Updated February 10, 2021

Best Online Savings Account

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Good online savings accounts have a high interest rate, flexibility and are fully secured. Here are the best banks to consider.

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Where is a Good Place to Open a Savings Account?

Interest RateCIT Bank
Big BankHSBC Direct
No FeesDiscover Bank
Savings With ATMsSynchrony Bank
Customer ServiceAlly Bank

Saving money is one of the smartest financial practices to have. But did you know that there's a, shall we say, dumb way of doing it?

Interest rates on typical bank savings accounts are laughably low. The national average interest rate was 0.05% as of December 10, 2020.[1]

I spent years parking my hard-earned savings in that typical savings account you get with a bank checking account. And guess what? My savings just sat there, doing nothing. I didn't know any better. The $10 a year I was getting in interest was a joke.

And then I caught on. I could earn a LOT more in interest with online savings account options that pay over 10x the national average. Why not let your hard-earned savings work for you instead of just sitting there?

I'm going to share my research for the best online high-interest savings accounts. Don't make my mistake - choose one of these accounts to get the most out of your savings.

If you're considering opening a personal checking or savings account, check out these promotions. You may also want to consider money market accounts:

Fact: 8% of people don't have any banking accounts at all. Now is the time to start saving.

How much do you save a month?

What to Look for in a Savings Account

There are a few things you want to have in an online savings account:

1. Security
My big hesitation was whether it's safe to store my money with a non-traditional bank. No worries - the banks on this list are all under FDIC insurance, which means that if the bank defaults, the government will pay you back everything you had in the account (up to $250,000).

2. Flexibility
Of course, you want to be able to remove your money at any time when you need to use it, without penalty. Easy access to your funds is important. All of these allow you to transfer funds to your existing checking account at any time.

Note that federal regulation limits how many times you can take your money out - you can make only 6 ACH withdrawals/transfers from a savings account per statement cycle. Also, note that it may take a few days for electronic transfers to complete.

3. Yield rate
After I'm sure my money is secure and that I can access it, really, all I care about is the interest rate. It's pretty obvious that you want the highest APY you can get.

4. Minimum balance
Some high-yield savings accounts require a minimum balance. If you don't keep that balance, the bank may charge monthly maintenance fees or reduce interest rates.

If you're just parking your money there (which is the purpose of a savings account), then this shouldn't be a problem. But to be fair, I'm including options with no account minimums as well.

Tip: Some online savings accounts give you extras like ATM access and bill pay. While these features are nice, you're probably already able to do those with your current bank account. So to me, it's not an important feature.

But if these are important activities for you, do some further research to see which accounts below have those features.

Best Online Savings Accounts

Here are our favorite online banks with high-yield savings rates.

No Fees: Discover Bank

Discover, known for their popular credit cards, also provides online banking.

Its savings account may not have the highest APY, but it does offer another incentive.

It often offers cash bonuses to eligible new customers. This provides a nice little boost to your savings balance. However, to get the bonus, it does require a higher initial deposit. The bonus makes the effective savings rates much higher.

There are no monthly fees or balance requirements. Another big advantage is that many common banking fees are waived. There are no fees for excessive withdrawals, insufficient funds, or incoming wires.

Discover is a full-service bank with cashback checking, savings, CDs, credit cards, and loans.

Best Big Bank: HSBC Direct

Many big banks now offer online-only accounts for everyone nationwide. This gives you the advantage of high online rates backed by a reputable, well-known national bank.

HSBC Direct is the online division of HSBC, one of the largest global banks. Its online savings account has a high APY with no monthly fee and only $1 minimum to open.

This is a great option for those who need a low minimum balance. We all need to start somewhere!

Note that this account can only be opened and managed online. You can't go to a branch to conduct business.

Best for Active Savers: CIT Bank

CIT Bank's Savings Builder account has one of the highest rates currently on the market. To receive the top-tier APY, you need to open the account with $100 initial deposit, and deposit at least $100 every month (which is easy to meet). It encourages you to save money by rewarding active savers with a better interest rate.

So, if that sounds like you, it's worth checking out to get that top-tier rate.

The other way to get the high rate is to have a balance of $25,000.

There is no monthly fee. The savings account alone does not come with an ATM card for easy withdrawals.

CIT Bank is the online bank of CIT Group Inc., a financial holding company with over a century in business. It offers online checking and savings products.

Best Savings with ATM Access: Synchrony Bank

Synchrony Bank (which used to be part of General Electric) doesn't require a minimum to open or a minimum balance. So this makes a solid choice for those who are just starting to save.

Another great feature with Synchrony's online savings account is that it comes with an ATM card for easy access. So if you need your money at any time (like in an emergency), you can withdraw savings quickly instead of having to waiting for the transfer to be completed.

Synchrony will even refund domestic ATM fees charged by other banks, up to $5 per statement cycle.

This is the best savings account for flexibility, competitive rate, and no minimum.

High Interest Rate: Banesco USA

Banesco USA is the US division of Banesco Banco Universal, the largest national bank in Venezuela. In the US, it has strong roots in the south Floridian community. But the accounts are available for anyone to open nationwide.

BanesGrow Savings account offers one of the highest savings rates around. There are some requirements, but they are relatively low. It requires $100 to open, and you have to keep a minimum balance of $300 to earn the advertised APY and avoid a monthly fee.

Low Minimum Deposit: Vio Bank

Vio Bank is the online bank division of MidFirst Bank, one of the largest privately-owned banks in the US.

Its online savings account offers one of the best rates in the nation. The $100 minimum deposit is pretty low and there is no monthly maintenance charge.

Vio Bank does not offer checking services or an ATM network. While good rates are a win, it does take away some of the convenience factor.

With Over $5,000: Popular Direct

Popular Direct Savings Account is through Banco Popular North America (BPNA), a New York State chartered bank. It has one of the current best rates.

The downside is that the minimum deposit requirement is a whopping $5,000. And you must keep a $500 balance in the account or else you'll be charged a $4 monthly fee. If you close the account within 180 days, there's an early closing cost of $25.

With Over $10,000: UFB Direct

UFB Direct has one of the best APYs currently on the market for their High Yield online savings account. The catch is that you have to deposit and keep a balance of $10,000 or more to earn the high rate. There is no interest if your balance drops below $10,000.

This account does come with ATM access for convenience.

For Young Adults to Open: Salem Five Direct

If you have $100 to start with, you can get a higher APY at Salem Five Direct (for balances up to $1,000,000).

There is no minimum balance and no monthly fees.

Although you might not have heard of this financial institution, it's actually got a long banking history of over 160 years. It's the online branch of Salem Five Cents Savings Bank based in Massachusetts.

That's why we love helpful guides like these. They help you discover great options that you might not be aware of.

Salem Five Direct also has an eOne Combo option, where you can pair it with their checking account. The checking account has no minimum balance and a yield of 0.25% APY. Salem Five Direct never charges an ATM fee and will reimburse fees by other banks up to $15 per statement cycle.

Best Customer Service: Ally Bank

Founded in 1919, Ally Bank was previously General Motors Acceptance Corp. (GMAC), so it's got a pretty solid history.

There is no minimum required to open an account (but you have to fund it within the first 30 days). Its rates are not the highest, but many people love Ally Bank for its incredibly user-friendly site and great customer support. It's online banking, but a real human is available to help 24/7.

Good customer support is a nice treat in this day and age where everything seems automated. When you want to speak to a person to get something done, Ally Bank has you covered.

Best High Yield Money Market: TIAA Bank

This last one isn't technically a savings account, but rather a money market account. But for this article, both pretty much serve the same purpose. You can also initiate up to 6 withdrawals/transfers per statement cycle.

TIAA Bank gives you a 1st year introductory APY for up to $250,000. TIAA Bank promises that the yield of your account will stay in the top 5% of similar accounts offered in the U.S. banking market.

You also get ATM access, so you have easier access to your money. TIAA Bank never charges an ATM fee. And if you have over $5,000 in the account, TIAA Bank will even reimburse 100% of the ATM fees charged by other U.S. banks.

TIAA Bank also has a Yield Pledge checking account with an introductory APY. Pretty awesome for a checking account.

Best Non-Bank Savings Account: Wealthfront

Wealthfront is not a bank. It's a robo-advisor that also offers a high-yield savings account for short term goals. It only takes $1 minimum to open and there are no management fees. You don't need use their robo-advisor services to open this account.

There are some benefits to using a non-bank savings account. You get unlimited free transfers in and out of your account (instead of the 6/month limit for bank savings accounts). And Wealthfront's savings account is FDIC insured up to $1 million.

Wealthfront also provides excellent free personal finance tools. It has great calculators for retirement, buying a home, college savings, and travel.

Why Open a Savings Account

The purpose of a savings account is to have somewhere secure to park money that you may need to use in the near future. This could be for emergency savings, down payment for a house, for a big vacation, or for family planning.

A high-yield savings account will allow your money to grow a bit, instead of them just sitting there doing nothing.

The reason you want the money in a separate account from your checking is so you don't accidentally spend it. And we all know how easy that is to do. Something's always coming up. But if you have money in a separate savings account, you're less likely to use it in a pinch.

Fact: 41% of Americans do not even have $500 in savings. And more than half (54%) have no savings strategy and aren't sure how to change the situation.

Related: How to Save Money Fast.

Because you may need to use this money at any time, you want an account that lets you transfer the money out without penalty or fees. This is the advantage of a savings account, as opposed to an investment account like a Roth IRA.

Even though investment accounts may offer higher returns for your money, you may be penalized and take a tax hit if you try to withdraw the money early.

A high-yield savings account is a easy surefire way to grow your money a little. But remember, it's not an investment account so you're not going to get rich off of it. And it's also not a checking account, so don't set one up if you need to make a ton of withdrawals.

Tip: The best thing to do is to have enough in your checking account for everyday needs, and put money in savings for emergencies and any upcoming goals. After that, if you can, put money you don't need in the near-future in investments for long-term goals and retirement planning.

Is an Online Saving Account Right for You?

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Before you stash your money into one of the above savings accounts, here are some things to consider:

Do you need quick access to your money?
Remember, a savings account's purpose is to SAVE money, not spend it. So an online savings account won't give you fast and unlimited access to your money. Making deposits and withdrawals could be a little tougher.

If you want to withdraw (like transferring funds out to your bank account), it typically takes 3 days or more before the transfer goes through. And you typically can only make 6 withdrawals a month.

Are you comfortable with web banking?
Completely web-based banking means that there's no physical branches where you can just stroll in and ask questions, deposit cash, withdraw money, etc. You also lose having a relationship with your local bank. Online banks typically do have customer support by phone (and many by web chat), but phone calls to banks can be quite frustrating.

What is your financial situation?
Think about what your goals are and your personal financial situation. If your situation is tight and you don't have a lot of spare cash at the end of every month, it may not be worth it to open another bank account just to keep a small amount of money in. Keep in mind that like traditional savings accounts, online savings accounts will have restrictions such as minimum deposit, minimum balance, and limits on withdrawals. Most minimum balance requirements are reasonable.

Fun Fact: 31% of people spend what they earn per month, and 15% spend more than they earn.

What Experts Say

CreditDonkey assembled a panel of industry experts to answer readers' most pressing questions. Here's what they said:

Savings Account vs. Money Market Accounts

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Money market accounts are kind of like hybrid checking and savings accounts.

They still have a withdrawal limit of 6 per month, but you get freer access to your money. Money market accounts may offer a debit card, ATM access, and check writing abilities. But in exchange for the flexibility, the interest rate may be lower. And there may be higher balance requirements.

Money market accounts are ideal for short term savings with a little more versatility.

Check out the best money market rates.

Savings Account vs. Certificates of Deposit

Certificates of Deposit (CDs) are ideal for longer-term savings.

Unlike a normal savings account (where you can continuously add and withdraw funds), CDs require you to put in a fixed amount of money for a fixed amount of time (such as a 2-year CD, 5-year CD, etc.). You get a set interest rate that will be honored for the entire term.

In exchange for this big commitment, a CD typically pays higher interest rates. If you wish to withdraw your funds sooner, you'll be subjected to a penalty (usually a few months' worth of interest).

Plus, you'll often need a larger deposit to open a CD account.

See our guide of the best CD rates.

Savings Account vs. Checking Account

Checking accounts are ideal for your day-to-day money management. If you need quick and frequent access to your money, this is where you'll want to keep them. You have the flexibility to access your funds any time you need with no restrictions. You can also pay bills, write checks, and make debit card purchases.

Most checking accounts don't give you any interest, but TIAA Bank and Salem Five Direct both offer checking accounts with interest (TIAA Bank has a tiered system where the APY increases with a higher balance).

See our guide of the best online checking accounts.

If you're considering a new personal checking or savings account, check out these promotions.

Other Popular Savings Accounts to Consider

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Here are the best 5 online savings accounts to build wealth fast:

CIT Bank
CIT Bank Savings Builder account rewards active savers or high-balance savers with a very high rate. To get the high 0.4% APY, you can do one of 2 things: open an account with $100 minimum and deposit at least $100 per month, or have a balance of $25,000. See latest CIT Bank promo codes.

Marcus by Goldman Sachs
Goldman Sachs offers personal loans and online savings accounts with competitive rates through Marcus. No minimum to open. No service charges or internal transaction fees. Marcus does not offer a checking account, a mobile app or ATM network. There is a limit of $1,000,000 in combined deposits per account.

American Express National Bank
American Express - known for their credit cards - also has a Personal Savings account available. Their rates are competitive with other high-yield savings accounts. You can bank online for this product through the mobile app

HSBC Direct
If you like the sound of a large bank, check out HSBC Direct - the online operation of the global banking giant HSBC. Its Online Savings account pays a fantastic rate with just $1 to open.

Live Oak Bank
Live Oak Bank has one of the current highest rates on an online savings account that we have found. Live Oak is a smaller regional bank. It is under FDIC insurance up to $250,000 per depositor. No minimum balance and no maintenance fees.

Capital One 360
Capital One has very high customer satisfaction ratings for its award-winning mobile app and other tools. Its savings account rates are slightly lower rate than other online savings accounts. However, it's a full-service bank, so it's a good choice if you want everything under one roof. No minimum to open and no maintenance fees. Capital One also has credit cards and auto loans.

Vio Bank
Vio Bank is the online bank division of MidFirst Bank, one of the largest privately owned banks in the US. It offers a High Yield Online Savings account and CDs with high rates. $100 minimum to open. No monthly fees.

SFGI Direct
SFGI Direct is an offering from Summit Community Bank. Their savings account rates are very competitive to other online banks. $500 minimum to open. No monthly fees.

FNBO Direct
FNBO Direct is a division of the First National Bank of Omaha. Its online savings account has competitive rates with no monthly fees. $1 minimum balance to open.

Sallie Mae
This student loan servicer also has expanded into consumer banking. Sallie Mae pays a competitive rate on its online High Yield Savings account. It also has a good money market account with checkwriting privileges. Both accounts have no minimum deposit and no monthly fees.

Citizens Access
Citizens Access is the online operation of Citizens Bank. All U.S. residents can apply for this online savings account. It pays a high rate with no service fees. The minimum deposit required to open is $5,000.

Northfield Bank
Northfield Bank provides an online-only Platinum Savings account with a high APY. You only need $0.01 to open the account. However, there is a monthly fee unless you keep an average daily balance of $2,500 each statement cycle.

Savings Accounts from Credit Unions

Credit unions are another good place to look for savings accounts. Often, credit unions can provide better interest rates and more personalized customer service.

Your deposits are insured by the NCUA (National Credit Union Administration) up to $250,000 per depositor.

Alliant Credit Union
Alliant is a highly awarded online credit union known for online savings accounts. The Alliant High-Rate Savings account comes with ATM access for easy withdrawals. You can also open up to 19 savings accounts for different financial goals. $5 minimum to open, but this is covered by Alliant through a bonus. No monthly fees when you elect eStatements.

There are some eligibility requirements to open an account with Alliant. Check Alliant's website to see if you qualify. Or anyone can join with a $10 donation to the Foster Care to Success program.

Digital Federal Credit Union (DCU)
If you have less than $1,000, you can get a super high rate with the DCU Primary Savings account - much higher than even the top online banks. This high rate is offered on up to a $1,000 balance. Any balance over $1,000 gets a lower APY, so it's great if you only have a little bit of money to save. $5 minimum to open. No monthly fees.

Check the DCU website for eligibility requirements.

How to Make Withdrawals

There are 4 ways you can withdraw money: online funds transfer (like to your own bank checking account), outgoing wire transfer, telephone transfer, and check request. Some banks offer an ATM card so you can withdraw at ATMs.

Just remember that there is a federal withdrawal limit of 6 per statement cycle. So make sure you don't go over that amount, or you could be subjected to an excess withdrawal fee.

How to Make Deposits

To make deposits electronically, you can transfer money from your own bank account or send a wire transfer.

For check deposits, a lot of online banks (like all the ones on this list) have mobile banking, where you can deposit checks remotely by taking a picture of it with your phone. Or you can always send a check by snail mail.

Cash deposits can be more problematic as many banks do not accept cash deposits. You will typically have to deposit the cash at a traditional bank first, then electronically transfer it to your online bank. If you link your bank accounts, this makes it easier.

Common Questions

What is an APY?
Let's do the complicated answer first: APY stands for Annual Percentage Yield, which is the return you get over a 1-year period based on the interest rate and compounded interest (which means that your interest will earn interest), and also based on the assumption that the funds will remain in the account for 1 year.

The simple answer is that, basically, 1.00% APY means 1% interest. This means if you save $100, you will earn $1 in interest in a year.

How are these online savings accounts able to offer higher interest rates?
Online banks don't have physical locations, which means that they have much lower operating costs than brick-and-mortar banks. This means they can save on overhead and pass those savings onto customers by offering better rates. Plus, many credit card companies such as American Express and Discover offer high-rate savings accounts to attract deposits to support their main business, credit card lending.

Does applying for a savings account hurt your credit?
Usually, banks will only conduct a soft pull on your credit when qualifying you for a savings account. This won't affect your credit.

Is my money safe in an online savings account?
As long as you pick one that has FDIC insurance, then yes, online banking is safe. This means that if the bank defaults, the U.S. government will pay you back every cent you had in the account, up to the FDIC maximum of $250,000. All the savings accounts in this list are FDIC insured.

Can I take my money out whenever I need to?
Federal regulation only allows you to make 6 withdrawals/transfers per statement cycle, before a fee kicks in.

Why should I open an online savings account over investing in stocks?
A savings account gives you access to emergency funds in case something happens. It's good to have at least 3 months to 6 months of necessary expenses saved in an online savings account before you invest in stocks. Another reason to keep an online savings account is for overdraft protection.

What is minimum balance requirements?
Some banks require a minimum balance to keep your account open or to receive interest. If you fall under the minimum balance, some banks may charge you a minimum balance fee.

Bottom Line

It is time to start saving for your future.

A high-interest savings account is a great way to make your money grow a little bit. Not putting your savings into one is literally like leaving money on the table. Avoid traditional national banks. There are tons of great online savings accounts that pay over 20x more in interest. Compare the difference.

I wish I'd known that sooner. But I hope you're all the wiser now and will consider it if you're still keeping your money in an account with non-existent interest.


Write to Anna G at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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