I remember a time when the best online savings accounts paid annual yields of 4% to 5%.
Those days are long gone. LONG gone.
Thanks to the low-rate environment, it’s not a surprise that for the past several years, my clients have been griping about how their savings accounts pay next to nothing, even from the best high-interest banks.
As painful as the interest situation is, looking for a top savings account to stash away some cash for a future financial goal or an unexpected emergency should be part of your financial strategy. But it can be hard to get excited if you don’t feel like you are earning any interest on your money.
There are still plenty of online banks that offer excellent terms. Don’t let your money sit in a savings account that’s going to be eaten by annual fees. You shouldn’t have to pay to let your money sit.
The top 11 best online savings accounts
- Best Ongoing Interest Rates: CIT Bank Savings
- Best Signup Bonus: Chase Bank
- Consistently High Interest Rates: Ally Bank
- Best One Year Interest Rates: Everbank
- Best CD Rates: Discover Bank
- Variety of Products: Compass Bank BBVA
- Best for Military: USAA
- High Interest Rates: Synchrony Bank
- Trustworthy: Capital One 360 Savings Account
- Great Customer Service: American Express High-Yield Savings Account
- The New Guy: Digit.co
All the banks on my list are great places to stash your cash. Each can provide different benefits, covered below.
1. CIT Bank Savings – Best Ongoing Interest Rates
If you are looking for a bank to just store some of your cash in for a rainy day, CIT Bank is a great choice. CIT Bank focuses on CDs and savings account, and also IRA options.
You might think, “Why would I go with a bank that just does that instead of one with more options like online checking?”
That’s an understandable question. CIT Bank is in the upper tier of interest rates for all of these institutions, and in some cases comes out ahead of everyone else. On top of their high interest rate, they also offer a bonus rate tier for customers that have more than $25,000 saved with them. Essentially, it is a loyalty bonus. Not many banks reward you for being extra loyal.
Aside from the great interest, I think it is sometimes a good thing to limit your account options at a bank. If you open up an account with checking, savings, CDs, investment, and so on it can get tempted to pull money out of the savings or CD to refill your checking account quickly. Having them separated requires more financial discipline at the cost of a little bit of convenience. I think the extra interest you are earning is worth it.
Here’s what you should know about CIT Bank’s new Savings Builder High Yield Savings Account:
- Top tier interest: 2.15% APY with a minimum account balance of $25k, or 2.15% APY with lower balances if you make at least a single $100 deposit each month, which you should be able to easily maintain with scheduled deposits.
- Missed monthly deposits: Missing a month drops you to 1.14% APY, but as soon as you make the next month’s $100 deposit, you’re back at the highest APY. It’s that simple!
- CIT does have a minimum of $100. That’s measly. And honestly, with any of the banks on this page if you saved just $100 you’re going to earn a whopping $1 interest max in the first year. You need to save more money, but CIT requires $100 to get started.
- Bonus: For the first month of the account, all customers receive 2.15%, after which point you have to meet the requirements above.
- Additional info: See CIT’s website for full terms and disclosure. The Savings Builder comes in at 26x the national average on savings accounts.
CIT is also great because of its easy deposits. You can fund your account or add additional deposits via easy online transfer from your current bank, mailing in a check, or wire transfer. It also comes with easy access and transfers. The user interface is easy to use, so you’ll be able to transfer funds to and from your other bank easily.
If you are looking for a place to store some cash for a rainy day and want to earn a great interest rate in the meantime, definitely take a look at CIT Bank.
2. Chase Bank – Best Signup Bonus
Chase Bank is a big bank for physical locations with thousands of branches and ATMs across the country.
While they’re not as competitive on the interest rates, they do have the best signup bonuses of any bank in the country. You do have to jump through a couple of hoops to get the full $350, though. Here are the full details of their offer:
|Bonus #1||Bonus #2||Total|
Open a checking account and set up direct deposit
Open a savings account and deposit $10,000 within 10 days, maintaining the balance for 90 days
Chase is completely available online, or in-person. To get the bonus you can get your coupon online and then walk into a physical location to set up the account, or complete the process entirely from the comfort of your computer.
Chase Bank also gives you:
- Access to over 16,000 Chase ATMs and 5,100 branches
- Mobile check deposit – It’s as easy as taking a selfie.
- Overdraft Protection – Link this account to your Chase checking account for Overdraft Protection.
- Chase QuickPay® with Zelle® – Take the drama out of splitting a check.
- Real-time fraud monitoring – We watch your debit-card to help your money stay your money.
Updated APY: 0.01% effective as of 6/15/18. Interest rates are variable and subject to change.
Updated Surcharge: $5 per withdrawal and $2.50 for any transfers or inquiries at ATMs outside the U.S., Puerto Rico and the U.S. Virgin Islands. Fees from the ATM owner still apply.
3. Ally Bank – Consistently High Interest Rates
Ally Bank is one of my favorite banking institutions. (Yes, we bloggers are a weird bunch and have favorite banking institutions while the rest of the world goes about their normal lives.)
Why do I love Ally so much? Let me quote myself from an article earlier this year, Best Online Checking Accounts:
Ally Bank was built on the premise of getting rid of all the crazy fees that normal banks charge while giving customers great rates and great customer service.
I mean, seriously? How can you not love that? A bank that is fighting to end banks gouging customers will get my vote every time. In the linked article above I told you how great Ally’s checking accounts were, but the saving options are great, too.
Here’s what you get with Ally:
- High yield interest rate. You won’t earn more interest with a reputable online bank.
- No minimums. At all. That means no minimum deposit, no minimum balance requirement. No minimum balance fees. In fact, you can open an account with as little as $1.
- Easy deposit options. You can fund your account or add additional deposits via easy online transfer from your current bank, mailing in a check, wire transfer, or simply scanning in your deposit.
- Easy access and management. The user interface is top-notch and you’ll be able to transfer funds to and from your other bank easily.
- Other account options. You can start with a savings account and grow your finances with Ally. They offer a robust set of accounts ranging from checking to savings to CDs and IRAs.
Ally is built on not gouging customers for every penny they’ve got. That’s a great bank, and one of the reasons I use this bank in addition to Capital One 360.
4. Everbank – Best One Year Interest Rates
Everbank is one of the longest standing online banks and consistently has some of the best introductory interest rates. Currently their money market account is offering 1.11% for the first year. This gives them one of the strongest savings rates in the industry.
Features you should know about Everbank accounts include:
- Low initial deposit of $25
- Avoid fees by keeping at least $25 in the account
- CD’s and Checking accounts available
If you are looking for a solution to get competitive one year interest rates then Everbank will be a good option for your needs.
5. Discover Bank – Best CD Rates
Discover moved into the banking business a few years ago. Their rates are competitive with other online products, so it is definitely a firm to include in your search for a top savings account.
The product offerings are similar with Discover, but I really like Discover’s online CD. The rates on the CDs are very nice compared to some other players in the industry.
Here’s what you get with Discover Bank’s Online Savings account:
- Great interest. To attract customers, Discover often has some of the highest interest rates available.
- Several account options. You can start with a savings account and expand to an online certificate of deposit, IRA CDs, or a money market account.
- Low minimums. This is the only place that you might downgrade Discover on a bit. The other institutions on this page require no minimum or a super low deposit to open an account. Discover requires a $500 minimum deposit. However, there are still no minimum balance requirements or fees for going below $500, so it isn’t much to worry about once you get your account open.
If you are interested in creating a CD ladder to reach a goal or as part of your emergency savings strategy, Discover is a great place to start.
6. Compass Bank BBVA
Compass isn’t the most popular bank on our list, but it’s one you should know about. BBVA Compass is one of the top largest U.S. commercial banks based on deposit market share.
They offer a wide variety of products and services, everything from small business loans to online savings accounts (because that’s why you are here right?)
- Interest rate. BBVA Compass offers tiered interest rates that compound to make your money grow faster.
- Low initial deposit. While you are required to make an initial deposit, it’s a minuscule $25.
- Account options. You’ll have the freedom to choose between several different account types: Everyday Savings, Money Market, or CD account.
- Beware of fees. One of the few negatives of BBVA is their monthly service fees that come along with their accounts. It’s only $15 a month, but it’s something that should be noted when opening up an account.
If you haven’t heard of Compass Bank BBVA, you should take the time to familiarize yourself with the organization, their online money market account will make it worth your time.
7. USAA – Best for Military
*Be aware that you must have a family member this is serving/has served in a branch of the military to open an account with USAA.
Aside from being an exceptionally reputable organization, as an online savings account, USAA offers several unique benefits that the other banks on this list don’t. You can get a HUGE variety of different products with USAA. They offer just about any financial or insurance product you could ever need, and having all of your account and product in one place is an impressive advantage.
What you’ll get with USAA:
- Use just about any ATM. If you ever need to get money out of your online savings account at an ATM, you don’t have to worry about those ATM fees. You will be able to use more than 60,000 “USAA-preferred” ATMs for free. They will also refund you the fees of any ATM that isn’t one of the preferred machines.
- Low initial deposit. Similar to some of the other accounts, USAA does require an initial deposit, but it’s only $25.
- No fees. With a USAA savings account, you will not have to may any service fees or any fees if you transfer money to another bank.
If you have a family member that has ever served in the military, it’s worth checking out an online savings account with USAA.
8. Synchrony Bank
Synchrony has gotten very competitive in offering the some of the highest interest rates for deposits. They do not offer as many products as many of the other online banks, but they put their focus on what they are good at — vehicles for saving.
Here’s what you get with a Synchrony online savings account:
- High interest. Synchrony is dedicated to being competitive on interest rates to attract new clients.
- Low minimum. It only requires $30 to open an account and you avoid a $5 monthly fee by maintaining a balance of $30 or higher.
- Easy access. Many of the online banks only let you do transfers. Synchrony also has a debit card option to make accessing your cash easier.
- No balance dependence. Some banks increase your interest rates the more money you put in. Synchrony gives you the same interest rate no matter how much or how little you put in.
9. Capital One 360 Savings Account
I’ve had an account with Capital One 360 Savings longer than I have with Ally. That’s because Capital One 360 (formerly ING Direct) was one of the first reputable online banks to exist. Capital One 360 is easy to use, secure, and you can connect your account to your other accounts, including your Capital One Investing account.
Here’s what you get with Capital One 360:
- Extremely competitive interest rate. The difference in rates between Capital One 360 and other banks is so small most people wouldn’t notice. If you aren’t seeking absolute best interest and are looking at the bigger picture, keep reading.
- No minimums. Like Ally, you won’t be hit with any minimum balance fees nor will you have to send a ton of money to open an account. You can open an account with as little as $1.
- Easy deposit options. Opening an account is easy — you just link a checking account from another institution like you would with any other bank. Then you transfer your funds over. You can also set up an automatic transfer. This is a great way to save up for your short-term goals. If you know you need to save $1,000 for a trip, you can set up your Capital One 360 Savings Account to withdraw $200 each month from your checking account for the next five months.
- Easy access and management. Capital One 360’s user interface is one of the best around. One of the unique things Capital One 360 offers is “sub-accounts” where you can open up mini-accounts to hold your saving goal money. So you can have a main Savings Account, but have mini-accounts for Vacation Fund, Emergency Fund, and so on.
- Other account options. You can start with a savings account and grow your finances with ING. They offer a robust set of accounts ranging from checking to savings to CDs, mortgages, and investing.
If you compare Ally and Capital One 360 you won’t find much difference in interest rates. Capital One 360 has been around longer from an online banking standpoint, and they are definitely trustworthy.
10. American Express High-Yield Savings Account
Just like Discover, American Express, the credit card company that offers fantastic cash back now has a banking arm that offers great interest on your account.
Rates are currently very competitive with some of the larger, well known online banks. Account access is not as sophisticated as you see with other banks, but you don’t need that sophistication if you are just looking for a solid place to keep some of your cash. If American Express Savings offered a full suite of financial products like mortgages and checking accounts on top of the savings account and CD, I would be more concerned about the website. But this is a pretty basic product: deposit money, earn interest, watch it grow.
AMEX also has a 36-month CD that you can drop your money into to earn a slightly higher rate of return. However, the difference is so small that I can’t recommend locking your funds up for 3 years. (If you elect to close a CD before its maturity date you pay back 3 months of interest. That’s dumb.)
Here’s what you get with AMEX’s High Yield Savings Account:
- Great interest. To attract customers, American Express often has some of the highest interest rates available.
- Simple options. You have two account options: high-yield savings and certificate of deposit. Two simple choices rather than an array of confusing options.
- No minimums. You don’t have a minimum balance requirement, and you don’t get hit with a fee for letting your balance get too low.
Whichever way you go, you’ll end up with American Express’ renowned customer service to back you up. You probably won’t need it, but it is always nice to know it is there.
11. A New Option: Digit.co
Another interesting savings option is Digit.co. This is a bank that uses an algorithm to determine how much money to transfer from your checking account into savings every few days. By tracking your income and spending habits, Digit.co can determine how much extra money should be going into savings. Digit promises that it’s automatic transfers won’t overdraw your account. The interest paid is very small, but it does exist. This is an account for people who want to save without needing to think about it.
Getting access to your money is easy; it’s all done through text. You text simple commands to change how much you save, to check your balance, and to withdraw to your own account. Most of the time, once you text that you want to withdraw, the money is there in the next day or two. This is a great account for saving up for a night out each month, or for other entertainment.
Consider your savings account needs, and do your research. With the right approach, you can get the most efficient use out of your money.
Why you need a savings account
With so many options for storing your money and the low-interest rates, a lot of my clients ask, “why do I even need a savings account?” and honestly, that’s a great question.
The first reason is the obvious one – you get a slightly higher interest rate, and earning a little interest is better than no interest, right? But the interest you earn isn’t the only reason to find a good online savings account.
The other reason is a little more obvious, it forces you to save that money. Federal regulations limit the number of times that you can withdraw money from your account. If you can keep taking money out of the account, it’s going to encourage you to save. There are hundreds of thousands of places that you can open up a savings accounts, but all of them basically break down to three categories, traditional savings account, online savings account, and kids savings account. Many of these also offer a money market. If the MMA account offers a higher interest rate then we will list that instead of the savings account option.
What to Look for in a Top Savings Account
There’s no need to let your money sit in an account that doesn’t pay any interest at all. That’s one of the worst things you can do with your money because the value of your money will slowly go down due to inflation. You need to generate some interest to combat inflation just to maintain the spending power of the money you have. However, even the highest yield savings account is unlikely to beat inflation.
Then again interest isn’t everything. There are other considerations as well when choosing from among the top savings accounts.
Interest – High Yield
For me, interest comes first. Generating interest helps protect your money from inflation. Even if inflation is really low, getting some small interest on the side will help you bolster your account over time. Interest isn’t the only important factor, but it never hurts to have someone paying you to store your cash with them.
Don’t get too caught up in chasing yields, however. Most of the time, the difference between accounts isn’t enough to prompt you to move your money every time a bank comes out with a newer, higher yield.
Having great customer service is another key aspect of a great savings account. If you earn a little bit more interest at one bank but the customer service is awful you will probably regret it. I like to stick to firms that have solid reputations or that I’ve had previous experience with.
The accounts on this list all offer good customer service and a good user experience.
You want easy access to your funds. If you have to jump through a lot of hoops to pull money out of your emergency fund during an unexpected setback, it defeats the purpose. Other considerations when you look at savings account access:
Do you have to go to a physical branch? Or can you transfer funds online using your smartphone? What about ATM access? Can you withdraw money at ATMs across the country for free, or at least get reimbursed for the fees you do pay? Access can be a tiebreaker when you are comparing two very similar banks.
Understand the Purpose of Your Savings Account
Saving for future purchases and expenses is one of the best things you can do to stabilize your financial situation. Rather than using credit spending (and winding up in debt if you don’t pay off the balance each month), identifying your spending goals and saving up can help you buy the things you want — without ruining your financial future.
You should also understand that keeping an emergency fund available for a rainy day can be a good idea. What happens when the car needs repairs or you need to replace the dryer? An emergency fund can protect you from the need to borrow in order to meet these unexpected expenses.
While a high-yield account would be nice, it’s important to recognize that your savings account isn’t meant to help you build wealth so you can fund your retirement (learn more about investing for retirement through a Roth IRA). Rather than expecting high yields from your savings account, here’s how to think about it:
One of the biggest advantages of a savings account is the liquidity. Because it’s cash, it’s instantly available for you to use. You don’t have to sell shares and what for the proceeds of the sale, or jump through hoops to get your money. It’s available immediately.
This is what makes a savings account ideal for an emergency fund. You know you can get to the money immediately if you need it. The liquidity also makes it great for access your money for a short-term savings goal. You know that you will be able to pay with your savings account when you need to, or you can use the money to instantly pay off your credit card after you’ve used it to book your vacation (and earn the points).
The other reason to incorporate a savings account into your financial strategy is so that you can keep the money safe. You don’t have to worry about losing your vacation money in the stock market when you keep it in a savings account. You know the money is there when you need it for an emergency with your savings account. Plus, if your account is with a federally insured institution, you don’t have to worry about losing your money if the bank fails.
Stop thinking of your savings account as a place to help you grow your wealth, and instead think of it as a way for you to protect your assets and keep your long-term financial situation from deteriorating due to debt. You can also think of your savings account as a way to help you save for short-term goals. As long as you incorporate a savings strategy along with an investing strategy that allows you to build wealth over time, you should have a balanced approach to your overall financial plan.
Whether you are saving up an emergency fund or just preparing to spend money on a nice vacation next year, you need a great savings account to hold your money. Here are my favorite places to wring as much yield as possible out of your savings account.
Types of savings accounts
There are a few different types of savings accounts, but don’t worry, the main idea is still the same.
Bank Savings Accounts
This is the traditional idea of a savings account at a physical bank. You can walk into any local branch of a bank and open up one of these savings accounts. Normally, these accounts have maintenance fees and low-interest rates.
Online Savings Accounts
These accounts work almost identical to a traditional savings account except you manage the whole account strictly online. In most cases online savings accounts offer slightly better interest rates because they have lower overhead costs.
Savings Account for the Kids
Maybe you want to open up a savings account for your kids, that’s a very good idea! Some banks have savings accounts specifically designed for kids, but don’t’ worry, you’ll have control over the account. It’s a great way to teach your children about managing money.
Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s