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The Best Credit Union CD Rates – February 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

The top credit union CD rates
Source: iStock

Certificates of deposit (CDs) are a great way to safely store your savings at a financial institution, as they offer a guaranteed rate of return, and CD rates tend to be higher than those on traditional savings accounts. Maybe you’ve even heard that credit union CD rates offer higher returns—but is that really the case?

On average, yes. As of September 2018, the average one-year credit union CD had a 1.10% annual percentage yield (APY), compared to the 0.87% APY average among one-year bank CDs.

Using data from DepositAccounts.com, another LendingTree company, we identified the top one-year credit union CD rates, as of February 6, 2019. We then eliminated any credit union with a health rating lower than a B and identified the top three offerings in three categories: restricted, no cost, and best banking app. If there was a tie by APY, we went with the product with the lower minimum deposit. Here are the best one-year credit union CD rates.

Best credit union CD rates with restricted memberships or membership fees

Each of these credit unions have restricted membership criteria, but don’t let that scare you away. If you don’t meet their membership criteria, it’s possible to make a small donation to their charity of choice in order to become eligible for membership. Furthermore, these credit union CD rates offer some of the highest-returning share certificates out of any category.

PenFed Credit Union – 1-Year Money Market Certificate, 2.60% APY, min. deposit $1,000

12 Month Money Market Certificate from PenFed Credit Union PenFed has an APY of 2.60%. You’ll need a minimum of $1,000 in order to open this CD, which is less than some of the CDs with higher rates. Interest is compounded daily and posts to accounts monthly. However, be aware of the steep early withdrawal penalty. If you withdraw funds before the year is up, you may forfeit all interest accrued up to that point.

Eligibility for this credit union is mainly based on military status, governmental employment status, affiliation with certain associations and organizations or relation to eligible members. However, if you don’t qualify through those criteria, getting a membership to this credit union is not difficult if you’re willing to pay a one-time fee of $17 to either Voices for America’s Troops or the National Military Family Association. PenFed is one of our favorite credit unions because it’s extremely focused on supporting our troops, veterans, and military personnel.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

USAlliance Financial – 12 Month CD, 2.80% APY, min. deposit $500

USALLIANCE Financial
Membership to USAlliance Financial is open to anyone who lives, works or worships in certain counties of Massachusetts, the city of West Haven, Conn., and a few districts in New York. However, if you don’t qualify by location, you can qualify by giving USAlliance authorization to make you a member of various organizations, including the American Consumer Council, if you aren’t already a member of these organizations. Keep in mind that these organizations may request fees.

Once you’re a member of USAlliance Financial, you can open a 12-month CD with a great rate of 2.80% by depositing a minimum of $500. Their early withdrawal penalty equals 180 days’ worth of interest earned on the amount you withdraw.

LEARN MORE Secured

on USALLIANCE Financial’s secure website

NCUA Insured

Partner Colorado Credit Union – 12 Month CD Special, 2.80% APY, min. deposit $500

60 Month CD Special from Partner Colorado Credit UnionMembership to Partner Colorado Credit Union is open to anyone willing to donate $5 to the Partner Colorado Foundation. The credit union will help you make the donation when you’re ready to open an account. You may want to first find out if you’re eligible through the other fields of membership prior to opening an account.

Once you’re a member of Partner Colorado Credit Union, you can open the 12-month CD Special with a minimum of $500. Their early withdrawal penalty is 90 days interest.

LEARN MORE Secured

on Partner Colorado Credit Union’s secure website

NCUA Insured

Connexus Credit Union –12 Month Certificate, 2.70% APY, min. deposit $5,000

12 Month Certificate from Connexus Credit Union With a $5 donation to the Connexus Association, anyone can join Connexus Credit Union. The Connexus Association assists educational institutions by providing scholarships and financial information. Once you become a member of the credit union, you’ll be able to open their 12 month CD with a $5,000 deposit.

If you’re able to deposit $5,000 into Connexus’s 12 month CD, you’ll earn $140 by the end of the term. However, if you withdraw funds early, you’ll be penalized with 90 days’ worth of interest.

LEARN MORE Secured

on Connexus Credit Union’s secure website

NCUA Insured

AgFed Credit Union –12 Month Share Certificate, 2.75% APY, min. deposit $1,000

12 Month Share Certificate from AgFed Credit UnionWith a minimum deposit of $1,000, you could earn an APY of 2.75% on a 12 month CD. An early withdrawal penalty may be imposed if you withdraw funds prior to the CD’s maturity date. The penalty is equal to the lesser of all of the dividends for 180 days on the withdrawn amount or all of the dividends on the amount withdrawn since the open or renewal date.

Anyone can join this credit union by making a one time, non-refundable payment of $20 to either the Friends of the National Arboretum organization or the Friends of the National Zoo organization. However, check to see if you qualify through their other fields of membership as you won’t have to pay a $20 fee.

LEARN MORE Secured

on AgFed Credit Union’s secure website

NCUA Insured

Best CD rates for credit unions with no cost to join

The thing about credit unions is that they’re not usually just open to anyone. You usually need to meet some membership criteria in order to get in and get access to all of their really nice products. These credit unions, however, will let you in for free regardless of your personal details. (Note: Only two credit unions met our criteria for this list.)

Unify Financial Credit Union –1-Year Share Certificate, 1.75% APY, min. deposit $1,000

UNIFY Financial Credit Union
Unify FCU offers the highest interest rates on CDs (which it calls share certificates) of any credit union with no cost to join. The interest rate on their 12-month CD, for example, is 1.75%, compared to the national average of 1.33% in February. You’ll need to deposit a minimum of $1,000 to open this CD. If you withdraw your money early, however, you’ll face a penalty of 90 days’ worth of interest.

LEARN MORE Secured

on UNIFY Financial Credit Union’s secure website

NCUA Insured

NASA Federal Credit Union –1-Year Share Certificate, 1.25% APY, min. deposit $1,000

NASA Federal Credit Union
If the rigid inflexibility of CDs makes you leery, NASA FCU might be your best bet. They have a lot of flexible certificates, such as add-on certificates that let you start with as little as $250, and bump-rate certificates that let you opt for a one-time interest rate increase if rates go up. You can even take out a loan from your certificate should you need the cash before it’s matured. You can join NASA FCU with a complimentary membership to the National Space Society.

If you do need to make an early withdrawal, you will face a penalty of 180 days’ worth of interest.

LEARN MORE Secured

on NASA Federal Credit Union’s secure website

NCUA Insured

Best CD rates for credit unions with the best mobile apps

By their very nature, CDs aren’t something that require constant attention, poking, and prodding. It’s a set-it-and-forget-it kind of a deal, so you won’t need any spiffy banking apps to use CDs.

But, if you’d like to switch all of your banking to the same institution that holds your CDs, it might be a wise idea to consider one of these credit unions if you’re a digital junkie. Most credit unions lag behind their bank compatriots in terms of mobile banking apps, but these credit unions offer top-notch mobile apps, according to MagnifyMoney’s 2017 mobile banking app analysis.

Redstone Federal Credit Union – 12 Month MemberPlus Regular Share Certificate, 2.09% APY, min. deposit $1,000

Redstone Federal Credit Union
You can’t just make a simple donation to join to Redstone Federal Credit Union if you fail to meet their membership criteria. You need to be a government employee or contractor, a member of the military, reserve, or National Guard, or affiliated with a number of organizations listed on their website among other options.

However, if you do qualify for membership, you could earn an APY of 2.09% with a minimum deposit of $1,000. Redstone FCU has compounding and non-compounding certificates, which allow you to have the option to withdraw interest earned or not throughout the term of the certificate.

LEARN MORE Secured

on Redstone Federal Credit Union’s secure website

NCUA Insured

Eastman Credit Union –1-Year Investment Certificate, 2.00% APY, min. deposit $1,000

Eastman Credit Union
Eastman Credit Union also has pretty restrictive membership requirements. You’ll have to be an employee (or a family member of an employee) of one of their select employers, or live in certain parts of Tennessee, Texas, or Virginia.

Eastman CU is another one of the rare credit unions that allow you to withdraw your dividends penalty-free before the maturity date, although again, doing so will lower your total returns. Currently, you can earn an interest rate of 2.00% on a 12-month CD with a minimum deposit of $1,000. If you withdraw your money before the CD matures, you’ll owe a penalty fee of anywhere between seven days’ worth of dividend earnings or all of your dividend earnings.

LEARN MORE Secured

on Eastman Credit Union’s secure website

NCUA Insured

Wright-Patt Credit Union –1-Year Certificate, 1.97% APY, min. deposit $500

Wright-Patt Credit Union
Unlike many credit unions, you can’t just make a simple donation to join Wright-Patt CU if you fail to meet their membership criteria. You need to live in certain areas of Ohio, be associated with Wright-Patterson Air Force Base, or be an employee of their select employer group, among other options.

You can earn $9.85 on a 12-month CD with just a relatively small $500 deposit. However, if you’re able to deposit $100,000 or more, you’ll earn an APY of 2.07%, which will return $2,070 in interest. Early withdrawal penalties vary depending on the original term of your CD, however they’ll be anywhere between 5-12 months’ worth of dividends.

LEARN MORE Secured

on Wright-Patt Credit Union’s secure website

NCUA Insured

Delta Community Credit Union – 1-Year Certificate, 1.60% APY, min. deposit $1,000

Delta Community Credit Union
There are many ways to join Delta Community CU, such as living in certain parts of Georgia, being a member of one of their select employers, or being a member of one of their partner organizations. Interestingly, citizens of many countries like Argentina, France, and Peru are also eligible to join.

Delta Community CU used to be the lowest-earning credit union on our list, but recently increased the APY on this product from 1.10% to 1.60%. The early withdrawal penalty is 90 days’ worth of interest on a 12-month CD.

LEARN MORE Secured

on Delta Community Credit Union’s secure website

NCUA Insured

 

3 questions to consider before opening a credit union CD

Banks are more likely to call their products certificates of deposit, while credit unions often refer to them as share certificates. Aside from the name, the biggest difference between the two is that credit unions have higher average annual percentage yields (APYs) than traditional banks, as of September 2018. That’s good news: It means more money back in your pocket when the CD matures (i.e., reaches the end of its term and is available for withdrawal).

There really is no difference in safety between depositing money in a CD with a credit union versus a bank, as long as they participate in either the National Credit Union Administration (NCUA) for credit unions, or the Federal Deposit Insurance Corporation (FDIC) for banks.

According to Neal Frankle, a Los Angeles-based Certified Financial Planner with Wealth Pilgrim, deposits of up to $250,000 per financial institution are “backed by the full faith and credit of United States Government, so it’s pretty solid.”

For the most part, choosing a CD at a bank or a credit union boils down to your preference as a consumer: Do you want to be a bank customer or a member of a credit union? Here’s a primer on the differences.

The biggest advantage of credit union CDs over bank CDs is that you can likely earn more interest. But with both products, the longer the CD term, the more interest you will earn. And with a CD laddering strategy, you can have the best of both worlds: frequent access to your money, yet you can still keep it locked away in high-interest, long-term CDs.

Beyond that, the disadvantages of opening a credit union CD are the same as if you’re opening a CD with a bank. You can’t access that money without paying an early withdrawal penalty until the CD matures. While CDs do offer some of the highest rates for any financial product you’re likely to come across at a bank or credit union, they still don’t really earn great interest. If you’re investing for the long-term (like retirement savings), your money is better invested in the riskier (but higher-earning) stock or bond market.

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.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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The Top 6 Month CD Rates for February 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

The top 6 month CD rates
Source: iStock

Short-term certificate of deposit (CD) accounts offer investors a safe opportunity to squirrel away money for a future expense. If you’re looking for a brief solution for storing your cash and want to earn more interest than a typical savings account will offer, a 6 month CD can make a lot of sense. (It’s also a good place to start if you’re building a CD ladder.)

Using information from DepositAccounts.com, another LendingTree company and a database of offerings at more than 17,100 banks and credit unions, we found the five banks and five credit unions with the top 6 month CD rates. If there was a tie, we chose the institution with the smaller minimum-deposit requirement. We pulled these rates on February 11, 2019, and we excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.84%, according to the DepositAccounts.com database. These options outperform that average by a long shot. (You may also want to view our picks for the overall best CD rates.)

Banks with the best 6 month CD rates

Virtual Bank

VirtualBank

6 month CD APY: 2.50%
Bank information: VirtualBank is a subsidiary of Louisiana-based IBERIABANK Corp., offering 24/7 digital or telephone access on eCDs, open to applicants anywhere in the U.S.
Where to open CD account: Online (paperless account options)
Minimum balance to open: $10,000
Maintenance fees: $0
Early withdrawal penalties: 30 days’ interest

LEARN MORE Secured

on Virtual Bank’s secure website

Member FDIC

6 Month Popular Direct CD from Popular Direct

Popular Direct

6 month CD APY: 2.49%
Bank information: Popular Direct is an online bank that services customers in the U.S., Puerto Rico, and throughout the Caribbean. They currently have some of the most competitive rates in the market – not only in their CD products, but with their savings account as well.
Where to open CD account: Online
Minimum balance to open: $10,000
Maintenance fees: $0
Early withdrawal penalties: 120 days of simple interest

LEARN MORE Secured

on Popular Direct’s secure website

Member FDIC

First Internet Bank

First Internet Bank

6 month CD APY: 2.45%
Bank information: A subsidiary of First Internet Bancorp, this online bank founded in 1999 has no branch locations, but offers service online in all 50 states.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE Secured

on First Internet Bank’s secure website

Member FDIC

6 Month CD from Live Oak Bank

Live Oak Bank

6-month CD APY: 2.45%
Bank information: Live Oak Bank is located in Wilmington, NC, but serves customers nationwide through online banking. While their initial focus was to help small businesses acquire funding, they now help all individuals through personal banking.
Where to open CD account: Online
Minimum balance to open: $2,500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE Secured

on Live Oak Bank’s secure website

Member FDIC

6 Month Online Time Deposit from My eBanc

My eBanc

6 month CD APY: 2.45%
Bank information: BAC Florida Bank of Coral Gables, Fla., is part of The Pellas Group. The CD program, open to all foreign and domestic customers, is designated as a “BAC Internet Time Deposit.” Overseas CDs based on the euro are not insured by the FDIC.
Where to open CD account: Online
Minimum balance to open: $5,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE 

Member FDIC

Credit unions with the best 6 month CD rates

18 Month IRA Certificate Special - New Money from Interior Federal Credit Union

Interior Federal Credit Union

6 month CD APY: 2.78%
Credit union information: Interior Federal Credit Union was established in 1935 with the intention to promote financial wellness. During the Great Depression, employees of the Department of the Interior (the federal department that is responsible for the conservation of federal lands and natural resources) couldn’t get credit at their local banks, so they formed this credit union. Today, the credit union serves U.S. residents nationwide.
Membership details: Anyone can join by the credit union by joining the New Mexico Wildlife Federation, which you can do when you’re filling out your application. Check to see, however, if you’re able to join through employment, organization affiliation, or through an immediate family member.
Where to open CD account: You can open an account online or at one of their branches.
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 30 days’worth of interest.

on Interior Federal Credit Union’s secure website
1 Year Junior Jumbo Certificate from Advancial

Advancial

6 month CD APY: 2.62%
Credit union information: Advancial was established in 1937. Since then, they’ve been providing creative ways to serve their members.
Membership details: Anyone can join this credit union if they join Connex, which has a $5 membership fee. However, if you choose to join the way, you’ll have to join using a paper application. You can just reach out to the credit union to provide you with the paperwork via email. Before you do that, see if you qualify another way.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: Determined by the credit union.

on Advancial’s secure website
PenFed Credit Union

PenFed Credit Union

6 month CD APY: 2.40%
Credit union information: PenFed, established in 1935, today serves more than 1.6 million members at branch locations in all 50 states and select overseas facilities.
Membership details: Open to current or retired members of the U.S. military, federal employees, affinity partners, members of qualifying organizations, or by donating to Voices for America’s Troops or the National Military Family Association.
Where to open CD account: You can open an account online or at one of their branches.
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

36 Month Share Certificate from Communitywide Federal Credit Union

CommunityWide Federal Credit Union

6 month CD APY: 2.30%
Credit union information: Founded as a credit union to provide quality financial services to individuals in South Bend, IN, CommunityWide Federal  Credit Union has grown to offer their services to various communities within Indiana as well as the digital world.
Membership details: Anyone can become a member by donating to a list of organizations including the Y.M.C.A. If you’re a member of the Michiana Goodwill Boosters or Marine Corps. League of St. Joseph Valley, you’re also eligible to become a member.
Where to open CD account: Online
Minimum balance to open: $2,000
Maintenance fees: $0
Early withdrawal penalties: Equal to the amount withdrawn multiplied by the remaining days left in the term.

LEARN MORE Secured

on Communitywide Federal Credit Union’s secure website

NCUA Insured

6 Month Certificate from State Department Federal Credit Union

State Department Federal Credit Union

6 month CD APY: 2.06%
Credit union information: State Department Federal Credit Union was established in 1935 by eight people employed by the United States Department of State. Since then, they have expanded to serve a multitude of members worldwide.
Membership details: Anyone can join by the credit union by joining the American Consumer Council, which you can do when you’re filling out your application. Check to see, however, if you’re able to join through employment, organization affiliation, or through an immediate family member.
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 30 days of dividends on the withdrawn amount or the amount of dividends you’ve earned since the account opened –the credit union will impose the lesser of the two.

LEARN MORE Secured

on State Department Federal Credit Union’s secure website

NCUA Insured

Pros and cons of using 6 month CDs

Pros:

  • The CD rates offered by banks and credit unions are generally higher than those on savings accounts.
  • The rates are fixed and guaranteed for the length of their term.
  • The discipline of keeping the funds in the CD means the money will be available upon maturity. (Note: Most banks offer a seven-day grace period to reinvest or withdraw the investment, after which the funds will roll over into a new CD. However, you are not guaranteed the same rate.)

Cons:

  • Six-month CD rates are lower than those offered on longer CD investment terms.
  • To tap into the CD funds — even for emergencies — consumers must accept a loss through penalties, which can include a percentage of the funds, a percentage of the earned interest, or a combination of both. A typical penalty on a short-term CD is between 30 and 90 days’ worth of interest earnings.
  • If you’re not confident you can do without access to the funds for six months, you may be better off putting your money in a traditional savings account, which is likely to earn less interest than a CD.
  • Since CD rollovers may reset at a different percentage rate, consumers must speak with the bank before the grace period ends to ensure they are getting the best deal.

Using a 6 month CD for laddering

A CD ladder comprises small-amount CDs with varying terms and respective interest rates that contribute to a long-term investment strategy. After the 6 month CD matures, investors can withdraw the funds for a predetermined expense. Or, they can reinvest the money into a longer-term CD with a better rate. By staggering the maturity dates on short-term CDs, consumers have access to their cash on a regular, predictable basis.

Where can you open a CD account?

Consumers can open 6 month CD accounts (or longer) from banks and credit unions. Bank and credit union CD rates are based on Federal Reserve rates, and there may be strategic times to pursue these short-term instruments following a rate increase.

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.

Gabby Hyman
Gabby Hyman |

Gabby Hyman is a writer at MagnifyMoney. You can email Gabby here

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Best of

Best Online Banks in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

As the cost of operating brick-and-mortar locations grows, traditional banks have ratcheted up fees in turn and kept their rates stubbornly low. Online bank offerings, meanwhile, have only gotten more enticing. Since they incur lower overhead costs, they can pass those savings on to consumers in the form of higher yields and lower fees.

Average savings account rates among online banks nearly doubled from 0.79% in June 2017 to 1.52% in December 2018. With the Fed predicted to raise rates several more times in 2019, rates will likely continue their ascent. Brick-and-mortar bank rates, on the other hand, have seen little growth. Over the last year, the average rate inched from 0.16% to just 0.26% as of this writing. Credit unions haven’t fared much better, with average rates rising from 0.18% to 0.23% over the same time period.

Needless to say, in today’s rising rate environment, online banks are often the best option for consumers looking for higher returns on their deposits. And yet, it can be daunting to make the switch from one bank to another. In our inaugural Best Online Banks roundup, we hope to make the choice a bit easier for those looking to make the switch.

Best bank for CDs

How we picked the top five: We chose the bank with the highest 1-year CD rate and consistently held a spot on MagnifyMoney’s Best CD Rates page for two years.

#1 Ally Bank– Winner

Institution
APY
Minimum Balance Amount to Earn APY
High Yield 12-Month CD from Ally Bank
Ally Bank

2.75%

$0

LEARN MORE Secured

on Ally Bank’s secure website

Ally Bank is the best bank for CDs thanks to its consistently high rates, especially on its 1-year account. Ken Tumin of DepositAccounts.com (both MagnifyMoney and DepositAccounts.com are owned by LendingTree) agreed, pointing out the bank’s No Penalty CD offering, which offers a competitive rate without penalizing account holders for early withdrawals. The bank’s competitive rates extend across its three different CD account types — the High Yield CD, Raise Your Rate CD and No Penalty CD. Each CD’s rate applies to all balances, except on the 18-month and 3-year High Yield CDs, where higher balances snag higher rates. This spread of products makes it easy for you to grow your savings in a number of ways.

Even better, Ally Bank doesn’t require a minimum deposit to open any of its CDs. This opens up the opportunity to grow savings at Ally’s high rates to a wider variety of customers who may not be able to reach the high minimums at other banks. Ally Bank CDs also don’t charge monthly fees, allowing your money to grow undisturbed by unnecessary charges.

#2 Synchrony Bank

12 Month CD from Synchrony BankWith both standard and IRA CDs available, Synchrony Bank offers competitive rates across all its CDs. Its 1-year CD rate matches Ally’s (at time of writing), but Synchrony also requires at least $2,000 to open an account; this may place the accounts slightly out of reach for certain customers looking to save with CDs.

LEARN MORE Secured

on Synchrony Bank’s secure website

Member FDIC

#3 Marcus by Goldman Sachs®

High-yield 12 Month CD from Goldman Sachs Bank USAPreviously known as Goldman Sachs Bank USA, Marcus by Goldman Sachs is the consumer bank arm of investing giant Goldman Sachs. Through Marcus, you can find a High Yield Savings account in addition to its High Yield CDs and No-Penalty CDs. At time of writing, its 1-year APY is only slightly smaller than Synchrony’s, though it has not been the most consistent over the years. You’ll also need at least $500 to open a Marcus CD.

#4 Barclays

12 Month Online CD from BarclaysWith its London beginnings 300 years ago, investment bank Barclays has now made a big name for itself in the online banking space with its competitively high rates. Its 1-year CD rate matches the #3 entry on this top five list, ranking lower due to a lack of rate consistency over the past two years.

Barclays does fall short slightly in its total offerings, with only an Online Savings account and nine Online CD terms at the moment, while other banks often include a checking account or money market account.

LEARN MORE Secured

on Barclays’s secure website

Member FDIC

#5 Capital One

12 Month 360 CD from Capital OneCapital One 360 accounts are the standalone online bank offerings from Capital One. Capital One 360 accounts offer a convenient online banking experience with high-yield interest rates on its accounts. Its 1-year CD rate is on par with the top-ranked bank (its rates are just short of Ally’s and Synchrony’s) — still, you won’t need a minimum amount to deposit to open any Capital One 360 account, nor will you face monthly fees.

Best bank for savings accounts

How we chose the top five: We chose banks that had the highest savings account rate and consistently held a spot on MagnifyMoney’s Best Savings Account page for two years.

#1 Ally Bank – Winner

Institution
APY
Minimum Balance Amount to Earn APY
Online Savings Account from Ally Bank
Ally Bank

2.20%

$0

LEARN MORE Secured

on Ally Bank’s secure website

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We'll receive a referral fee if you click here. This does not impact our rankings or recommendations

Ally Bank doesn’t come out top for CDs alone — it is also the best online bank for savings accounts. Its Online Savings Account has one of the highest industry rates and has consistently held a spot on MagnifyMoney’s Best Savings Account list for two years. Plus, you won’t need to worry about having a high balance to open or maintain this account, since Ally doesn’t require either.

In addition to its high rates, Ally Bank “excels in its online transfer capabilities, a feature that’s often overlooked by other banks,” according to Tumin. With its quick turnaround and zero to low fees, Ally’s transfer policies makes it much easier to access your money, especially in case of emergency.

#2 Barclays

Online Savings Account from BarclaysAlthough its savings account rate is consistently on par, and sometimes higher than, Ally Bank’s, the Barclays Online Savings Account hasn’t quite held onto a consistent ranking on our Best Savings Account list over the years. You still won’t have to worry about meeting a minimum deposit amount or grappling with a monthly fee to benefit from this great rate, though.

LEARN MORE Secured

on Barclays’s secure website

Member FDIC

#3 Marcus by Goldman Sachs

Goldman Sachs Bank USA
Offering a similar (and sometimes higher) savings rate on its Online Savings Account as Ally’s, Marcus by Goldman Sachs does require a minimum deposit (a mere $1) to start earning interest. You don’t need a minimum amount to open the account, though. You also won’t face transaction fees on your account, allowing your money to really grow in this competitive account.

#4 Synchrony Bank

Synchrony Bank
Synchrony Bank’s High Yield Savings account certainly delivers on its name with a competitive interest rate on all balances — plus, there’s no monthly fee. As is the case with all savings accounts, you’re limited to six outgoing transactions per statement cycle. Luckily, Synchrony won’t charge an extra fee on every additional transaction, but they could close your account if you keep it up.

LEARN MORE Secured

on Synchrony Bank’s secure website

Member FDIC

#5 Salem Five Direct

eOne Savings from Salem Five DirectThe only bank not in our top 5 banks for CDs, Salem Five Direct shows up big with its competitive eOne Savings rate. (If you’re lucky enough to have an account balance over $1 million, however, you’ll earn at a much lower rate.) You’ll need at least $100 to open the account; after that, you won’t face any other minimum requirements nor a monthly fee. The online bank has over 160 years under its belt through its parent bank, Salem Five.

LEARN MORE Secured

on Salem Five Direct’s secure website

Member FDIC

Best Bank for Money Market Accounts

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

#1 Sallie Mae Bank– winner

Institution
APY
Minimum Balance Amount to Earn APY
Money Market from Sallie Mae Bank
Sallie Mae Bank

2.20%

$0

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on Sallie Mae Bank’s secure website

Ending Ally’s winning streak, Sallie Mae Bank’s Money Market Account offers a rate well above the competition. The bank has had the highest money account rate and consistently held a spot on MagnifyMoney’s Best Money Market page for two years. While Sallie Mae is typically under associated with student loans, Sallie Mae Bank (under SLM Corporation) offers some great banking products designed to help you grow your savings efficiently.

Tumin noted that Sallie Mae’s “excellent money market rate is interestingly higher than the savings account,” whereas other online banks have chosen to focus more on their savings accounts. This Money Market Account doesn’t require a minimum balance, nor does it charge a monthly fee. Plus, it includes check-writing capabilities, a feature that Tumin considers crucial to a successful and true money market account.

#2 Capital One

360 Money Market from Capital OneThe Capital One 360 Money Market account earns interest according to two balance tiers. Your balances below $10,000 will earn at a lower, less competitive rate. The account’s much higher interest rate on balances of $10,000 and over, however, earn the account the second spot here. The account doesn’t include check-writing abilities nor an ATM card, so you’ll have to make some electronic transfers to other ATM-accessible accounts if you need cash.

#3 Self-Help Credit Union

Money Market from Self-Help Credit UnionThe first credit union in this roundup, Self-Help Credit Union is actually a group of member-owned, mission-driven credit unions, a nonprofit loan fund, and the Center for Responsible Learning. Growing from beginnings in North Carolina in 1980, the credit union now reaches over 145,000 members throughout the nation, with a solid branch presence in North Carolina, South Carolina, Florida, California and the Chicago metro area.

The Self-Help Credit Union Money Market Account’s high-yield interest rate comes at a bit of a cost. For starters, you’re required to deposit at least $500 to open the count. You’ll also need to maintain that balance to earn interest and waive the account’s monthly fee.

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on Self-Help Credit Union’s secure website

NCUA Insured

#4 Ally Bank

Money Market Account from Ally BankAlly Bank is so highly focused on its savings account that it might have allowed its money market account to dip slightly, as mentioned above. Still, the account, which earns interest based on balance tiers, offers solid rates consistently enough to make this list. You’ll earn at the higher rate if you maintain a balance of at least $25,000; any balances below that will earn at a rate only slightly lower. In addition, it does well in terms of service — there’s no minimum amount you need to open or maintain the account.

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on Ally Bank’s secure website

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#5 ableBanking

Money Market Savings from ableBankingableBanking, a division of Northeast Bank founded in 1872, is an online bank and community that offers a number of high-yield deposit accounts. Its Personal Money Market account stands out with its competitive rate that reaches past Ally’s current highest money market rate. You will need at least $250 to open the ableBanking Personal Money Market account.

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on ableBanking’s secure website

Member FDIC

Best Bank for Checking Accounts

How we chose the top five: Our best bank for checking accounts had to tick a few boxes — it had to charge no monthly maintenance fees, offer an out-of-network ATM fee refund, and consistently hold a spot on MagnifyMoney’s Best Checking Account page for two years.

#1 Ally Bank – winner

Institution
APY
Minimum Balance Amount to Earn APY
Interest Checking Account from Ally Bank
Ally Bank

0.10%

$0

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on Ally Bank’s secure website

Earning the title as the best bank for checking accounts, Ally Bank’s Interest Checking account has no monthly fees, refunds up to $10 in third party ATM fees each month, and consistently held a spot on MagnifyMoney’s Best Checking Account page for two years. 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, Tumin noted that standard checking account rates are generally low everywhere. “Use Ally’s low fees, like their free overdraft transfers, to your advantage,” he says, to really get the most out of this kind of account.

#2 Charles Schwab Bank

High Yield Investor CheckingA division of the bigger brokerage firm, Charles Schwab Bank was launched in 2003. It currently offers only two accounts: a savings account and a checking account. This Schwab Bank High Yield Investor Checking® account, launched in 2007, earns at a decent rate. Plus, it comes with no monthly fee or a minimum deposit or balance requirement. 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.

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on Charles Schwab Bank’s secure website

Member FDIC

#3 Aspiration

The Summit AccountIf you’re looking for both a great checking account and a way to give back to your community, Aspiration is the bank for you — it donates an industry-leading 10% of its revenue to charities.

Interestingly, Aspiration partly makes its revenue through Pay What is Fair Fees. Essentially, you get to choose how much you want to pay for the bank’s products. Account holders set their own fee on the account dashboard, which then gets debited monthly from their Aspiration account or another linked account. And while this opens up the door to paying $0, the bank hopes you won’t, since it works to operate on the basis of trust and fairness with its customers. You can change the amount you pay at any time. For extra services like wire transfers, the bank promises to charge only the cost of completing that service.

This particular account, the Aspiration Summit Account, doesn’t charge a monthly service fee at all and earns at a pretty high interest rate for a checking account. You can also benefit from the bank’s free access to every ATM in the world. The account doesn’t require a minimum deposit to open or balance to maintain.

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on Aspiration’s secure website

Member FDIC

#4 First Technology Federal Credit Union

Dividend Rewards CheckingThe Dividend Rewards Checking account from First Technology Federal Credit Union offers some great perks to customers who meet a few requirements. You’ll need to use your debit card for a minimum of 12 purchases, set up direct deposit or one recurring ACH withdrawal and enroll in e-Statements each statement period. These actions will qualify you for ATM fee rebates and the chance to earn the highest interest rate in this category. You can snag the higher rate by keeping your account balance under $15,000. Otherwise, a larger balance will start earning at a much lower rate.

Without meeting these requirements, your balance will still earn interest, just at a minimal rate. The account will never charge a monthly fee, regardless of your requirement qualifications. You also won’t face a fee when you use any of the 30,000 CO-OP Network ATMs in the country. Note that your money here will be insured by the National Credit Union Administration, instead of by the FDIC.

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on First Technology Federal Credit Union’s secure website

NCUA Insured

#5 BankPurely

CheckingPurelyBankPurely is a division of Flushing Bank, focused on pairing banking with ethical, environmental and social issues. Not only does the bank decrease its carbon footprint with its online-only presence, but it also plants a tree for every CheckingPurely account opened. You’ll need at least $1 to open this account, but there’s no minimum balance to maintain afterwards. You also get to avoid a monthly fee on this account while still earning interest at a pretty solid checking account rate.

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on BankPurely’s secure website

Member FDIC

Top online banks

How we chose the top five: The winners are the banks the showed up the most among the four categories.

#1 Ally Bank

From its 1919 beginnings as a financing division of GM, Ally Bank is now one of the biggest names in the online banking industry. It earns the title of Top Online Bank here because it showed up the most among the four above categories. In fact, it came out on top in every category except for Best Banks for Money Market Accounts — Tumin noted that its “savings account has been keeping competitive” while the money market account has seemingly fallen to the wayside, especially in the last year or two. Still, the account gets some credit for its check-writing abilities. Plus, the bank and its other products perform well with their consistently competitive interest rates and zero to low fees.

#2 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.

#3 Goldman Sachs Bank USA

Goldman Sachs Bank USA offers some of the highest rates in the industry. Like Synchrony before it, this bank ranked twice, making it into the top five banks for CDs and for savings accounts. At the time, these are the only kinds of accounts Goldman Sachs Bank USA offers. There is some variety with its High Yield CDs and No Penalty CDs, which offer the chance to make a withdrawal without facing a heavy penalty. While you don’t need a minimum deposit to open a savings account, you’ll need at least $500 for the CDs. They’re all still excellent accounts due to their high-earning rates and lack of monthly service fees.

#4 Barclays

Barclays is one of our top online banks thanks to its CDs and savings account, though 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 what amount you can set aside, and you won’t face monthly service fees for owning these accounts.

#5 Capital One

Changing it up slightly in this shortlist is Capital One, ranking as a top online bank for its money market account as well as its CDs. Its money market account didn’t make it to the top of that list, but it still offers a competitive interest rate for higher balances. Its CDs also continue to perform competitively, especially on its long-term accounts.

Best overall bank

How we chose the best overall bank: The best overall bank is the bank that ranked in the top five for all four categories — checking, savings, money markets and CDs.

Winner: Ally Bank

The best overall bank appeared in all four categories. In this case, Ally Bank dominated by placing first in each category, except for money market accounts, where it placed fourth. Ally continues to offer competitive rates across its savings, money market, checking and many CD accounts.

The 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. Certainly 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.

APYAccount NameMinimum Balance Amount to Earn APY
2.20%Online Savings Account$0
2.75%High Yield 12-Month CD$0
0.10%Interest Checking Account$0
0.90%Money Market Account$0

Best new online bank

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: Vio Bank

Less than a year old and boasting an incredibly competitive interest rate on its High Yield Online Savings account Vio Bank certainly fits the bill for best new online bank, with. “They’ve got promise and potential with no monthly fee and no balance requirement,” Tumin said.

While there is no balance requirement to maintain the account and earn interest, you will need to open the account with at least $100. This is a pretty high requirement, especially for an online savings account.

APYAccount NameMinimum Balance Amount to Earn APY 
2.41%High Yield Online Savings Account$100

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on Vio Bank’s secure website

Member FDIC

2.65%12 Month High Yield Online CD$500

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on Vio Bank’s secure website

Member FDIC

LEARN MORE: Online vs. traditional bank accounts

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 is that they have no physical branch locations to deposit cash or talk to a bank representative 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, get more comfortable and then you can 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 great! 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 quite need a full service branch, 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 down 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 typically won’t get you the highest returns. Even if you just want to set some money aside, why not set it aside in an account that will earn you 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 only be growing your money, not losing any to unnecessary fees.

Choosing a CD account: Finding a certificate of deposit, or CD, 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 into opening a CD, always check the account’s minimum deposit requirement. Banks will typically require anywhere from $500 to $10,000 to open a CD. Many online banks don’t require any minimum. 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 mix between a savings and a checking account. For starters, you’ll want to find one with a high-earning interest rate. Some banks may offer higher interest rates on their money market accounts than 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 experience, 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 outgoing transactions per statement cycle.)

Choosing a checking account: Finally, choosing the right checking account might be the most important 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.

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.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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