Editorial note: Any opinions, analyses, statements, reviews or recommendations expressed in this article are those of the authors' alone, and have not been reviewed, approved or otherwise endorsed by any provider of the products listed below.
Nowadays, saving money in an account at many big banks is just about as useful as stashing it under your mattress if you’re looking to earn returns. Not only have rates on deposit accounts at traditional banks barely budged in the last few years — despite a federal funds rate that's not far off its recent ten-year highs — but they often penalize customers with fees for everything from carrying a balance under a certain amount or daring to use an out-of-network ATM.
Online banks are a different story. Without the cost of maintaining physical branches to contend with, online banks get to pass those savings to consumers in the form of higher rates and fewer fees.
It can be easy to ignore the benefits of an online savings account, if only to avoid the slight hassle of moving your money from one bank to the next. But why pass up the chance to earn more money at no real extra cost to you? Moving money to and from an online account can often be as easy as initiating an electronic transfer. Online banks tend to offer robust mobile and online portals with 24/7 customer support to make up for lack of a physical branch presence.
If you’re not sure where to start, check out the best online savings accounts below.
All rates are current as of 8/07/2020
The best national online savings accounts
How we chose the best national online savings accounts
To find the best online savings accounts among our partners, we took a few important factors into account:
- High interest rate: We honed in on the highest APYs offered on an online savings account to ensure high returns.
- No monthly fee: None of the above accounts charge a monthly fee. This allows your money to grow undisturbed by pesky bank charges.
- Low minimum deposit: A top online savings account should have a low (or $0 minimum deposit) so a wider selection of customers can take advantage of the account.
#1 American Express National Bank
Although American Express is more known for its credit cards, it also offers deposit accounts through its Personal Savings brand of American Express National Bank, including its free High Yield Savings Account. You can earn its APY on all balances and regardless of your opening deposit. You may open this account as a Payable on Death (POD) account.
American Express was founded in 1850 and has expanded ever since. American Express National Bank came along in 1989 and is headquartered in Sandy, Utah.
#2 Ally Bank
Ally Bank offers a robust suite of competitive online bank accounts. Its Online Savings Account is a standout for its high-yield APY, no monthly fee and no balance requirements. Plus, you can easily save toward separate savings goals within the same account through Ally’s buckets system.
Ally Bank got its start as the financing arm of GM in 1919. Today, it’s an online banking leader with products across the financial spectrum. It is based in Sandy, Utah, and offers 24/7 customer support, in addition to online and mobile app access.
#3 Capital One
Capital One’s 360 Performance Savings is part of the bank’s extensive suite of 360 online deposit accounts. There is no minimum deposit required to open the account, nor a minimum balance required to maintain the account or earn interest. There is no monthly fee on the account.
Capital One 360 offers more competitive rates than the bank’s in-branch account offerings. You can access all of your Capital One deposit accounts online, at a branch and on the bank’s mobile app, which includes mobile check deposit capabilities. Capital One was founded in 1933 and is headquartered in Mclean, Va.
#4 Live Oak
A rising competitor in this space, Live Oak continues to offer some of the best interest rates even as rates fall elsewhere. You can open a Live Oak Bank Savings account online with any deposit amount. There also is no monthly fee, nor a minimum balance requirement. Interest compounds daily.
You can access Live Oak Bank accounts online and through its mobile app. To deposit funds into this online account, you can transfer funds via ACH in one to two days; mail a check to the bank’s headquarters; deposit a check through the Live Oak Bank Mobile App; or wire funds from an external account into your Live Oak Bank account.
Founded in 2008, Live Oak Bank is an online bank headquartered in Wilmington, N.C., also known for its small business lending services.
#5 Marcus by Goldman Sachs
The Online Savings Account from Marcus by Goldman Sachs® is a simple and straightforward account. It grows your money at a rate that consistently competes with its competitors. You don’t need a certain balance to open this account, but you will need at least $1 to start earning the 1.05% annual percentage yield (accurate as of 7/9/2020). There is no monthly service fee nor other transaction fees.
Marcus is accessible both online and on mobile, although its mobile app is available only in the Apple App Store.
MIN TO EARN: $0Learn More
Ken's methodology for choosing the best savings accounts
To choose my five best online savings accounts, I took a few important factors into account:
- History of high interest rates: My top picks have a history of offering competitive rates for multiple years. They don’t play games by offering the best rates only on promotional accounts, new accounts or at new websites.
- Functional online account management: All of my picks have an online account management system that allows for large electronic fund transfers to and from your accounts at other banks. Many also allow you to manage your beneficiaries online.
- Beneficiaries and trust accounts: How easy banks make the process of designating multiple beneficiaries was also a factor in my picks. In addition, banks that allowed trust accounts were ranked higher.
- Other Features: Fees, wire transfer policies and ATM access were just a few of the factors considered.
#1 PurePoint Financial
PurePoint Financial has maintained very competitive rates on its Online Savings Account since PurePoint Financial was launched in early 2017. PurePoint Financial is a division of MUFG Union Bank, N.A., which is a large western regional bank better known as Union Bank.
One shortcoming of the PurePoint Financial Online Savings Account is a $10,000 minimum balance that’s required to earn the top rate. The rate for balances under $10,000 is low. Consequently, this account is only suitable for those who intend to maintain a $10,000 minimum balance. Since PurePoint Financial has been able to maintain higher rates than online savings accounts without minimum balance requirements, I consider this shortcoming a reasonable trade-off for those looking to maximize yield. On the positive side, there is no monthly service fee regardless of the minimum balance.
In regards to managing the Online Savings Account online, PurePoint Financial ranks high. The online account management system allows customers to initiate free bank-to-bank electronic funds transfers on amounts up to $250k. That’s larger than what’s allowed at many other online banks. Before transfers can take place, a link to an external account must be established using the online system. Up to ten external accounts can be linked which is an above-average number. The online system can also be used to add, remove and change beneficiaries for an account.
In addition to individual and joint accounts, the Online Savings Account can be opened as a personal trust account. This is often not possible at other online banks.
One shortcoming is the lack of ATM access.
MIN TO EARN: $10,000Learn More
#2 Live Oak Bank
Live Oak Bank’s Savings Account is the youngest account in my picks, but since it launched in the first half of 2017, the Savings Account has consistently offered competitive rates. The rates have remained in the high range for online savings accounts without minimum balance requirements.
The Savings Account has no minimum balance requirement. All balances earn the stated APY. Live Oak Bank does limit a customer’s aggregate balance (total of all consumer accounts) to be no greater than $5 million. There is no monthly maintenance fee.
In regards to managing the Savings Account online, Live Oak Bank ranks high. The online account management system allows customers to initiate free bank-to-bank electronic funds transfers on amounts up to $250k. That’s larger than what’s allowed at many other online banks. Before transfers can take place, a link to an external account must be established using the online system. Up to three external accounts can be linked which is an average number. The online system can also be used to add, remove and change beneficiaries for an account.
Live Oak Bank does have a few shortcomings. There is no ATM access. Although wire transfers are allowed, a fee is charged, even for incoming wire transfers. Lastly, Live Oak Bank does not offer trust accounts.
#3 SFGI Direct
SFGI Direct, a division of Summit Community Bank, has offered consistently competitive rates on its Savings Account since 2009. The online bank keeps things simple with this Savings Account being its only product since it began operation.
The Savings Account requires a $500 minimum deposit to open, but the minimum balance to earn interest is only $1. The only maximum is the total initial deposit, which is limited to $25,000. There is no monthly maintenance fee.
In regards to managing the Savings Account online, SFGI Direct is average. One positive is that the online account management system allows customers to initiate free bank-to-bank electronic funds transfers of any amount. Most online banks limit the size of these transfers, with many banks limiting them to small amounts. One downside is that only one link to an external account is allowed for transfers. Another downside is that the online account management system cannot be used to change beneficiaries. Up to four named beneficiaries can be designated in the online application; however, beneficiary changes requires closing the account and opening a new one.
Additional shortcomings of SFGI Direct include the lack of ATM access, the inability to accept wire transfers and the lack of trust accounts.
MIN TO EARN: $1Learn More
#4 Marcus by Goldman Sachs
Marcus by Goldman Sachs has maintained very competitive rates on its High-yield Online Savings Account since it acquired the internet deposit business from GE Capital Bank in April 2016. During this time, the rates of the Online Savings Account have been in the high range for online savings accounts without minimum balance requirements.
The Online Savings Account has no rate tiers and requires only a $1 minimum balance to earn the stated APY. Marcus by Goldman Sachs is very fee friendly. Not only is there no monthly service fee, but there are also no transaction fees. This includes wire transfers. There are no fees for sending or receiving wire transfers. Most banks charge a fee when you send a wire transfer.
In regards to managing the Online Savings Account online, Marcus by Goldman Sachs ranks high. The online account management system allows customers to initiate free bank-to-bank electronic funds transfers on amounts up to $125k for withdrawals and with no limit for deposits (as long as maximum balance limits are maintained). That’s larger than what’s allowed at many other online banks. Before transfers can take place, a link to an external account must be established using the online system. Up to four external accounts can be linked which is an average number.
Marcus by Goldman Sachs does have a couple of shortcomings. There is no ATM access, and accounts cannot be opened in the names of trusts.
MIN TO EARN: $0Learn More
#5 Synchrony Bank
Synchrony Bank has maintained very competitive rates on its High Yield Savings Account since Synchrony Financial was spun off from GE Capital in 2014. During this time, the rates of the High Yield Savings Account have been in the high range for online savings accounts without minimum balance requirements.
The High Yield Savings Account has no minimum balance requirements. All balances earn the stated APY. Synchrony Bank is fee friendly. There are no monthly service fees. One of the few fees that do exist applies to outgoing wire transfers. This is a $25 fee unless a customer qualifies for Diamond status. There is no fee for incoming wire transfers.
Unlike many online savings accounts, Synchrony Bank offers ATM access. Synchrony doesn’t charge a fee when customers use the ATMs of other banks. In addition, Synchrony Bank will refund ATM fees charged by other banks, up to $5 per statement cycle.
In regards to managing the High Yield Savings Account online, Synchrony Bank ranks high. The online account management system allows customers to initiate free bank-to-bank electronic funds transfers on amounts up to $250k for withdrawals and up to $500k for deposits. Those are higher limits than the limits of many other online banks. Before transfers can take place, a link to an external account must be established using the online system. Up to ten external accounts can be linked which is an above-average number.
In addition to individual and joint accounts, the High Yield Savings Account can be opened as an IRA or trust account. This is often not possible at other online banks. The online application can accommodate up to four beneficiaries per account. Paper form must be used to add, remove or change beneficiaries after the account is opened.
MIN TO EARN: $0Learn More
The highest savings account rates
There are certain institutions that will offer an incredibly high savings account rate only to take it away or drop the rate incredibly low. Some of the accounts listed below are from institutions that don't have a great track record or require a high balance amount to earn the APY, but others offer reliability and consistency. While we do advise that you do further research before opening one of these savings accounts, these institutions have the highest savings rates currently available. Please keep in mind that this list does not include money market accounts. There may be money market accounts with higher rates than the accounts listed below, but we've listed the top ten highest rates for savings accounts only. If you'd like to see our full list of the highest bank account rates, you'll want to check out our Bank Account Interest Rates Summary.
The highest savings account rates
|First Foundation Bank||1.20% (up to $5m) |
|Online Savings Account - New Money Only||Learn More|
|CIBC Bank USA||1.05%||CIBC Agility Savings||Learn More|
|Fitness Bank||1.05% ($100+)||Fitness Savings (12,500+ Steps)||Learn More|
|Nationwide by Axos Bank||1.05%||My Savings||Learn More|
|Vio Bank||1.04% ($100+)||High Yield Online Savings||Learn More|
|Prime Alliance Bank||1.01% ($100+)||Personal Savings Account||Learn More|
|SFGI||1.01%||SFGI Direct Savings Account||Learn More|
|Salem Five Direct||1.00% (up to $1m)|
|High Yield Savings||Learn More|
|Live Oak Bank||1.00%||High Yield Online Savings||Learn More|
|American Express||1.00%||High Yield Savings Account||Learn More|
What to consider when choosing the best online savings account
When committing to a bank, you may want some peace of mind knowing your deposits won’t go to waste over the years. In 2014, online bank rates began to rise steadily, with a steep incline starting after a Fed rate hike in June 2017 and continuing through to the latest rate increase in Dec. 2018. However, with the Fed’s three latest rate cuts, savings account rates are now on a slight decline, although it’s not expected to continue for much longer. Still, online savings rates continue to outperform brick-and-mortar institutions, which still earn at an average 0.27%, according to our data.
For a potentially better rate outlook, you could consider opening a certificate of deposit (CD), or two. Average savings rates don’t respond the most positively to Fed moves quite like CDs do, thanks to traditional big banks keeping their rates low to drag down the average. Average CD rates, on the other hand, saw an increase in response to the rate hikes. Since CDs lock in your rate for a few months or years at a time, you can use these accounts to take advantage of today’s rates before they drop even further. Once your CD term matures, a new rate may apply, so you’ll have to check whether you’re still getting the best rate deal.