The best high-yield online savings accounts offer strong interest rates and great customer service, making them a popular option for savers. Studies also show online savings accounts often come with lower fees.
“High-yield” is unfortunately a bit of a misnomer these days; a decade ago, interest rates were 4% and 5% among select savings accounts and money market accounts. Today, the best rates are around 2% while a fair amount are still hovering around 1% or more. This trend will continue until banks and credit unions need more cash from depositors.
Interest rates.
Interest rates are important because money shouldn’t lose too much purchasing power. In a perfect world, interest rates offered by banks should beat inflation while preserving the balance without risk. I am not aware of any bank offering a savings option with ongoing interest rates high enough to beat inflation, whether measured by the government-reported CPI-U or by any other meaningful measure of consumer prices. Nevertheless, if your savings is at a brick and mortar bank earning below 0.25% APY, choose one of the better options below.
Customer service.
When evaluating customer service, there are two important factors to consider. The best banks offer all account maintenance and transfers through a professional, reliable, and easy-to-navigate website. Secondly, live customer service representatives should be knowledgeable, helpful, and available, although customers should have to deal with a representative infrequently if at all.
Based on my own experiences and reviews from other Consumerism Commentary readers, here are the most-recommended accounts for short-term savings. All of the listed interest rates directly below from our partners and in the table that follows are current but they are subject to change by the banks. Although I have nine accounts listed below the table of rates, you don’t need to have accounts with that many different banks. Choose one that fits you the best.
First, here is a list of the latest interest rates. Following this table, I offer a few of my own observations and opinions about savings accounts from nine popular online banks.
Account Type
Amount
Institution
Type
Rate
APY
Min. To Earn APY
Details
Ultima Bank
Rates as of Aug. 26th
Savings
2.00%
2.02%
$0
SMART Savings Account - for young adults 18 yrs or younger, withdrawals prior to 18th birthday may result in a penalty
Dollar Bank Federal Savings Bank
Rates as of Aug. 26th
Savings
1.60%
$0
Everything Savings - 1.60% APY throughout 2015 on balances below $20,000 when linked with an Everything Checking Account. The rates require Everything Checking with six qualifying monthly posted payments for example: check, Online Banking bill payment, Telephone Banking bill payment, ACH debit, Point-of-Sale transactions (signature or PIN based).- Open online and mail in forms. Available in Pennsylvania, and Ohio market area. Rate collected within: 15222 (PA)
BBVA Compass (Rate in AL)
Rates as of Aug. 26th
MMA
1.09%
1.10%
$10,000
ClearChoice Money Market - $10,000 - $19,999 - $15 monthly fee waived with $10,000 minimum daily balance or with automatic $25 transfer from BBVA checking account - Rate collected within Birmingham, AL
BBVA Compass (Rate in AL)
Rates as of Aug. 26th
MMA
1.09%
1.10%
$20,000
ClearChoice Money Market - $20,000 - $49,999 - $15 monthly fee waived with $10,000 minimum daily balance or a $25 transfer from a BBVA Compass checking account - Rate collected within Birmingham, AL
BBVA Compass (Rate in CA)
Rates as of Aug. 26th
MMA
1.09%
1.10%
$20,000
ClearChoice Money Market - Tier $20,000 - $49,999 - $15 monthly fee waived with $10,000 minimum daily balance or a $25 transfer from a BBVA Compass checking account - Rate collected within: Northern CA
BBVA Compass (Rate in CA)
Rates as of Aug. 26th
MMA
1.09%
1.10%
$10,000
ClearChoice Money Market - Tier $10,000 - $19,999 - $15 monthly fee waived with $10,000 minimum daily balance or with automatic $25 transfer from BBVA checking account - Rate collected within: Northern California
SFGI Direct
Rates as of Aug. 26th
Savings
1.06%
$1
GE Capital Bank
Rates as of Aug. 26th
Savings
1.04%
1.05%
$1
Online Savings - APY for balances between $1 to $1,000,000
Bank2
Rates as of Aug. 19th
Savings
1.01%
$0
Great Rate Savings - Tier Up to $35,000 - Account must be linked to Great Rate Checking Account - Available only to Oklahoma residents
Radius Bank
Rates as of Aug. 26th
Savings
0.99%
1.00%
$2,500
Radius High-Yield Savings - APY for balances $2,500 and above - apply online
iGOBanking
Rates as of Aug. 26th
Savings
1.00%
1.00%
$0
iGO Online Savings
Salem Five Direct
Rates as of Aug. 26th
Savings
1.00%
$0
eOne Savings - APY on balances of $0.01-$500,000. Companion account to eOne Checking, no minimum balance, no monthly fees, free ATM card, Online applicants only, who do not have existing deposit accounts with Salem Five
Biscayne Bank
Rates as of Aug. 26th
Savings
1.00%
$1
Regular Savings - Maintain $1,000 balance each day and avoid a $25 monthly maintenance fee - Miami-Dade County, Florida market area only
ableBanking
Rates as of Aug. 26th
MMA
1.00%
$0
Money Market Savings - up to 6 withdrawals are permitted per month - apply online - a division of Northeast Bank based in Maine
Barclays
Rates as of Aug. 26th
Savings
1.00%
$0
Online Savings - APY for all balances
Coulee Bank
Rates as of Aug. 26th
Savings
1.00%
1.00%
$0
Kasasa Saver - Must be a resident of Wisconsin, Minnesota or Iowa
Ally Bank
Rates as of Aug. 26th
Savings
0.99%
$0
Online Savings - Free online transactions, no monthly fees, no minimums - Apply online - Rate collected within: CA
Discover Bank
Rates as of Aug. 26th
Savings
0.95%
$0
Online Savings Account - Account can only be held in individual or joint ownership - Up to 6 preauthorized transfers from your Online Savings Account per statement cycle
Ultima Bank
Rates as of Aug. 26th
Savings
0.90%
0.90%
$1,000
UBM Direct Savings Account
The Palladian Private Bank
Rates as of Aug. 26th
Savings
0.90%
0.90%
$0
Currently there is a promotional interest rate for Palladian Savings Account which is fixed at 1.30% for the first six months. After the promotional interest rate ends, the interest rate will be the non-promotional variable interest rate that is offered for Palladian Savings Account at that time (currently 0.90%). There is a minimum initial deposit of $10,000 and maximum initial deposit of $100,000.
American Express
Rates as of Aug. 26th
Savings
0.90%
$0
High-Yield Savings - Bank by phone or online only.
Sallie Mae Bank
Rates as of Aug. 26th
MMA
0.90%
$0
Nationwide - apply online
Santander Bank
Rates as of Aug. 26th
MMA
0.90%
$10,000
Money Market Savings Account - APY for balances between $10,000-$4,999,999 - New accounts only - apply online - Rate collected within: New York
EH National Bank
Rates as of Aug. 26th
MMA
0.86%
0.86%
$250,000
Premium Money Market - tier $250,000 and over
Ally Bank
Rates as of Aug. 26th
MMA
0.85%
$0
Money Market Savings Account - All balances - No monthly fees - Apply online - Rate collected within: CA
Colorado Federal Savings Bank
Rates as of Aug. 26th
Savings
0.85%
0.85%
$2,500
Online Savings Account - up to 6 withdrawal transactions per month with no service fee
Mutual of Omaha Bank
Rates as of Aug. 26th
MMA
0.85%
0.85%
$1,000
Online Money Market - Rate/APY for balances from $1,000 - $1,000,000
First Internet Bank
Rates as of Aug. 26th
MMA
0.80%
$0
Money Market Savings - Rate earned on balances up to $99,999.99 - transaction limitations - apply online
AmTrust Direct
Rates as of Aug. 26th
MMA
0.80%
0.80%
$5,000
Earn More Money Market Account - Rate earned on balances of $5,000.00 and up-new money only.
Discover Bank
Rates as of Aug. 26th
MMA
0.80%
$100,000
Money Market Tier $100,000 and up
Sallie Mae Bank
Rates as of Aug. 26th
Savings
0.80%
$0
Nationwide - apply online
EH National Bank
Rates as of Aug. 26th
MMA
0.80%
0.80%
$10,000
Premium Money Market - tier $10,000 - $49,999
MyBankingDirect
Rates as of Aug. 26th
MMA
0.80%
0.80%
$5,000
Earn More Money Market Account - Rate earned on balances of $5,000.00 and up-new money only.
Discover Bank
Rates as of Aug. 26th
MMA
0.75%
$10,000
Money Market Tier $10,000 - $24,999 - $10 minimum balance fee if average balance is below $2,500
Union Federal Savings Bank
Rates as of Aug. 26th
MMA
0.75%
$1
Online Money Market Account - Union Federal Savings Bank is currently not accepting new applications for Online Money Market Accounts
Bank of Internet
Rates as of Aug. 26th
MMA
0.75%
0.75%
$1
Money Market Savings Account
SmartyPig
Rates as of Aug. 26th
Savings
0.75%
$0
APY for balances up to $50,000
FNBO Direct
Rates as of Aug. 26th
Savings
0.75%
0.75%
$0
Online Savings Act - Rated Kiplinger's Best Online Savings Account, no minimums, no monthly fees, manage accounts securely online
Discover Bank
Rates as of Aug. 26th
MMA
0.75%
$50,000
Money Market Tier $50,000-$99,999
Discover Bank
Rates as of Aug. 26th
MMA
0.75%
$2,500
Money Market Tier $2,500 - $4,999 - $10 minimum balance fee if average balance is below $2,500
Discover Bank
Rates as of Aug. 26th
MMA
0.75%
$5,000
Money Market Tier $5,000 - $9,999 - $10 minimum balance fee if average balance is below $2,500
Workers' Credit Union
Rates as of Aug. 26th
Savings
0.75%
0.75%
$50
cuSave - Online Savings - Membership is limited to residents of Massachusetts or New Hampshire or those who work for a company that is based in Massachusetts
Discover Bank
Rates as of Aug. 26th
MMA
0.75%
$25,000
Money Market Tier $25,000 - $49,999 - $10 minimum balance fee if average balance is below $2,500
TIAA Direct
Rates as of Aug. 26th
MMA
0.74%
0.75%
$50,000
Money Market - tier $50,000 -$99,999
Capital One 360
Rates as of Aug. 26th
Savings
0.75%
$0
360 Savings Account - No fees - No minimum balance - Online account
FSG Bank
Rates as of Aug. 26th
MMA
0.75%
$10,000
Classic MMA - Limited time offer -Rate special for balances over $10,000 - Account holder must also have primary checking account with FSG Bank - Opening balance must be an original deposit - limited to communities within Tennessee and Northern Georgia market area
WSFS Bank
Rates as of Aug. 26th
MMA
0.75%
0.75%
$25,000
WSFS MM - Rate in PA - Tier $25,000 - $49,999
Century Bank Direct
Rates as of Aug. 26th
MMA
0.74%
$0
Online MM Rate - apply online
Geddes Federal Savings and Loan Association
Rates as of Aug. 26th
MMA
0.70%
0.70%
$50,000
Central New York market area only
Chesapeake Bank
Rates as of Aug. 26th
Savings
0.70%
0.70%
$1
Clear Sky Savings - Tier $1 - $249,999
Rates / APY terms above are current as of the date indicated. These quotes are from banks, credit unions and thrifts, some of which have paid for a link to their website. Bank, thrift and credit union deposits are insured by the FDIC or NCUA. Contact the bank for the terms and conditions that may apply to you. Rates are subject to change without notice and may not be the same at all branches.
GE Capital Bank is making a name for itself in the world of online banks by offering high rates and low fees on its FDIC-insured online savings account. Its online savings account offers a 1.05% APY and requires no monthly minimum balance and has no transaction fees as of August 23, 2015. click here to apply
Ally Bank was selected by Kiplinger Magazine as the best savings account for 2009. Formerly known as GMAC Bank, Ally Bank provides an interest rate for their online savings account of 0.99% APY as of August 23, 2015. click here to apply
Barclays is a large, international bank that has been around for 300 years, and operates in over 50 different countries. Barclays offers a 1.00% APY on all deposits, with no minimum balance and no monthly fees, as of August 23, 2015. click here to apply.
Discover Bank offers a solid online savings account with a fast opening process; my account was opened within twenty-four hours. The current interest rate for the Discover Bank Online Savings Account is 0.95% APY as of August 23, 2015.
Capital One 360 offers no fees and no minimum balance requirement. Like ING DIRECT before it, Capital One 360 also has a great website and excellent customer service. So far, managing your money with Capital One 360 is just as easy as it was with ING DIRECT. Capital One 360 offers a current interest rate of 0.75% APY as of August 23, 2015
FNBO Direct offers no fees and no minimum balance requirement. FNBO Direct is the online arm of First National Bank of Omaha. FNBO has an interest rate of 0.75% APY as of August 23, 2015. click here to apply
CIT Bank was founded in 1908 in St. Louis by Henry Ittleson. Throughout the 20th century, CIT continued to grow, in all sectors. CIT Bank, an FDIC-insured institution, serves consumers and small businesses with certificates of deposit, savings accounts and custodial accounts. CIT Savings account offers 1.00% APY on all deposits between $100-$24,999 and 1.05% APY on all deposits of $25,000 and above, as of August 23, 2015. click here to apply
EverBank has a variety of products including a high yield checking account, a money market account, and world currency CDs, all with top-tier interest rates. Currently, for first time account holders, Everbank’s Yield Pledge Money Market account offers a new account bonus rate of 1.60% for the first six months, a first year APY currently at 1.11% for account balances up to $150K and an ongoing APY of 0.62% APY. And their Yield Pledge Checking Account for first time account holders for balances up to $100,000 offers a new account bonus rate of 1.60% for the first six months, and based upon balances on a tiered structure, first year APY is currently at 0.95%-1.08% and a tiered ongoing APY of 0.30%-0.56% APY as of August 23, 2015. click here to apply
SmartyPig currently sports one of the better interest rates you can find online at 0.75% APY as of August 23, 2015. In addition to the high interest rate, you can also convert your savings goals into gift cards and earn an additional bonus for each gift card conversion. SmartyPig is not a bank by itself, but it is a goal-oriented savings vehicle, a layer, that can be compared with other savings accounts.
HSBC Advance offers no fees and no minimum balance requirement. HSBC Advance (formerly HSBC Direct) entered the race with one of the highest interest rates ever available at 6% APY. HSBC Advance Online Savings Account has an interest rate of 0.05% APY for $10,000 as of August 23, 2015.
Lending Club Investing offers a significantly higher return than most banks. LendingClub is a social lending site where you can invest in loans issued to individuals and businesses. The most recent average net annualized return for notes by grade A to C is between 5.19% and 8.88%, as of August 23, 2015. While these investments are not FDIC insured, given the low interest rates paid by banks, LendingClub may be an alternative worth considering.
What is your favorite online savings account? Share your thoughts in the comments below.
For more banks to round out the selection, see this list of savings accounts interest rates. I have been tracking the rate changes for many years now, and this list gives you an idea of which banks have been consistently offering the highest interest rates.
Credit: iStock photo by psphotograph
Tell us: What online savings account works best for you?
Best Online Savings Accounts, August 2015 is a post from Consumerism Commentary. New to Consumerism Commentary? Start here.