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Banking

Best Savings Accounts

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Interest rates on savings accounts vary greatly, which means you need to shop around to find your best rate available. It’s possible to find rates reaching well past 2%, while the average savings account rate stands at around 0.27% (as of March 2020). This is why we check rates daily at more than 5,000 U.S. banks and credit unions, to make it easy for you to gain the best possible return on your savings.

A savings account is a key component of everyone’s financial life, but everybody needs something a little different from their savings account. That might mean you want to maximize your interest earnings, while others might need easy branch access. For that reason, we’ve outlined the best savings accounts in several different categories to better help you find the right one for your preferences.

So whether you’re shopping around for a new savings account or you need to open one for the first time, this comprehensive guide should help you get started. Below, you’ll find the best savings accounts to choose from, and a full brief on every aspect of selecting the right account for your needs.

Rates are accurate as of March 5, 2020

Best Savings Account Rates from Top Online Banks

Some people really put an emphasis on banking with a well-known, dependable bank that offers high rates and great features. For this reason, we’ve compiled a list of the big online banks that have had competitive rates for two consecutive years and either don’t require a minimum deposit amount or have a low minimum deposit amount requirement.

1. Barclays – 1.60% APY, no minimum deposit to open account

Barclays

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on Barclays’s secure website

Member FDIC

Barclays originated in London over 300 years ago. In 1965, Barclays incorporated Barclays Bank in California, and in 1971, incorporated Barclays Bank of New York, where its Wealth unit is now based. While the bank has a presence in several U.S. cities, it settled its headquarters in Wilmington, Del. in 2001, where the online business currently resides.

While Barclays had been predominantly making a name for itself in the credit card space, the bank launched its online savings account in 2012 with a fairly competitive rate. Since its launch, the bank has remained consistent with its rate and even decided to up its game in March 2019 to compete with the other online banks. Today, Barclays holds on to a 1.60% APY, and doesn’t require a minimum amount to open the account or a balance to earn that APY.

You can fund the account by transferring funds via ACH, setting up direct deposit, mailing a check or uploading a picture of a check via the bank’s Deposit Checks feature. Be aware that Barclays may hold your deposited funds for up to five business days if deposited by check or electronically. If you fund the account via ACH or transfer from another bank, the funds will be available immediately. The maximum amount that you can withdraw or deposit is $250,000 per transaction.

If having the ability to bank at the palm of your hand is important to you, you’ll be happy to know that Barclays has a mobile app.

2. American Express National Bank – 1.70% APY, no minimum deposit amount

American Express National Bank

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on American Express National Bank’s secure website

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Member FDIC

While this institution was established in 1989, American Express National Bank can trace its roots back to 1850 when its parent company, American Express, was originally founded. Not unlike Barclays, American Express is widely known for its credit card products.

With our sponsored advertiser, American Express National Bank, you can also open deposit accounts like its Personal Savings Account. Luckily for banking customers, the account historically offers good rates that consistently land it in top rankings. Today, you can take advantage of its 1.70% variable Annual Percentage Yield (APY) with any deposit amount. The account doesn’t charge a monthly fee, nor any fees for wires or to deposit checks.

This high yield savings account does not come with an ATM/debit card or checks. You can deposit money by mailing a check and make online transfers to and from your account. When pulling funds from your external bank, it will take five business days to appear in your account when you initiate the transfer from your Personal Savings account, and one to three when you initiate through your external account. Sending funds from your Personal Savings Account will take one to three business days no matter which side you initiate from. American Express Personal Savings is accessible online only; it does not have a mobile app.

3. Goldman Sachs Bank USA – 1.70% APY, no minimum deposit to open account

Goldman Sachs Bank USA

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Member FDIC

Marcus by Goldman Sachs® is a brand of Goldman Sachs Bank USA that powers the bank’s online savings accounts, as well as its personal loans. Marcus launched its online savings account in 2016 with a competitive rate (at the time). While savings rates have fluctuated, continue to do so, this online brand has continued to offer a consistently competitive rate on its savings account. Today, the bank is offering a 1.70% APY. There isn’t a minimum deposit amount or balance requirement to earn the APY — plus, this account doesn’t come with any monthly fees either.

You can easily fund the account by either transferring your funds directly from a linked external bank account, setting up direct deposit, sending a check or sending a domestic wire transfer. While you can deposit as much as $1 million per account, you’ll only be able to transfer a maximum of $125,000 per outgoing transfer when initiated online. Marcus does give you the option to call its customer service number if you need to withdraw more than that amount. Keep in mind that you’ll be limited to making six certain withdrawals or transfers per statement period.

One downside to this online-only bank is that it doesn’t currently have a mobile app that allows you to conduct transfers, so you’ll have to conduct transfers on Marcus’ website. However, the online bank did join forces with Clarity Money, a personal finance app from Goldman Sachs Bank USA. Through Clarity Money, you’ll be able to monitor your account and manage your finances in a simple way.

4. Capital One — 1.50% APY, no minimum deposit to open account

Capital One

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Member FDIC

Turn to Capital One 360 for Capital One Bank’s more competitive rates. As an online-only operation, Capital One 360 accounts provide savers with higher deposit rates for better savings. They’re not just a flash in the pan either; Capital One remains one of our top picks for their consistently competitive rates.

The Capital One 360 Performance Savings earns a 1.50% APY on all balances. There’s no monthly fee, so your savings can grow in peace without the bank taking out a chunk. You can open the account with any deposit amount that works for you, as there is no minimum deposit nor balance requirement.

Capital One 360 accounts can be managed easily online, on the bank’s mobile app or at a Capital One Cafe or branch.

5. Discover Bank – 1.50% APY, no minimum deposit to open account

Discover Bank

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Member FDIC

Known for its credit cards, Discover’s first card was first used in 1985. In that same year, Discover acquired Greenwood Trust Company, which officially changed its name to Discover Bank in 2000. Today, you can find several online banking products from Discover Bank, including certificates of deposit and a cashback checking account.

Dip into Discover Bank’s deposit offerings with its competitive Online Savings Account. There’s no minimum to open the account or start earning its 1.50% APY. Plus, interest is compounded daily and paid monthly for faster earnings. Discover also promises no fees so you can avoid fees on items like monthly maintenance, checks, returned deposited items, excessive withdrawals and insufficient funds.

Discover Bank is accessible solely online, which includes its mobile app, available both in the Apple App Store and Google Play. Its mobile app offers check deposit.

Best Rates from New Online Savings Accounts

Over the last year or so, there have been several new online banks being created by bigger banks or big banks introducing new online savings options. This list includes those banks that have either launched within the last two years or introduced a brand-new savings account with consistently high rates within the last two years.

1. North American Savings Bank (NASB) — 1.97% APY, $50,000 minimum deposit to earn APY

North American Savings Bank

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Member FDIC

Founded in 1927, North American Savings Bank is headquartered in Kansas City, Mo. It is a full-service bank with a range of deposit and lending products. You can find NASB locations in the Kansas City area.

NASB’s High Rate Savings account reserves its 1.97% APY for high balances between $50,000 and $5 million. Any balance outside of that range that will earn 0.10% APY instead. Whatever your balance, NASB guarantees your rate for six months after opening. You’ll need at least $50,000 to open the account. There is no monthly fee to worry about, and you will have to enroll in E-Statements.

You can access your account online, over the phone and through Mobile Banking, which includes Mobile Check Deposit.

2. CIBC USA – 0% APY, $1,000 minimum deposit to open account

CIBC USA

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Member FDIC

CIBC, or Canadian Imperial Bank of Commerce, began as two Toronto-based banks: The Canadian Bank of Commerce (founded in 1867) and the Imperial Bank of Canada (founded in 1875) — the two banks merged in 1961. CIBC expanded into the U.S. in 1991 with CIBC U.S., and established its headquarters in Chicago. You can find CIBC USA locations in Illinois, Michigan, Missouri and Wisconsin.

The online-only CIBC Agility™ Online Savings Account offers a competitive 0% APY on all balances, although you’ll need at least $1,000 to open an account and get started. It does not charge a monthly fee, so your savings can keep growing uninterrupted.

To withdraw funds from your account, you can make transfers between accounts (both internal and external) or submit a request in writing for a check to be issued in your name. To deposit money, you can also make ACH transfers or send a cashier’s or personal check to CIBC USA in either the bank’s name or your name. Check deposits are placed on a 10-day hold.

In addition to online account access with CIBC NetBanking, you’ll also have further on-the-go access with the CIBC US Mobile Banking App.

3. HSBC Direct – 1.70% APY, $1 minimum deposit to open account

HSBC Direct

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Member FDIC

HSBC Direct is the online-only offering from HSBC Bank USA, which traces its history back to the Hongkong and Shanghai Banking Corporation Limited in 1865. As part of HSBC Bank USA, the HSBC Direct Savings account earns a competitive 1.70% APY on all balances. You must open an account with at least $1 in new money, meaning money not already on deposit with HSBC. There is no monthly fee to worry about here.

HSBC Direct provides Money Management Tools that are designed to help you manage your money, set goals and stick to a budget. This includes email alerts for bills, low balances and fees, customizable goals and comparable income and spending.

When you have an HSBC US account, you can pay bills and make transfers and other payments in the Move Money section. Transfers in and out of the account typically take three to five business days to clear. Deposits into the account are limited to $3,000 daily and $5,000 monthly. An ATM or debit card is not included with this account.

Take advantage of the HSBC Mobile Banking App for further accessibility, like mobile check deposit. You can find it in the App Store and Google Play.

4. Vio Bank – 1.75% APY, $100 minimum deposit to open account

Vio Bank

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Member FDIC

Vio Bank is an online division of MidFirst Bank which was founded in 1911.

Vio Bank has certainly been a recent stand-out candidate for its competitively high rates on its CDs as well as its High Yield Online Savings Account. It currently earns 1.75% APY and compounds interest daily for better savings. Plus, there’s no monthly fee. You will need at least $100 to open the account. It’s better to stick to electronic statements here, because paper statements cost $7 each.

Vio Bank doesn’t provide debit cards or check writing capabilities on its High Yield Online Savings Account or any other accounts. Instead, you’ll have to make online ACH transfers. Deposits into the account may take five or more business days. You’re limited to $25,000 daily and $100,000 monthly on transfers to and from external accounts initiated by Vio Bank. There aren’t any limits on transfers initiated outside, though. You can fund your High Yield Online Savings Account by mailing a check, depositing a check on mobile or sending an incoming wire.
In addition to its online presence, Vio Bank extends itself to a mobile app, as well, which allows you to manage your accounts and make transfers on the go. It is available in the Apple App Store and Google Play Store.

5. CIT Bank – 1.75% APY, $100 minimum deposit to open account

CIT Bank

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Member FDIC

CIT was founded in 1908 in St. Louis, Mo., and is now headquartered in Pasadena, Ca. CIT’s personal banking sector also includes OneWest Bank in Southern California.

The 2.20% APY on the Savings Builder account isn’t earned outright. When you open the account, it will start earning at a 2.176% interest rate from the day you open it through what’s known as the first “Evaluation Day,” which falls a couple months after opening. On each Evaluation Day, CIT will determine whether you qualify for the 1.75% APY for the next month. You can qualify by either maintaining a balance of $25,000 or more or making at least one monthly deposit of $100 or more. Failure to meet these requirements will bump your APY down to 1.15%. Interest is compounded daily.

You’ll need at least $100 to open a Savings Builder account. It does not charge a monthly maintenance fee. You can fund your Savings Builder account through electronic fund transfers, mailed checks or wires. You can use these same methods to transfer money out of your account; just note, though, that an outgoing wire will cost $10 for accounts with a balance of less than $25,000.

The CIT Bank mobile app provides another outlet to manage your accounts, deposit checks and make transfers.

Best High-Yield Savings Accounts

If the feature you care about the most is the rate a bank offers on a savings account, this list is for you. These banks are currently offering the highest savings account rates.

1. FitnessBank – 2.10% APY, $100 minimum deposit to open account

FitnessBank

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Member FDIC

Personal goals often revolve around health and money and Fitness Bank seeks to seamlessly bring those together. Fitness Bank is a division of Affinity Bank, which was founded in 2002.

The Fitness Savings Account earns interest on balances over $100. The exact APY you earn on your Fitness Savings Account depends on your average daily step count which is calculated each month. The top rate of 2.10% APY is reserved for customers who log 12,500 steps or more. The rate drops to 2.00% APY for an average daily step count between 10,000 to 12,499; to 1.75% APY for 7,500 to 9,999 steps; and to 1.25% APY for 5,000 to 7,499 steps. Finally, the rate plummets to 0.50% APY if you’re logging 4,999 or fewer steps. When you open a new account and have at least $100, the account will have an initial APY of 2.10% until the rate adjustment date after the first full month.

You need at least $100 to open a new Fitness Savings Account. You must also maintain a $100 minimum average daily balance in order to waive the $10 maintenance fee. There is no fee for incoming wires. You can deposit money into your account through online transfers, which typically take three to five days to post.

To track your steps, you will need to download the FitnessBank Step Tracker app. Then you can link it with your Garmin, FitBit, Apple Health or Google Play.

2. BrioDirect – 1.65% APY, $25 minimum deposit to open account

BrioDirect

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FDIC Insured

For the next best high-yield savings rate, head to BrioDirect which doesn’t require any physical commitment from you. BrioDirect is an online brand of Sterling National Bank, founded in 1888, which manages and holds your accounts.

Open a BrioDirect High-Yield Savings account with just $25 to start. You’ll also need to maintain at least $25 in the account to earn the 1.65% APY. There is no monthly fee and the only other posted fees are a $10 excessive transaction charge and a $35 overdraft/insufficient funds fee.

You can transfer money between your BrioDirect savings account and other accounts using the bank’s External Transfers feature online or by calling the bank. You can also fund the account by wiring the money or sending a check. There isn’t a BrioDirect-branded mobile app, but you can use Sterling’s Personal Mobile Banking app to manage your accounts.

3. First Foundation Bank — 1.75% APY, $1,000 minimum

First Foundation Bank

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Member FDIC

Founded in 1990, First Foundation Bank is headquartered in Irvine, Ca. and has 20 locations in California, Hawaii and Nevada.

First Foundation Bank’s Online Savings account sets itself apart from the bank’s other offerings with its competitive 1.75% APY on balances $1,000 and over. Balances under that earn 1.00% APY. You’ll need to open a new account with at least $1,000 in new money, or money not already held on deposit with the bank.

You can access your Online Savings account online and on mobile to pay bills, deposit checks, transfer money and more.

4. Prime Alliance Bank — 1.96% APY, $10,000 minimum balance to earn APY

Prime Alliance Bank

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Member FDIC

Prime Alliance Bank was founded in 2004 and is headquartered in Woods Cross, Utah. This is its one location that you can bank at, otherwise reachable over the phone, email and fax.

Prime Alliance Bank’s Personal Savings account earns its competitive 1.96% APY on balances $10,000 and over. Balances between $1 and $9,999 will earn 1.86% instead, which is still a solid rate at which to grow your money. There is no monthly fee on the account.

You can access your account online and on mobile, where you can use Mobile Deposit to deposit checks remotely.

5. Customers Bank – 0.25% APY, $25,000 minimum deposit to open account

Customers Bank

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Member FDIC

Established in 1997, Customers Bank is a subsidiary of Customers Bancorp, Inc., a bank holding company in Phoenixville, Pa.

You’ll need quite a big deposit to snag the Customers Bank High-Yield Savings Account’s 0.25% APY — it requires $25,000 to open and to earn interest.

There is no maximum balance limit, though, so this may work best for individuals with higher balances. Interest is compounded monthly.

Smaller-balance savers can choose Customers Bank’s Digital Savings account. It also earns 0.25% APY, but with a $5,000 minimum balance requirement instead.

To fund a High-Yield Savings Account, you can transfer money from an existing Customers Bank account, make an online transfer or wire money from an external account or mail a check.
Customers Bank offers a mobile app available in the Apple Store and Google Play.

Best Savings Account Bonus Offers

Some banks offer cash bonuses to bring in new customers. There are often requirements that need to be met in order to qualify for these bonuses, so you’ll want to pay attention to those prior to applying. This list includes banks offer bonuses for opening a savings account.

1. Discover – Up to $200 bonus with $25,000 minimum deposit + 1.50% APY on all balances

Discover Bank

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Member FDIC

Largely known for its credit cards, Discover also offers an array of high-yield deposit accounts. With roots as the Greenwood Trust Company, founded in 1911, Discover Bank came into being by name in 2000.

You have until April 6, 2020 to open a new Discover Online Savings Account and redeem this bonus offer. If you deposit at least $15,000 into the new account by April. 20, 2020, you’ll earn a $150 bonus. Deposit at least $25,000 by the same date, and you’ll earn a $200 bonus. If you qualify, the bonus will be deposited by May 4, 2020. You can apply online or by phone.

The account itself earns at a solid 1.50% APY, and interest is compounded daily. There are no minimum deposit or balance requirements or a monthly fee.

2. Citibank – $700 bonus with $50,000 minimum deposit

Citi

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Member FDIC

Citibank got its start way back in 1812 as the City Bank of New York. Part of the larger Citigroup, Citibank offers customers deposit, lending and investing products for both individuals and businesses. Citi has a physical presence in 98 countries, including in 12 U.S. states plus Washington D.C. Citibank’s headquarters are located in Sioux Falls, S.D.

You have until March 21, 2020 to snag this huge $700 bonus offer from Citibank. To earn the bonus, open a Citi Priority Account Package and deposit at least $50,000 in new money within 30 days of opening the new account. New money means the funds must be held outside of Citibank to qualify. You must maintain at least $50,000 between the checking and savings accounts in the Package for 60 consecutive calendar days to qualify.

The Citi Priority Account Package charges a $30 monthly fee, which you can waive by keeping a combined average monthly balance of $50,000 or more in eligible linked accounts. As a premium account, the Citi Priority Account Package includes access to Citi Personal Wealth Management, relationship rates, free and unlimited checks and more. Its Interest Checking account earns 0.03% APY and the Citi Savings account earns between 0.04% and 0.15% APY, depending on your balance. Higher balances earn higher rates.

3. Citibank – Up to $500 bonus with $15,000 minimum deposit

Citi

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Member FDIC

Based in Sioux Falls, S.D., Citi traces its history back to New York City in 1812. Snag a $400 reward from Citibank by being a new customer and opening a Citibank Account Package by March 31, 2020. Deposit at least $15,000 in either the checking or savings account within the package within 30 days of opening the account. The money must be new to Citibank and kept across both accounts for 60 days. Add an extra $100 to your reward by making at least one qualifying direct deposit each month for two consecutive months within 60 days of account opening for a total bonus of $500.

The Citibank Account package includes both the checking and savings account. There is a $25 monthly fee which you can waive with a $10,000 minimum balance across both accounts. The checking account earns a 0.01% APY, and the savings account will earn between 0.04% and 0.13%, depending on your balance. Citibank offers a mobile app to access your accounts.

4. Associated Bank — $400 bonus with $25,100 minimum deposit

Associated Bank, NA

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Member FDIC

Associated Bank was founded in 1970 when three Northeast Wisconsin banks merged. It is headquartered in Green Bay, Wisc.

Earn a $400 bonus when you open both an Associated Choice Checking account and an Associated Relationship Savings account by June 30, 2020. Open the Choice Checking account with at least $100. You must also make three payments through Associated Bank Online Bill Pay or at least one direct deposit of $300 or more within 45 days of account opening. Open the savings account with at least $25,000. You must maintain a $25,000 minimum combined balance between the two accounts for 90 days to receive the reward 120 days after account opening.

Email yourself a coupon code from the offer page to bring into a branch to redeem. Your new accounts must be funded with new money not already held with Associated Bank. Associated Bank employees and customers who already have or have had a checking account or Associated Relationship Savings account at Associated Bank within the last six months are not eligible for the offer.

The Associated Choice Checking account earns between 0.01% and 0.01% APY, where higher balances earn higher rates. There is a $25 monthly fee, which you can waive with at least $10,000 in combined deposit accounts or either an HSA or investment account. The Associated Relationship Savings account earns according to balance tiers, between 0.03% and 0.25% APY.

5. Chase – Up to $350 bonus with $10,000 minimum deposit and direct deposit in a qualifying checking account

Chase Bank

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Member FDIC

Established way back in 1824, Chase is headquartered in Columbus, Ohio. It has a presence in 33 states and Washington D.C.

Another checking and savings mix-and-match bonus, you have until April 20, 2020 to open a new Chase Total Checking account. Once it’s open, setting up direct deposit will snag you a $200 bonus. Earn another $150 when you open a Chase Savings account and deposit at least $10,000 in new money within 20 business days. You must also maintain that balance for at least 90 days.

The accounts themselves aren’t too remarkable. The Chase Total Checking account charges a $12 monthly fee unless you have direct deposits totaling $500 or more, a minimum $1,500 balance at the beginning of each day or a $5,000 average beginning day balance in combined account balances. The Chase Savings account also charges a fee, $5 per month, that you can waive with a minimum $300 balance at the beginning of each day, at least one repeating automatic transfer of at least $25 or more from your personal Chase checking account or Chase Liquid® Card, a linked Chase College Checking account for Overdraft Protection, an account owner younger than 18 or a qualifying linked account. Chase provides users with a mobile app to manage accounts.

Best Savings Account Rates from Credit Unions

Some people prefer to do their banking with credit unions because of the member benefits that extend beyond the deposit accounts. This list includes credit unions that currently offer the best savings account rates for low and high depositors.

1. Digital Federal Credit Union – 6.17% APY, up to $1,000 account balance

Digital Federal Credit Union (DCU)

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NCUA Insured

Chartered in 1979, Digital Federal Credit Union is based in Marlborough, Mass. and is the largest credit union headquartered in New England by asset size. Eligibility for DCU membership is based on your family relationship to a current member, the company you work for or retired from, an organization you belong to or a community you’re a member of (where you live, worship, attend school, etc).

DCU offers its members a whopping 6.17% APY on its Primary Savings account. However, this high APY applies to the first $1,000 in your account. Everything over that will earn 0.25% APY. The account requires a $5 opening deposit and balance to maintain membership. There is no monthly service fee.

Transfers through DCU’s Payment Center impose a minimum amount of $0.01 and maximum amount of $2,500.

DCU offers account access through branches (both DCU and CO-OP), online, at ATMS and over the phone. There is no mobile app.

2. Blue Federal Credit Union — 5.00% APY, $25 minimum deposit

Blue Federal Credit Union

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NCUA Insured

Blue Federal Credit Union formed in 2016, as a merger of Wyoming-chartered Warren Federal Credit Union and Colorado-based Community Financial Credit Union. Blue has locations in Colorado and Wyoming, as well as thousands more CO-OP Shared Branches around the country.With a Blue Federal Credit Union Accelerated Savings account, it’s best to keep a maximum of $1,000 in the account. Balances between $25 to $1,000 maintain the high rate of 5.00% APY, while anything over $1,000 drops to 0.10% APY. To earn dividends at all, you must maintain a $25 minimum balance and make a transfer of at least $5 per month into the account. Dividends are calculated daily and paid monthly.Blue Federal Credit Union is accessible in person, over its 24/7 call center phone line, online and on mobile.

3. St. Mary’s Bank — 5.00% APY, $25 minimum deposit

St. Mary's Bank

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Founded in 1908, St. Mary’s Bank is headquartered in Manchester, N.H. It was the first credit union founded in America, known then as St. Mary’s Cooperative Credit Association. All its locations are in New Hampshire, but membership is open to anyone who purchases one share of capital stock for $5.

For higher-than-usual savings at St. Mary’s Bank, look to its Rainy Day Savings account. It gives a big 5.00% APY boost to balances $25 – $499. Balances between $500 and $999 earn 3.00% APY, remaining competitive, but balances $1,000 and over drop to a mere 0.05% APY. To earn interest, you must make a monthly automatic transfer of at least $25 from direct deposit or a St. Mary’s Bank checking account.

Almost quite literally meant for rainy day savings, this account limits you to one free withdrawal per month. Each subsequent withdrawal will cost $2. There is no monthly fee on the account.

St. Mary’s Bank is accessible online, over the phone, at branches and through its free mobile banking app, available for Android and Apple devices.

4. CommunityWide Federal Credit Union – 1.90% APY, $1 minimum deposit to open account

Communitywide Federal Credit Union

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NCUA Insured

CommunityWide Federal Credit Union was founded in 1967, originally known as West Washington Association Federal Credit Union, settling into its current name in 1985. Based in South Bend, Ind., CommunityWide opens membership up to employees/retirees/donors of select employer groups, relatives of qualified members and members of select charity groups.

The Funds account from CW is a unique approach to savings. You’re allowed to make a withdrawal from the account between the 1st and 5th of each month; any withdrawals outside of that period are subject to a penalty of seven days’ dividends. Complying with this account’s requirements allows you to earn at 1.90% APY, a higher rate than the credit union’s standard savings account. You need only $1 to open an account and there is no monthly fee to maintain the account.

In addition to online access, CW provides mobile access either through your browser or its mobile app available for iOS and Android, which allows for check deposit.

5. USALLIANCE Financial – 0.33% APY, $500 minimum balance amount

USALLIANCE Financial

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NCUA Insured

USALLIANCE Financial was founded in 1966 by a handful of IBM employees. Today, it opens up membership to various neighborhoods in the New York City metro area, select schools, houses of worship and members of certain community-oriented organizations.

The High Dividend Savings account earns 0.33% APY and compounds interest daily. You’ll need to open an account with at least $500 and maintain a $500 minimum balance to keep earning dividends.

While there is no monthly fee, there is a $5 withdrawal fee that applies to any movement of money out of the account, including transfers. To transfer funds between accounts, you can initiate either through USALLIANCE or from your external account. Transfers will take a few days to post.

USALLIANCE offers its mobile app in both the Apple Store and Google Play. It allows you to view all your activity, pay bills, deposit checks and more.

Savings Account FAQs

What is a savings account?

A savings account is a type of deposit account where you can stash money for any length of time, long or short. Banks and credit unions reward you with an attractive return on your savings balance — thanks to the magic of compound interest, your savings can grow steadily over time. Keep in mind that unlike checking accounts, savings accounts aren’t designed to handle frequent transactions. Due to the Federal Reserve’s Regulation D which mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle.

While they give customers a safe place to stash their money, savings accounts serve a different purpose for financial institutions. Banks and credit unions use their customers’ deposits to fund loans and other products. Banks charge borrowers interest on loans, which funds in part the interest you earn on your savings deposits. So when you open and fund a savings account, you’re helping your bank fund its business.

Is my money protected in a savings account?

The money you place into a savings account at a bank is generally protected by FDIC insurance, up to the legal limit. This limit applies per person, per bank, per ownership category.

For example, you would receive full FDIC coverage of a $250,000 deposit made to a savings account at ABC Bank, and you would get full FDIC insurance on $250,000 deposited in a savings account with XYZ bank.

If ABC Bank went under, you wouldn’t lose a dime of your deposit. The FDIC would either set you up with a new account at another FDIC-insured bank for the same amount as the closed account, or send you a check for the balance. However, if you had a $50,000 checking balance and a $250,000 savings account balance with ABC Bank, you would only receive $250,000 in total FDIC insurance for your accounts — with a potential loss of $50,000.

Credit unions rely on National Credit Union Administration (NCUA) insurance. The NCUA is an independent agency that maintains the National Credit Union Share Insurance Fund (NCUSIF), which funds deposit insurance payouts. All federal credit unions are insured by the NCUA. State-chartered credit unions are regulated by the state supervisory authority where the credit union’s main office is located, but they may also have NCUA insurance.

How should I use funds in my savings account ?

Money kept in a savings account is best left alone unless you absolutely need it. To maximize the return on your savings, stash most of your liquid cash flow in a savings account, and only keep the funds you need for day-to-day spending in your checking account. That allows your money to grow more efficiently — more money in a savings account means more interest earned and compounded.

Is it easy to move money in and out of a savings account?

How easy it is to move money in and out of your savings account depends on your financial institution. Typically, a transfer between deposit accounts goes through Automated Clearing House (ACH). ACH transfers should only take one to two business days to clear, often clearing immediately or within one business day. Some institutions, however, may take the full two days depending on their own rules and regulations.

Keep in mind that savings accounts have a limit of up to six certain transfers or withdrawals per month, thanks to the Federal Reserve’s Regulation D, or Reg D. This limit only applies to “convenient” transfers and withdrawals made by “preauthorized, automatic, telephonic agreement, order or instruction, or by check, debit card or similar order made by the depositor and payable to third parties.” Less convenient transactions are exempt from this regulation, including withdrawals or transfers made in person at the bank or ATM, by mail or over the phone.

Making more than six transactions per cycle will often result in an excessive transaction fee depending on the financial institution. Exceeding the limit several times can lead to the bank closing your account for good.

Do I need a savings account?

It’s safe to say that everyone should have a savings account. If your money is going to sit in a bank account, it might as well earn interest while it’s there. And if you’re going to earn interest, it’s surely best to find an account that earns the most interest possible — namely a high-yield savings account.

Even if you’re not interested in chasing the highest possible interest rate, you should still have a savings account to keep your money safe. Some people don’t trust banks and stash cash under their mattresses. But what happens if your house burns down or there’s a break-in? Stolen or lost funds are gone for good. Meanwhile, money in a savings account is kept safe by the FDIC, which even offers bank skeptics peace of mind. FDIC insurance means you’ll get your money back no matter what.

What should I consider when applying for a savings account?

If you’re not sure which account to choose, consider your savings priorities first. If you’re trying to reach a savings goal, a high-yield savings account will help you reach your goal faster than a lower-rate account.

Perhaps you want an account where you don’t have to worry about fees. There are several free savings accounts and accounts that don’t charge for excessive withdrawals that would be perfect for your needs.

Generally, though, these two features should be your top priorities when applying for a savings account. A high-yield savings account grows your money more efficiently, and not having fees taking out a chunk of those savings helps you keep it.

Is it better to have a savings account with a bank or a credit union?

If you’re looking at interest rates, there’s not much difference between the average savings accounts offered by banks and credit unions. In June 2019, the average savings account rate from brick-and-mortar banks earned just 0.28% APY, while credit unions had an average APY of 0.25%. But that doesn’t mean you won’t find competitive rates at banks or credit unions — it simply means you’ll need to shop around.

The same goes with fees. A 2018 MagnifyMoney survey of 57 rewards checking accounts from banks and credit unions indicated that credit unions tend to charge slightly higher fees than their traditional bank counterparts. However, credit unions are nonprofits, and tend to charge fairer fees than big banks do.

For many people, the choice of bank or credit union is a matter of personal preference. When you join a credit union, it means that you own a piece of the institution along with the other members. With a credit union there’s more transparency about how your deposits are being used — many people prefer to know that they are funding loans and helping other members, as opposed to paying big executive paychecks.

When it comes to physical access, banks usually have credit unions beat. Big banks have the money to spread their branches throughout the country, while credit unions tend to serve specific communities and locations. Still, credit unions very often partner with other credit unions and ATM networks to provide their members with widespread ATM access. Note that the CO-OP Financial Services credit union service organization has the second largest branch network in the United States.

Why should I open a high-yield savings account?

A high-yield savings account is an easy way to boost your savings without any extra effort on your part. Let’s say you have $5,000 in a 0.01% APY savings account, which is a typical rate from traditional, big banks. Assuming you don’t make any additional contributions, in a year, you’d earn a whopping 50 cents in interest. That’s a pretty poor rate.

Switching that $5,000 deposit over to a high-yield savings account that earns 2.00% APY would yield $100 and change in interest annually — that’s definitely a sight better than 50 cents. Additional recurring deposits, perhaps monthly, would increase your savings even more. Setting up automatic recurring deposits an easy way to turbocharge your savings.

What fees are typically associated with a savings account?

Many deposit accounts charge a monthly maintenance fee. The exact fee amount depends on the bank and specific account, but they can range anywhere between $5 to $15 a month. The good news is that there’s almost always a way to waive the fee. Typically this means maintaining a minimum monthly balance or making a certain number of transactions per month. You seldom have to worry about any monthly fees with online savings accounts.

Banks often charge for returned deposits, overdrafts, excessive transactions, expedited delivery or transfers, incoming and outgoing wire transfers, and paper statements. Avoid these things and skip the fees. If you’re worried about overdrafting your account, monitor your balance closely. There’s no need to pay $35 for overdrafting your account.

Are online savings accounts safe?

Many of the best savings accounts are available online. By operating only over the internet, banks are able to save on the cost of owning and maintaining physical branches. Banks pass those savings onto their customers in the form of the high rates you see above.

But just because they’re online doesn’t mean they’re any less secure than a well-known bricks-and-mortar bank. Reputable online banks offer FDIC insurance on your balances up to the legal limit. If you’re unsure, you can use the FDIC’s BankFind tool to double check a bank’s insurance status.

As for online security, most banks employ the same security features as the big banks, if not more. This includes network and browser encryption, firewalls, anti-virus scanning and anti-malware protection. Banks may also offer additional safety features like two-step authentication, automatic logout, fingerprint identification and proactive account monitoring. You can always check a bank’s exact safety features on its website, which applies to both online-only and brick-and-mortar banks.

Can I open more than one savings account?

You sure can. If you have a lot of cash on hand, opening multiple savings accounts can allow you to maximize your FDIC insurance. Think of the scenario mentioned above: Keep $250,000 in an ABC Bank savings account and $250,000 in an XYZ savings account. Dropping the total $500,000 in a single ABC Bank savings account would leave $250,000 uninsured.

Opening more than one savings account may also help you keep track of separate savings goals. For example, you can use one savings account to house your emergency fund which you never touch except for dire circumstances. Keeping it separate from your other accounts may make it easier for you to avoid dipping into your emergency backstop.

If you do have more than one savings account, just make sure they all earn at competitive rates.

How often do savings account rates change?

Unlike certificates of deposit, savings accounts have variable rates. This means that the bank can decrease or increase their rate at any point, often without notice. However, you can typically expect rate changes to happen on or right after the start of a month.

Deposit account rates often track the federal funds rate, which is set by the Federal Reserve. The federal funds rate establishes the rate banks and other financial institutions charge each other for lending. So when the federal funds rate is cut, banks tend to cut their own rates in response. This includes not only deposit rates, but loan rates as well. Conversely, banks boost their interest rates when the Fed raises the federal funds rate. Keep an eye on the Federal Reserve’s regular meetings to get a better sense of where the federal funds rate — and therefore your deposit rates — are headed.

Do I pay taxes on savings account interest?

If you earn $10 or more in interest in a year, then yes, your savings interest is taxable. Your bank or financial institution will send you a 1099-INT form documenting the interest you’ve earned. Using that form, you include your interest earnings with your annual tax filing. The bank will also send a copy of your 1099-INT form to the IRS.

Even if you don’t receive a 1099 from your bank, you’ll still need to report interest earned on your tax return. Plus, if you earned more than $1,500 in interest in a year, you’ll need to list out the sources of all that interest income on Schedule B of the 1040 Form.

Your earned interest is taxed according to your marginal tax bracket. If you earned $50 in interest and you’re in the 22% tax bracket, you’ll pay $12 in taxes on that interest earned.

What are the alternatives to a savings account?

Having a savings account is a crucial part of your financial life, but there are other types of deposit accounts that you can (and perhaps should) fit in.

Certificates of deposit

A certificate of deposit (CD) is a time deposit. Unlike savings accounts, which have no expiration date, CDs operate according to defined terms. Typically, CD terms range between three and 60 months, although some institutions offer terms beyond these parameters. Once you make your initial deposit, you have to wait for the term to expire — or mature — to access your funds and interest earnings.

CDs are a solid savings alternative for folks who have already maxed out their other savings accounts. They’re also good for longer-term savings goals. Opening a longer CD lets you lock in a high rate for the length of the term and not have to deal with the rate fluctuations that come with regular savings accounts.

CDs often require a minimum deposit to open, often ranging between $500 and $10,000. Any deposits larger than that are often considered “jumbo” CDs. However, there typically aren’t monthly fees to worry about with a CD.

Withdrawing money from a CD before maturity will result in an early withdrawal penalty. Remember how banks use savings accounts to fund their loans? The same is true here, except with CDs, you’re essentially making a promise to the bank that they can use those funds for a set amount of time.

For example, if you open a five-year CD, the bank expects to be able to use the funds for loans over a period of five years. If you withdraw that money after three years, the bank loses access to those assets and charge you a penalty. The penalty is often expressed as a portion of the interest earned. In this example, you might be charged 365 days’ worth of interest for making that early withdrawal. Some banks may offer “no-penalty” CDs, which tend to have shorter terms, that allow you to avoid the penalty.

Money market account

A money market account resembles a savings account more closely. It earns interest without an expiration date and limits your outgoing transactions to six per cycle. However, money market accounts can also include some checking account features like a debit card and the ability to write checks. This makes them a good alternative if you plan to dip into the account a bit more regularly, rather than using it only for emergencies.

Money market accounts tend to earn at higher interest rates than regular savings accounts. However, they also tend to require higher balances to open and then earn interest. Money markets often charge monthly fees, as well, even when they’re online.

Checking account

Checking and savings accounts are the bread and butter of your financial life. While savings accounts are meant for stashing your money away, checking accounts are designed to help you move through the world, making payments, sending transfers, getting cash and more.

That doesn’t mean that your checking account can’t earn interest, too, however. Maximize your savings by opening a high-yield checking account to match your high-yield savings account. Checking accounts don’t earn at rates as high as savings accounts, but that way, all your money in all your accounts can be growing. For more efficiency, consider keeping the majority of your funds in your savings account for better growth — then you can transfer funds over to your checking account as needed.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Banking

Neobanks: The Future of Banking

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

In the world of deposit accounts and personal finance, there is a new class of mobile-friendly, budget-focused apps called neobanks. Neobanks offer a range of services that are designed to improve the banking experience for consumers with fee-free accounts, user-friendly features and interfaces and competitive interest rates on deposits.

What is a neobank?

A neobank is a financial technology company — otherwise known as fintech — that offers banking services, most often in online or mobile-first formats. You may also have heard them referred to as mobile banks or challenger banks.

Setting aside all the jargon, very few neobanks are actually banks in their own right. That is because most of them lack a state or national banking charter. Instead, neobanks partner with established chartered banks to hold their customers’ deposits and provide Federal Deposit Insurance Corp. (FDIC) insurance (more on that below).

Neobanks are different from virtual banks, digital banks or online banks — these terms refer to a separate banking category. Online, virtual or digital banks are chartered banks in their own right, with federal deposit insurance, or they are online brands of bigger, brick-and-mortar banks that provide deposit insurance coverage.

Still, neobanks offer similar services, chiefly in the form of cash management accounts. These accounts typically earn an interest rate that is competitive with the best savings account rates together with debit card access and the liquidity that comes with a checking account.

Neobanks break the brick-and-mortar mold

Many neobanks were founded by entrepreneurs hoping to tap into frustration with the banking establishment, which is stacked with institutions charging over-the-top fees and paying rock-bottom interest rates. It’s no accident that in the 2017 Survey of Unbanked and Underbanked Households, the FDIC found that 30.2% of unbanked households cited a lack of trust in banks as a reason for not having a bank account and about 45% noted issues with bank account fees as a reason for avoiding banking altogether.

This is the gap that neobanks are trying to fill for consumers’ benefit. It’s this innovation that Ken Tumin, founder of DepositAccounts.com, says is neobanks’ greatest strength.

“Innovation has helped neobanks come out with new banking products with greater simplicity, fewer fees and better interest rates,” said Tumin. “Neobanks are adding to the competition in mobile and digital banking. Added competition is always good for consumers.”

Common account features offered by neobanks

No fees: Neobanks often cut out all fees, which opens their products up to a wider range of customers. This goes well beyond that pesky monthly maintenance fee, as neobanks also nix the fees for overdrafts, excessive transactions and third-party ATM withdrawals.

Aspiration has attempted to build customer loyalty by operating on a Pay What Is Fair fee system. They don’t charge an upfront fee, but ask their customers to pay it forward in a fee that they think is fair, even if that’s $1 — or even zero dollars.

Check out the fee schedules of some of the top neobanks:

NeobankMonthly FeeOverdraft FeeThird-party ATM Withdrawal FeeATM Surcharge Rebates?
Simple$0$0$0No
AspirationVariable$0$0$5/month
Varo$0$0$2.50No
Empower$6$0$0Three a month up to $10 per fee
Chime$0$0$2.50No

Strong focus on online and mobile experiences: Neobanks are a product of changing times. Per the FDIC survey, more and more Americans are doing their banking on a mobile device, jumping from 23.2% in 2013 40.4% in 2017.

Neobanks put a heavy emphasis on the mobile experience they offer, knowing that customers are increasingly banking on the go and need well-designed, easy-to-use interfaces. While some neobanks make accounts accessible via both apps and online websites, many operate exclusively on mobile apps — these are known as mobile-first neobanks.

High interest rates: Similar to online banks like Ally Bank, neobanks can offer their customers very competitive interest rates on their deposits as they lack the infrastructure costs of conventional banks. Traditional banks and their standard offerings of 0.01% APY can barely compete. Take a look at the competitive interest rates these neobanks have to offer:

NeobankAPY
Simple1.75%
Aspiration1.50%
Varo Money2.80% (with requirements)
1.92% (without requirements)
Empower1.60%
Chime0.25%

Customer focus: Neobanks are also attempting to disrupt the traditional banking industry with a real focus on putting their customers first.

Neobanks put a major emphasis on transparency, especially by being more upfront about the few fees they do charge, and communicating frequently about rate changes. For example, Chime and Varo Money boast no hidden fees, laying out clearly all the fees they do and don’t charge. For other neobanks, it’s as easy as going to their FAQ for the lowdown on their slim fee schedule. Simple, emails its customers when a rate change is coming up and tells you how that will affect you and your money.

Neobanks tend to include money-saving and budgeting features that are built into their products, at no additional cost. For example, Simple displays an additional Safe-to-Spend amount when you check your account balance on the app. This is the amount the app has determined you have to spend freely after taking care of bills and savings goals. You can also easily set up these savings goals, and even split your savings into different buckets, labeled according to your personal aims.

Chime recognizes the issues customers run into when paychecks and bills don’t line up. This neobank deposits your paycheck into your account as soon as Chime gets it, instead of waiting the traditional one to two days. This gives you real-time access to your money.

Neobanks and FDIC insurance

As noted above, neobanks are not state- or federally-chartered banks, and as such they cannot directly obtain FDIC insurance for their client’s deposits. To provide the crucial security of FDIC coverage, neobanks partner with one or more chartered banks. At the end of each day, neobanks sweep their clients’ money into accounts at the partner banks — sometimes referred to as program banks — where the funds receive FDIC insurance.

Some neobanks cooperate with only one partner bank, which provides deposits with the standard level of FDIC insurance. Many neobanks utilize multiple partner banks, which allows them to promise deposit insurance coverage amounts that are multiples of the standard level of FDIC insurance. For instance, Aspiration claims that each of its customers gets up to $2 million in FDIC insurance on their deposits.

If you have a high balance in your deposit accounts, this is a great way to maximize your FDIC coverage. Let’s say, for example, you have $600,000 in savings you need to place in a new account. Conventional banks provide the standard level of $250,000 in FDIC coverage per account, per client — which means you would need to open three accounts at three separate banks to obtain full FDIC insurance coverage for your $600,000 balance. Alternatively, you could place the full amount in a single Betterment Everyday account.

Take a look at some of the big neobank names, their partner bank(s) and the extent of their FDIC insurance for individually owned accounts.

AccountPartner BanksFDIC Insurance Limit*
Aspiration SaveAvailable in customer statements$2 million
Betterment Everyday Cash ReserveThe Bancorp Bank
Citibank, N.A.
Wells Fargo Bank, N.A.
+7 others
$1 million
SoFi MoneyMetaBank
East West Bank
TriState Bank Capital Bank
+3 others
$1.5 million
Chime Savings AccountStride Bank, N.A.
The Bancorp Bank
$250,000
*For individually owned accounts.

Are neobanks safe?

Money deposited with a neobank is safe as long as it secures FDIC insurance from partner banks. In terms of online security, neobanks are just as safe and secure as traditional banks and their own websites and online systems. Of course, when you’re working with the internet, there is always a chance of internet failure — not just for you, but for your bank, too.

For example, neobank Chime experienced an outage in October 2019 due to technical issues with a third-party payment processor. This led to intermittent outages for customers trying to access the Chime app, website and ATM transactions. The Chime team responded swiftly to outage reports and helped its customers recoup any out-of-network ATM fees and righted any awry transactions.

This isn’t a neobank-specific scenario, however. In the same month, Bank of America and its customers suffered a similar outage, while Wells Fargo had its own outage earlier in February 2019.

In the event of a bank outage online, it’s important not to panic. Your money isn’t lost in this situation. To get more information on the extent of the outage, it helps to check the company’s social media accounts for updates or give customer service a call. Just keep in mind that thousands of other customers are going to be calling customer service as well.

Finally, your money and information are still protected by several tech safety measures like firewalls, encryption and two-factor authentication. While these measures help protect your money, you should also do your due diligence in checking your accounts during a bank outage for potential fraudulent transactions.

Neobanking downsides

No branch access

The lack of branch access is a potential drawback, especially for more traditional banking customers. If you need to speak with a neobank representative, that’s mostly done online or over the phone.

Neobanks aren’t completely without physical access, however, partnering with ATM networks for nationwide ATM access. For example, both Varo Money and Simple provide access to over 55,000 Allpoint ATMs.

If you’re still wary, though, Tumin suggests keeping an account at a local brick-and-mortar bank or credit union in addition to an account at an online-only bank, whether it’s a traditional online bank or one of the new neobanks. That way, you can take advantage of the best of both worlds.

Bank middleman

When you place your money with a neobank, it is acting as a sort of middleman between you and an FDIC-insured partner bank. While your money is just as safe and secure once it reaches that bank, FDIC coverage typically doesn’t apply until your money is moved into an account at a partner bank. The money is not insured between the time you make the deposit and the moment it is deposited with the partner bank.

Tumin points out this issue with some neobanks where they have a cash sweep account that distributes deposits into multiple banks. These neobanks don’t clearly disclose their program banks until you have an account with them or ask specifically. It’s not entirely clear that these sweep accounts are as safe as the standard checking or savings accounts that are held at one bank.

Neobanks are getting their own bank charters

Varo Money is an example of a neobank that has gone most of the way through the arduous task of getting its own banking charter. In February 2020, Varo Money was the first neobank to be approved by the FDIC to receive deposit insurance. Once the FDIC’s move gets a final sign-off from the Office of the Comptroller of the Currency and the Federal Reserve, Varo will no longer need to deposit its customers’ funds with partner bank, The Bancorp Bank, for deposit insurance.

Square, a payments fintech, applied for a new industrial loan company (ILC) charter in 2018 and in March 2020 was approved by the FDIC to create a new industrial bank in Utah, pending approvals from the Utah Department of Financial Institutions. This is a slightly different authorization than a bank charter, but an ILC can offer deposit accounts and can obtain FDIC insurance. Investment and loan fintech company SoFi also applied for an ILC charter in 2017, but withdrew its application shortly after.

Varo Money plans to expand product line

Varo Money’s COO Wesley Wright credits Varo’s success to its dedication to “providing better and fairer banking for everyday Americans and breaking barriers from the very beginning.” He also expects Varo Money to receive final charter approval by the end of 2020. Once they receive that green light, Varo plans to expand to additional financial services including credit cards, loans and additional savings products.

“We do anticipate that other fintechs will apply to the FDIC for a national bank charter,” he shared. “Our progress with the charter application underscores a bigger shift in the banking industry toward technology-driven experiences as well as a renewed regulatory commitment toward financial inclusion.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Banking

Wallit Family Money Management App Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Wallit is designed to help families manage money and track spending. The app has features focused on budgeting, saving, spending and sending money, and lets you add multiple family members as users so everyone’s on the same page. The Wallit app lets you set allowances and assign tasks to family members, as well as monitor spending and track purchases. All-in-all, it’s a pretty well-rounded family budgeting app.

How does Wallit work?

The Wallit app is a free download available in the Apple App Store and Google Play (note that Wallit was rebranded from the name Ourly in 2019). Before downloading, start by signing up for a Wallit account, which you can do online. You will need to provide a username, password, email address, phone number and birthdate. Download and install the app, then sign into your account.

Once you’re logged in, you must connect at least one bank account to the Wallit app, to enable the app to track your spending and to use its other features. Wallit integrates with 90% of all banks and credit unions in the U.S. During this linking process, you will be able to see whether your institution supports Wallit.

You can add accounts for your children, and you can add a “co-parent” to your account. This is another adult in your family who also manages family finances. Within Wallit, co-parents can approve and edit allowances paid from your Wallit balance, but cannot transfer or receive money.

Wallit features

Your Wallit account is the core of the Wallit experience. You transfer money into your Wallit account from your linked external bank account, and then distribute the money to your family members, like paying your child’s allowances, and buying gift cards. Wallit holds your money in accounts with its partner bank, Radius Bank, which provides Federal Deposit Insurance Corp. (FDIC) insurance coverage for your money.

Once you have your account set up and your family has been added, you can get started managing you and your family’s finances, whether you need to budget, save, spend or send money — or all of the above.

Monitor family finances

Linking your and your family’s bank accounts allows you to manage your Wallit balances and move money around with ease within the app. Transfers from your bank account to your Wallit will take about three to five business days to be completed.

Once your bank accounts are linked to Wallit, you can see your account balances and history in one place. If your child has a linked checking account, you can see the purchases they’re making from that account. That way you can keep a closer eye on your child’s spending habits. You can still use Wallit even if your child doesn’t yet have their own checking or savings account.

Set allowances

Wallit allows you to set and track the allowance you pay your child. You can set up a weekly allowance in an amount of your choice. If you have multiple children on your plan, you can set different amounts for each child. Then each Saturday, Wallit will have you approve the allowance(s) for the upcoming week.

Establish goals

Wallit also allows you to set savings goals, like saving for a new computer, for example. You do this in the app through the “Goals” tab. Once you create a goal, you can share it with your family on your Wallit plan.

Every time you log into Wallit, you can see your progress towards that goal on your dashboard. You can visit the “Goals” tab again if you ever need to make edits to a goal.

Assign and approve tasks

Not only can you set allowances for your kids, but you can set them chores and keep track of them in Wallit, too. As the parent, you can assign your children tasks directly through the app. You personalize which child it’s assigned to, the task schedule, instructions and any other information about that chore.

Once your child finishes a task, they can submit it for approval in the Wallit app. This even involves taking a picture of the completed task, too. As the parent, you can then review and approve this task on your own app interface. Wallit helps you more seamlessly pay your child’s allowances for chores.

Spend

Once your child has been paid their allowance or for completing a task, they can easily use Wallit to buy digital gift cards from partnering retailers and brands. Kids on Wallit can only use the money that’s in their Wallit balance for this spending. That way, they’re preventing from overspending, overdrafting or taking on debt.

Wallit’s fees and fine print

Wallit is completely free to use. The app does not allow overdrafting or overspending from your Wallit account. There’s also no borrowing involved so you don’t have to worry about debt or interest.

When you add family members onto your Wallit plan, you will need to add their personal information as well, including your children’s. Wallit ensures that it does not intentionally collect personal information from minors without prior parental consent.

Advantages of the Wallit app

  • Monitor your family’s finances in one place
  • Set and track allowances and chores
  • Teach your kids about saving up with Wallit’s goals

As a parent, you can easily and quickly sign up for your Wallit account, and once you’re in, just as seamlessly add your kids or co-parent. As the administrator, you can see your whole family’s financial picture in one app.

Wallit also makes it easy to track the allowances you pay to your children. Plus, if you pay them an allowance for completing chores, Wallit’s tasks feature can help you monitor and track their progress on chores, too.

Wallit’s goals system can help you teach your children about saving by setting their money aside for a future purchase, rather than spending any extra cash right away. The goals interface illustrates the final goal amount and how far you’ve come to reaching that goal, making it easier for your kids to understand.

Downsides of the Wallit app

  • Doesn’t connect with all U.S. banks and credit unions
  • Doesn’t earn any interest
  • Drawn out transfers take three to five business days

Wallit works with 90% of banks and credit unions in the U.S. That’s an expansive network, but if you’re a customer of that other 10%, you cannot benefit from the Wallit app at this time.

While Wallit can help teach your children about saving, it can’t build your savings for you. The Wallit account doesn’t earn interest, making it an impractical place to actually stash your savings. That job is much more suited for a high-yield savings account, which will keep your money safe and typically growing at a competitive rate at the same time.

Wallit is also not the most dynamic money management app out there. It doesn’t have the capability to split your spending into categories as many budgeting apps do, or alert you of potential overspending. It also doesn’t help you track other finances, like loans or credit cards.

Transfers from your bank account to your Wallit balance take about three to five business days. While this is relatively standard, this means you have to wait three to five days to pay your child’s allowances or pay them for completing tasks. This certainly stretches out the process more than just paying your child in cash, for example. Constantly keeping enough money in your Wallit balance would be a solution, but that detracts from the savings that money could be earning you in a different account.

Wallit vs. other money management apps

 

Best for

Fee

Wallit

Families with kids

None

Honeyfi

Couples

$59.99 annually OR $9.99 monthly

Wally

Manually budget and track expenses

None

Simple

Comprehensive financial management package

None

Wallit vs. Honeyfi

If it’s family budgeting you’re after, consider Honeyfi, a budgeting app for couples. Like Wallit, you and your partner will need to link your personal bank accounts to the app to use its features properly. However, Honeyfi also allows you to sync your credit cards, loans and investments as well, offering a more holistic financial picture than Wallit.

Honeyfi allows you to create custom budget categories, split transactions and connect to Venmo and save towards specific goals together. Honeyfi isn’t free, however, charging a $59.99 annual fee or a $9.99 monthly fee (the subscription covers one couple).

Wallit vs. Wally

Wally is an option for those who want to budget and track their expenses without linking their bank account. Understandably, there are folks who are uncomfortable with connecting a third-party budgeting app to their bank accounts. As an alternative, Wally has you manually enter your income and expenses, which are organized under various categories. Wally also enables receipt scanning. With the information you enter, Wally provides a basic analysis — via pie charts — of your spending by category for each week, month and year.

Wallit vs. Simple

Finally, for a more comprehensive savings and budgeting package, consider Simple, a neobank dedicated to making banking easier and more accessible for consumers. Simple offers a cash management account, involving both a checking and savings component to its experience.

Simple’s checking account features includes a “Safe-to-Spend” balance, which is what Simple flags as spendable after accounting for bills. The savings feature, known as your Protected Goals account, earns 1.75% APY, while the checking side earns 0.01% APY. You can also divvy up your Protected Goals into separate savings goals with personalized labels. Simple is free of charge.

Is Wallit right for you?

Wallit is the best family budgeting app for you if you constantly find yourself overwhelmed by managing your family’s internal finances. It helps you organize yourself when it comes to paying the kids’ allowances, saving towards various goals and even assigning chores to your kids. It’s not the most intensively analytical app, but it can be just the tool to organize your family’s money and teach your kids about saving in one simple app.

Fees mentioned in this article are accurate as of the date of publishing.

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