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Credit Cards: Find the Best Credit Card Offers & Deals – January 2020

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The best credit cards can help you earn $2-$5 or more for every $100 you spend – an easy way to make hundreds or even thousands a year. When done properly, low-rate credit cards are also the cheapest way to borrow. Some cards won’t charge you interest for almost two years! And credit cards are the best way to build, rebuild or maintain an excellent credit score, if you pay on time and as agreed, and don’t carry high balances.

But if you get it wrong, you can easily end up buried under a pile of expensive debt. This is a step-by-step guide that will help you find the best credit cards while avoiding expensive traps.

 

Top Credit Card for 2019

The Amex EveryDay® Credit Card from American Express ranks as our top credit card for 2019. This card offers a combination of benefits that are unmatched among other cards in the market, including 0% intro APR periods, rewards and great cardholder perks — all at a $0 annual fee. Cardholders can utilize the intro periods for both balance transfers and purchases by taking over a year to pay off debt without accruing interest. The card also comes with a $0 balance transfer fee. The transfers must be requested within 60 days of account opening, which saves you the typical 3% transfer fee most other cards charge.

Beyond the intro periods, there is a rewards program where cardholders can earn 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases. This rate is beneficial for people who spend $500 a month at U.S. supermarkets, since this spending allows you to maximize rewards at the higher rate.

The Membership Rewards® points you earn can be redeemed for a variety of options, and a great option for travelers is the ability to transfer points to 18 participating frequent flyer programs including Delta SkyMiles, British Airways, Avianca LifeMiles and Singapore Airlines KrisFlyer.

Often these transfers are on a 1:1 rate, with some programs requiring more or less points. Additional redemption options include booking for travel, gift cards, merchandise, pay with points at checkout and statement credit. This card also has a wide range of additional perks that vary from shopping and entertainment benefits to travel and purchase protections.

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  • Simple Welcome Offer
  • The 2-point bonus on grocery store spending is capped
  • You need 20 transactions each month to get the 20% bonus

Tip: Make any large purchases or balance transfers as soon as you can so you can benefit from the 0% intro period.

Read our full review of The Amex EveryDay® Credit Card from American Express here.

How to Choose and Use a Rewards Card

It is now easy to earn great rewards when you use a credit card for your spending. You should earn at least 2% cash back, and you can earn even more with a bit of work. At the 2% cash back rate, the money can add up quickly. If you spend $1,000 a month, you can earn $240 a year.

How to Choose

Best Cash Back Credit Cards

Cash back credit cards are a great way for you to earn money back from everyday purchases. There are two types of cash back credit cards — flat-rate and category. Flat-rate cards offer the same cash back rate for all purchases, while category cards offer higher rates for certain purchases, such as gas, groceries, travel and dining. Below, we break down the best cash back credit cards.

Best Flat-Rate

These are the top cards offering a flat cash back rate.

Citi® Double Cash Card – 18 month BT offer

1% When You Buy + 1% When You Pay

Citi® Double Cash Card – 18 month BT offer

The Citi® Double Cash Card – 18 month BT offer is the best overall cash back credit card. So long as you pay your statement balance in full and on time every month, you will earn 2% cash back. Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay. The bonus cash back can take up to two billing cycles to post.

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  • No caps on how much cash back you can earn.
  • Cash back earning formula is easy to understand
  • There is a range of interest rates. You won’t know yours until after you apply

Key Information

Credit Score Required : Excellent/Good

Purchase Interest Rate : 15.49% - 25.49% (Variable) APR

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer : 0% for 18 months on Balance Transfers

BT Fee : 3% of each balance transfer; $5 minimum.

Tip: Make sure you pay your statement balance in full and on time to maximize your cash back.

FULL REVIEW 

Fidelity® Rewards Visa Signature® Card

Unlimited 2% Cash Back on Every Purchase

Fidelity® Rewards Visa Signature® Card

The Fidelity® Rewards Visa Signature® Card offers Fidelity customers an unlimited 2% cash back on everyday purchases. The cash back you earn must be deposited into a Fidelity account, but you don’t need to have a Fidelity account to apply for the card. If you do not have a Fidelity account, they will open a Fidelity Cash Management Account to deposit your cash back. It works like a checking account with no minimum balance requirement and no monthly fees.

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  • Simple cash back earning formula
  • No caps on how much cash back you can earn
  • You need to have a Fidelity account in order to redeem your cash back

Key Information

Credit Score Required : Excellent Credit

Purchase Interest Rate :15.49% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer : None

BT Fee : Either 3% of the amount of each transfer or $5 minimum, whichever is greater.

Tip: You don’t need to keep your retirement or stock accounts with Fidelity to qualify for this card. Anyone can apply.

FULL REVIEW 

Best Category Bonuses

Here are the top cash back cards that pay much higher rates in certain bonus categories, which can be a great way to boost your returns.

Fort Knox Federal Credit Union Visa® Platinum Card

Unlimited 5% Cash Back on Gas

Fort Knox Federal Credit Union Visa® Platinum Card

If you spend a lot of money on gas, there is no better card than this. You can unlimited 5% cash back on gas and 1% cash back on all retail purchases. You must be a member of the credit union, but anyone can join. Pay $5 to join the American Consumer Council of Kentucky (you can do that here) and you will be eligible to join.

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  • No limit to the cash back you can earn, even in the bonus category
  • You have to be a member of the credit union to get the card

Key Information

Credit Score Required : Good

Purchase Interest Rate : 11.50% - 18.00% Variable

Annual Fee : $0

Sign-on Bonus : N/A

Intro Purchase APR : N/A

Intro Balance Transfer : N/A

BT Fee : $0

Tip: If you are not yet a member, you can use the non-member application process. Once approved, you can join with your $5 contribution to American Consumer Council.

Check out other gas credit cards.

Blue Cash Preferred® Card from American Express

6% Cash Back at U.S. Supermarkets (Up to $6,000 of Spend, then 1%)

Blue Cash Preferred® Card from American Express

The unparalleled 6% cash back rate at U.S. supermarkets and select U.S. streaming subscriptions makes this one of the best cards on the market for heavy grocery shoppers. Even with the $95 annual fee, most grocery shoppers will come out ahead. You will earn 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), and 3% cash back at U.S. gas stations and transit (e.g., taxis/rideshare, parking, tolls, trains, buses and more), as well as – NEW 6% Cash Back on select U.S. streaming subscriptions & 3% Cash Back on transit including taxis/rideshare, parking, tolls, trains, buses and more. You’ll earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

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  • Simple, easy to understand Welcome Offer
  • There is an Annual fee

Key Information

Credit Score Required : Excellent/Good

Purchase Interest Rate : 14.49%-25.49% Variable

Annual Fee : $95

Welcome Offer : $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

Intro Purchase APR : 0% for 12 months

Intro Balance Transfer : 0% for 12 months

BT Fee : Either $5 or 3% of the amount of each transfer, whichever is greater.

Tip: If you spend less than $200 a month on groceries, you may be better off with Citi® Double Cash Card – 18 month BT offer or Fidelity® Rewards Visa Signature® Card. But, if you spend more each year, this is a great option.

FULL REVIEW 

Check out other grocery credit cards.

Uber Visa Card

3% for Dining Out

Uber Visa Card

This card appears to have millennials’ interests at heart, offering a generous rewards rate on dining purchases, including UberEATS. The Uber Visa Card offers 5% back in Uber Cash on Uber, Uber Eats, and JUMP, 3% back in Uber Cash on dining, hotels, and airfare and 1% back in Uber Cash on all other purchases

As mentioned, dining purchases are defined as spending at restaurants, bars, on takeout or via the UberEATS service. Points can be redeemed for Uber credits, gift cards or cash back.

Another perk: There is a $0 annual fee with this card. And there’s a terrific sign-up bonus – Earn $100 in Uber Cash after spending $500 on purchases in the first 90 days.

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  • Good disclosure: they tell you what you need to know
  • Simple introductory bonus
  • Impossible to know your interest rate until you apply

Key Information

Purchase interest rate : 17.24% - 27.99% Variable

Annual fee :$0

Sign-on bonus : Earn $100 in Uber Cash after spending $500 on purchases in the first 90 days.

Intro purchase APR : None

Intro balance transfer : None

BT fee : Either $10 or 3% of the amount of each transfer, whichever is greater.

Tip: Use this card for all dining, hotel and airfare purchases to maximize your rewards at the higher rate.

FULL REVIEW 

Check out other dining cards.

Do you spend a lot of money in other categories? You can find the best cash back credit cards for every category here.

Best Travel Credit Cards

If you would like to earn free travel, there are a number of credit cards designed specifically to help you earn free flights quickly. Here are the best travel rewards credit cards.

Best Credit Cards for U.S. Travel

Bank of America® Travel Rewards Visa® credit card

Best No Annual Fee Travel Card – Miles Can Be Used Anywhere

Bank of America® Travel Rewards Visa® credit card

With this card, you Earn unlimited 1.5 points per $1 spent on all purchases. There are no restrictions and no blackout dates. Every 100 points can be redeemed for $1 worth of travel. The rewards get even better if you have “Preferred Rewards” at Bank of America®. If you’re a Preferred Rewards member, you could increase your points earned with a bonus of 25% – 75%.

There is a $0 annual fee and no foreign transaction fees. You can use your points for a wide range of travel options, including flights, hotels, vacation packages, cruises, rental cars and even pesky baggage fees.

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  • Simple introductory bonus
  • No limit to the points you can earn
  • There is a range of interest rates. You won’t know yours until after you apply

Key Information

Credit Score Required : Excellent/Good

Purchase Interest Rate : 16.49% - 24.49% Variable APR

Annual Fee : $0

Sign-on Bonus : 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases

Intro Purchase APR : 0% Introductory APR on purchases for 12 billing cycles

Intro Balance Transfer Offer : None

BT Fee : Either $10 or 3% of the amount of each transaction, whichever is greater.

Tip: The Preferred Rewards program offers excellent rewards. If you rollover your old 401(k) or IRA to Merrill Edge®, you can get up to a 75% credit card bonus and ATM fee reimbursement with a Bank of America® checking account.

Best Credit Cards for International Travel

These are the best credit cards for use when traveling outside of the country. None of these cards have foreign transaction fees. And some of them even have chip and pin, helping to increase acceptance.

Platinum Rewards MasterCard® from First Tech FCU

No Annual or Foreign Transaction Fee + Chip and Pin Functionality

Platinum Rewards MasterCard® from First Tech FCU

This card is a great companion for overseas travel with a $0 annual fee or foreign transaction fee. Even better, the card offers chip and pin functionality. Most major credit card issuers in America have rolled out chip and signature, which can be problematic overseas. If you try to use your card at a ticket machine or with a waiter’s portable payment device, you have a good chance of being rejected.

It’s easy to join the credit union —membership is free if you work for a sponsor technology company, work for the state of Oregon or live in Lane County, Oregon. Otherwise, you just need to join the Financial Fitness Association with a one-time fee of $8. There is a sub-par rewards program: 1 point for every $1 you spend.

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  • $0 annual fee or foreign transaction fees
  • You have to be a member of the credit union

Key Information

Credit Score Required : Good

Purchase Interest Rate : 11.99% to 18.00% Variable

Annual Fee : $0

Sign-on Bonus : Earn 10,000 Rewards Points when you spend $2,000 in your first two months

Intro Purchase APR : N/A

Intro Balance Transfer APR : Introductory 0.00% APR balance transfer for 12 months

BT Fee : No balance transfer fee

Tip: Use this card for foreign travel, not for rewards since you earn a very low rate.

Capital One® QuicksilverOne® Cash Rewards Credit Card

Best Foreign Travel for Fair Credit

Capital One® QuicksilverOne® Cash Rewards Credit Card

This card is designed for people with Average/Fair/Limited credit. If you have defaulted on a loan in the past five years (but not more than once), or if you have had limited credit history (at least one account for less than three years), you would be considered “average.” With this card, you can earn unlimited 1.5% Cash Back on every purchase, every day. There is also no foreign transaction fee, but be aware of the $39 annual fee.

You can use this card to build your credit score by keeping your utilization low (ideally below 20%) and make your payments on time and in full every month. Capital One® provides free access to your FICO® score so you can track your score and see when you are eligible for an upgrade to a no-fee card.

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  • No limit to the cash back you can earn
  • No confusing categories or limits
  • No annual fee or foreign transaction fee

Key Information

Credit Score Required : Average/Fair/Limited

Purchase Interest Rate : 26.99% (Variable)

Annual Fee : $39

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer Offer : None

BT Fee : None

Tip: Use this credit card to build your score and avoid expensive foreign transaction fees.

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on Capital One’s website

FULL REVIEW 
How to Use

In order to maximize your cash back, make sure you follow these suggestions:

  • Use your chosen cash back card for ALL of your spending. Your goal should be to replace cash, checks, automatic debits and debit cards completely. For example, you can automate bill payments (like your cell phone) to be debited from your credit card. This will make your life easier (only one payment to make each month) and it will make budgeting easier (you can set a target for spending and track it easily).
  • Set up automatic monthly payments for the statement balance, not the minimum due. If you set up automatic payments, you will ensure that your payment will be on time every month. And if you set up the automatic payment for the statement balance, you will ensure that you are never charged interest and only charge what you can afford to repay.
  • Avoid cash advances. If you use your credit card to take out cash, most companies will charge a cash advance fee that averages 3%. The interest rate on cash advances is usually above 20%. And there is no grace period, which means interest starts accruing right away.

Best Balance Transfer Credit Cards

With a balance transfer credit card, you can transfer debt from a high interest rate credit card to a 0% introductory promotional rate. You can find no fee balance transfers for up to 15 months. If you are willing to pay a fee, you can find a card that offers a 0% introductory rate on balance transfers for 18 or 21 months. The fee is usually worthwhile. If you want to do the calculation, you can use the calculator on our interactive tool.

Remember: You cannot transfer debt between two credit cards from the same bank.

Here are the best 0% balance transfer offers on the market today. All of these credit cards waive interest during the promotional period, which means there is no retroactive or deferred interest charge to worry about. However, if you fail to pay the balance off within the introductory period, interest will be assessed on the remaining balance.

Citi Simplicity® Card - No Late Fees Ever

0% intro APR on transfers for 21 months; 5% balance transfer fee

Citi Simplicity® Card - No Late Fees Ever

Citibank has a strong intro of 0% for 21 months on Balance Transfers. In addition, the Citi Simplicity® Card - No Late Fees Ever has some added perks. There are no late fees, no penalty rate and no annual fee. Although you should always try to pay on time, it is nice that this card will not punish you for the occasional mistake. In addition to the balance transfer offer, you pay no interest on purchases for 21 months.

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  • No late fee, no penalty APR and a $0 annual fee
  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Excellent/Good

Purchase Interest Rate : 16.24% - 26.24% (Variable)

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : 0% for 12 months on Purchases

Intro Balance Transfer Offer : 0% for 21 months on Balance Transfers

BT Fee : 5% of each balance transfer; $5 minimum

Tip: Make sure you transfer your balance within 4 months of opening the card, otherwise you lose the promotional offer.

FULL REVIEW 

Chase Slate®

No Fee – introductory 0% on transfers for 15 months

Chase Slate®

With the Chase Slate® credit card you can enjoy an introductory balance transfer offer of 0% Intro APR on Balance Transfers for 15 months and pay an Intro $0 on transfers made within 60 days of account opening. After that: Either $5 or 5%, whichever is greater. The intro $0 transfer fee is a great way to save money when completing your transfer. In addition to the balance transfer offer, you pay 0% Intro APR on Balance Transfers for 15 months — great for those who want to pay off a large purchase over time without accruing interest.

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  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • Interest rate is not known until you apply.

Key Information

Credit Score Required : Excellent/Good

Purchase Interest Rate : 16.74% - 25.49% Variable APR

Annual Fee : $0

Sign-on Bonus : No bonus

Intro Purchase APR : 0% Intro APR on Purchases for 15 months; then 16.74% - 25.49% Variable APR

Intro Balance Transfer Offer : 0% Intro APR on Balance Transfers for 15 months; then 16.74% - 25.49% Variable APR

 

BT Fee : Intro $0 on transfers made within 60 days of account opening. After that: Either $5 or 5%, whichever is greater.

Tip: Compete your transfer within 60 days from account opening to take advantage of the intro $0 transfer fee.

FULL REVIEW 

Paying off credit card debt sometimes requires more than one balance transfer credit card. If you want even more choices, check out our full guide to the best balance transfer cards, or use our balance transfer calculator to see which cards will save you most.

Best Luxury Card

The Platinum Card® from American Express

Airline perks, entertainment benefits, rewards and more

The Platinum Card® from American Express

The Platinum Card® from American Express is the best overall luxury card on the market, offering numerous benefits for cardholders. To name a few perks, you can receive: up to $200 in annual savings on Uber rides, American Express® Preferred Seating for select entertainment events, access to the American Express Global Lounge Collection with more than 1,000 airport lounges across 120 countries, a $200 airline fee credit per calendar year to cover baggage fees and more at one qualifying airline, and numerous other benefits.

The rewards program is great for frequent travelers — you get five Membership Rewards® points per dollar spent on flights booked directly with airlines or with American Express Travel and five Membership Rewards® points per dollar spent on eligible hotels booked on amextravel.com.

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  • Good disclosure: they tell you what you need to know
  • Simple introductory bonus
  • High annual fee

Key Information

Credit Score Required : Excellent/Good

Annual Fee : $550

Welcome Offer : 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.

Tip: To earn the most Membership Rewards points, be sure to purchase flights directly with airlines or with American Express Travel and book hotel stays directly on amextravel.com.

 

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Terms Apply |  Rates & Fees

Best Low Rate Cards

If you’re someone who carries a balance month-to-month, a low rate credit card can be a great way for you to save money. Whether you want to complete a balance transfer, finance a large purchase, of simply have a low rate card in your wallet, there is a card for you. See below for our top picks.

How to Choose and Use a Low Rate Credit Card

When done properly, credit cards can be the cheapest way to borrow. Just make sure you choose the right credit card for your situation and automate a plan to pay off the debt as quickly as possible.

How to Choose

Best 0% Purchase Credit Cards

With a 0% introductory purchase offer, you will not be charged interest for purchases made on the credit card during the promotional period. This is a great way to finance a purchase. Even better, none of these top cards charge retroactive interest if you don’t pay off the balance during the promotional period. (A lot of store credit cards offer 0%, but then hit you with a big penalty. But don’t worry – these recommendations don’t do that).

Citi® Diamond Preferred® Credit Card

0% intro on Purchases for 18 Months

Citi® Diamond Preferred® Credit Card

If you are looking to finance a purchase, Citi offers a long introductory APR on purchases: 0%* for 18 months on Purchases* after opening the credit card. This is a fantastic length of time for you to pay off your balance. Additionally, the Citi® Diamond Preferred® Credit Card has an intro 0%* for 18 months on Balance Transfers*. There is also a $0* annual fee and the ability to choose your payment due date from any available due date in the beginning, middle or end of the month. After the intro period ends, the APR is 15.74% to 25.74%* (Variable).

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  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • Interest rate is not known until you apply.

Key Information

Credit Score Required :Excellent/Good

Purchase Interest Rate : 15.74% to 25.74%* (Variable)

Annual Fee : $0*

Sign-on Bonus : None

Intro Purchase APR : 0%* for 18 months on Purchases*

Intro Balance Transfer Offer : 0%* for 18 months on Balance Transfers*

BT Fee : 5% of each balance transfer; $5 minimum.

Tip: The 18 months starts from when you open the credit card, not when you make the purchase. So make sure you time your application with your planned purchase.

FULL REVIEW 

TruWest Visa® Signature Card

0% Intro on Purchases for 18 Months – Credit Union Membership Required

TruWest Visa® Signature Card

TruWest is a credit union with restricted membership. Unfortunately, you need to live in certain regions of Texas or Arizona, or work for a few select employers to join. You can learn about membership eligibility here. If you are able to join, you will find a long 0% introductory APR for 18 months period on both purchases and balance transfers (9.40%-10.40% Variable APR, after). Even better, the credit card has reasonable credit union interest rates after the promotional period ends. There is no annual fee on the card.

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  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Excellent/Good

Regular Purchase & Balance Transfer APR : 9.40%-10.40% Variable

Annual Fee : $0

Sign-on Bonus : Earn $100 when you spend $100 in the first 90 days

Intro Purchase APR : 0% introductory APR for 18 months

Intro Balance Transfer Offer : 0% introductory APR for 18 months

BT Fee : 3% of the amount of each balance transfer.

Tip: Make sure you check your membership eligibility before you apply.

Best Low Interest Credit Cards

Having a credit card with a rate that stays low is a good idea. In case of an emergency, you will always have access to a low cost way to borrow. Here are some great low interest rate options:

Visa® Titanium Signature Rewards Card from Andrews Federal CU

As Low as 8.49% Variable APR from a Credit Union Anyone Can Join

Visa® Titanium Signature Rewards Card from Andrews Federal CU

The Visa® Titanium Signature Rewards Card from Andrews Federal CU has the lowest ongoing APR on our list at 8.49% Variable. If you qualify for the lowest rate and end up carrying a balance, you may be charged little interest (compared with higher APR cards). This card is also a good option if you have existing debt on a credit card because you can transfer it during the balance transfer N/A.

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  • There is a range of interest rates. You won’t know yours until you apply.
  • You have to join the credit union, but membership is open to all. Click here to check for eligibility.

Key Information

Credit Score Required :Excellent/Good

Purchase Interest Rate : 8.49% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer Offer : None

BT Fee :1.50% of the transfer amount or $50; whichever is greater

Tip: You need to have an excellent credit score in order to qualify for the lowest interest rate.

You might get a lower APR from a credit union or bank near you that doesn’t accept nationwide applications, and you can check our full list of low interest credit cards to see if there is one that works for you.

How to Use

If you need to borrow money, credit cards can be an incredibly low cost way of borrowing. Just make sure you pay attention to the following tips:

  • Get that balance transfer done quickly! If you are transferring a balance, make sure you complete the transfer as soon as possible. The introductory offer starts from when you open the card, not when the transfer is completed. And you can lose the offer with most issuers if you wait more than 60 days to complete the transfer.
  • Automate your monthly payments. If you pay late, you can be charged a costly late fee. And, if your payment is 60 days late, you can lose the introductory offer entirely.
  • You cannot transfer debt between two cards of the same bank. For example, if you open a Citi account you will only be able to transfer debt from credit cards other than Citi.

Best Cards to Help Build or Rebuild Your Credit Score

If you’re someone who is new to credit or has poor credit history, there are credit cards designed for you. These cards are a great way to begin your credit journey, or to improve your credit score. See below for our top picks.

How to Choose and Use a Credit Card to Build or Rebuild Your Score

If you are looking to build or rebuild your credit score, a credit card can be the perfect tool.

How to Choose

If you have no credit, or your credit score is below 620, you should consider a secured credit card.

If you have limited credit history (less than three years) or you have only defaulted once on a credit card or loan (not multiple times), you should consider a credit card for fair credit.

Best Secured Credit Cards if You Have Bad or No Credit

Secured credit cards are the best option if you need to build or rebuild your credit score. The best secured credit cards have no annual fees. If you’re going to use a secured credit card, it will help you grow your score if you pay your balance on time every month, keep your credit utilization low, and you apply for an unsecured credit card after 12-18 months of regular use.

Need to know more? These are ways that you can build your credit without paying interest and spending just $10 a month, and these are tips for improving your credit score.

Discover it® Secured

No Annual Fee Secured Card with Free FICO® Score; $200 Deposit Required

Discover it® Secured

This is our favorite secured credit card. There is a $0 annual fee and you will get free access to your credit score. In order to open the card, you will need to deposit at least $200, depending upon your creditworthiness. If you have previously filed bankruptcy, you still have the chance to be approved. With this secured credit card, you will earn 2% cash back at restaurants or gas stations (on up to $1,000 in combined purchases each quarter) and 1% cash back on all other purchases.

Our favorite part of this card is the automatic monthly reviews starting at 8 months to see if you can be transitioned to an unsecured card. If you qualify, you will be graduated (and get your deposit back).

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  • No annual fee
  • Free FICO® credit score

Key Information

Credit Score Required :

Purchase Interest Rate : 24.49% Variable APR

Annual Fee : $0

Sign-on Bonus : Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically (new cardmembers only).

Intro Purchase APR : None

Intro Balance Transfer Offer : 10.99% for 6 months

BT Fee : 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

Tip: This product reports to all three credit bureaus. It is a great tool to build your score. But, if you miss payments, you can do damage to your score.

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Rates & Fees

FULL REVIEW 

Rate Advantage Secured Visa Credit Card by Coastal FCU

No Fee Secured Card; Credit Union Membership and $100 Deposit Required

Rate Advantage Secured Visa Credit Card by Coastal FCU

This card has no annual fee, and you only need to deposit $100 in a Collateral Savings Account to get started. If you’re not a member of Coastal Credit Union, you can join the North Carolina Sustainable Energy Association for $18, which is deducted from your initial deposit, and become a member. So you’ll need $118 to get started. While the initial deposit is lower than the Discover it® Secured, you lose out on the rewards. This card takes more work to open, since it involves joining a credit union, but anyone can apply.

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  • A single interest rate that you know up front, before you apply
  • You have to join a credit union

Key Information

Credit Score Required : Anyone can apply

Purchase Interest Rate : as low as 17.50% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer Offer : None

BT Fee : $5 or 3%, whichever is greater

Tip: It is easy to join the credit union. Join an organization for $18 and you will become eligible.

We also have a list of several other no annual fee secured credit cards from both banks and credit unions anyone can join. Or browse our list of hundreds of secured cards to compare rates, fees, and deposit requirements.

Best Credit Cards if You Have Fair Credit

If you have fair or average credit, you might be able to qualify for an unsecured credit card. If you have more than one default in the last five years, you will find it difficult to get approved. In addition, if you are currently delinquent on any of your accounts it will also be hard to get approved, and you should try a secured card instead.

Here are some good cards for people with fair credit:

Capital One® QuicksilverOne® Cash Rewards Credit Card

1.5% Cash Back for People with Average Credit – with $39 Annual Fee

Capital One® QuicksilverOne® Cash Rewards Credit Card

Capital One® has created a credit card specifically for people with Average/Fair/Limited credit. If you have defaulted on a loan (but not more than one) in the last five years, or you have limited credit history (at least one account for less than three years), you would meet the definition of average credit. With this card, you will earn unlimited 1.5% Cash Back on every purchase, every day
with no limit on how much you can earn, and no changing categories.

Transparency Score 30
Transparency Score
  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • There is an annual fee

Key Information

Credit Score Required : Average/Fair/Limited

Purchase Interest Rate : 26.99% (Variable)

Annual Fee : $39

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer Offer : None

BT Fee : None

Tip: Watch your credit score closely. As you pay down your debt, your score will improve. Once your score is above 700, you can find a lot of choices for credit cards with better rewards or no annual fee.

APPLY NOW Secured

on Capital One’s website

FULL REVIEW 

You may also want to try and see if you are pre-qualified for a credit card before applying. Banks can perform a ‘soft’ pull on your credit file to give you a sense of whether you might qualify for one of their products. It leaves no mark on your credit score, and you can see a full list of ways to check if you’re pre-qualified here.

How to Use It

In order to build your credit score with one of these cards, you should follow our tips. By doing this, you should see real improvement in your score.

  • Don’t use more than 10% – 20% of your available credit. For example, if you have a $500 credit limit, never spend more than $50. That keeps your utilization low.
  • Use your card every single month. You should make sure you have a transaction every month, so that positive data is reported to the credit bureaus.
  • Automate and pay your statement balance in full and on time every month. Even just one late payment could crush your score. And by paying the balance in full, you will avoid any interest expense.
  • Watch your score closely. Keep an eye on your credit score. After 12 months, you should really start to see a big improvement. Once your score is above 650, you should try to get your secured card converted or apply for an unsecured credit card.

A Special Note: Beware Predatory Companies

Many lenders target consumers with FICO® credit scores of less than 650. If you have searched for “credit cards for bad credit,” you will probably find offers from companies like First Premier. In addition to high interest rates, these lenders often require application processing fees, maintenance fees and more. You could be given a $300 credit limit and see a big portion of it eaten up with fees.

Stay away from these specialist subprime lenders. Instead, consider the following:

  • If you need to borrow, consider a personal loan instead. You can find much better deals. Search for options here.
  • If you want to build your credit score, use a secured credit card instead.

Other Benefits of Using a Credit Card

Not only can you use a credit card to earn rewards, borrow at low rates or build your credit score for free – but there are many other benefits available. Here are some of the benefits that you can find:

Available on Most Credit Cards

  • $0 Liability on Fraudulent Activity: Credit cards are the best way to protect yourself from fraud. So long as you report the fraud to your credit card company, you will not be liable for any losses on any major credit card.
  • Car Rental Collision Insurance: If you waive collision coverage when renting a car, your credit card may provide secondary coverage of $50K or more.

Available on Some Credit Cards

  • Retail Purchase Protection: Protects you from loss, theft, fire or accidental damage for a limited period of time after your purchase has been made. Not all cards protect you from loss, so look it up in the Purchase Protection Coverage Description Document.
  • Price Protection: If you buy something in stores and you see an advertised price, you will receive the difference between the two prices.
  • Extended Warranties: Duplicates both manufacturers and store warranties for a limited length of time and for limited dollar values (varies by card).
  • Travel Accident Coverage: If you are injured during travel, and you purchased the tickets via credit card, your company fully insures you.
  • Lost Luggage Coverage: You can receive compensation for lost, stolen or damaged luggage if you purchased flight or travel tickets using your credit card.
  • Trip Interruption Cancellation Coverage: If travel delays keep you from completing a trip, and you purchased the tickets on your credit card, the full value of the tickets will be refunded
  • Concierge Services: Certain cards offer free access to local concierge services that can help you make dinner reservations, purchase event tickets, and locate items while you are abroad.

Should You Get a Credit Card?

Credit cards are like knives. Used well, they are great (even essential) tools. But if you start playing with them, you can get into trouble quickly.

There are two big risks associated with swiping plastic:

  • You spend more than you should, because it is just too easy
  • You pay higher interest rates than you should, adding years to your debt repayment

Before using a credit card, you need to answer the following question honestly:

Do I trust myself with plastic? Can I exhibit the necessary self-control to spend only what I can afford to pay in full every month?

If you have the discipline and self-control, keep reading and we will help you find the best credit card for your needs. But, if you don’t, it is possible to live a long and fulfilling life without plastic cards in your pocket.

Which type of card is best for you?

Why do you want a credit card? The answer to that question will determine which type of card is best for you.

Just remember this critical rule when selecting a credit card:

You should have a Rewards Card for your spending. You should have a Low Rate Card for your borrowing. But you should avoid mixing the two. The best Rewards Cards tend to have higher interest rates. And the best Low Rate Cards often have no (or bad) rewards.

The information related to The Amex EveryDay® Credit Card from American Express, Citi® Double Cash Card – 18 month BT offer, Bank of America® Travel Rewards Visa® credit card, Citi Simplicity® Card - No Late Fees Ever, Chase Slate® and Citi® Diamond Preferred® Credit Card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

FAQ

The minimum payment calculation differs by credit card issuer. The most common is 1% of the principal balance plus any interest or fees that accrued in the month (or a set amount, like $25, if the minimum due is very low).

If you use your credit card at an ATM to take out cash, a few things will happen. First, you would be charged a cash advance fee, which is usually about 3%. Second, interest would start accruing immediately, because most issuers do not have a cash advance grace period. And the cash advance interest rate is usually much higher than the purchase rate. Don’t be surprised to see interest rates as high as 24% (or higher).

While there is no over-limit fee, having a credit card with a balance that is greater than the credit limit can have a very negative impact on your credit score. In general, you want to keep your credit card balance below 20% (ideally below 10%) of your credit limit.

We do not recommend closing credit cards, because it can reduce your credit score. Closing unused credit cards does two things. First, it reduces your total available credit. That increases your utilization, which is bad for your score. Second, the age of your open credit cards helps your score. If you close old accounts, you can hurt your score over time.

The law requires that any payment amount beyond the minimum due must be applied to the highest APR balance first. The minimum due is at the discretion of the credit card companies. However, it is usually applied to the balance with the lowest APR first. Your goal is to eliminate high APR debt – so don’t be afraid to make much bigger payments on credit cards. The extra amount will always go to the most expensive debt first.

Each application for new credit can take 5-10 points off your credit score. If you are planning on applying for a mortgage or auto loan in the near future, you have to be very careful. Even just 5 points can be painful. However, if you are not going to be applying for a mortgage or auto loan in the next 6-12 months, you should not worry too much about your credit score. Instead, focus on getting out of debt quickly.

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

Best of, Earning Interest

The Best High-Yield Online Savings Accounts in January 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 January 29, 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.

LEARN MORE 

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 Annual Percentage Yield (APY) as of 12/11/2019. 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.

LEARN MORE 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.

LEARN MORE 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.

LEARN MORE 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.

LEARN MORE 

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 and eligible for the 1% cash back offer). 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.

LEARN MORE Secured

on Ally Bank’s secure website

Member FDIC

7. High Rate: HSBC Direct – 2.00% APY, $1 minimum to open, no minimum balance to earn APY

HSBC Direct Savings from HSBC DirectHSBC Direct is the online division of financial giant, HSBC Bank. Based on the amount of assets HSBC Bank has acquired to date, it is the 14th largest bank in the U.S. While HSBC Direct may sound like a new player to the online banking game, this division was actually around prior to the 2008 financial crisis and offered extremely competitive rates. After the financial crisis, the bank renamed the online division to HSBC Advance and slowly started to decrease its online savings account rates, much like other online banks were doing around that time.

Fortunately, HSBC has decided to reenter the online banking space. Since the initial launch in July of 2018, the bank has consistently increased its HSBC Direct Savings Account rate from 1.70% APY to 2.00% APY. You only need $1 to open the account and the APY will be applied to any balance below $2 million. You may fund the account via ACH transfer and the account can be opened online. You will have to deposit new money to the account, which means that you cannot be a member of the HSBC Group in the United States. The account doesn’t have a monthly maintenance fee and all deposits are FDIC insured.

LEARN MORE Secured

on HSBC Direct’s secure website

Member FDIC

8. High Rate: Vio Bank – 1.95% 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 1.95% 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.

LEARN MORE Secured

on Vio Bank’s secure website

Member FDIC

9. 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.

LEARN MORE Secured

on Customers Bank’s secure website

Member FDIC

10. 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. CBIC Bank USA does have a mobile banking app, but make sure that you download the app for the U.S., not Canada.

LEARN MORE Secured

on CIBC USA’s secure website

Member FDIC

11. 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.

LEARN MORE Secured

on Citizens Access’s secure website

Member FDIC

12. 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 – especially if you take advantage of the promotional 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.

LEARN MORE Secured

on Betterment’s secure website

FDIC Insured

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.

LEARN MORE 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.

LEARN MORE Secured

on Elements Financial’s secure website

NCUA Insured

15. High Rate: BrioDirect – 2.05% 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 2.05% 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.

LEARN MORE 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.

LEARN MORE 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.

LEARN MORE Secured

on Prime Alliance Bank’s secure website

Member FDIC

18. High Rate: Quontic Bank – 1.95% APY, $500 minimum to open

High Yield Savings Account from Quontic Bank Quontic Bank, the Adaptive Digital Bank, was founded in 2009 and is headquartered in New York City. With a small physical presence on its own, Quontic Bank offers customers access to over 90,000 ATMs in the country. You can also access your accounts online and on mobile, which includes check deposit.
Its High Yield Savings account earns 1.95% APY on all balances, but you’ll need at least $500 to open the account. You may also want to keep a balance of at least $10,000 to avoid the $10 monthly fee. While E-Statements won’t cost you a thing, paper statements cost $5 per month. Uniquely, this savings account comes with a Debit MasterCard.

LEARN MORE Secured

on Quontic Bank’s secure website

Member FDIC

19. High Rate: Salem Five Direct – 1.91% APY, $100 to open – Be aware of transfer limitations

eOne Savings from Salem Five DirectSalem Five Direct is the online bank division of Salem Five Cents Savings Bank, a community bank based in Salem, Massachusetts. Salem has been around for more than 150 years and all deposits are insured by the FDIC up to the legal limit.

You only need $100 to open this account, and there are no monthly maintenance fees. However, they do have a few limitations to be aware of. First, according to their online banking agreement, Salem Five Direct limits the dollar amount of their External Transfers to $5,000 per transaction, $5,000 in aggregate per day, and $20,000 in aggregate per month. So, if you decide to have more than one account with them, like their money market account, they’ll look at the aggregate amount of External Transfers conducted from both the savings account and money market account. Second, account holders are limited to six withdrawals per statement cycle due to Federal Regulations. If you exceed the six withdrawal limit, they’ll charge you $10 per additional transaction.

Finally, the web and mobile experiences are not great. But, if you give them a call (which we have done), you will get friendly service from a community bank. While this bank does offer one of the best rates for an online savings account, we want you to be aware of their limitations.

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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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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 federal funds rate rises, you might see that reflected in the deposit interest rates at most banks.

As the Fed hiked rates over recent years, online banks were far quicker to raise their rates in turn than traditional banks. Just look at the average APY offered by big banks — 0.26% vs. 1.52% on average for online banks as of December 2018.

We’ve enjoyed successive Fed rate hikes for the last few years, but the trend is waning. As we continue into 2019, the odds of a rate hike this year have reached zero. The Fed did nothing at its January meeting, and didn’t raise rates at the March meeting either.

The bleak federal funds rate outlook doesn’t necessarily mean that banks will start slashing their own deposit account rates. Online banks are extremely competitive and need to remain so if they want to maintain their edge.

In the January Goldman Sachs earnings call, Goldman Sachs Executive Vice President and CFO Stephen M. Scherr noted it has no plans to walk back on rates for its online savings account Marcus, aiming to keep its rank among the top savings rates in the country.

We heard much of the same from fellow online bank Ally Bank, whose CFO Jennifer LaClair said during its January earnings call that it’s still important to take the “competitive landscape” into account.

Still, other earnings calls indicated that banks are in as much of a holding pattern as consumers are. When asked about the bank’s deposit rate outlook in the event of a Fed rate slowdown, Bank of America CFO Paul Donofrio noted, “At some point, the broader retail rates will rise. We just don’t know when. So, I think we’re just going to have to wait and see.”

As for what that all means to 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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The Best Online Banks in 2020

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The costs of operating brick-and-mortar bank branches are growing, which may explain why traditional financial institutions have ratcheted up fees and kept their rates stubbornly low. Meanwhile, online bank and credit union products have consistently offered lower fees and higher rates than those offered by conventional banks. Since online banks incur lower overhead costs, they can pass the savings on to consumers in the form of higher yields and lower fees.

Despite the decline in the federal funds rate in 2019 and the corresponding reductions in deposit yields at financial institutions nationwide, average savings account rates at online banks and credit unions are still well above those offered by their brick-and-mortar counterparts. As of January 2020, the yields paid on online savings deposits were averaging 1.75% APY, while savings accounts at brick-and-mortar banks were averaging a mere 0.27% APY.

Regardless of the rate environment, historical trends show that online banks outperform brick-and-mortar rates. It’s clear that online banks are the best option for consumers who want higher returns on their deposits. But for some consumers, it can still be daunting to make the switch to online banking. In the second edition of our Best Online Banks roundup, we hope to make the choice a bit easier for those looking to get an online account.

Best online banks for CDs

How we picked the top five: We chose banks with the highest 1-year CD rates that have consistently ranked in MagnifyMoney’s Best CD Rates page for the last two years.

#1 Goldman Sachs Bank USA — Winner

Goldman Sachs Bank USA, which operates the brand Marcus by Goldman Sachs®, is the consumer banking arm of financial industry giant Goldman Sachs. Goldman Sachs Bank USA has offered consistently high CD rates, and has been boosting their yields in a falling-rate climate — even as other competitors keep dialing back their own rates.

Ken Tumin, founder of LendingTree-owned DepositAccounts.com, lauds Goldman Sachs Bank USA for its rates and its product line. “The addition of No-Penalty CDs with competitive rates has helped make Goldman Sachs Bank USA one of the best online banks for CDs,” he said. No-Penalty CDs provide you with the flexibility to withdraw your full balance at any time, starting seven days after you fund the account.

Goldman Sachs Bank USA’s high-yield CDs each require a $500 minimum deposit. You have 30 days to fully fund your account after you open it, although your interest rate locks in whenever you reach the $500 minimum deposit level.

If you hit the $500 minimum deposit level within 10 days of opening your CD account, the bank’s 10-Day CD Rate Guarantee kicks in, ensuring you get the highest published interest rate and APY the bank offers for that term. This helps you avoid the possibility of a rate reduction after you open the account but before you fully fund it.

#2 Ally Bank

12 Month High Yield CD from Ally BankLast year’s winner, Ally Bank, offers competitive rates across three different CD account types: High Yield CDs, Raise Your Rate CDs and No Penalty CDs. Ally Bank’s No Penalty CDs are of particular interest in today’s rate climate, as they allow you to avoid paying the price for closing out your certificate in exchange for one with a higher rate.

Ally Bank CDs rank highly for their rates as well as their lack of a minimum deposit requirement, which lets savers with low balances benefit from Ally Bank’s products. Whether you have a low balance or a high balance, you can snag great rates on Ally Bank’s 18-month and 3-year High Yield CDs, as well as its No Penalty CD.

#3 Capital One

12 Month 360 CD from Capital OneCapital One 360 is the online banking brand of Capital One. Capital One 360 offers a convenient online banking experience with very competitive interest rates on its full range of deposit products.

Currently, the highest Capital One 360 CD rates are concentrated on its mid-term accounts; on the whole, its rates are just short of those from Goldman Sachs Bank USA and Ally Bank. Capital One also features no minimum deposit requirement to open its CDs.

#4 Synchrony Bank

12 Month CD from Synchrony BankOffering both standard CDs and IRA CDs, Synchrony Bank has competitive rates across its entire line of CDs. However, Synchrony requires at least $2,000 to open an account, so this may place the accounts slightly out of reach for certain customers looking to save.

#5 Barclays

12 Month Online CD from BarclaysWith its roots in London 300 years ago, Barclays has made a big name for itself in the U.S. with its online bank, which offers consistently competitive rates. Over the past two years, it has managed to ride the wave of rate changes in both directions, with its rates not falling far behind its predecessor on this list.

Barclays doesn’t offer as wide a variety of CD types and terms as some other competitors, matching most closely with Capital One 360’s lineup. Still, Barclays promises no hidden minimums or fees, making for a more straightforward savings experience.

Best online banks for savings accounts

How we picked the top five: We chose banks that have maintained the highest savings account rates and consistently ranked in MagnifyMoney’s Best Savings Account page for the last two years.

#1 Goldman Sachs Bank USA — Winner

Goldman Sachs Bank USA isn’t just the best choice for CDs — it is also the best online bank for its savings account. The Goldman Sachs Bank USA Online Savings Account has consistently held a spot on MagnifyMoney’s Best Savings Account list for two years, and has sustained leading rates amid falling industry yields over the past year.

Tumin calls out one user-friendly fee in particular as a reason for its rise. “Goldman Sachs Bank USA is one of the very few banks that does not charge a fee for sending a wire transfer,” he said. Free wire transfers allow you to send money quickly, safely, and inexpensively.

Marcus by Goldman Sachs doesn’t require a minimum deposit to open a new Online Savings Account, (although you’ll have to make some sort of deposit within 60 days of opening to avoid account closure), nor does the account require a minimum balance to start earning interest. You also won’t face transaction fees on your account, allowing your money to really grow.

#2 Barclays

Online Savings Account from BarclaysBarclays Bank currently offers a savings rate that’s competitive with Goldman Sachs Bank USA. However, the Barclays Online Savings Account hasn’t quite held onto a consistent ranking on our Best Savings Account list over the years. Still, you won’t have to worry about meeting a minimum deposit amount or grappling with a monthly fee to benefit from this great rate, though.

#3 Synchrony Bank

High Yield Savings from Synchrony BankSynchrony Bank’s High Yield Savings account certainly delivers on its name with a competitive interest rate on all balances, earning even more than Goldman and Barclays as of this writing. Plus, there’s no monthly fee.

As is the case with all savings accounts, you’re limited to six outgoing transactions per statement cycle. However, unlike most institutions, Synchrony doesn’t charge an extra fee on every additional transaction, though they could close your account if you keep it up.

#4 American Express National Bank

High Yield Savings Account from American Express National BankNew to our list this year, American Express National Bank has often hovered among these competitors for a while, finally breaking through for 2020. It’s a simple account, with no minimum deposit or balance requirement, nor a monthly fee to worry about.

There’s no mobile banking app connected to American Express National Bank, which is the equally simple online bank offering from credit card giant American Express. You can access your American Express National Bank’s banking accounts online or over the phone, with some funding options available by mail, too.

#5 Ally Bank

Online Savings Account from Ally BankAlly Bank has remained a constant presence on our best-of lists, especially for its competitive, user-friendly Online Savings Account. You won’t need to worry about having a high balance to open or maintain this account, since Ally doesn’t require either. It also doesn’t charge a monthly service fee.

In addition to its high rates, Ally Bank offers top of the line online transfer capabilities: it’s a feature that provides a more seamless banking experience, but is often overlooked by other banks. With its quick turnaround and zero to low fees, Ally’s transfer policies make it much easier to access your money, especially in case of emergency.

Best online banks for money market accounts

How we chose the top five: The winner of best bank for money market accounts is the institution that had the highest money account rate and consistently held a spot on MagnifyMoney’s Best Money Market page for two years.

#1 Premier Members Credit Union — Winner

Ending Goldman Bank USA’s winning streak, Premier Members Credit Union offers a special competitive money market account rate that has consistently ranked on MagnifyMoney’s Best Money Market page for two years.

“Premier Members Credit Union’s Money Market has a unique reversed tiered system that offers a big rate advantage for those with small balances,” said Tumin. As of this writing, this Money Market Account offers its top 3.00% APY on balances up to $2,000, while its top tier of $250,000 and over earns 0.25% to 0.30% APY. You only need $5 to open a new Money Market Account. Another plus is the account’s inclusion of paper checks for further convenient access.

Premier Members Credit Union began in 2015 as a merger between Boulder Valley Credit Union and Premier Members Federal Credit Union. Membership is open to residents and employees within select Colorado communities, employees and family members of select partner companies and relatives of current members. You can also become eligible by joining the Impact on Education charity.

#2 Virtual Bank

eMoneyMarket from Virtual BankVirtual Bank’s competitive rate applies when you open a new eMoney Market account with at least $100 in new money. The interest rate applies to all balances of at least $0.01, and interest is paid monthly. There’s no minimum balance requirement, but keeping at least $100 in the account allows you to waive the $5 monthly fee.

Virtual Bank is an online division of IBERIABANK, which was founded in New Iberia, La., in 1887. Virtual Bank is available online and on mobile, through your browser and mobile app offerings.

#3 Sallie Mae Bank

Money Market from Sallie Mae BankLast year’s winner, Sallie Mae Bank still rocks the top three this year, offering a rate well above the competition on its Money Market Account. While the name Sallie Mae is typically associated with student loans, Sallie Mae Bank offers some great banking products designed to help you grow your savings efficiently.

Interestingly, Sallie Mae Bank’s money market rate is higher than its own savings account, whereas other online banks tend to focus more on their savings accounts. This account doesn’t require a minimum balance, nor does it charge a monthly fee. Plus, it includes check-writing capabilities, a feature that experts like Tumin consider the hallmark of a true money market account.

#4 Self-Help Credit Union

Money Market from Self-Help Credit UnionFounded in 1980, Self-Help Credit Union is based in Durham, N.C., with 29 branches total throughout North Carolina, South Carolina and Florida. In addition, there are other institutions under the Self-Help brand, including Self-Help Federal Credit Union, Center for Responsible Lending and Self-Help Ventures Fund.

The Self-Help Credit Union Money Market Account’s high-yield interest rate requires a $500 minimum deposit and maintained balance. Keeping at least that much in the account will also help you avoid the $5 monthly fee.

You can join Self-Help Credit Union if you live, work, worship or attend school in select eligible counties, meet family or employer affiliation criteria or are/become a member of the Center for Community Self-Help (requires a $5 fee).

#5 Ally Bank

Money Market Account from Ally BankWith more of a focus on its other savings accounts, Ally Bank might have allowed its money market account to dip slightly. Still, the account offers a solid rate consistently enough to make this list. In addition, it does well in terms of service: There’s no minimum opening deposit amount or minimum balance amount needed to maintain the account. Plus, we give it credit for its check-writing abilities, which not many banks offer.

Best online banks for checking accounts

How we chose the top five: Our best online banks for checking needed to check off a few boxes: charge no monthly maintenance fees, offer out-of-network ATM fee refunds and consistently rank in MagnifyMoney’s Best Checking Account page for the last two years.

#1 Aspiration — Winner

If you’re looking for both a great checking account and a way to give back to your community, Aspiration is the bank for you, as it donates 10% of its revenue to charities.

The Aspiration Spend & Save Account is a cash management account that earns at a pretty high interest rate. Note that while the Save side of the account earns the high APY, the Spend side also earns cashback. You can earn up to 5% cashback at businesses part of Aspiration’s Conscience Coalition, which focus on “building a better world;” 0.5% at merchants with a high AIM (Aspiration Impact Measurement) score, which measures for sustainability; and 0.1% on all other purchases. It doesn’t require a minimum deposit to open or a minimum balance to maintain the account.

You get to save money when using ATMs, as Aspiration allows you free access to every ATM in the world, plus five ATM surcharge reimbursements each month. This user-friendly ATM policy is Tumin’s favorite of Aspiration’s features.

As for fees, Aspiration implements a Pay What Is Fair system. It works just like it sounds — essentially, you get to choose how much you want to pay for the bank’s products, even if it’s $0. Account holders set their own fee on the account dashboard, which then gets debited monthly from their Aspiration account or another linked account. Aspiration hopes and trusts its customers will agree to operate on a two-way basis of trust and fairness. For extra services like wire transfers, the bank promises to charge only the cost of completing that service.

Aspiration is not a bank; rather, it is a an SEC-registered broker-dealer, so the FDIC insurance is provided by partner banks. Aspiration keeps the cash you deposit in a Spend & Save account with multiple partner banks, which provide FDIC insurance of up to $2 million.

#2 Simple

Checking Account + Protected Goals Account*Another fintech cash management account takes the number two spot: Simple’s online checking account. This account includes a Simple Visa® Debit card, paper checks and built-in savings and budgeting features. There’s no monthly fee and no minimum balance requirement.

The interest-earning aspect at Simple comes from its savings feature, the Protected Goals account. The money you keep in Goals earns 1.90% APY if you have $10,000 or more, or 1.75% if you have less than that. Just keeping money in the checking account will accrue 0.01% APY.

Like Aspiration, Simple is not a bank, so it sweeps your deposits into accounts at BBVA USA, which provides FDIC insurance up to the legal limit. Founded in 2009, Simple is based in Portland and is accessible online, on mobile and over the phone.

#3 Consumers Credit Union

Free Rewards Checking (High)Consumers Credit Union’s free Rewards Checking account doesn’t quite earn interest outright; instead, you’re required to meet certain qualifications first to determine your rate on balances up to $10,000. Meeting the requirements also guarantees unlimited reimbursement for any and all ATM fees.

The starting 3.09% rate requires you to enroll in eDocuments, make at least 12 debit card purchases totaling at least $100 each month and receive direct deposits or ACH credit totaling at least $500 per month. Meet all those requirements, plus spend at least $500 in CCU Visa Credit Card purchases each month, to earn the 4.09% APY, or spend at least $1000 in CCU Visa Credit Card purchases each month to snag the top rate of 5.09% APY. If your balance surpasses $10,000, you will earn significantly lower rates.

Rewards Checking doesn’t charge a monthly fee and includes unlimited check-writing abilities. Consumers Credit Union provides members with access to over 30,000 ATMs and over 5,000 shared branches. Founded in 1930 and headquartered in Lake County, Ill., Consumers Credit Union opens membership up to anyone. All you have to do to join is become a member of the Consumers Cooperative Association with one-time $5 Membership fee.

#4 Ally Bank

Interest Checking AccountAlly Bank’s Interest Checking account has no monthly fees and refunds up to $10 in third-party ATM fees each month. The account also earns interest, where your balance determines your rate. Balances of $15,000 and over can earn the account’s higher rate, although neither rate stands out too much.

Still, standard checking account rates are generally low everywhere. Ally’s Interest Checking account is better used for its low fees, like their free overdraft transfers, to really get the most out of this kind of account.

#5 Charles Schwab Bank

High Yield Investor CheckingCharles Schwab Bank, a division of financial services giant Charles Schwab, was launched in 2003. It currently offers a savings account and a checking account, the Schwab Bank High Yield Investor Checking account, which earns at a decent rate. Plus, it comes with no monthly fees, minimum deposit requirements or minimum balance requirements. The account includes a Platinum Debit Card, which you can use at any ATM in the world. If you face any foreign ATM fees, Charles Schwab Bank provides unlimited ATM fee rebates.

When you open a High Yield Investor Checking account, you’ll be opening a linked Schwab One brokerage account at the same time, as well. These are two separate accounts, although accessible through the same Charles Schwab login.

Best online banks for checking accounts

How we chose the top five: The winners are the online banks that ranked best among the four categories above: checking, savings, money markets and CDs.

#1 Ally Bank

Ally Bank remains the Top Online Bank of 2020, having appeared in all of the categories above.
From its 1919 beginnings as a financing division of GM, Ally Bank is now one of the biggest names in the online banking industry. Its rates remain consistently competitive and its fees are consistently low to nonexistent. Further, Ally provides customers with user-friendly features and perks for a better overall banking experience.

“Ally offers easy online account management, which includes a solid ACH bank-to-bank transfer capability for all of their accounts” Tumin noted. He also praises Ally for “keeping competitive” on its savings account and maintaining ease for customers.

#2 Goldman Sachs Bank USA

Goldman Sachs Bank USA offers some of the highest rates in the industry, topping the lists twice for best CDs and best savings accounts. At the time, these are the only kinds of accounts Goldman Sachs Bank USA offers. Still, there is some variety with its high-yield CDs and no-penalty CDs, which allows one to make a withdrawal without facing a heavy penalty. Its CDs require a minimum deposit of $500, while the online savings account can be opened with any amount. They’re all excellent options thanks to their high yields and lack of monthly service fees.

#3 Barclays

Barclays is one of our top online banks thanks to its CDs and savings account. These are the only kinds of accounts available through Barclays U.S. bank division. Neither of these accounts require a minimum deposit to open, which allows you to start saving no matter which amount you can set aside, and you won’t face monthly service fees for owning these accounts.

#4 Synchrony Bank

Synchrony Bank appears twice in our roundup categories as one of the best banks for CDs and one of the best banks for savings accounts. These placements land the bank in the second spot for top online banks. Not only does this mean that Synchrony offers some of the highest rates, but it also signals that the bank has been consistent in its rates offerings.

In addition to those accounts, Synchrony also offers a money market account, IRA CDs and an IRA money market account; there is no checking account at this time. If you elect to get an ATM card from Synchrony, you can use any ATM displaying the Plus or Accel logos without being charged by Synchrony. You can also receive ATM rebates up to $5 per statement cycle.

#5 Capital One 360

Capital One 360 appears once on this list for its consistently competitive CD rates, where it placed third. Its CDs continue to perform competitively, especially on its 1-year and longer-term accounts. Capital One is also a solid CD choice for its lack of a minimum requirement. You are allowed to add up to 10 beneficiaries to your Capital One 360 CDs as well.

Best overall online bank

How we chose the best overall bank: The best overall online bank is the institution that averaged the top ranking in the four categories above: checking, savings, money markets and CDs.

Winner: Ally Bank

Ally Bank keeps its crown as the Best Overall Bank in 2020, offering a top-five account in all four categories above. “Ally Bank offers the best combination of savings account, checking account and CDs,” Tumin said of Ally’s win. “All of these accounts have a long history of competitive rates and features.”

Ally Bank’s vast spread of products makes it easy for you to grow your savings in a number of ways. Its CDs provide a variety of high-rate savings options. Its online savings account consistently offers a top rate, despite declining rates elsewhere. Its money market account and interest checking account offer much by way of accessibility and low fees.

Ally Bank started as GMAC in 1919, the financing division of GM and evolved over time to keep up with consumers’ needs and demands for a better bank. In 2009, GMAC became the online Ally Bank, focused on transparency with its customers and greater value on its accounts. Since then, Ally has grown its offerings to include not only auto financing, but also high-yield deposit accounts, credit cards, investment accounts and more. Plus, its existence as an online bank means greater returns for you and more convenient 24/7 access.

Best new online bank

How we chose the winner: To find the best new online bank, we found the bank that was launched within the last 12 months and has held the highest APY since it’s launch.

Winner: BrioDirect

BrioDirect is a competitive new bank to keep your eye on. “BrioDirect has maintained one of the highest rates for a low-minimum online savings accounts since it was launched in the summer of 2019,” Tumin said.

The high-yield savings account highlighted requires a $25 minimum deposit and minimum balance to earn interest. There’s no monthly fee.

BrioDirect also offers a wide variety of high-rate CDs from 30-day to 60-month terms. As of writing, its short- and mid-term CDs fare better in today’s rate climate. These high-rate CDs require at least $500 to open.

BrioDirect is an online sub-brand of Sterling National Bank, so deposits are considered under one banking roof for FDIC insurance purposes.

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Should I switch to an online bank account?

Switching to an online bank could be the right move if you’re really trying to boost your savings and you’re tired of the low yields a traditional bank provides. Online banks typically help you avoid high account fees and balance minimums, too. Certainly, a big difference is the lack of physical branches. Still, online banks offer user-friendly online and mobile interfaces for increased convenience.

Even if you’re not convinced it’s time to ditch your big bank in favor of one of our picks, you don’t have to take an all-or-nothing approach to online banking. Often the biggest deterrents when people consider moving their banking online are that they have no physical branch location to deposit cash and no bank representative to talk to in person.

But “it doesn’t need to be all or nothing,” Tumin said. “If you have a local bank, you can do most of your banking with an online bank and have a checking account with your favorite local bank.”

With this strategy, you can get a feel of how to transfer money online and then start transferring more money to the savings account, he added. You could also simply keep your accounts linked for the easier cash access. To really take advantage of an online bank’s high rates, you could keep the majority of your funds in a high-yield account to boost your savings more efficiently.

If you find that you’re comfortable with online banking, then you can either make the switch completely or split your money between your online and local bank depending on your preferences.

Choosing the right bank account

Choosing the right bank accounts depends entirely on you and what’s important to you. If having a physical branch location nearby is part of your ideal banking experience, then an online bank won’t be the right place to open all your accounts. Perhaps you don’t need full service branches, just easy ATM access. Maybe you’re all for the high-yield accounts, typically found at online banks. Determining these preferences and necessities will help you narrow your search.

Choosing a savings account: When looking for a savings account, it’s tempting to just plop your money into the easiest option at your local bank. Unfortunately, this approach to saving won’t typically get you the highest returns. Even if you just want to set money aside, why not set it aside in an account that will earn you more money with no extra work on your part? Look for a savings account that offers a high-earning interest rate. Even better, find one that doesn’t charge a monthly fee. That way, you’ll be growing your money, not losing it to unnecessary fees.

Choosing a CD account: Finding a certificate of deposit with a high interest rate is even more crucial. After you make your initial deposit, you won’t have access to that money until the CD term ends. You’ll want to make that deposit a worthwhile investment, especially if you open a CD that’s a year long or more. Before you rush to open a new CD, always check the account’s minimum deposit requirement. Banks will typically require a minimum deposit of anywhere from $500 to $10,000 to open a certificate. Many online banks don’t require a minimum opening deposit. Still, the larger your initial deposit, the more interest you’ll earn, especially since you cannot make additional deposits throughout the CD term.

Choosing a money market account: A money market account often works like a hybrid of a savings account and a checking account. For starters, you’ll want to find a money market account with a high yield. Some banks offer higher interest rates on their money market accounts than on their savings accounts, but that’s not always the case. Plus, you may need to fork over large amounts to open the account or earn at the best rate. To get the best money market account, find one that provides an ATM card. That way, you can access your account more easily than a regular savings account. (You’re still limited to six transactions per statement cycle.)

Choosing a checking account: Finally, choosing the right checking account may be the most important financial decision, since you’ll constantly be moving money in and out of your account. The best checking accounts are those that don’t charge a monthly fee. You shouldn’t have to pay a bank to keep your money safe and accessible. Even better, find a checking account that earns interest. That way, you can grow your money in all accounts, not just your savings.

Bank fees and fine print to watch out for

Traditional bank accounts are rife with fees. From monthly service fees to overdraft fees, paying bank fees like these can really cut into the savings you’re trying so hard to build. To avoid falling into this trap, it helps to start by finding bank accounts that don’t charge monthly fees. This is especially common at online banks.

You may have to search through the fine print and account disclosures for other potential bank fees. It’s important to look for fees charged for out-of-network ATM usage, excessive transactions, account inactivity and incoming and outgoing transfers, since you could easily run into them if you’re not careful. Some online banks may even charge you for paper statements.

Another big fee that you’ll want to avoid is an overdraft fee. You won’t want to overdraft your account in the first place, but always keep an eye on your balance so it doesn’t happen by accident. You can typically find these fees in an account’s fee schedule. Some banks may require you to call or visit a branch to learn more about their fees.

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