s interest rate environment is slightly better than other states on this list, ranking 29th overall. New Jersey has an average MMA rate of 1.2 percent APY and an average CD rate of 1.8 percent APY. While these rates aren’t significantly lower than in other states, they still make it challenging for residents to grow their savings.

4. California

California ranks as the fourth-hardest state to save money, due in large part to its high cost of living and significant tax burden.

The Golden State ranked 49th in the local economy category, with the third-highest cost of living in the country, according to Bankrate’s study. Everyday expenses in California, including housing and utilities, are among the most expensive in the U.S.

Californians also have a high household debt-to-income ratio, ranking 37th among all U.S. states. A higher debt burden means residents may have less flexibility in their budgets to contribute to savings.

Lastly, California has a high tax burden, ranking near the bottom of all U.S. states at 46th place, with a state and local tax rate of 13.5 percent, according to Bankrate’s study.

And while California’s economy showed some job growth, with a 3.2 percent increase in non-farm jobs over the past five years, it still ranked No. 30 in employment growth — lower than many other states.

3. Vermont

The third-hardest state to save money is Vermont, primarily due to a weak job market and high tax burden.

The state ranked third worst for employment, with non-farm employment growth declining by 0.5 percent over the past five years.

Vermont also has the fourth-highest tax burden in the U.S., with a state and local tax burden of 13.6 percent.

In addition to these challenges, Vermont offers some of the lowest interest rates for deposit accounts. The state ranked third worst for its interest rate environment, with an average MMA rate of 0.3 percent APY and an average CD rate of 1.6 percent APY.

2. Connecticut

Connecticut ranks as the second-hardest state to save money, largely due to its high tax burden and above-average cost of living. The state has the second-highest state and local tax burden nationwide at 15.4 percent, meaning residents have less take-home pay to put towards savings.

The Nutmeg State also ranked 43rd in the local economy category, with a cost of living that’s well above the national average, according to Bankrate’s study. Higher everyday expenses make it more difficult for residents to set aside money for the future.

Additionally, Connecticut has experienced relatively slow job growth in recent years. It ranked near the bottom of all states at the No. 40 spot in non-farm employment growth over the last five years, with only a 1.3 percent increase.

1. Hawaii

The beautiful nature of Hawaii comes at a cost, as the Aloha State is the hardest state in the U.S. to save money. This is largely due to two factors: its exceptionally high cost of living and sluggish job market.

Hawaii also has the highest cost of living in the country, according to Bankrate’s study, indicating that everyday expenses such as housing, groceries and transportation are significantly more expensive than in other states.

The Aloha State also has a shrinking job market with a declining rate of 2.3 percent for all non-farm employment in recent years.

Lastly, Hawaii ranks near the bottom (the third-worst in the country) of the tax category, placing a heavy burden on its residents with a state and local tax rate of 14.1 percent.

And it ranks dead last for its deposit account yields, offering the lowest average rates for CDs (0.4 percent APY) and MMAs (0.1 percent APY) in the country.

How each state stacks up

SOURCE: Bankrate Easiest and Hardest States to Save Money study

Savings APYs are still high

APYs on deposit accounts naturally fluctuate according to macroeconomic conditions. Chief among those is the Federal Reserve’s federal funds rate, which is the rate at which banks borrow and lend each other money, usually on an overnight basis. Slashing the federal funds rate has the indirect effect of lowering APYs.

The Fed paused cutting rates in March, indicating that APYs may remain elevated for a bit longer, so it’s still a great time to open a new savings account if you find your current yield to be lackluster.

Online-only banks tend to offer top-notch yields on nationally available accounts compared with traditional brick-and-mortar banks — and that includes many of the largest institutions offering wide branch availability across several states. In fact, the largest institutions tend to offer some of the lowest yields on the market.

As such, you don’t need to cross state lines in order to open a top-notch CD, savings or money market account.

What to do if you can’t move to a savings-friendly state

Depending on your financial situation, moving to a new state can provide a great avenue to maximize your savings potential, and perhaps even give you more disposable income, to boot. But what if you can’t move?

Because your state’s local tax burden and cost of living isn’t something you can change, you’ll need to rely on what you can control. When it comes to saving money, that really means two things: generating more income and/or cutting back on your expenses.

Here are some tips for saving money on a tight budget:

• Make small, consistent changes: Cut back on unnecessary expenses like unused subscriptions and impulse purchases.
• Stick to a budget: Use a budgeting method like the 50/30/20 rule or a budgeting app to track expenses and find areas where you can cut back.
• Automate savings: Set up automatic transfers to a high-yield savings account or retirement plan (such as a 401(k)) to ensure consistent savings.
• Maximize cash-back and discounts: Use cash-back apps, compare insurance rates and look for bank bonuses to get extra savings on everyday expenses.

Learn more: Create a monthly budget in five steps

And if you find that cutting back on your expenses isn’t enough, it could be time to turn to the gig economy or find a way to generate passive income. If you’ve got some extra cash to invest, now could be a good time to open a high-yield CD, which promises a fixed rate of return for the specified time period. Just be sure you won’t need to touch that money until the CD matures to avoid shelling out money in early withdrawal penalties.

All of this noted, remember that moving to another state may come with a cost large enough to offset savings for some time, not to mention you could run into hiccups during your move that end up costing you even more money. What’s more, it may not always be the right choice to leave your current community to save money in another state, as there are a host of political and social factors to also consider, not just the bottom line in your pocketbook.

“Aspiring savers should review this data carefully, but also consider that certian metro areas may not reflect the state average,” Kates says. “Job availability and cost-of-living may vary from region to region, while average savings rates may remain more consistent.”

Bottom line

If you’re looking to maximize your savings, states in the Midwest and South — such as Tennessee, Missouri and Texas — offer a more favorable financial environment due to low costs and taxes and strong employment growth. On the other hand, if you live in such states as Hawaii, California or Connecticut, high costs and taxes may make it much harder to save.

Where you live can make a significant difference to your financial future, so consider those factors if you’re looking to improve your ability to save.

Methodology

To determine where it’s easiest and hardest for Americans to save money in the U.S., Bankrate compared all 50 states based on seven metrics across three categories (weightings in parentheses): economic conditions (50 percent), taxes (25 percent), and the interest rate environment for certificates of deposit (CDs) and money market accounts (both 25 percent). We leveraged the latest data available for each metric.

State economies have the biggest impact on residents’ ability to save as they influence the cost of living, income, the job market and how much debt individuals within that state might take on. To measure each state’s economic conditions, Bankrate considered the following data points (sources and weightings in parentheses):

• Cost of living (Missouri Economic Research and Information Center, 2024 – 17.5 percent)
• Four-year percent change in inflation-adjusted household income (U.S. Census Bureau, American Community Survey, 2019-2023 – 7.5 percent)
• Five-year percent change in total nonfarm employment for part-time and full-time workers (Bureau of Labor Statistics, 2019-2024 – 7.5 percent)
• Household debt-to-income ratio (Federal Reserve, Q2 2024 – 17.5 percent)

Statewide household debt-to-income ratios and cost of living hold a combined weight of 35 percent because those metrics are more representative of an economic environment that would foster better opportunities to save money. The five-year change in total nonfarm employment and inflation-adjusted household income hold a combined weight of 15 percent.

Bankrate also analyzed combined local and state tax burden rates from the Tax Foundation as of 2022. States with lower tax burden rates were rewarded in the ranking. To measure every state’s interest rate environment, we analyzed average certificate of deposit (CD) and money market account (MMA) account rates based on APYs listed in each state as of the week of February 19, 2025, via Bankrate. Average CD rates are based on any CD maturity. States with higher average CD and MMA rates were rewarded in the ranking. In the overall ranking, No. 1 means the easiest state to save money, and No. 50 means the hardest state to save money.