As the world continues to change, online saving accounts have been on the rise and they solve the problem of convenience. Online banks term interest rates as annual percentage yield (APY) which reflects the results of compounding. The best online savings offer savings account high rate of return and also offer safety. They do not have high fees and are easily reachable when a customer needs any help. These accounts are ideal high yield savings accounts ideal for individuals that do not need to access their savings often. However, if you withdraw and deposit often, get paid in cash, or have limited access to a computer, this might not be the best route for you. Below is a list of the best savings accounts in November and they have been rated according to their interest rates, bonus services, account features, customer support, and ATM access.
How do online savings accounts differ from traditional savings accounts?
The biggest difference between traditional brick and mortar bank savings accounts, a credit union, and online saving accounts is the physical branch accessing. In brick and mortar traditional banks or credit unions, you can talk directly to someone about your account while in online banks you have to do it online. An additional difference is that online saving accounts allow customers to use banking services from anywhere, 24 hours a day, and all week. On the other hand, traditional accounts have physical locations that operate within a specific set of hours and close on holidays and sometimes weekends.
Advantages of Online Savings Accounts
1. Effective customer service as you get any customer service through a phone call or online chat support. This helps in saving time and is very efficient as you can access customer service from anywhere.
2. High interest rates– Online saving accounts tend to charge higher interest rates as they do not suffer the same overhead costs as traditional walk-in banks and hence can pass on a higher interest rate to their customers.
3. Latest technology experiences– Most online saving accounts have invested in the latest technology and one can easily access their account through mobile applications or using your voice or camera to make deposits. Also, they have websites where you can easily get every information and also support easily.
4. Lower fees- Online high yield savings accounts charge lower fees than credit unions and banks. Online banks can lower or remove fees on things like overdraft line of credit. They offer services like online payment of bills, low charges on investment accounts, and also reimburses charges you incur when using other ATMs.
5. FDIC Insured- Most online savings accounts are FDIC insured and this makes them safe in case the bank fails, your money is not lost.
6. Easy access- For online accounts, you can be able to access your account at any given time from anywhere as long as you have a mobile app or a computer to check your balance. This saves you time as you do not need to queue or have to time yourself before it closes like in a brick and mortar bank. Depending on which online account you choose to use, some can even deposit checks remotely.
Disadvantages of online savings accounts
1.No personal support services- With the best online savings, you cannot meet the person who is offering you customer support because most do not have a physical location. The most you can get to an in-person service is a phone call. So if your preference is in-person service, these savings accounts may not be the best options for you.
2. Transfer of funds may be a slow process
This high yield savings account is not efficient for any funds that you urgently need. It might take up to five days for your funds’ transfer to be successful. However, if you plan, you will be able to withdraw before the time you need the funds and have your funds just on time.
3. It’s placing a lot of trust with the Internet– Without an in-person or a physical location that you can go to in case of any account issues, it takes a lot of trust. This is because websites and mobile apps have downtimes sometimes either as a result of technical issues or scheduled maintenance. Downtime causes your online savings to account to be inaccessible temporarily.
4. Deposits often take time- The options available are depositing the check to another account then transfer the amount or the bank can apply for you where you take a picture of the check. Both of these options may take time so these high yield savings accounts may not be ideal for you if you do regular deposits.
5. Limited services- A high yield savings account does not offer all the services a normal bank or credit union offers. Some of these services are student loans, credit cards, broking services and this might inconvenience you if you would like these options available.
How to choose the best high yield savings account
1. A high rate APY- Check for the highest interest rates you can find in the market of all savings accounts of November 2020. Although the high rate APY should not be your main focus on online saving accounts decision as rates change. Ensure you consider all factors and this might result in you going for a slightly lower apy than you intended but save on other charges.
2. Monthly fees- Apart from the high apy factor to achieve bank high yield savings, there are other requirements needed. To start with, the monthly feescan be destructive to your savings account because some savings accounts charge when your balance is below a certain amount.
3. Minimum balance– Some online accounts need a minimum balanceas a requirement while others do not. The credit union and banks mostly need a minimum balance for you to be able to earn interest on your savings. Minimum requirements make it bearable to manage an online high yield savings account.
4. Withdrawal options are very different from how credit union and brick and mortar banks allow withdrawals. Some online accounts limit the number of withdrawals according to the institution. Ensure you are aware of the withdrawal options and policies that surround the account and also the charges that you will incur for excess transactions.
5. Up to date digital experience- Look for online accounts that are using up to date digital technology. These include stable and reliable mobile apps and online sites. With mobile apps and you often deposit checks, make sure you check for the mobile check option to avoid any inconveniences in the future.
5.Reliable customer support- Make sure the best online savings bank you choose has reliable customer support. This is important as they do not have physical locations and you need to be sure in the case of any requests or questions, there is someone who can best assist you to your satisfaction.
6. Safety- Just like you have to ensure a credit union is registered, you should check if the high yield savings account you are looking to open is insured by FDIC (Federal Deposit Insurance Corporation) for safety purposes. This comes in handy in the event of the high yield savings account failing. The online savings account gets reimbursed up to an amount of $250000 per customer.
Considering all these factors might lead you to not going for the highest apy but choose the fifth or ninth in the rates but it will still qualify as a high yield savings accounts.
List of the Best Online Savings Accounts as of November 2020
It is an online bank that offers full service which was founded in 2009 and its headquarters are in Sandy, Utah. This online bank is the digital-only banking division of Ally Finnacial Inc. Ally account is the bank for you if you are looking to have a combined checking and savings account. The savings accounts are high yield savings accounts on their own and it has bonus benefits if you have the Ally checking account too. With a 060 apy no minimum balance, and both accounts you get access to over 43000 ATMs which makes it convenient and easy to make withdrawals. This account compounds daily and hence make more money with it than with the accounts that use monthly compounding. You don’t get to get a debit card if you only have an online savings account. Checking accounts although can not deliver a high rate and meaningful returns as much as best savings accounts do.
Ally is one of the best high yield savings account as it does not charge ATM fees even if it is an out of network ATM, and if the ATM provider charges, then Ally refunds the charges to your account up to $10 monthly.
As with the majority of the online savings account, you cannot deposit cash in your savings account. Alternatively, you can remotely deposit checks with eCheck deposit which is a feature on the Ally mobile app. This online savings account provides up to 6 free withdrawal or transfer transactions per statement cycle and after that charges a $10 fee per withdrawal or transfer. A way to maximize your withdrawal transactions is to ask the bank for a mailed check which does not count as one of the 6 transaction limits.
The available deposit options are mobile check deposits, mailed checks, wire transfers, and electronic transfers to external bank accounts which are usually free. To add a bonus benefit, these savings accounts offer free envelopes that are postage-paid to reduce for the customer. On the other hand, the savings account withdrawal options are a physical check, outgoing wire transfers, no fee electronic transfers, and outgoing wire transfers.
Another unique feature of this high yield savings account is, you can create up to 10 different saving goals within the same savings account. For example, is you can create a saving goal of an emergency fund, a vacation fund, or a school fees fund. The customer service is live and also 24/7 available over the phone or through an online chat on the website or the Ally mobile app.
Ally Bank has money market accounts that offer 0 50 apy on all balance tiers which is not the best rate available from other high yield savings 0 50 apy accounts but it’s better than some competitors. For certificates of deposits, their high yield range from three months to 5 years. There is no minimum opening deposit required to open a CD. Ally is a member FDIC so, in the event of the bank failing, you recover your funds.
- High annual percentage yield apy 0 60
- Member FDIC
- Saving buckets in which you can segment your money to up 10 different sections
- Customer service is 24/7 through live chat on the website, email, and also the phone
- Access to over 43000 ATMs for money market or checking accounts
- Checking account option is available
- No minimum balance required
- 6 transfers or withdrawals allowed per statement cycle
- It is a full-service bank that offers a variety of saving products
- No monthly fee
- ATM access if you own a checking account
- No physical location
- An overdraft fee of $25
- You cannot deposit cash for this savings account
- $10 fee per transaction after the 6 allowed withdrawals per statement cycle
- Check deposit Limit of $50000 per day and up to $250000 per 30days
Established in 2018, Vio Bank is the MidFirst online division that offers online high yield savings at 0 60 apy. MidFirst Bank has been FDIC insured since 1934. It is the best bank for you if you are looking to earn the highest annual percentage yield, APY, and high interest savings. This bank provides both certificates of deposits and high yield online savings account. To open a Vio Bank savings account, you need your social security information, mailing address, and your driving license and it takes you approximately 5 minutes to open it.
The minimum initial deposit required to open an account with this online savings accounts is $100 with a high 0 60 apy. Although there is a minimum opening deposit, the account does not require any monthly maintenance fee. Additionally, no charges are incurred for any incoming wire transfers, whether international or domestic. Also, for incoming or outgoing transfers, there are no fees but domestic wire transfers cost you $30.
Other charges you incur monthly is $5 if you opt to receive paper statements of your savings account. You can withdraw or transfer up to 6times every month per statement cycle and after that, you are charged a $10 fee for every withdrawal you make. Also, if your account is dormant for a year, there is a dormant monthly fee of $5.
Vio Bank high yield online account lacks an ATM network and also has no checking account. It is one of the high interest savings accounts in online banks with a high 0 60 apy. Customer support is available seven days a week either by phone or on the live chat which is on the online bank’s website.
- Strong 0 60 APY
- No monthly fee
- Member FDIC
- Free 6 withdrawals or transfer per statement cycle
- Has the best high yield savings
- The mobile app is user friendly
- No option to add a checking account
- No ATM access
- $5 monthly fee charged to receive paper statements for your account
- $10 fee per transaction after you make 6 monthly transactions per statement cycle
- A $100 minimum balance is required to open an account
Marcus By Goldman Sachs has built a name for itself because of its APY 0 50 on its high yield savings accounts. With no required minimum deposit, you can open an account then fund it later. Even so, the accounts that are not funded in 60 days could be closed. Goldman Sach online bank is the most straight forward bank if you are looking for high interest savings accounts with no attached conditions. This is among the best online saving rates you can find in the market. It does not require and monthly maintenance fees and also does not charge for any domestic wire transfers.
To deposit money in this online bank account, there are options like making a wire transfer, making direct payments, sending a check, and transferring funds. To withdraw from this savings account, you can request a withdrawal via a check that is mailed to you, use a free wire transfer to a linked account in another bank, (whether brick and mortar banks or online banks), or even use your phone via ACH. This savings account lacks a variety of no-fee personal loans, has no checking account options or atm cards.
Being an online savings bank, it does not have a branch but customers access their saving accounts through either the mobile application, the online bank’s website, and also via phone. The customer care center is usually open all seven days a week.
It is recommended for low-cost personal loans, transferring funds, and also if you are looking to maximize your interest rate and reduce your fees.
- Offers an attractive APY 0 50
- No monthly fees required
- Provides same-day transfers of up to $100,000
- Free electric transfers for Marcus accounts
- Excellent customer support 24/7
- Offers personal loans with no fees
- No minimum deposit fees required
- Member FDIC
- The customer support offered is not 24/7
- Lacks the feature of mobile check deposit which limits your liquidity options.
- No ATM card available
- No checking account options available
These online banks benefit more people looking for high yield savings accounts with minimal fees and a user-friendly mobile application. The mobile app allows you to transfer funds quickly, remotely deposit checks, and view your balance. To open a CIT bank savings builder account, you need $100, but it needs no minimum balance once you acquire the account. The bank has no monthly maintenance fees but charges a fee of $10 on outgoing wire transfers if you have a balance below $25000. Also, it’s important to note that your 0 50 apy drops if you don’t deposit at least $100 per month or if your balance drops below $25000.
Other services CIT Bank offers include: providing home mortgages, certificates of paying competitive interest rates, high yield online savings accounts, and money market accounts. These services can be accessed over the phone, through a mobile, or online.
This online bank is recommended for individuals who plan to save regularly while earning a high apy 0 50 than the checking accounts at banks and credit unions. It is a suitable arrangement for an emergency fund or a specific goal eg buying a new car or going for a vacation. Also ideal for those who do not want restrictions on a specific number of transactions per month or have a minimum balance requirement.
- Easy to use
- Motivational as it pushes you to deposit $100 for your savings per month
- FDIC Insured bank
- Competitive interest rates
- Has a high apy 0 50
- No monthly fees
- $25000 minimum balance to earn a high apy 0 50
- No ATM card issued
- Different apy rate if you don’t meet apy requirements
This online savings account 0 55 is known to offer over-the-top reward programs in the credit card industry with considerably high-interest rates. This online savings account does not charge any monthly fee, has no minimum balance requirement, and has an apy 0 55.
To open an account, you do not need any minimum balance, and also to earn apy 0 55 no minimum amount is required. Besides, all balances gain the same interest rate.
This online interest savings account is best it does not have fees. Services like deposited item returns, account closure, official bank checks, or insufficient funds have no fee attached to them. Other products you can get with this savings account offers to include a money market account, certificates of deposit, and a checking account.
Discover online savings account, checking accounts earn up to 1% cash back rewards when $3000 is spent on debit card purchases every month. Also, Checking accounts do not have minimum balance requirements or any activity requirements.
Money market accounts with Discover allow you to earn higher interest than you would with a brick and mortar bank. It provides customers with a debit card, check-writing capabilities, and ATM access. Just as any brick and mortar banks, Discover is a member of FDIC so, in the event of the bank failing, you recover your funds. Additionally, it is known for excellent customer service for 24 hours, 7days a week.
Your deposit options are several such as direct deposits, mobile deposits, wire transfers, mailing in checks, and online transfers. On the other hand, your withdrawal options include transfers to other Discover accounts, official bank checks, online transfers to other bank accounts, and also outgoing wire transfers. You can be able to easily access your funds through any ATM if you electronically transfer the funds.
Discover’s high yield online savings account is the best for you if you are looking for an online bank with no fees with the best high yield savings.
- One of the best mobile apps in the market
- Member FDIC
- Account access at any given time
- The interest rate is the same for all balances
- Easy access to your savings
- No monthly maintenance fee or any other fees
- You can automate your deposits to build your savings consistently
- FDIC Insured
- Expensive mobile offerings
- Competitive APY 0 55 rate
- No minimum balance requirements or minimum deposit requirements
- Limited branch access
- No ATM card
This account is famous for its popular credit cards and also allows you to link your external bank account to it. There is an estimation of over 114 million American Express National cards as of 2019 worldwide. This linking offers a perfect solution if you would prefer to view all your accounts on one platform.
American Express National Bank, member FDIC, are high yield savings accounts 0 60 apy, annual percentage yield, that has no monthly maintenance fee or minimum balance requirements. Interest is earned on a daily and is posted every month and hence high returns for a saver.
High yield saving accounts through American Express National Bank that have no activity for about 180 days are automatically closed. You can easily link this online bank to your other external banks which allows transfers of money back and forth easily at any time. You can access customer care any time 24 hours hour a day either through phone or the website.
For you to get a checking account, you need to find another bank because American Express does not have any checking accounts or money market account options for card customers.
This is the best high yield saving account for strict savers and also individuals looking for online savings account 0 60 high apy.
- You can link with your external bank accounts
- FDIC Insured
- Solid 0 60 APY
- No monthly fees
- No minimum initial deposit
- Customer support 24/7
- Minimum of $1 to earn APY 0 60
- No checking account available
- No mobile check deposit option
- No mobile app available
- No physical branch
- No ATM card or checks
- No money market account
1. Which is the best savings account of online banks?
The best savings accounts are the accounts that offer a daily compounding without charging any monthly fees. Daily compounding gathers much more interest than an account that is compounded monthly. According to our list, the best savings account as of November is Ally Bank which pays an apy of 0.60 on all the balances on the savings accounts without any limit. The mobile app also has a feature known as eCheck that allows you to deposit checks from your remote location. Another noteworthy benefit is that the app provides users with attractive saving ways of specific goals in buckets. In the same savings account, you can be able to create different sections you can call buckets with your specific different goals. This feature helps you to save up for goals like a vacation, a car, a house at the same time but separately, yet in one savings account. With all these unique features that come with Ally’s savings account, this is the best account to give you the best online experience in the savings world.
2. Are online savings accounts a good idea?
Online savings accounts are a good idea as they earn an interest of 20-25 times more than what you would earn from your local brick and mortar banks. The crucial thing you must do is research for the best interest rates in the market and then evaluate what requirements you will have to forego to get the best for your needs. Also, some online savings accounts usually need a minimum initial deposit so if that is not what you are looking for work with apy no minimum saving accounts.
Once you choose the best features according to your needs, start an online application. The apy high rate should not be your main focus on online saving accounts decision as rates change which is influenced greatly by the Federal Reserves. When they change credit union and some banks follow suit. These are the most important things to consider before deciding on the account with the best online savings.
3. How much interest will I get on $1000 a year in a savings account?
Online banks often term their savings accounts interest rate as APY which is inclusive of compounding. Money in a high yield savings account earns compound interest where the principal which is your opening deposit and accumulated interest decides the interest either monthly, quarterly, or daily. With a compounding of daily and a 0 01 apy, the principal amount earns an interest of 1/365 of 1% for a year it $1000x 0.01 x 1 which totals to $1010.
The amount does not look much but if you saved $100 every month, adding it to the initial deposit of $1000 for a year, the interest t the end of the year would be $16.05% making your total amount to be $2216.05. Within 10 years of depositing $100 every month, you would have a total of $13725.50.
For simple interest, the interest would be paid only on the principal. A simple Interest of $1000 at 1% for a year would total to $1010.
This makes saving accounts a good emergency fund as the emergency deposit when it is compounded can total up to a satisfactory sum of money.
4. Is Ally the best savings account?
Ally account is the best online account for you if you are looking to have a combined checking and savings account. Additionally, in this list of high yield savings accounts, it has the highest apy 060 which is an above-average rate for the majority of the savings accounts in the market.
It satisfies the factor of excellent customer support and is best for individuals who do not feel the need for a physical location. With no maintenance, minimum deposit, or monthly fees required, you can maximize savings making this the best high yield savings account on the list. Another key benefit of this account is that it has very flexible fund transfers and you can be able to schedule transfers a year in advance.
Ally also does not charge for use of out-of-network ATMs and if the ATM owner charges any amount, they reimburse up to $10 every month. Furthermore, the high yield savings account is FDIC insured making it a safe option.