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The Best No-Penalty CD Rates

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.

CDs, or certificates of deposit, work under an easy-to-understand premise: You agree to place your money with a bank or credit union for a set amount of time, during which it will earn interest. At the end of the period, you get your money back plus a nice chunk of interest earnings. But if you withdraw money from your CD before the term expires — or before the CD “matures,” in financial parlance — the institution will charge you a penalty fee for breaking the terms of your agreement.

Generally depositors understand that they can’t touch their funds while they’re in the CD account. But the accounts below are special CDs that let customers withdraw money from a CD account with no penalty charge at whatever time they want. No-penalty CDs aren’t generally widespread, but we’ve selected the best of these accounts available nationwide, based on the following criteria:

  • An APY of at least 1.80%
  • No penalties for early withdrawal of funds
  • Available across the nation

The best no-penalty CD rates in January 2020

1. My eBanc

TermAPYMinimum balance to earn the APY
11 months2.00%$100,000

This Florida-based online savings bank may go by a somewhat generic name, but it’s a division of BAC Florida Bank, a financial institution with more than 45 years of history. The no-penalty CD offered here is called the Flex Time Deposit, and if customers who deposit at least $100,000 can earn an APY of 2.00%, which ranks at the top of the accounts on this list. Depositing at least $10,000 will earn you a decent APY of 1.90%.

Where this account truly shines is that it allows for two partial withdrawals of your funds without having to close your CD account entirely (as long as the balance still remains at $10,000 or more). All of the other no-penalty CD accounts on this list require you to withdrawal all of the principal and any interest earned.


on My eBanc’s secure website

Member FDIC

2. Marcus by Goldman Sachs®

TermAPYMinimum balance to earn the APY

Marcus by Goldman Sachs stakes a strong claim to offering the best no-penalty CDs around, requiring a mere $500 deposit for customers to start earning solid APYs beginning at 1.65%. Interested customers should be aware, however, that like other no-penalty CDs on this list, the accounts offered by this bank lock in your money for seven days after you deposit. You can’t open a 7-month no-penalty CD on Monday and take out your money on Wednesday (if you needed to for whatever reason).

In addition, these accounts don’t allow any partial withdrawals of the principal. If you deposited $1,000 in an account and want to withdrawal money before that CD matures, you won’t be hit with any penalties — but you have to take out all $1,000 and your account will then be closed.


on Goldman Sachs Bank USA’s secure website

Member FDIC

3. PurePoint Financial

TermAPYMinimum balance to earn the APY

The online arm of Union Bank offers a great APY among the no-penalty CD accounts reviewed, which makes it a no-brainer — assuming you have the $10,000 needed for the minimum deposit. PurePoint’s sweet spot is the 13-month term no-penalty CD account, which offers an APY of 1.90%.

This no-penalty CD accounts come with the usual caveats — you can’t make any partial withdrawal of funds, and you have to wait seven days after your initial deposit before withdrawing. However, if you have the sizable chunk of change needed to open one of these accounts, you’ll earn some of the highest APY for your money.


on PurePoint Financial’s secure website

Member FDIC

4. Ally Bank

TermAPYMinimum balance to earn the APY
11 months1.65%Up to $5,000
11 months1.70%$5,000
11 months1.85%$25,000

Online-only bank Ally offers a single no-penalty CD account with an 11-month term that earns more APY depending on how much you deposit. Because it has a low minimum balance requirement, this account will attract consumers without a lot of money to spare who still want a no-penalty CD. Higher balances can earn better APYs.

Similar to all of the other products listed, this Ally no-penalty CD account makes you wait for the seventh day after the initial deposit to withdraw your funds, and the bank doesn’t allow for partial withdrawals. The bank also offers what it calls its 10 Day Best Rate Guarantee, promising that if depositors fund this CD within 10 days of opening it, Ally will make sure the account earns the highest rate available should the bank change its rate within that 10 day period. It’s by no means a game-changer, but a nice bonus to avoid feeling left out if you deposit a pile of money in your CD on Thursday, only to discover on Friday that Ally hiked its rates.


on Ally Bank’s secure website

Member FDIC

5. Citizens Access Liquid CD

TermAPY Minimum balance to earn the APY
11 months1.85%$5,000

Another no-penalty CD hails from online-only bank Citizens Access. This bank is backed by Citizens Bank N.A., which has roots dating back 190 years and has over $150 billion in assets.

Citizens Access calls its no-penalty CD a Liquid CD, but it functions in the same way as the other products on this list. It only offers one Liquid CD, which has an 11-month term and a current APY of 1.85%. There is a $5,000 minimum deposit required for this CD, and it features no penalty for a one-time withdrawal of its entire balance as soon as seven days after funding.


on Citizens Access’s secure website

Member FDIC

6. Investors eAccess

TermAPYMinimum balance to earn the APY

Another no-penalty CD requiring a minimal balance is the 6-month CD offered by Investors eAccess. This New Jersey bank provides one of the most competitive products when it comes to short-term CDs in the no-penalty category, but it does come with a few caveats.

First of all, there are no partial withdrawals allowed by this CD. If you need to take money out, you have to liquify the entire account. You’ll also receive your funds via paper check sent first class mail, so don’t expect an instantaneous turnover of funds should you want to make an early withdrawal. That said, the APY and low minimum account balance make this an excellent choice for short-term savings.


on Investors EAccess’s secure website

Member FDIC

7. CIT Bank

TermAPYMinimum balance to earn the APY
11-month 1.75%$1,000

If you have the $1,000 minimum deposit for this no-penalty CD account, CIT Bank will give you a rate of 1.75% APY on an 11-month term. While that’s not as much as you can earn with a comparable CD term with some of the options above, the deal offered by CIT could provide a decent alternative.


Member FDIC

8. Colorado Federal Savings Bank

TermAPY Minimum balance to earn the APY
11 months1.71%$5,000

Branchless bank Colorado Federal Savings Bank offers an array of financial products, including a number of certificates of deposit ranging from a 1-month to a 60-month. Among its CD offerings is a no-penalty CD that is worth highlighting.

The Colorado Federal Savings Bank features an 11 month no-penalty CD with an APY of 1.71%. This CD requires a minimum deposit of $5,000, with no maximum deposit limit. As a no-penalty CD, you’re able to withdraw the CD’s full balance – including interest and principal – with no penalty, seven days after you begin funding the account.


on Colorado Federal Savings Bank’s secure website

Member FDIC

9. Chartway Credit Union

TermAPYMinimum balance to earn the APY
12-month share certificate1.25%

This credit union may be based in Virginia Beach, Va., but you can potentially become a member, so long as they meet one of the following conditions:

  • You reside or go to school or a place of worship in one of the areas served by a local branch of the credit union. Currently, Chartway Credit Union operates branches in the states of Florida, Texas, Utah and Virginia.
  • You have a family member who’s already a Chartway member
  • You or someone in your immediate family works at a company that utilizes Chartway’s financial services for its employees
  • You make a $10 donation to the We Promise Foundation, a charity founded by the credit union.

Once you’re a member, you can open a 12-month share certificate. Doing so requires a minimum deposit of $500, on which you’ll earn an APY of 1.25%. As with all the other no-penalty CD accounts listed, you can’t make a partial withdrawal of your funds — it’s all or nothing.


on Chartway Federal Credit Union’s secure website

NCUA Insured

What to watch out for with no-penalty CDs

Although no-penalty CDs, like any certificate of deposit, carries with it minimal risk of losing your principal, it’s important you thoroughly understand the terms of the account and understand what circumstances you can withdraw funds. Otherwise, your supposedly no-penalty CD will start devouring your funds with fees.

One of the biggest differences between no-penalty CDs lies with whether you can make partial withdrawals or if you have to withdraw the entire amount. If the account allows for partial withdrawals, make sure you understand if the bank or credit union considers a full withdrawal (and closure of the account) count toward your withdrawal limit. It’s easy to imagine a scenario where you skim the fine print, read a CD allows for two partial withdrawals, make those two withdrawals, then get hit with a penalty when you later try to close the account early because the bank considers that a “third” partial withdrawal.

Another concern you should have when shopping for no-penalty CDs is whether or not the bank or credit union will continue to offer it. AgFed Credit Union, for example, occasionally offers competitive no-penalty share certificates but they’re only available for funding for a limited time. If you snooze on some of these no-penalty CDs, don’t be surprised if they have vanished by the time you are ready to pull the trigger and fund one.

Learn more: Is a no-penalty CD worth it?

According to Ken Tumin, our in-house savings expert and founder of LendingTree-owned, no-penalty CDs aren’t a bad option since there isn’t really much risk to trying one out. Just aim to find the longest term no-penalty CD deal you can since the rates will generally be higher.

“When the bank has your money for longer, they’ll usually offer a higher interest rate — and that interest will have more time to compound,” Tumin says. “So if you open a no-penalty CD, you should go for the one with the longest term possible. The rates will likely still be higher, and after all, if you decide to take the money out early, it’s no problem.”

Also, look for no-penalty CDs that offer the benefit on full withdrawals. Some banks only allow penalty-free partial withdrawals, Tumin warns.

Building a CD ladder to avoid withdrawal fees

If you’re interested in using CDs while still maintaining access to your funds, there’s another approach you could consider: building a CD ladder.

It’s can be a complicated strategy, but in short, you split your deposit up into smaller chunks and open several CDs with various term lengths. When the CDs reach maturity, you can renew the account and lengthen the term or withdraw the money if you need to. This way, you can take advantage of higher interest rates while still avoiding early withdrawal fees.

For a step-by-step guide to building a CD ladder, check out our guide linked above. And for even more savings strategies and tactics, keep your eye on the blog. We’re always reviewing the latest financial products and accounts to help you find the best solutions for your money.

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

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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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


on Salem Five Direct’s secure website

Member FDIC

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.


NCUA Insured

How to find the right savings account for you

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

January savings index

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

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

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

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

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

Survey Methodology

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

How the Fed impacts online savings rates

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

The Best Online Banks in 2020

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

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, 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 Bank Ally 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 Bank Virtual 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 Checking Charles 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.


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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