Online banks have many great things, such as a high APY and low fees. However, are they truly safe? Learn more about their pros and cons and the best online savings accounts by reading the rest of this post.
American Express® High Yield Savings Account - You earn 0.40% interest rate along with no minimum deposits or monthly fees. Amex High Yield Savings account has been my favorite Hub account for the past 7 years. Using this account to Pull/Push your money is absolutely necessary when you have many accounts. Here's why:
*No dollar limitations for ACH transfers - When you find a top bank rate account, you don't want to be limited to just $5K or $10K transfers. Amex Savings will let you transfers as much as you want whether you are pulling or pushing money from and to an external bank account.
*1 to 2 business days ACH transfers speed - With top-notch user interface, you get your money to another external account or pull money from another bank account within a day or two.
*No loss of interest during transfers - On the day you initiate your transaction on the high yield savings account website, the funds will be reflected in your Current Balance and begin earning interest.
Some other features from American Express High Yield Savings Account include Free Wire Transfers, 3 maximum linked accounts, and maximum 6 ACH withdrawals per month.
Savings account offers are frequently updated. Find the best nationwide Savings/Money Market rates here, and the best Savings account bonuses here. The Axos Bank and CIT Bank accounts offer great rates available nationwide which I recommend.
|Aspiration||1.00% APY + $150 Cash||Review|
|Axos Bank High Yield Savings||Up to 0.61% APY||Review|
|Quontic Bank High Yield Savings||0.55% APY||Review|
|CIT Bank Money Market||0.45% APY||Review|
|American Express High Yield Savings||0.40% APY||Review|
|Discover Bank Online Savings||0.40% APY||Review|
|Axos Business Savings||0.20% APY + $100 Bonus||Review|
Table of Contents
Are Online Savings Accounts Safe?
Pros & Cons of Online Savings Accounts
- Higher interest rates. Higher yields are one of the main advantages of an online savings account. A higher yield can help grow your funds at a quicker rate. Online savings accounts offer APY’s in the 1.6% to 1.8% range, which is 16 times more than what traditional banks offer.
- Lower bank fees. There are generally no maintenance fees, but sometimes it is in exchange for maintaining a minimum balance.
- Online convenience. Banking can be carried out either online at the bank’s website or on their mobile app.
- Easy transfers. Many online banks make ACH transfers free and easy.
- No physical branches. The idea that online banks do not have a physical person you can go talk to about your account and banking needs is the biggest disadvantage that they have. Traditional banks offer a teller to help you out.
- Difficulty withdrawing money. Online banks usually do not offer ATM services and may charge for withdrawals.
How to Protect Your Online Savings Account
Even though online banks are considered secure, you should still take proactive measures to protect your financial information. This should be applied even if you bank online or in person.
When you bank in person, your information is stored digitally. Follow these steps to protect your account:
Using public Wi-Fi won’t necessarily give someone instant access to your info, but someone who is knowledgeable in technology can find a way to access your information sent through a public network.
Try to avoid banking on public Wi-Fi and make sure the banking apps are not running in the background.
Many hackers disguise their email address to make it look like it came from your bank. Never click on any suspicious links in an email. Contact your bank directly to confirm whether they need information from you.
Try to make a password that includes a unique combination of letters, numbers, and symbols. The more random your password is, the more secure it is.
You can further protect your account by applying two-step authentication factor. This requires two steps to log-in.
For example, you would need to enter your password and a unique code that is texted to you before you are able to log into your account.
All banks can be subject to failure, but the more established a bank is, the less likely it is to fail. Choose a bank that has a trustworthy reputation to minimize the threat of a bank failure. This is especially important if your deposits exceed $250,000 or if the bank is not FDIC insured.
Opt in and always pay attention to fradulent activity alerts. It’s always best to check and make sure, even if you think you made the transaction yourself.
Best Online Savings Accounts
With the CIT Bank Savings Builders account:
• Earn a top tier, competitive APY on your money—one of the top savings rates in the nation. Earn 0.40% APY on your funds - grow your savings faster.
• Build a habit of savings. Pay yourself first. Start with $100 per month and build your habit of savings-—all while getting a top rate.
• FDIC Insured
Open a Discover Online Savings Account for all these features:
• Earn high interest rate of 0.40% APY
• No minimum opening deposit, no minimum balance requirement, and now no fees
• Interest on Discover Online Savings Accounts is compounded daily and credited monthly
• Manage your account online or with the Discover mobile app
• FDIC insurance up to $250,000
See advertiser website for full details
• Earn up to 0.61% APY with interest compounded daily and no monthly fees with the Axos Bank High Yield Savings account
• No minimum balance requirements
• Free ATM card upon request
• $250 minimum opening deposit
• Free Incoming Wires
Most online savings accounts are FDIC insured, but always confirm before you open an account. Even when it is insured, take proactive measures to safeguard your financial information.
Online savings accounts can provide several advantages over traditional savings accounts. Compare different terms and conditions, including yield rates, to find an online bank that meets your savings account needs.
For more information on banking, check out the rest of our bank guides right here on HMB!