Are you looking for a savings account? There are a lot of savings products out there nowadays stemming from a traditional bank to an online bank.
Online savings accounts are similar to traditional savings accounts, but there are some key differences. Most online savings accounts do offer the same FDIC protection that traditional accounts also offer.
This means that your money will be insured up to $250,000 if the bank fails.
We recommend learning more about:
- CIT Bank’s Savings Builder account
- Discover Bank’s Online Savings account
- America Express Personal Savings account
- HSBC Direct Savings account
American Express® High Yield Savings Account - You earn 0.50% 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.
|Discover Bank Online Savings||$200 Bonus + 0.40% APY||Review|
|Aspiration||$150 Bonus + 1.00% APY||Review|
|Axos Business Savings||$100 Bonus + 0.20% APY||Review|
|Axos Bank High Yield Savings||Up to 0.61% APY||Review|
|Quontic Bank High Yield Savings||0.55% APY||Review|
|American Express High Yield Savings||0.50% APY||Review|
|CIT Bank Money Market||0.45% APY||Review|
Table of Contents
What We Like About Online Savings Accounts
Higher interest rates. This is one of the key reasons to consider an online savings accounts. Many offer APYs in the range of 1.6% to 1.8%, while traditional savings accounts rarely go above 1%.
Lower bank fees. Online banks are less likely to charge monthly maintenance fees. However, you may need to maintain a minimum balance to get that feature.
Online convenience. Online savings accounts allow you to conduct your banking without leaving your house.
Easy transfers. Many online banks offer free and easy ACH transfers to make up for the fact that they can’t accommodate cash deposits.
What We Don’t Like About Online Savings Accounts
No physical branches. If you’re the type of person who would prefer to talk face-to-face with your teller to do your banking, then you’re in the wrong place. The only customer service offered by online banks would be
Difficulty withdrawing money. Online savings accounts will charge you for withdrawing money early.
Fewer product offerings. Many traditional banks offer other financial products, such as mortgages, insurance, and other types of financing. Online banks don’t usually offer these.
Should You Open An Online Savings Account?
There are a couple things to consider before deciding to open an online savings account. If you need access to your money quickly, you might want to consider a traditional savings account because they tend to not have fees associated with early withdrawals.
If you prefer going to a physical branch, this is another thing to consider. Since online banks don’t have any time of physical branch, this may be an issue for some that prefer to have that physical interaction.
Online banks generally also do not accept cash deposits since they don’t have an ATM network for you to deposit at. The only way for this cash to enter your account is to transfer it from an existing account.
How To Open An Online Savings Account
The process is quite simple once you’ve made your decision to open one. Choose your bank that suits your needs by researching the terms and yield of the products they have to offer.
Gather any documents you think you may need to open an account such as a Social Security Number or driver’s license number. Submit your application and just wait!
Once you’re accepted, you can fund your account by using an existing bank account that you already have.
Online Savings Account FAQs
Are online-only banks safe?
Online banks are considered very safe. Using specific technology that protects your privacy, you can rest assured that online banks are just as safe as in-person banks. That is, there is minimal risk.
Can you lose money in a savings account?
If you’re banking with an FDIC-insured bank (which most banks are), your money will be protected if the bank were to fail. However, this is only for amounts less than $250,000. Any amount higher than that is not insured by the FDIC.
What is the typical minimum balance for an online savings account?
Many online savings accounts don’t require a minimum balance, but some require as little as $1. Others have a $5,000 minimum balance requirement or higher. Don’t try to open a new online savings account if you do not have enough funds to meet the bank’s minimum deposit requirement.
Are online savings accounts FDIC insured?
Most online savings accounts are FDIC insured, meaning that your funds will be protected for up to $250,000 in the event of a bank failure.
Recommended Online Savings Accounts
• 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
With the American Express® High Yield Savings Account:
• Earn 0.50% APY on your deposits. Your High Yield Savings account earns interest daily and is posted to your account monthly.
• Links easily with your current bank accounts. No need to switch banks.
• FDIC Insured. Your account is insured to at least $250,000 per depositor.
• 24/7 Account Access
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:
• Bonus offer applies for your first Discover Online Savings Account
• Earn $200/$150 Bonus with promo code HMB122 by 03/15/2022
• Fund your first savings account with at least of $25K within 30 days of account open date to earn the $200 Bonus
• Fund your first savings account with at least of $15K within 30 days of account open date to earn the $150 Bonus
• 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
Of course, there are pros and cons to having an entirely online savings account. Major cons include not being able to do your banking face-to-face with your teller.
However, this allows the online banks to offer higher APYs, which will help grow your savings faster! For more posts like this, check out our list of bank guides!