My local bank offers a basic savings account with a 0.04% interest rate with the opportunity for a lot of fees. If you are a high roller and have a minimum of $30,000 to open an account, you can earn 0.75% interest at that bank (the interest rate “skyrockets” to 0.85% if you can bring $5 million to the table). Oh, and it took me a couple minutes to find that information. Where’s the transparency?
If this situation sounds familiar to you, then I recommend looking into an online high yield savings account where you can earn a better return on your money, avoid most fees, and enjoy added functionality. If you still need a brick and mortar bank, then consider keeping your local account and using the online savings account to stash your emergency fund or long term savings.
How to Find the Best Banks and Rates
All banks are not created equally. There are variations in interest rates, reliability, functionality, and more. When looking for a new bank, consider these features:
- FDIC insurance. The most important feature – if the bank is not FDIC insured, keep looking.
- Interest rates. The higher the better, provided the bank meets your other needs.
- Account minimums. Some banks require you to deposit a large amount of money to receive the best rates or avoid fees.
- Fees. Keep these to a minimum.
- Functionality. Some banks offer great features such as unlimited sub-accounts, high yield checking accounts, Certificates of Deposit, the ability to link to a brokerage account, and more.
- Access to funds. How quickly and easily can you access your money if you need it? Is there a brick and mortar version of the bank, or is it only online?
Top Online High Interest Savings Accounts
The following banks meet the criteria listed above, and each of them offers something a little different than their competitors. These banks are all covered by the FDIC and are great options if you are searching for a new online bank. Bank rates change often, but we do our best to maintain an accurate listing of current high yield savings account rates. Use the following chart for current options, or read more details below the rate chart.
|Online Bank||Min. Deposit||Account Details|
|$1||Rated the top online bank in 2008 by Kiplinger’s and has a 4 out of 5 star rating from Bankrate’s Safe and Sound Ratings. for more information, visit:
- Official FNBO Direct website.
|$1||Ally Bank offers savings accounts and CDs, including a no penalty CD. Ally Bank also offers the ability to create sub-accounts for targeted savings.
- Ally Bank Review.
- Official Ally Bank website
|$1||Create up to 30 sub-accounts. Capital One 360 also offers CDs, a high interest checking account, and the ability to link your account to ShareBuilder, an online brokerage. For more information, visit:
- Capital One 360 Review
- Official Capital One 360 Website.
|$1,500||$1,500 initial-deposit requirement. Features 1.51% Bonus Rate for first three months. No-fees for online banking with minimum account balance of $5,000. Also available: CD's high interest checking, Money market account, more. For more information visit:
- Official Everbank website.
|$500||The Discover Bank Online Savings Account has a $500 opening deposit plus no minimum balance. Also available: money market accounts, certificates of deposit (CD) and an IRA CD. For more information visit:
- Discover Bank Review.
|$1||American Express Personal Savings Accounts currently offer high interest rates on savings accounts, checking accounts, money market accounts, and CDs.For more information, visit:
- American Express Personal Savings Accounts Review.
|$25,000 (bonus rate)|
$100 (standard rate)
|CIT Bank offers best in class interest rates, with a bonus rate for balances over $25,000. For more information, visit:
- CIT Bank Website
Ally Bank. Ally Bank is the new name for what was formerly GMAC Bank. They offer high rates, unlimited sub-accounts, and excellent CD rates. Ally Bank is of the few banks to offer a no penalty CD, which you can break at any time without any fees. Ally Bank accounts have no monthly fees and no minimum balance requirement. You can read more in my Ally Bank review, or you can open an Ally Bank account at http://www.ally.com.
FNBO Direct. FNBO Direct, the online branch of First National Bank of Omaha, was rated the top online bank in 2008 by Kiplinger’s and has a 4 out of 5 star rating from Bankrate’s Safe and Sound Ratings. There are no minimum balance requirements, no extra fees, and you can easily link other bank accounts with FNBO Direct. You can find more information or open an FNBO Direct account at https://www.fnbo.com.
Capital One 360. Capital One 360 is probably the most well known online bank and they have many attractive features that set them apart from other banks. Their best features include the ability to create an unlimited number of sub-accounts (which makes targeted savings easy), ability to link to their high yield checking account (Checking), ability to link directly to your ShareBuilder account, a program to refer friends and family to earn bonuses, good CD rates, and more. For more information, read our Capital One 360 review or click to open an account.
EverBank. EverBank currently offers some of the highest interest rates among online banks, with features including high yield savings accounts, a money market account, checking accounts, CDs, credit cards, and investment accounts. EverBank offers a high introductory rate and has a $1,500 minimum balance to open an account and there are no fees with a minimum balance of $5,000. You can find more information or open an EverBank account at https://www.everbank.com.
American Express Personal Savings Account. You are probably most familiar with American Express for the credit cards, but they recently began offering an online savings account as well. They offer very competitive interest rates (well above the national average), and a variety of CDs, ranging from 6 months to 5 years. There is no minimum to open an account, no minimum balance requirement, and no inactivity fees. You can find more information in our American Express Savings Account Review, or open an account at http://personalsavings.americanexpress.com/.
CIT Bank is one of the top online banks in the US, offering high interest rates across the board, and a bonus rate for those who maintain a daily balance of $25,000 or more. There are no monthly fees and the customer service is excellent. For more information, or to open an account, visit: CIT Bank’s website.
Discover Bank. Discover Bank offers top tier online savings and money market accounts which feature high interest rates as well as CDs for Roth IRAs that are among the highest in the nation. For more information about Discover Bank read this Discover Bank Review or visit the Official Discover Bank website.
Sallie Mae Bank. Sallie Mae just opened a new consumer banking division and they currently offer some of the highest rates in the nation. Sallie Mae is FDIC insured, has no minimum balance requirements, and no fees. Salllie Mae also has a unique arrangement with Upromise – you can earn a 10% annual match on Upromise earnings. For more information, please read this Sallie Mae Savings Account Review for more information.
SmartyPig. SmartyPig is a different kind of bank, offering high interest rates and an incentive to save. SmartyPig is FDIC insured and has no minimum balance or fees. To open a SmartyPig account, you need to declare a savings goal, then set up automatic deposits toward your goal. This is an easy process and only takes a few minutes to set up. For more information about SmartyPig’s great interest rates or to open an account, see this Smarty Pig review.
Photo credit: Carly Jane1