5 Best Online Savings Accounts

By Miranda Marquit. Last updated 19 March 2021. 13 comments

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Having a savings account is pretty much taken as an article of faith among those in the personal finance world. You are supposed to have a savings account — and you are supposed to look for the highest yield or interest rate.

In many cases, the highest yield is likely to come from an online source because of their limited services and low overhead.

Pros and Cons of Online Savings Accounts

Before you decide to open an online savings account, it's important to research your options and understand the realities that come with online savings accounts.

Better Interest Rates

The main advantage to an online savings account is the higher yield. Traditional brick and mortar banks are paying yields of between 0.1% and 0.3% right now. But if you put your money in an online savings account, you could earn a yield of .40% and more. While this is hardly "high yield" when compared with the 4% and 5% yields common prior to 2008, it is still better than what you will get at a brick and mortar bank.

Inconvenient Access to Funds

The biggest downside to an online savings account is your access to the funds.

While you can mail paper checks to some online banks for deposit, it's more common to transfer money from your checking account into your online savings account. And, if you want to withdraw your money, chances are that you need to transfer it from your online savings account to your primary checking account. This can take three to four business days — which can problematic if you need your money immediately.

Some online savings accounts have ways around this, though. You might be able to link your online savings account with an online checking account with the same bank. You can then instantly transfer the money to the linked checking account and use the debit card to withdraw the money from the online checking account.

Finally, there are some banks that will send you an ATM card for use in withdrawing money from your account. You need to be careful in these cases, since you might end up paying ATM fees. Your bank might not charge you, but the bank that owns the ATM may. Some online banks reimburse consumers for all fees, though. This can be a way to access your money quickly and conveniently without worrying about ATM fees.

Which Online Savings Accounts Are the Best?

When deciding which online savings account is likely to work best for you, start out by looking at interest yields. You need to look beyond the Annual Percentage Yield (APY), though. Some of the items to consider include:

  • Minimum balances
  • Fees
  • Introductory periods
  • Customer service
  • FDIC insurance

With an online savings account, it is also important to consider how you will manage your funds. An easy-to-navigate website is essential if you plan to do the bulk of your banking via the Internet. Many online banks provide live chat so that customers can contact support quickly and easily.

Here are the best online savings accounts, all of which are FDIC-insured.

CIT Bank

CIT Bank's Savings Builder is a tiered interest rate account that offers up to 0.50% APY.

A minimum $100 deposit is required to open an account. There are no fees to open or maintain an account. You can call customer service 24/7 or contact them online through the website.

Click here to open an account now!

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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 responsibility to ensure all posts and/or questions are answered.

Guest's picture

Ally doesn't coordinate well with Quicken -- you can't request transaction download through Quicken. You have to go to Ally site and push the download to Quicken. (Is this the Direct Connect? I forget what they call it.) Anyway, it's a pain, and it's the reason I closed my recently opened account with Ally.

Quicken has been around a long time, and works with many, many different banks and financial institutions, but Ally/GMAC hasn't invested a little time into making this work...? Ridiculous.

Guest's picture

I download my transactions from Quicken for my Ally accounts with no problem.

Guest's picture
Rajiv Agrawala

Everbank's website shows under "Rates & Fees" for this account an $8.95 "Monthly fee in any month when average daily balance is below $5,000". Which means one of two things:
1) The REAL minimum balance to open is $5000, not $1500.
2) Having a balance of $1500 with a 1.01% APY would earn only about $15/yr, but would cost you about $96/yr, meaning you're paying EverBank rougly $81/yr to hold your money.

Guest's picture

You bring up a good point about the Yield Pledge account -- which is that even if a bank has a specific minimum to OPEN the account (in this case $1,500), you do need to read beyond the initial marketing materials to see what else is in store if you don't meet the other requirements. Thanks for bringing that up.

Ryan Guina's picture

EverBank announced this week they will be dropping their fees. There will no longer be a minimum balance requirement.

Guest's picture

Don't let a higher or the bank with the highest interest rate be your main decision maker. I remember back in the early 2000's when many online banks were competing for business they would out raise each other in terms of interest paid. But a lot of their other qualities (customer service, fees, etc.) were worse than a lower interest paying bank.

Also, many of those highest yielding banks then have horrible rates now. Find a bank with a decent interest rate that also excels in every other area. I would rather earn a few dollars less per year and not have to deal with any headaches than the other way around.

Guest's picture

You should look at Sallie Mae. They have a money market accout paying 1.5%

Guest's picture

I created a spreadsheet that contains all the questions I need an answer to, to understand what a bank charges, min/max, other fees, rewards, and rates. I'm surprised these sites don't offer such a tool. I add to it as rules change, and have used it for years for comparison. Financial institutions have a lot of hoops to jump through, and EVERYONE should understand those rules. Personally, I abhor marketing gimmicks. To me, they are a red flag. A good sound financial institution doesn't need gimmicks. Treating customers professionally, easy to understand rules, nice assortment of products with good rates, sound management, and most important, security taken seriously, will go a long way than some 6 month gimmick. Who wants to spend all their free time institution hopping.

Guest's picture

I personally have a handful of different online savings accounts. Since their rates fluctuate all the time, I can move my money around and ensure it is always earning a great rate.

Guest's picture

And btw, Ally's rates are no longer quite as good as they were for a little while. I think their rate is down to .84%......

Guest's picture

I wonder what how the value of the dollar can be trusted when our dept is 20 trillion

Guest's picture

When Ban Cards yield 19.2 % annually its time for Savings accounts to yield 7% annually. THis is the main use of your savings why not become the 50 50 partner we should be. even 5 is an insult people do not save because a $in hand is worth $1.19. on the market.

Guest's picture

Great post, and you're definitely right--it's so important to research your options and understand what each bank offers. Different banks/ accounts are created for different people, so it's always good to know what's right for you. And Cinch offers a personalized recommendation tool to do just that!