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The Best Business Savings Account Rates in 2020

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.

Are you looking to start or grow a business? Opening a business savings account can offer federal protection for the funds you deposit (up to $250,000) and provide a source of liquidity should inevitable expenses arise. You can earn interest while setting aside money for capital improvement or income taxes. A commercial savings account can add credibility to your business, arm you with a business debit card and help your cash flow.

The best way to choose an account that fits your needs is to start by comparing the annual percentage yield offered by banks and credit unions. Then look for benefits that might make the account attractive based on your needs. Is there a monthly maintenance fee or a minimum deposit to open? Does the bank provide ample access to ATM and online account services?

Deciding which business savings account is best for your needs can be a difficult process, but hopefully this roundup of our picks for best savings accounts will help give you a head-start.

The best business savings account rates — February 2020

Institution

APY

Minimum balance amount

First Internet Bank

1.81%

None

Live Oak Bank

1.10%

None

Digital Federal Credit Union (DCU)

1.92%

$25,000

Capital One

2.00%

None

Goldwater Bank

1.65%

$0.01

Community Bank of Pleasant Hill

1.40%

None

Axos Bank

1.06%

$25,000

Presidential Bank (Maryland)

0.50%

$5,000

Northpointe Bank

0.40%

$25,000

Andrews Federal Credit Union

0.10%

$100

Source: Deposit Accounts, January 9, 2020

1. First Internet Bank, 1.81% APY, No minimum balance, ATM services

First Internet Bank offers an FDIC-insured savings option for businesses with a good 1.81% APY on any balance amount. You only need $100 to open the account. There is no minimum balance to deposit or maintain the account to earn the APY.

While it only costs $100 to open your business savings account and you must maintain an average daily balance of $4,000 to avoid a $5 monthly maintenance fee.

Unlimited deposits can be made each month and six transfers or withdrawals are allowed without charge. Keep in mind that the FDIC only insures up to $250,000. So, if you deposit more than $250,000 into the business savings account, the excess deposit amount will not be insured by the FDIC.

The First IB ATM cards are offered to sole proprietors only. There is no charge for ATM transactions or electronic statements. Founded in 1999 by the First Internet Bancorp, First IB offers remote banking in all 50 states.

Fine print: Only six preauthorized, automatic, PC, or telephonic transfers are allowed each month. This restriction is common among most of these institutions, however, First Internet Bank will charge you $5 per item if you go beyond the allotted six.

Restrictions on joining: none.

SEE DETAILS Secured

on First Internet Bank’s secure website

Member FDIC

2. Dedicated to Businesses: Live Oak Bank, 1.10% APY, No minimum balance

Live Oak Bank awards a 1.10% APY on its business savings account, which is eight times the national average. There is no minimum opening balance or deposit required to open a business savings account.

The business savings account is open to deposits of up to $5 million and is free of monthly maintenance fees. You may make up to 6 withdrawals from your Live Oak Bank Savings account per statement cycle, including preauthorized, automatic and telephone transfers. After that there’s a $10 fee per withdrawal. Live Oak Bank, established in 2008, holds assets of $2.12 billion.

The bank is in Wilmington, N.C., and is a member of the FDIC. Learn more about business savings at Live Oak Bank.

Small Print: The bank may verify credit and employment history at its discretion, meaning you may receive a pull against your credit report.

Restrictions on joining: none.

SEE DETAILS Secured

on Live Oak Bank’s secure website

Member FDIC

3. Digital Federal Credit Union (DCU), 1.92% APY, $25,000 minimum balance

The Digital Federal Credit Union offers a solid 1.92% APY rate through its Business DCU Ltd Savings Account with a minimum $25,000 balance. This account features unlimited free deposits and no charge for the first withdrawal per month. However, withdrawals after that are $25 each.

Businesses participating in the DCU Ltd Savings Account receive 24/7 online banking, mobile banking through the DCU Mobile Banking App, access to DCU ATMs, deposits, transfers or balance verification. Created by the Digital Equipment Corporation in 1979, DCU is the largest credit union in Massachusetts by assets. Federally insured by NCUA, DCU is based in Marlborough, Mass.

Restrictions on joining: To join, you must meet eligibility requirements within the field of membership for employers, organizations, participating communities or condominium associations.

SEE DETAILS Secured

on Digital Federal Credit Union (DCU)’s secure website

NCUA Insured

4. Capital One, 2.00% APY, No minimum balance

Capital One is currently offering a business savings account with a 2.00% APY. This account doesn’t have a minimum balance requirement and doesn’t come with any monthly fees.

While this account doesn’t come with ATM access, Capital One makes it easy to transfer funds to either another one of their accounts or a linked account of your choosing. You can easily set this up through their online banking platform or mobile app. Their mobile app also allows you to deposit checks. Keep in mind, however, that you’ll be limited to depositing $5,000 per month into the business savings account. You’ll also be limited to making six withdrawals per month due to Federal regulations.

Restrictions on joining: none.

SEE DETAILS Secured

on Capital One’s secure website

Member FDIC

5. Goldwater Bank, 1.65% APY, $100 minimum amount to open

Goldwater Bank is an online institution with a highly competitive rate on their business savings account. With a minimum deposit of $100, you can open their Savings Plus Business account and start earning an APY of 1.65%. Once you open the account you only need a balance of $0.01 to continue earning the APY.

Restrictions on joining: none.

LEARN MORE Secured

on Gold Water Bank’s secure website

6. Community Bank of Pleasant Hill, 1.40% APY, No minimum balance

With its 1.40% APY, the Business Premier Money Management Account at Community Bank of Pleasant Hill offers highly competitive rates to explore. You need only put down $25 to open the account and maintain a minimum balance of $10,000 to avoid a $10 monthly service charge and $4 paper statement fee.

ATM access is offered surcharge-free when using ATMs in the MoneyPass® network. Community Bank began operations on Dec. 6, 2006, and is a member of the FDIC. Members can search for partner ATMs online or through mobile access.

Fine print: Just watch out for hefty withdrawal fees. You can make free withdrawals on the second and fourth Wednesdays of the month; on other days, there’s a $25 withdrawal fee. If you plan to make regular in-person withdrawals, this probably isn’t the best account for your needs.

Restrictions on joining: none.

LEARN MORE Secured

on Community Bank Of Pleasant Hill’s secure website

7. Axos Bank: 1.06% APY, $25,000 minimum balance, ATM access

Axos Bank, formerly known as BofI Federal Bank offers one of the top APY rates in our nationwide survey of business savings accounts. The bank’s Business Premium Savings Account with a high-yield 1.06% APY can be opened with a $25,000 minimum deposit.

There is no monthly maintenance fee for the account and no average daily balance requirement.

Axos Bank also makes it easy to access your funds when you need it. Customers have ATM access to their accounts along with free online banking. However, ATM withdrawal limits are $1,010 per day and there’s a daily purchase limit of $5,000. BofI is an FDIC-insured bank based in San Diego and publicly traded online. Other products include Business Interest Checking and Business Money Market accounts.

SEE DETAILS Secured

on Axos Bank’s secure website

Member FDIC

8. Presidential Bank (Maryland), up to 0.50% APY, $5,000 to open, ATM services

Presidential Bank’s Commercial Premier Savings account offers 0.50% APY for balances up to $35,000, making it a decent — if not extraordinary — bet for business owners.

Business customers are not required to maintain a minimum balance on the account in order to receive all ATM privileges. So long as you use one of their ATMs you won’t incur fees, but there is a $0.75 ATM fee for non-network ATMs. Free online banking, mobile banking and ATM card come with the account.

Established in 1985, Presidential Online Bank was one of the first lenders to offer online banking. Located in Bethesda, Md., it currently lists assets in excess of $550 million.

Restrictions on joining: none.

LEARN MORE Secured

on Presidential Bank’s secure website

9. Northpointe Bank, 0.40% APY, $25,000 minimum balance

The Business Savings account at Northpointe Bank currently pays out 0.40% APY if you deposit and maintain a balance of $25,000. However, you only need $1,000 to open the account and you can start earning 0.20% APY with that balance. If your balance increases anywhere between $2,500 and $24,999.99, the APY will increase to 0.25%. If your balance increases to $100,000, the APY will further increase to 0.50%. There are no monthly fees with this account.

Restrictions on joining: none.

SEE DETAILS Secured

on Northpointe Bank’s secure website

Member FDIC

10. Andrews Federal Credit Union, 0.10% APY, $100 minimum balance, ATM banking

The Business Base Share Savings account at Andrews Federal Credit Union offers a 0.10% APY. You can open the account with as little as $5 and there is a $100 minimum balance requirement to earn the APY.

The account comes with free online banking, free eStatements and a debit card. Transactions are free at Andrews Federal & CO-OP ATMs. However, there is a $25 charge for withdrawals that result in overdrafts.

Founded in 1948 in Suitland, Md., Andrews Federal Credit Union has assets over $1.5 billion and offers a range of banking services to 120,000 members worldwide.

Restrictions on joining: $5 fee to join the credit union. Open to field of membership including nationwide membership eligibility through the American Consumer Council.

LEARN MORE Secured

on Andrews Federal Credit Union’s secure website

Learn more about business savings accounts

How we ranked the best business savings accounts

To come up with this list, we first used data from DepositAccounts.com, which tracks rates on a range of deposit accounts across thousands of banks in the U.S. Note: DepositAccounts is also owned by MagnifyMoney’s parent company LendingTree.com.

We eliminated any institutions that were given a health rating below a B by DepositAccounts. We also weeded out any credit unions that have very restrictive membership requirements. From there, we chose the top 10 business savings accounts with the highest APY. And lastly, all the banks on our list offer FDIC or NCUA insurance.

Business savings accounts vs personal savings accounts

Business and regular savings accounts may offer many of the same features ,such as 24/7 online banking, free electronic reporting, debit cards, fund transfers and ATM machines.

The trade-off in choosing a business account is that you’ll get services focused on business planning and spending in exchange for a less-desirable APY.

When you compare the interest earned on a business savings account with the best APY rates offered on savings accounts, it may not look like opening a business account is a wise strategy. The top business savings account APY right now is 1.40%. The top APY among personal savings accounts is 1.70% with no minimum deposit and ATM access. You can weigh the services, charges and minimum account fees between the top business and top personal savings accounts to decide which is best for you.

There are other benefits to offset any differences in earnings, particularly if your business is incorporated. It’s considered sound business practice to separate your personal saving and checking accounts from your business saving and checking accounts. A business account can help you manage cash flow, accounting, recordkeeping and working capital. At income tax time, separate accounts can help you differentiate business from personal expenses.

Paired with a business checking account, your business savings account can add professional branding, since all payments and correspondence with clients will bear your business name.

Or you can create savings in your business account to pay quarterly income taxes or purchase equipment.

Finally, business savings accounts are secure when you open accounts with banks and credit unions that are insured up to $250,000 per account by the FDIC or the NCUA.

North Shore Bank of Brookfield, Wis., says that a business savings account can boost your credit ratings and make it easier to obtain a business loan, since the lender can see you have an account dedicated to your company.

Choosing the right business savings account

When evaluating a financial institution for your business, there’s more than just finding a good APY.

Many of the banks on our Top 10 list look great on the APY front but carry fees that can eat into any of the returns you might make. Particularly, watch out for fees for ATM or bank withdrawals, monthly service fees and ATM fees.

The Small Business Administration (SBA) has identified the key factors to consider when searching for the right bank or credit union. These include:

  • Customer service reputation
  • Access to branches or no-surcharge ATMs
  • Benchmarks to have fees waived
  • Automatic FDIC insurance

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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The Best High-Yield Online Savings Accounts in February 2020

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.

The Best Online Savings Accounts

Updated February 14, 2020

Start saving today with these high-yield bank accounts

There are no excuses for sticking with a low-rate savings account these days. Online savings accounts provide consumers with interest rates that are way above those offered by conventional banks. The best online savings accounts can easily earn you an APY of 1.70% or greater, while the average rate offered by a traditional brick-and-mortar bank remains at a paltry 0.27%.

If you’re still skeptical about switching to an online bank, consider the facts. Your funds are just as safe stashed with an FDIC-insured online bank as they would be with the bank branch on Main Street, and you’re likely to get better technical support with an online-only bank website and app. Many offer round-the-clock customer support and online chat features that make it easy to resolve issues without needing to visit a branch in person. Along with higher rates, you may end up saving on the cost of the account. With lower overhead costs, online banks typically charge lower fees.

Every month we review and compile the best savings account offers from online banks. Our ranking factors in features such as a higher-than-average interest rate, no minimum balance requirement, and superior ATM access.

1. High Rate: Capital One – 1.70% APY, no minimum balance

360 Performance Savings from Capital OneA consistent rate leader for its deposit accounts, Capital One now offers its 360 Performance Savings. With a 1.70% APY on all balances and no monthly fee, you get a chance to boost your savings uninterrupted. There are no minimum balances required to open or maintain the account, either.

Capital One is able to offer higher rates and lower (to no!) fees on this online savings account compared to traditional in-branch offerings. Still, you can head to a Capital One branch or Capital One Café to open a new 360 Performance Savings account, if you prefer. You cannot use an ATM to withdraw or deposit funds, but you can visit a branch, call the bank or make your own online transfer. You can access all accounts on your mobile device through the Capital One app, as well.

SEE DETAILS 

Member FDIC

2. High Rate: American Express National Bank – 1.70% APY, no minimum balance (and no fees)

High Yield Savings Account from American Express National BankOur sponsored advertiser, American Express National Bank, offers a Personal Savings account, which earns a 1.70% variable APY. The account charges no monthly fees and requires no minimum deposit, making it an affordable account to open. You must fund your account within 60 days of applying for the account, and the FDIC insures your deposits up to $250,000. Overall, the account is a great option for anyone who wants the flexibility of earning a high interest rate on a sum of money you’ve stashed away, minus the withdrawal restrictions of a certificate deposit.

SEE DETAILS Secured

on American Express National Bank’s secure website

Partner Offer

Member FDIC

3. High Rate: Goldman Sachs Bank USA – 1.70% APY, no minimum balance (but no ATM access)

High-yield Online Savings Account from Goldman Sachs Bank USA

Our advertiser Marcus by Goldman Sachs, the consumer bank of Wall Street giant Goldman Sachs, offers a 1.70% APY on deposits. There isn’t a minimum balance requirement to earn the APY and there are no transaction fees. Upon opening the account, you can deposit funds via electronic transfer, wire transfer, or deposit by check. You can get access to your funds via electronic transfer or wire transfer.

Goldman has been investing heavily in Marcus, its online consumer bank. Marcus is already offering some of the best savings accounts and personal loans in the market, and further expansion is expected. The savings account has consistently been paying one of the highest rates in the market. With a 1.70% APY, you can get one of the highest rates in the market from a well-known brand. The maximum deposit is $1,000,000 and deposits are FDIC insured up to the $250,000 limit.

Marcus is accessible both online and via the Marcus mobile app, available only in the Apple App Store.

SEE DETAILS Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

4. High Rate: Barclays Bank – 1.70% APY, no minimum balance

Online Savings Account from BarclaysBarclays is a large, old British bank, based in London and with more than 325 years of history. Although Barclays is huge in the United Kingdom, it is a challenger brand in the US. Barclays offers savings products with highly competitive rates. These deposits are used to fund their rapidly growing American credit card business. The online savings account has a 1.70% APY with no minimum balance to open and no monthly fees. Your deposits are FDIC insured up to the legal limit. The Barclays website has a good look and feel. And you can have the confidence of keeping your money with one of the world’s largest and oldest universal banks.

SEE DETAILS Secured

on Barclays’s secure website

Member FDIC

5. High Rate: Synchrony Bank – 1.70% APY, no minimum balance, (and ATM access)

High Yield Savings from Synchrony BankSynchrony Bank pays a healthy 1.70% APY. There is no minimum balance requirement and no monthly fee. In addition to the great rate, you can get an ATM card. Most internet-only banks require you to transfer funds electronically, which can take a few days. If you ever need quick access to your funds, the ATM card makes access easy. You might not recognize the Synchrony brand in the banking space, but it is a large, well-capitalized business. Synchrony used to be a part of General Electric (GE), and was spun out as a separate company. Unfortunately, the digital experience is not the best, but they now have a mobile banking app.

SEE DETAILS 

Member FDIC

6. Favorite Online Package: Ally Bank – 1.60% APY, no minimum balance and you can get a free checking account

Online Savings Account from Ally BankAlly is a bank without branches that had been consistently paying high interest rates on savings accounts. While Ally is still offering rates way above what brick-and-mortar banks are offering, it seems this online bank no longer wants to be seen as the online bank with the most competitive rates. The current APY on Ally’s savings account is 1.60%. Although Ally has dropped its rate significantly, we still favor this online bank. It doesn’t require a minimum balance to earn the APY and, even better, you can open a free checking account (also with no minimum balance requirement). This makes access to your savings account incredibly easy – because you can transfer funds online (or via the app) and have immediate access via checks, debit cards and ATMs. With an Ally account, you will have access to their full suite of expanding (and market-leading) products such as CDs, money market account, checking account, and IRA accounts.

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

7. High Rate: Vio Bank – 1.85% APY, $100 to open

High Yield Online Savings Account from Vio BankVio Bank is the online division of MidFirst Bank, a national private financial institution with over $16 billion in assets. Vio Bank was recently created and is not yet as established as Marcus, Barclays, American Express, Synchrony, and Ally Bank. However, this online bank launched its High Yield Online Savings account with a strong APY (at the time of its launch) and has been consistently competitive since it launched. It’s currently offering an outstanding 1.85% APY on all balances. You only need $100 to open the account. You can fund the account via ACH.

There are a few limitations to keep in mind: incoming ACHs take anywhere between two to five business days to post and the online bank may place a hold your ACH for two or three business days. When you’re ready to transfer funds out of the account, you’ll be limited to $5,000 per outgoing ACH. You’ll also be limited to transferring an aggregate monthly total of $20,000 via outgoing ACHs. As is with every other savings account, you’ll also be limited to making six withdrawals per monthly statement cycle. The good news (aside from the high APY) is that Vio Bank doesn’t charge a monthly maintenance fee. Vio Bank also has a mobile banking app where you can conveniently manage your accounts on-the-go. Also, its website is mobile friendly so it should be fairly easy to do your online banking from a smart phone, as well. We think this online bank is very promising and hope it continues to offer one of the best savings account rates in the nation.

SEE DETAILS Secured

on Vio Bank’s secure website

Member FDIC

8. High Rate: CIBC Bank USA – 1.85% APY, $1,000 to open

CIBC Agility Savings - Online Only from CIBC USACIBC Bank USA is the U.S. division of a Canadian based bank. This division was established in 1991 and has since acquired over $27 billion in assets. Currently, CIBC Bank USA is offering an online-only savings account with a competitive APY of 1.85%. You’ll only need $1,000 to open the account. While there isn’t a monthly maintenance fee, you may be charged $10 if you make more than six transactions per statement cycle. CIBC Bank USA does have a mobile banking app, but make sure that you download the app for the U.S., not Canada.

SEE DETAILS Secured

on CIBC USA’s secure website

Member FDIC

9. High Rate: Citizens Access – 1.85% APY, $5,000 minimum balance amount

Online Savings Account from Citizens AccessCitizens Access is the online division of Citizens Bank. This division was recently created to provide the best savings rates to consumers. While the online division is brand new, the bank its backed by isn’t. Citizens Bank has been around for a while and has grown to have over $122 billion in assets. While you need to deposit and maintain a minimum balance of $5,000 to earn the 1.85% APY, you’ll be funding an account that comes with no fees. If your balance happens to fall below $5,000, the APY will drop to 0.25%. One downside to this online-only bank is that they don’t currently have a mobile banking app. This means that you’ll have to do all of your banking through their website. Luckily, their website is mobile-friendly.

SEE DETAILS Secured

on Citizens Access’s secure website

Member FDIC

10. High Rate: Live Oak Bank – 1.85% APY, no minimum to open, no minimum balance to earn APY

Savings Account from Live Oak BankFounded in 2008, Live Oak Bank offers a great spread of financial products, including its high-yield Online Savings account. The Online Savings account earns 1.85% APY on all balances. Plus, interest is compounded daily for faster savings. There’ s no minimum deposit requirement to open, either, nor a monthly fee to worry about.
In addition to online access, Live Oak Bank offers a mobile app.

SEE DETAILS Secured

on Live Oak Bank’s secure website

Member FDIC

11. High Rate: Betterment – 1.83% APY, $10 minimum to open

Betterment Everyday Cash Reserve - Promo Rate from BettermentBetterment is an investment company and one of the best robo-advisors. Since its creation, the mission of this company has always been to empower its customers to make the most of their money. With this mission in mind, the online brokerage decided to offer a high-yield savings account with an outstanding rate. While this account is not like your typical online savings account, it does come up with an outstanding rate. How is it different from other savings accounts? For one, Betterment is not a bank and is not FDIC insured. Fortunately, the company has partnered with a number of banks to offer FDIC insurance to accountholders. Essentially, your funds are deposited with the partner banks and will be insured up to $250,000 at each partner bank. One big benefit that Betterment is currently offering is the ability to opt out of depositing your money at a specific bank.

If you’re comfortable with the way this account is structured, you’ll be rewarded with a 1.83% APY. You only need $10 to open the account and there isn’t a minimum balance amount to earn the APY. This account doesn’t come with any maintenance fees and you can transfer money from the Betterment Everyday Cash Reserve account as many times as you want. If you choose to withdraw money from this account, it’ll be transferred to your linked checking account within 1 to 2 business days. While these types of emerging cash management accounts may not be for everyone, we do feel like they deserve a place on this list due to their outstanding rates.

SEE DETAILS Secured

on Betterment’s secure website

FDIC Insured

12. High Rate: CIT Bank – 1.75% APY, $100 to open

Savings Builder from CIT BankCIT is a very large bank that you probably never heard of. It has more than $50 billion of assets and makes loans (and leases) to middle market companies and small businesses. To fund those loans, CIT operates an internet-only bank that pays some of the highest interest rates in the country.

While CIT isn’t as big as other online banks, they’re currently offering a very healthy APY of 1.75% on their Savings Builder account. You only need $100 to open the account, but you’ll need to meet one of two requirements to earn the high rate. We really like the options that CIT Bank has put in place to earn this high APY. The two ways to continue earning this high rate are:

  1. Make a monthly deposit of $100 or more into this account
  2. Maintain a daily balance of $25,000 or more

Even better: there aren’t any monthly maintenance fees and interest compounds daily. Deposits are FDIC insured.

SEE DETAILS Secured

on CIT Bank’s secure website

Member FDIC

13. Unique Bank + Highest Overall Rate: Fitness Bank – 2.20% APY, $100 minimum to open

Fitness Savings (12,500+ Steps) from FitnessBankFitness Bank is unique and new online bank. It’s a division of Affinity Bank, which has been around since 2002 and has acquired over $318 million in assets. Affinity Bank decided to launch a concept like no other to reward actively fit individuals with the highest APY currently available. While most institutions choose to offer tiered rates based on balance amounts, Fitness Bank offers tiered rates based on the average number of steps you take on a daily basis. To earn the high 2.20% APY, you’ll need to take an average of 12,500 steps or more per day. If you only take an average of 10,000 to 12,499 steps per day, you’ll earn an APY of 2.00% (which is still a great APY). You’ll earn 1.75% APY if you take an average of 7,500 to 9,999 steps per day. Taking an average of 5,000 to 7,499 steps per day will qualify you for an APY of 1.25%. Finally, if you take anywhere between 0 to 4,999 steps on average per day, you’ll only earn 0.50%.

Fitness Bank will track your steps by requiring you to download its Step Tracker app. The bank will then calculate your average steps from the previous month to determine which tier you qualify for. Once the bank determines which rate your activity qualifies you for, you will continue earning that rate for an entire month until the bank recalculates your activity. The activity requirement will be waived for the first month so that you can get your app all set up and start logging in some steps. For this first month, you’ll automatically earn the 2.20% APY.

In terms of actual money, you will need at least $100 to open the account and you’ll need to maintain this balance to waive the $10 monthly maintenance fee. The bank does impose a limit on the amount of money you’re able to transfer in and out of the account via ACH. You cannot transfer more than $15,000 per day in or out of the account. You also cannot exceed more than six certain withdrawals or you’ll incur an excessive withdrawal fee of $10 for each additional withdrawal. In addition to the Step Tracker app, Fitness Bank has a mobile banking app to manage your account.

SEE DETAILS Secured

on FitnessBank’s secure website

Member FDIC

14. High Rate: Elements Financial – 2.10% APY, $2,500 minimum balance amount

Helium Savings 1 year Promo - New Money from Elements FinancialElements Financial was established in 1930 and currently has over $1.6 billion in assets. Its success is most likely attributed to its ability to reach customers nationwide. Anyone can become a member of this credit union just by opening a checking or savings account, or by applying for a loan or credit card. Regardless of the account you choose to open, Elements Financial will open a savings account for you and deposit $5 into the account to get you started.

If you choose to open a savings account with this credit union, you should consider opening the Helium Savings account. The credit union is currently running a promotion on this account with a 2.10% APY that is guaranteed for one year (or 12 statement cycles). Once the promotional period ends, the rate will drop to 1.30% (or whatever the rate is at the time the promotional period ends for you). The account requires a minimum deposit of $2,500 of new money to earn the APY, but you only need a minimum of $100 to open the account. However, you won’t earn interest if you have less than $2,500 in the account. Existing customers don’t qualify for the promotional APY. There aren’t any monthly maintenance fees associated with this account. You’ll be given an Elements ATM card to withdraw money from the credit union’s surcharge-free network. The credit union also has a mobile app that allows you to manage and maintain the account on-the-go.

SEE DETAILS Secured

on Elements Financial’s secure website

NCUA Insured

15. High Rate: BrioDirect – 2.00% APY, $25 minimum balance amount

High-Yield Savings from BrioDirectBrioDirect is powered by Sterling National Bank, which is a large bank in New York with over $29 billion in assets. This online brand recently launched with a high 2.00% APY. You only need $25 to open the account and you’ll need to maintain at least this amount on a daily basis to earn the APY. This account doesn’t have a monthly service fee and can be funded via ACH, wire transfer, or check. There are limitations to the amount of money you can transfer in and out via ACH. BrioDirect limits incoming ACH transfers to $500,000. The bank limits outgoing ACH transfers to $25,000 per transaction and a total of $125,000 per month. You are able to link as many external bank accounts as you’d like to this account. You can also initiate ACH deposits and withdrawals from other banks. You can manage this account online or from Sterling National Bank’s mobile app.

SEE DETAILS Secured

on BrioDirect’s secure website

FDIC Insured

16. High Rate: First Foundation Bank – 2.00% APY, $1,000 to open

Online Savings Account - New Money Only from First Foundation BankFirst Foundation Bank officially launched in 2008, but its leadership has been in the financial services industry since 1990. This bank was established by the same group that leads the Keller Group, a wealth management firm. The bank has grown to acquire over $6 billion in assets. In October, this bank launched an Online Savings Account with a high APY of 2.00%. You’ll need to have a balance of at least $1,000 in order to open that account and you’ll need to maintain that amount in order to earn the high APY. If your balance falls below $1,000, the APY will drop to 1.00%. This account doesn’t have a monthly service fee.

While Regulation D applies to this account, First Foundation Bank will provide an ATM card if you request one from the bank. The bank will reimburse ATM fees from other banks and ATM operators up to $20. There is a limit to the amount of money that you can withdraw. If you’re withdrawing from an ATM, the bank sets a daily limit of $500. The daily point-of-sale limit is $1,500. If you’re transferring money online or via ACH, the daily limit is $5,000 and the monthly limit is $10,000. If you need to transfer more than the preset limits, you’re able to call the bank and request that they increase the limit. The bank allows you to maintain the account online and through their mobile banking app.

SEE DETAILS Secured

on First Foundation Bank’s secure website

Member FDIC

17. High Rate: Prime Alliance Bank – 1.96% APY, $10,000 minimum balance amount

Personal Savings Account from Prime Alliance BankPrime Alliance Bank was established in 2004 to provide financial assistance to local businesses and residents. However, through its online banking platform, it’s now able to reach more customers while keeping that local bank service. Today, it’s grown to acquire over $455 million in assets. While the bank’s Personal Savings Account doesn’t require a minimum amount to open the account, you will need to have at least $10,000 in the account to earn the high APY of 1.96%. If your balance is below the amount, you’ll earn 1.86% APY. This account doesn’t have a monthly service fee. You’re able to request an ATM card and withdraw as much as you need from an ATM, but the account is limited to six certain withdrawals and transfers due to federal regulations. You’re able to maintain the account online or through the bank’s mobile app.

SEE DETAILS Secured

on Prime Alliance Bank’s secure website

Member FDIC

18. High Rates on two savings accounts: Customers Bank – 1.95% or 1.95% APY, $5,000 or $25,000 to open depending on account

High-Yield Savings Account from Customers BankCustomers Bank was established in 1997 and has grown to be known as a “super-community bank” in Pennsylvania, Washington D.C., Illinois, New York, New Jersey, and New England. The bank has over $9 billion in assets, making it a mid-sized bank. Currently, Customers Bank is offering two outstanding rates on two different accounts. Its Digital Savings Account requires a minimum deposit and balance of $5,000 to earn a high rate of 1.95%. This account doesn’t have any monthly fees. You can open this account here.
If you have $25,000 to deposit, the High-Yield Savings Account is a better fit for you. If you can deposit and maintain a minimum of $25,000 into the account, this bank will reward you with a 1.95% APY. You’ll have to maintain this balance to continue earning the high rate. You must fund the account within 30 days of receiving application approval. This account doesn’t come with any monthly fees.
A few items to be aware of: these accounts don’t come with checks or a debit card. Customers Bank does have ACH transfer limitations of $5,000 per day and $50,000 per statement cycle. You can easily open these accounts online and manage the account via Customer Bank’s website or mobile banking app. Deposits are FDIC-insured.

SEE DETAILS Secured

on Customers Bank’s secure website

Member FDIC

19. For High Balance Savers: Digital Federal Credit Union – 1.92%APY, $25,000 minimum to earn APY

DCU Ltd Savings from Digital Federal Credit Union (DCU) Digital Federal Credit Union was chartered in 1979 and today, serves over 800,000 members in 50 states. Membership is open to employees and retirees from over 700 companies, members of select organizations and communities and eligible family members. DCU has branded branches in Massachusetts and New Hampshire, in addition to thousands of CO-OP Shared Branches nationwide.

While there is no minimum deposit requirement, DCU offers its competitive 1.92% APY on Ltd Savings balances of $25,000 and over. Any balances under that do not earn interest, making this a better choice for higher-balance savers. There is no monthly fee.

It’s best to keep your money in this account without much movement, as you’re allowed only one free transfer per month. Each transfer out of the account after that will cost you $25.

SEE DETAILS 

NCUA Insured

20. For Small Balance Savers: Digital Federal Credit Union – 6.17% APY up to $1k

Primary Savings from Digital Federal Credit Union (DCU)Digital Federal Credit Union (DCU) currently offers a nice account for people who are just starting to save. You can earn an APY of 6.17% with their Primary Savings Account. You will only earn that rate on deposits up to $1,000. Once you have more than $1k, you should consider other accounts on this list. It is a credit union – and your deposits are insured by the NCUA up to the legal limit. Anyone can join the credit union by donating to one of their participating organizations such as Reach Out for Schools, which has a membership fee of $10. You’ll be able to join one their participating organizations when you go to open your account with DCU. DCU is also part of a nationwide CO-OP network that allows their members to have access to shared branches and surcharge-free ATMs throughout the U.S.

SEE DETAILS 

NCUA Insured

How to find the right savings account for you

  • Focus on rates, but don’t forget about fees. Snagging the highest interest rate isn’t always your best bet. You also want to ensure the whole account helps you earn consistent returns. For example, a high-rate online savings account might reset to a lower APY after an introductory period. Perhaps the best rate requires a balance that’s too high or too low for your needs. And watch out for monthly fees that could eat into your savings.
  • Compare, compare, compare. Use our savings account comparison tool to calculate how much you could earn with different accounts. You can filter by ZIP code and size, which can help large-balance savers find better options than no-minimum options.
  • Carefully consider CDs. CDs allow savers to earn more on their savings by agreeing to lock up their funds for a set period of time. With CDs, you make your initial deposit at a set APY and wait for the CD term to mature. With most CDs, you can’t touch the original deposit amount before maturity without paying a penalty. Since CDs are less liquid than a standard savings account, they’re good for setting aside money you won’t need to access in the near term. Typically, we recommend using CDs for long-term goals, like accumulating a down payment for a home.

January savings index

We asked 1,041 Americans about their savings habits during the month of January. Here’s what we found:

  • Overall, 39% of Americans increased their savings in January 2020, while 17% of Americans withdrew money from their savings.

  • The number of Americans who added money to savings in January dropped to its lowest point since October 2019.

  • Men increased savings at a higher rate than women: Forty-six percent of men added to their savings account in December, compared with just 33% of women. Meanwhile, 27% of women said they don’t have any savings, versus just 15% of men.

  • Nearly 3 in 10 Gen Zers withdrew money from their savings account in January, a higher rate than all other generations.
  • Consumers with a household income surpassing $100,000 are more than 13 times as likely to have a savings fund than those earning less than $25,000. Additionally, only a quarter of those earning under $25,000 per year saved money during December.
  • Top 3 things Americans saved for in December: general savings (32%), emergencies (26%) and vacation (23%).

Survey Methodology

MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,041 Americans, with the sample base proportioned to represent the overall population. The survey was fielded Jan. 15-20, 2020. Generations are defined as: Generation Z ages 18-22, millennials ages 23-38, Generation Xers ages 39-53, baby boomers ages 54-73 and Silent Generation ages 74 and older.

How the Fed impacts online savings rates

The interest rates offered by banks are tied to the federal funds rate, which is set by the Federal Reserve’s Federal Open Market Committee (FOMC). This includes the deposit account rates that grow your money in savings and other deposit accounts.

When the Fed hikes rates, online banks are far quicker than traditional banks to raise their rates in response. This is clear when you compare average rates from December 2018, just after the Fed ended its two-year-long rate hike streak. The average APY offered by big banks at that time was a paltry 0.26% vs. 2.10% on average for online banks.

We’re well past that rate hike trend in 2020. The Fed delivered three rate cuts in the second half of 2019, followed by a continuing pause on monetary policy. The odds of a rate hike these year are nonexistent, as its more likely we’ll see a rate cut at the end of this pause. The Fed did nothing at its January meeting, and didn’t give much of a clue as to what would cause them to make a change to their current policy stance.

Still, the average APY for online savings accounts continues to tower over brick-and-mortar rates: 1.73% APY for online accounts vs. the stagnant 0.27% at traditional bands.

Unfortunately, the bleak federal funds rate outlook doesn’t bode too well for deposit account rates overall. Banks started dropping their rates when the Fed took a pause at the start of 2019, slashed them even more when actual rate cuts were announced and continue to cut on through 2020. Luckily for consumers, online banks are extremely competitive and need to remain so if they want to maintain their edge.

In the January 2020 Ally Financial earnings call, Ally CFO Jennifer LaClair acknowledged that Ally rates dropped from the peak online savings average rate of 2.20% down to a significantly lower 1.60%. Additionally, they expect CDs to be rolling off around 1.80%. Still, Ally Bank saw record customer growth in the 4th quarter of 2019, despite “increased competition.”

Certainly, more and more online banks or online-only offerings from big banks are popping up. In their earnings call, Discover said much of the same, adding that they have their “product set and the ability to compete,” which is backed up by their high-yield accounts.

Meanwhile, big banks like JP Morgan Chase and Wells Fargo remain uncompetitive. JP Morgan Chase didn’t boost their rates even when the Fed was raising rates, so there was little to do when rates began to go down and they remain low. Wells Fargo expects retail banking deposit costs to decline as their promotional rates expire.

As for what that all means for you, chances are that if you keep your deposits with an online bank, you’ll still get the most competitive rates regardless of a Fed pause or rate decrease. You might see an overall decrease in online savings rates (moreso in the competitive rate-chasing CD space), but they’ll still outperform most brick-and-mortar rates any day.

The bottom line

So what’s a saver to do? At the end of the day, you want the account that makes the most sense for you. Choose the one that lets you save and manage your money in the best ways possible. The most efficient way to consistently grow your money is to open an online savings account. These accounts will offer the best interest rates compared to brick-and-mortar banks, no matter where the federal funds rate goes this year — plus, they’re easily accessible in case of emergency. If you don’t need immediate access to your money and you have some extra cash lying around, open a high-yield CD as a more long-term savings alternative.

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Continue reading The Best High-Yield Online Savings Accounts in February 2020

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Best of, Earning Interest

The Best High-Yield Online Savings Accounts in February 2020

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.

The Best Online Savings Accounts

Updated February 14, 2020

There are no excuses for sticking with a low-rate savings account these days. Online savings accounts provide consumers with interest rates that are way above those offered by conventional banks. The best online savings accounts can easily earn you an APY of 1.70% or greater, while the average rate offered by a traditional brick-and-mortar bank remains at a paltry 0.27%.

If you’re still skeptical about switching to an online bank, consider the facts. Your funds are just as safe stashed with an FDIC-insured online bank as they would be with the bank branch on Main Street, and you’re likely to get better technical support with an online-only bank website and app. Many offer round-the-clock customer support and online chat features that make it easy to resolve issues without needing to visit a branch in person. Along with higher rates, you may end up saving on the cost of the account. With lower overhead costs, online banks typically charge lower fees.

Every month we review and compile the best savings account offers from online banks. Our ranking factors in features such as a higher-than-average interest rate, no minimum balance requirement, and superior ATM access.

1. High Rate: Capital One – 1.70% APY, no minimum balance

360 Performance Savings from Capital OneA consistent rate leader for its deposit accounts, Capital One now offers its 360 Performance Savings. With a 1.70% APY on all balances and no monthly fee, you get a chance to boost your savings uninterrupted. There are no minimum balances required to open or maintain the account, either.

Capital One is able to offer higher rates and lower (to no!) fees on this online savings account compared to traditional in-branch offerings. Still, you can head to a Capital One branch or Capital One Café to open a new 360 Performance Savings account, if you prefer. You cannot use an ATM to withdraw or deposit funds, but you can visit a branch, call the bank or make your own online transfer. You can access all accounts on your mobile device through the Capital One app, as well.

SEE DETAILS 

Member FDIC

2. High Rate: American Express National Bank – 1.70% APY, no minimum balance (and no fees)

High Yield Savings Account from American Express National BankOur sponsored advertiser, American Express National Bank, offers a Personal Savings account, which earns a 1.70% variable APY. The account charges no monthly fees and requires no minimum deposit, making it an affordable account to open. You must fund your account within 60 days of applying for the account, and the FDIC insures your deposits up to $250,000. Overall, the account is a great option for anyone who wants the flexibility of earning a high interest rate on a sum of money you’ve stashed away, minus the withdrawal restrictions of a certificate deposit.

SEE DETAILS Secured

on American Express National Bank’s secure website

Partner Offer

Member FDIC

3. High Rate: Goldman Sachs Bank USA –  1.70% APY, no minimum balance (but no ATM access)

High-yield Online Savings Account from Goldman Sachs Bank USA

Our advertiser Marcus by Goldman Sachs, the consumer bank of Wall Street giant Goldman Sachs, offers a 1.70% APY on deposits. There isn’t a minimum balance requirement to earn the APY and there are no transaction fees. Upon opening the account, you can deposit funds via electronic transfer, wire transfer, or deposit by check. You can get access to your funds via electronic transfer or wire transfer.

Goldman has been investing heavily in Marcus, its online consumer bank. Marcus is already offering some of the best savings accounts and personal loans in the market, and further expansion is expected. The savings account has consistently been paying one of the highest rates in the market. With a 1.70% APY, you can get one of the highest rates in the market from a well-known brand. The maximum deposit is $1,000,000 and deposits are FDIC insured up to the $250,000 limit.

Marcus is accessible both online and via the Marcus mobile app, available only in the Apple App Store.

SEE DETAILS Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

4. High Rate: Barclays Bank – 1.70% APY, no minimum balance

Online Savings Account from BarclaysBarclays is a large, old British bank, based in London and with more than 325 years of history. Although Barclays is huge in the United Kingdom, it is a challenger brand in the US. Barclays offers savings products with highly competitive rates. These deposits are used to fund their rapidly growing American credit card business. The online savings account has a 1.70% APY with no minimum balance to open and no monthly fees. Your deposits are FDIC insured up to the legal limit. The Barclays website has a good look and feel. And you can have the confidence of keeping your money with one of the world’s largest and oldest universal banks.

SEE DETAILS Secured

on Barclays’s secure website

Member FDIC

5. Favorite Online Package: Ally Bank – 1.60% APY, no minimum balance and you can get a free checking account

Online Savings Account from Ally BankAlly is a bank without branches that had been consistently paying high interest rates on savings accounts. While Ally is still offering rates way above what brick-and-mortar banks are offering, it seems this online bank no longer wants to be seen as the online bank with the most competitive rates. The current APY on Ally’s savings account is 1.60%. Although Ally has dropped its rate significantly, we still favor this online bank. It doesn’t require a minimum balance to earn the APY and, even better, you can open a free checking account (also with no minimum balance requirement). This makes access to your savings account incredibly easy – because you can transfer funds online (or via the app) and have immediate access via checks, debit cards and ATMs. With an Ally account, you will have access to their full suite of expanding (and market-leading) products such as CDs, money market account, checking account, and IRA accounts.

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

6. High Rate: Discover Bank – 1.60% APY, no minimum balance

Online Savings from Discover Bank Discover Bank is famous for its credit cards. But it also has an online consumer bank. The savings account pays 1.60% APY. There is no minimum deposit or balance requirement, opening this savings opportunity to all kinds of savers. Discover doesn’t charge a monthly fee, either, nor an excessive transaction fee.
Discover provides customers with on-the-go access through its mobile app, which includes mobile check deposit.

SEE DETAILS 

Member FDIC

7. High Rate: Vio Bank – 1.85% APY, $100 to open

High Yield Online Savings Account from Vio BankVio Bank is the online division of MidFirst Bank, a national private financial institution with over $16 billion in assets. Vio Bank was recently created and is not yet as established as Marcus, Barclays, American Express, Synchrony, and Ally Bank. However, this online bank launched its High Yield Online Savings account with a strong APY (at the time of its launch) and has been consistently competitive since it launched. It’s currently offering an outstanding 1.85% APY on all balances. You only need $100 to open the account. You can fund the account via ACH.

There are a few limitations to keep in mind: incoming ACHs take anywhere between two to five business days to post and the online bank may place a hold your ACH for two or three business days. When you’re ready to transfer funds out of the account, you’ll be limited to $5,000 per outgoing ACH. You’ll also be limited to transferring an aggregate monthly total of $20,000 via outgoing ACHs. As is with every other savings account, you’ll also be limited to making six withdrawals per monthly statement cycle. The good news (aside from the high APY) is that Vio Bank doesn’t charge a monthly maintenance fee. Vio Bank also has a mobile banking app where you can conveniently manage your accounts on-the-go. Also, its website is mobile friendly so it should be fairly easy to do your online banking from a smart phone, as well. We think this online bank is very promising and hope it continues to offer one of the best savings account rates in the nation.

SEE DETAILS Secured

on Vio Bank’s secure website

Member FDIC

8. High Rate: CIBC Bank USA – 1.85% APY, $1,000 to open

CIBC Agility Savings - Online Only from CIBC USACIBC Bank USA is the U.S. division of a Canadian based bank. This division was established in 1991 and has since acquired over $27 billion in assets. Currently, CIBC Bank USA is offering an online-only savings account with a competitive APY of 1.85%. You’ll only need $1,000 to open the account. While there isn’t a monthly maintenance fee, you may be charged $10 if you make more than six transactions per statement cycle. CIBC Bank USA does have a mobile banking app, but make sure that you download the app for the U.S., not Canada.

SEE DETAILS Secured

on CIBC USA’s secure website

Member FDIC

9. High Rate: Citizens Access – 1.85% APY, $5,000 minimum balance amount

Online Savings Account from Citizens AccessCitizens Access is the online division of Citizens Bank. This division was recently created to provide the best savings rates to consumers. While the online division is brand new, the bank its backed by isn’t. Citizens Bank has been around for a while and has grown to have over $122 billion in assets. While you need to deposit and maintain a minimum balance of $5,000 to earn the 1.85% APY, you’ll be funding an account that comes with no fees. If your balance happens to fall below $5,000, the APY will drop to 0.25%. One downside to this online-only bank is that they don’t currently have a mobile banking app. This means that you’ll have to do all of your banking through their website. Luckily, their website is mobile-friendly.

SEE DETAILS Secured

on Citizens Access’s secure website

Member FDIC

10. High Rate: Live Oak Bank – 1.85% APY, no minimum to open, no minimum balance to earn APY

Savings Account from Live Oak BankFounded in 2008, Live Oak Bank offers a great spread of financial products, including its high-yield Online Savings account. The Online Savings account earns 1.85% APY on all balances. Plus, interest is compounded daily for faster savings. There’ s no minimum deposit requirement to open, either, nor a monthly fee to worry about.
In addition to online access, Live Oak Bank offers a mobile app.

SEE DETAILS Secured

on Live Oak Bank’s secure website

Member FDIC

11. High Rate: Betterment – 1.83% APY, $10 minimum to open

Betterment Everyday Cash Reserve - Promo Rate from BettermentBetterment is an investment company and one of the best robo-advisors. Since its creation, the mission of this company has always been to empower its customers to make the most of their money. With this mission in mind, the online brokerage decided to offer a high-yield savings account with an outstanding rate. While this account is not like your typical online savings account, it does come up with an outstanding rate. How is it different from other savings accounts? For one, Betterment is not a bank and is not FDIC insured. Fortunately, the company has partnered with a number of banks to offer FDIC insurance to accountholders. Essentially, your funds are deposited with the partner banks and will be insured up to $250,000 at each partner bank. One big benefit that Betterment is currently offering is the ability to opt out of depositing your money at a specific bank.

If you’re comfortable with the way this account is structured, you’ll be rewarded with a 1.83% APY. You only need $10 to open the account and there isn’t a minimum balance amount to earn the APY. This account doesn’t come with any maintenance fees and you can transfer money from the Betterment Everyday Cash Reserve account as many times as you want. If you choose to withdraw money from this account, it’ll be transferred to your linked checking account within 1 to 2 business days. While these types of emerging cash management accounts may not be for everyone, we do feel like they deserve a place on this list due to their outstanding rates.

SEE DETAILS Secured

on Betterment’s secure website

FDIC Insured

12. High Rate: CIT Bank – 1.75% APY, $100 to open

Savings Builder from CIT BankCIT is a very large bank that you probably never heard of. It has more than $50 billion of assets and makes loans (and leases) to middle market companies and small businesses. To fund those loans, CIT operates an internet-only bank that pays some of the highest interest rates in the country.

While CIT isn’t as big as other online banks, they’re currently offering a very healthy APY of 1.75% on their Savings Builder account. You only need $100 to open the account, but you’ll need to meet one of two requirements to earn the high rate. We really like the options that CIT Bank has put in place to earn this high APY. The two ways to continue earning this high rate are:

  1. Make a monthly deposit of $100 or more into this account
  2. Maintain a daily balance of $25,000 or more

Even better: there aren’t any monthly maintenance fees and interest compounds daily. Deposits are FDIC insured.

SEE DETAILS Secured

on CIT Bank’s secure website

Member FDIC

13. Unique Bank + Highest Overall Rate: Fitness Bank – 2.20% APY, $100 minimum to open

Fitness Savings (12,500+ Steps) from FitnessBankFitness Bank is unique and new online bank. It’s a division of Affinity Bank, which has been around since 2002 and has acquired over $318 million in assets. Affinity Bank decided to launch a concept like no other to reward actively fit individuals with the highest APY currently available. While most institutions choose to offer tiered rates based on balance amounts, Fitness Bank offers tiered rates based on the average number of steps you take on a daily basis. To earn the high 2.20% APY, you’ll need to take an average of 12,500 steps or more per day. If you only take an average of 10,000 to 12,499 steps per day, you’ll earn an APY of 2.00% (which is still a great APY). You’ll earn 1.75% APY if you take an average of 7,500 to 9,999 steps per day. Taking an average of 5,000 to 7,499 steps per day will qualify you for an APY of 1.25%. Finally, if you take anywhere between 0 to 4,999 steps on average per day, you’ll only earn 0.50%.

Fitness Bank will track your steps by requiring you to download its Step Tracker app. The bank will then calculate your average steps from the previous month to determine which tier you qualify for. Once the bank determines which rate your activity qualifies you for, you will continue earning that rate for an entire month until the bank recalculates your activity. The activity requirement will be waived for the first month so that you can get your app all set up and start logging in some steps. For this first month, you’ll automatically earn the 2.20% APY.

In terms of actual money, you will need at least $100 to open the account and you’ll need to maintain this balance to waive the $10 monthly maintenance fee. The bank does impose a limit on the amount of money you’re able to transfer in and out of the account via ACH. You cannot transfer more than $15,000 per day in or out of the account. You also cannot exceed more than six certain withdrawals or you’ll incur an excessive withdrawal fee of $10 for each additional withdrawal. In addition to the Step Tracker app, Fitness Bank has a mobile banking app to manage your account.

SEE DETAILS Secured

on FitnessBank’s secure website

Member FDIC

14. High Rate: Elements Financial – 2.10% APY, $2,500 minimum balance amount

Helium Savings 1 year Promo - New Money from Elements FinancialElements Financial was established in 1930 and currently has over $1.6 billion in assets. Its success is most likely attributed to its ability to reach customers nationwide. Anyone can become a member of this credit union just by opening a checking or savings account, or by applying for a loan or credit card. Regardless of the account you choose to open, Elements Financial will open a savings account for you and deposit $5 into the account to get you started.

If you choose to open a savings account with this credit union, you should consider opening the Helium Savings account. The credit union is currently running a promotion on this account with a 2.10% APY that is guaranteed for one year (or 12 statement cycles). Once the promotional period ends, the rate will drop to 1.30% (or whatever the rate is at the time the promotional period ends for you). The account requires a minimum deposit of $2,500 of new money to earn the APY, but you only need a minimum of $100 to open the account. However, you won’t earn interest if you have less than $2,500 in the account. Existing customers don’t qualify for the promotional APY. There aren’t any monthly maintenance fees associated with this account. You’ll be given an Elements ATM card to withdraw money from the credit union’s surcharge-free network. The credit union also has a mobile app that allows you to manage and maintain the account on-the-go.

SEE DETAILS Secured

on Elements Financial’s secure website

NCUA Insured

15. High Rate: BrioDirect – 2.00% APY, $25 minimum balance amount

High-Yield Savings from BrioDirectBrioDirect is powered by Sterling National Bank, which is a large bank in New York with over $29 billion in assets. This online brand recently launched with a high 2.00% APY. You only need $25 to open the account and you’ll need to maintain at least this amount on a daily basis to earn the APY. This account doesn’t have a monthly service fee and can be funded via ACH, wire transfer, or check. There are limitations to the amount of money you can transfer in and out via ACH. BrioDirect limits incoming ACH transfers to $500,000. The bank limits outgoing ACH transfers to $25,000 per transaction and a total of $125,000 per month. You are able to link as many external bank accounts as you’d like to this account. You can also initiate ACH deposits and withdrawals from other banks. You can manage this account online or from Sterling National Bank’s mobile app.

SEE DETAILS Secured

on BrioDirect’s secure website

FDIC Insured

16. High Rate: First Foundation Bank – 2.00% APY, $1,000 to open

Online Savings Account - New Money Only from First Foundation BankFirst Foundation Bank officially launched in 2008, but its leadership has been in the financial services industry since 1990. This bank was established by the same group that leads the Keller Group, a wealth management firm. The bank has grown to acquire over $6 billion in assets. In October, this bank launched an Online Savings Account with a high APY of 2.00%. You’ll need to have a balance of at least $1,000 in order to open that account and you’ll need to maintain that amount in order to earn the high APY. If your balance falls below $1,000, the APY will drop to 1.00%. This account doesn’t have a monthly service fee.

While Regulation D applies to this account, First Foundation Bank will provide an ATM card if you request one from the bank. The bank will reimburse ATM fees from other banks and ATM operators up to $20. There is a limit to the amount of money that you can withdraw. If you’re withdrawing from an ATM, the bank sets a daily limit of $500. The daily point-of-sale limit is $1,500. If you’re transferring money online or via ACH, the daily limit is $5,000 and the monthly limit is $10,000. If you need to transfer more than the preset limits, you’re able to call the bank and request that they increase the limit. The bank allows you to maintain the account online and through their mobile banking app.

SEE DETAILS Secured

on First Foundation Bank’s secure website

Member FDIC

17. High Rate: Prime Alliance Bank – 1.96% APY, $10,000 minimum balance amount

Personal Savings Account from Prime Alliance BankPrime Alliance Bank was established in 2004 to provide financial assistance to local businesses and residents. However, through its online banking platform, it’s now able to reach more customers while keeping that local bank service. Today, it’s grown to acquire over $455 million in assets. While the bank’s Personal Savings Account doesn’t require a minimum amount to open the account, you will need to have at least $10,000 in the account to earn the high APY of 1.96%. If your balance is below the amount, you’ll earn 1.86% APY. This account doesn’t have a monthly service fee. You’re able to request an ATM card and withdraw as much as you need from an ATM, but the account is limited to six certain withdrawals and transfers due to federal regulations. You’re able to maintain the account online or through the bank’s mobile app.

SEE DETAILS Secured

on Prime Alliance Bank’s secure website

Member FDIC

18. High Rates on two savings accounts: Customers Bank – 1.95% or 1.95% APY, $5,000 or $25,000 to open depending on account

High-Yield Savings Account from Customers BankCustomers Bank was established in 1997 and has grown to be known as a “super-community bank” in Pennsylvania, Washington D.C., Illinois, New York, New Jersey, and New England. The bank has over $9 billion in assets, making it a mid-sized bank. Currently, Customers Bank is offering two outstanding rates on two different accounts. Its Digital Savings Account requires a minimum deposit and balance of $5,000 to earn a high rate of 1.95%. This account doesn’t have any monthly fees. You can open this account here.
If you have $25,000 to deposit, the High-Yield Savings Account is a better fit for you. If you can deposit and maintain a minimum of $25,000 into the account, this bank will reward you with a 1.95% APY. You’ll have to maintain this balance to continue earning the high rate. You must fund the account within 30 days of receiving application approval. This account doesn’t come with any monthly fees.
A few items to be aware of: these accounts don’t come with checks or a debit card. Customers Bank does have ACH transfer limitations of $5,000 per day and $50,000 per statement cycle. You can easily open these accounts online and manage the account via Customer Bank’s website or mobile banking app. Deposits are FDIC-insured.

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on Customers Bank’s secure website

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19. For High Balance Savers: Digital Federal Credit Union – 1.92%APY, $25,000 minimum to earn APY

DCU Ltd Savings from Digital Federal Credit Union (DCU) Digital Federal Credit Union was chartered in 1979 and today, serves over 800,000 members in 50 states. Membership is open to employees and retirees from over 700 companies, members of select organizations and communities and eligible family members. DCU has branded branches in Massachusetts and New Hampshire, in addition to thousands of CO-OP Shared Branches nationwide.

While there is no minimum deposit requirement, DCU offers its competitive 1.92% APY on Ltd Savings balances of $25,000 and over. Any balances under that do not earn interest, making this a better choice for higher-balance savers. There is no monthly fee.

It’s best to keep your money in this account without much movement, as you’re allowed only one free transfer per month. Each transfer out of the account after that will cost you $25.

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NCUA Insured

20. For Small Balance Savers: Digital Federal Credit Union – 6.17% APY up to $1k

Primary Savings from Digital Federal Credit Union (DCU)Digital Federal Credit Union (DCU) currently offers a nice account for people who are just starting to save. You can earn an APY of 6.17% with their Primary Savings Account. You will only earn that rate on deposits up to $1,000. Once you have more than $1k, you should consider other accounts on this list. It is a credit union – and your deposits are insured by the NCUA up to the legal limit. Anyone can join the credit union by donating to one of their participating organizations such as Reach Out for Schools, which has a membership fee of $10. You’ll be able to join one their participating organizations when you go to open your account with DCU. DCU is also part of a nationwide CO-OP network that allows their members to have access to shared branches and surcharge-free ATMs throughout the U.S.

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NCUA Insured

How to find the right savings account for you

  • Focus on rates, but don’t forget about fees. Snagging the highest interest rate isn’t always your best bet. You also want to ensure the whole account helps you earn consistent returns. For example, a high-rate online savings account might reset to a lower APY after an introductory period. Perhaps the best rate requires a balance that’s too high or too low for your needs. And watch out for monthly fees that could eat into your savings.
  • Compare, compare, compare. Use our savings account comparison tool to calculate how much you could earn with different accounts. You can filter by ZIP code and size, which can help large-balance savers find better options than no-minimum options.
  • Carefully consider CDs. CDs allow savers to earn more on their savings by agreeing to lock up their funds for a set period of time. With CDs, you make your initial deposit at a set APY and wait for the CD term to mature. With most CDs, you can’t touch the original deposit amount before maturity without paying a penalty. Since CDs are less liquid than a standard savings account, they’re good for setting aside money you won’t need to access in the near term. Typically, we recommend using CDs for long-term goals, like accumulating a down payment for a home.

Online savings index 2020

Our online savings index tracks the monthly performance of a basket of online savings rates relative to a basket of savings rates from brick-and-mortar institutions.

  • Despite four Fed rate increases in 2018, savings yields at brick-and-mortar banks were pinned at less than 0.1%. Meanwhile, average yields at online banks soared, peaking above 2% in early 2019.
  • The spread between rates at online banks and brick-and-mortar banks widened considerably in the period between August 2017 and June 2019, then compressed somewhat in late 2019.

January savings index

We asked 1,041 Americans about their savings habits during the month of January. Here’s what we found:

  • Overall, 39% of Americans increased their savings in January 2020, while 17% of Americans withdrew money from their savings.

  • The number of Americans who added money to savings in January dropped to its lowest point since October 2019.

  • Men increased savings at a higher rate than women: Forty-six percent of men added to their savings account in December, compared with just 33% of women. Meanwhile, 27% of women said they don’t have any savings, versus just 15% of men.

  • Nearly 3 in 10 Gen Zers withdrew money from their savings account in January, a higher rate than all other generations.
  • Consumers with a household income surpassing $100,000 are more than 13 times as likely to have a savings fund than those earning less than $25,000. Additionally, only a quarter of those earning under $25,000 per year saved money during December.
  • Top 3 things Americans saved for in December: general savings (32%), emergencies (26%) and vacation (23%).

Survey Methodology

MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,041 Americans, with the sample base proportioned to represent the overall population. The survey was fielded Jan. 15-20, 2020. Generations are defined as: Generation Z ages 18-22, millennials ages 23-38, Generation Xers ages 39-53, baby boomers ages 54-73 and Silent Generation ages 74 and older.

How the Fed impacts online savings rates

The interest rates offered by banks are tied to the federal funds rate, which is set by the Federal Reserve’s Federal Open Market Committee (FOMC). This includes the deposit account rates that grow your money in savings and other deposit accounts.

When the Fed hikes rates, online banks are far quicker than traditional banks to raise their rates in response. This is clear when you compare average rates from December 2018, just after the Fed ended its two-year-long rate hike streak. The average APY offered by big banks at that time was a paltry 0.26% vs. 2.10% on average for online banks.

We’re well past that rate hike trend in 2020. The Fed delivered three rate cuts in the second half of 2019, followed by a continuing pause on monetary policy. The odds of a rate hike these year are nonexistent, as its more likely we’ll see a rate cut at the end of this pause. The Fed did nothing at its January meeting, and didn’t give much of a clue as to what would cause them to make a change to their current policy stance.

Still, the average APY for online savings accounts continues to tower over brick-and-mortar rates: 1.73% APY for online accounts vs. the stagnant 0.27% at traditional bands.

Unfortunately, the bleak federal funds rate outlook doesn’t bode too well for deposit account rates overall. Banks started dropping their rates when the Fed took a pause at the start of 2019, slashed them even more when actual rate cuts were announced and continue to cut on through 2020. Luckily for consumers, online banks are extremely competitive and need to remain so if they want to maintain their edge.

In the January 2020 Ally Financial earnings call, Ally CFO Jennifer LaClair acknowledged that Ally rates dropped from the peak online savings average rate of 2.20% down to a significantly lower 1.60%. Additionally, they expect CDs to be rolling off around 1.80%. Still, Ally Bank saw record customer growth in the 4th quarter of 2019, despite “increased competition.”

Certainly, more and more online banks or online-only offerings from big banks are popping up. In their earnings call, Discover said much of the same, adding that they have their “product set and the ability to compete,” which is backed up by their high-yield accounts.

Meanwhile, big banks like JP Morgan Chase and Wells Fargo remain uncompetitive. JP Morgan Chase didn’t boost their rates even when the Fed was raising rates, so there was little to do when rates began to go down and they remain low. Wells Fargo expects retail banking deposit costs to decline as their promotional rates expire.

As for what that all means for you, chances are that if you keep your deposits with an online bank, you’ll still get the most competitive rates regardless of a Fed pause or rate decrease. You might see an overall decrease in online savings rates (moreso in the competitive rate-chasing CD space), but they’ll still outperform most brick-and-mortar rates any day.

The bottom line

So what’s a saver to do? At the end of the day, you want the account that makes the most sense for you. Choose the one that lets you save and manage your money in the best ways possible. The most efficient way to consistently grow your money is to open an online savings account. These accounts will offer the best interest rates compared to brick-and-mortar banks, no matter where the federal funds rate goes this year — plus, they’re easily accessible in case of emergency. If you don’t need immediate access to your money and you have some extra cash lying around, open a high-yield CD as a more long-term savings alternative.

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