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Updated on Tuesday, December 1, 2020
Online savings accounts are the future of savings, with high yields, little to no fees and convenient 24/7 access. Our top savings account picks yield an average interest rate of 0.95% APY, far higher than the national average of 0.05% APY (according to the FDIC). Choosing one of our accounts could multiply your yearly interest earnings by up to 19 times the national average, which is significantly higher than what you can expect at most local bank branches.
Our team of experts evaluated over 100 banks and credit unions to find the best high yield online savings account. We cross-referenced each of the key traits that customers look for in a high-yield savings account, including APY, minimum balance requirements and monthly fees. We considered accounts from industry leaders that have a proven track record of offering competitive savings rates based on pricing data from over the past five-plus years.
This list is refreshed every week to ensure it always features the best online savings accounts and we’re constantly adding new ones to our database as they become available. If you don’t find what you’re looking for today, make sure you check back regularly to see a new selection.
The Best Savings Accounts in November 2020 Overall
Minimum balance to earn
American Express National Bank High Yield Savings
Ally Bank Online Savings Account
Synchrony Bank High-Yield Savings Account
Marcus by Goldman Sachs High Yield Online Savings
Capital One 360 Performance Savings
Barclays Bank Online Savings Account
Affirm Savings Account
Fitness Bank Savings
SmartyPig Savings Account
First Foundation Bank
Do you have a savings goal in mind? Tell us about it!
1. High Rate: American Express National Bank – 0.60% APY
|Overview: Our sponsored advertiser, American Express National Bank, offers a Personal Savings account, which earns a 0.60% variable Annual Percentage Yield (APY) as of 11/30/2020. 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.|
2. Favorite Online Package: Ally Bank – 0.60% APY
|Overview: Ally 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 0.60%.|
Although Ally has dropped its rate significantly, along with its competitors, we still favor this online bank. It doesn’t require a minimum balance to earn the APY and, even better, you can open a free checking account (also with no minimum balance requirement). This makes access to your savings account incredibly easy – because you can transfer funds online (or via the app) and have immediate access via checks, debit cards and ATMs. With an Ally account, you will have access to their full suite of expanding (and market-leading) products such as CDs, money market account, checking account, and IRA accounts.
3. High Rate: Synchrony Bank – 0.60% APY
|Overview: Synchrony Bank pays a healthy 0.60% 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.
|Overview: Our advertiser Marcus by Goldman Sachs, the consumer bank of Wall Street giant Goldman Sachs, offers a 0.50% Annual Percentage Yield 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 0.50% 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.
5. High Rate: Capital One – 0.50% APY
|Overview: A consistent rate leader for its deposit accounts, Capital One now offers its 360 Performance Savings. With a 0.50% 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.
6. High Rate: Barclays Bank – 0.45% APY
|Overview: Barclays 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 0.45% 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.
7. Highest Overall Rate: Affirm – 1.00% APY
|Overview: Affirm is known for offering payment plan options at checkout, allowing you to buy now and pay later for products across thousands of merchants. It’s entering the competitive online savings space, though, with its Affirm Savings account.|
Affirm Savings earns a 1.00% APY on all balances. There is no minimum required to open, and there is no monthly fee. This is a mobile-first account, and can be opened within the Affirm app that’s available in the Apple App Store and Google Play Store. Affirm Savings deposits are FDIC insured by Cross River Bank.
8. Unique Bank + High Rate: Fitness Bank – 0.85% APY
|Overview: Fitness 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 0.85% 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 0.75% (which is still a great APY). You’ll earn 0.65% 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 0.55%. Finally, if you take anywhere between 0 to 4,999 steps on average per day, you’ll only earn 0.25%.|
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 0.85% 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. In addition to the Step Tracker app, Fitness Bank has a mobile banking app to manage your account.
9. High Rate: SmartyPig – 0.80% APY
|Overview: SmartyPig is a division of Sallie Mae Bank, which provides the FDIC insurance for SmartyPig accounts. SmartyPig is accessible online and in its mobile app, which is available in both the Apple App Store and Google Play Store.|
The SmartyPig savings account works with all balances. However, SmartyPig rewards lower balances with higher rates. Balances from $0.01 to $2,500 earn 0.80% APY; balances from $2,500.01 to $10,000 earn 0.80% APY; balances from $10,000.01 to $50,000 earn 0.55% APY; and balances over $50,000 earn 0.55% APY.
There is no monthly fee to worry about. The account allows you to create and save towards specific savings Goals, which is handy if you need to differentiate where your money is going. You can even set a target date to reach each goal to help you stay motivated and on track.
10. High Rate: First Foundation Bank – 0.75% APY
|Overview: First 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. Its Online Savings Account offers a competitive APY of 0.75%. 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. This account doesn’t have a monthly service fee.|
While Regulation D applies to this account, First Foundation Bank provides 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 $20,000 and the monthly limit is $100,000. 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.
Why trust us?
At MagnifyMoney, it is our mission to inform our readers about the best financial opportunities out there. Our insights have been cited by top financial publications including Marketwatch, CNBC and the Wall Street Journal.
Our dedicated team of financial experts spends dozens of hours grading online savings accounts according to their interest rates, fee schedules, extra features, minimum balance requirements and accessibility, adjusting our rankings as banks and their offerings change on a weekly basis.
We distilled our picks from a list that included hundreds of banks, credit unions and online institutions nationwide.
Our methodology for picking the best high-yield savings accounts
To find the best high-yield online savings accounts, MagnifyMoney looks at over 6,000 financial institutions each week, from small community banks and credit unions to traditional brick-and-mortar banks to new online banks.
- Savings account rates: We heavily weighted the APYs offered by each bank in terms of both magnitude and consistency. Higher savings rates were prioritized over lower rates. Due to the variable rates on savings accounts, we also gave additional consideration to banks that were known to maintain competitive rates over longer periods of time.
- Minimum deposit and balance requirements: To ensure accessibility to all customers, we focused on banks that welcome deposits of all sizes, where the ideal banks in this category have minimum balance and deposit requirements of $0.
- Bank account fees: Unnecessary fees can eat into your long-term savings in a major way. Banks that offered low or no fees were given priority in this category over banks that are known to charge account maintenance fees, service charges and other surcharges.
- Customer service: We considered overall customer satisfaction and bank reputation when weighing each bank performance in this category. While each customer’s experience varies, we looked at relative feedback each bank received at the national level based on data sourced from consumer advocates like the Consumer Financial Protection Bureau (CFPB) and the Better Business Bureau. Banks that failed to meet minimum standards of performance were excluded.
What should I know about high-yield savings accounts?
It’s easy to take your savings account for granted, setting up automatic deposits and forgetting about it. But there’s a lot more to high-yield savings accounts that you should know.
For one, you can find consistently more competitive rates at online banks than with your typical big bank. Online banks are also more fee-friendly — although there are still some legal limitations you should be aware of to avoid extra fees.
What is a high-yield savings account?
A high-yield savings account, also known as a high-interest savings account, is a savings account that earns interest at a higher rate than a traditional savings account. The average savings account interest rate tends to hover around 0.20% APY, but big brick-and-mortar banks often offer interest rates more like 0.01% APY.
High-yield savings accounts raise the bar and offer upwards of 1% to 2% APY — sometimes even 3% APY in good rate conditions. High-interest savings accounts are also more likely to come with added benefits like little to no fees, especially when offered by an online bank.
How much interest will I earn with a high-yield savings account?
When you open a high-yield savings account, you’re almost guaranteed to earn more in interest than with a traditional savings account.
For example, let’s say you have $5,000 to deposit into a savings account. If you choose a high-interest savings account with a 2.30% APY, for example, you’ll earn $116 and some change in a year, provided you don’t make any additional contributions to the account in that time (which would boost your savings even more).
If you deposit your $5,000 into an average savings account at 0.20% APY for a year, you’ll earn just $10 in interest. It’s a pretty big difference in earnings, and all it takes is a simple account switch.
Even in a low-rate environment, where a high-yield savings account might be earning 1.30%, for example, you’ll still make about $65 in interest, which is still well over the $10 average earnings from a traditional savings account.
Does the APY for high-yield savings accounts change?
Savings accounts are variable-rate accounts, so their rates are subject to change — and they will over the course of an account’s lifetime. This is in contrast to fixed-rate savings vehicles, like CDs, which have set rates for predetermined periods of time.
There is no universal answer for how often interest rates change on high-yield savings accounts, since each institution has its own policies and decisions. However, you can often expect an institution to change its savings account rates about once a month at least. This change typically happens at the beginning of the month.
High-interest savings accounts are also more likely to see changes in their APYs than traditional low-rate savings accounts, because high-interest accounts have more room to change. Traditional savings account rates can only go so low, especially since many of them are already bottomed out at 0.01% APY.
How to choose the best high-yield savings account
- Start by finding the highest APY
- Check whether the institution is consistent with its high rates
- Look for a no-fee account
- Confirm any account balance minimums
When you’re looking for the best high-yield savings account, it’s tempting to go straight for the highest APY you can find. That account will certainly offer the highest yield at the moment, but there’s also more to it than that. Unless you’re okay with the possibility of switching accounts periodically to chase the highest rates, it may help to find an account offered by an institution that consistently offers some of the most competitive savings account rates. We’ve started our roundup above with those accounts, offered by consistent industry-leaders over the past two years.
But high yields may mean nothing if you lose your earnings to fees, so the best high-interest savings accounts out there are also the ones with little to no fees. Look for accounts with no monthly service fees, no overdraft fees and/or no excessive transaction fees. This will help you keep your savings intact.
You’ll also want to choose a high-yield savings account that works within your existing finances. Some accounts may impose minimum deposit or balance requirements to open and keep the account. We think the best high-interest accounts are the ones that require low or $0 minimums, which makes the account much more accessible to savers. But, if you have a high balance and find a savings account that offers a higher rate for high balances, then you can go for that account if it better fits your needs.
How do I open a high-yield savings account?
In most cases, opening a high yield savings account is as easy as clicking a button on the institution’s website and completing a short application form. You will likely be approved for the account right away.
A savings account application will likely require your name, home address, email address and Social Security Number. If the account requires a minimum deposit at opening, you’ll also likely have to link an external account at this time. Otherwise, you may make your initial deposit after opening, often within a 30- or 60-day window.
If you have a rocky banking history, like previous negative balances or circumstances where the institution closed your account, your application for a high-interest account may be denied. You can check out your recorded banking history with ChexSystems, a reporting system that many banks use. If there are any errors or points of contention, you may be able to dispute an item in your ChexSystems report.
What should I use a high-yield savings account for?
You can use a high-yield savings account for a variety of reasons and savings goals. You can use it as your emergency fund, where you stash your cash for a rainy day, for example. Perhaps you want to use a high-interest savings account to boost your savings toward your next vacation or your kid’s college education.
Luckily, many institutions allow you to have several savings accounts at a time, meaning you can save toward separate goals simultaneously without ever getting your wires crossed.
Should I get an online savings account?
An online savings account is your best bet for obtaining the highest interest rate available. Online banks lack the costs associated with maintaining brick-and-mortar branches, and they generally pass the savings onto you in the form of better interest payouts. And like we’ve said, if your money is going to sit in an account, you might as well make it worth your while by growing it at a competitive rate.
Online savings accounts generally feature superior accessibility. Online banks are laser-focused on offering the best possible and most user-friendly app experiences. There’s often 24/7 customer service, and they tend to provide very good ATM access. When shopping for the best savings account to suit your needs, make sure you include a good mix of online banks offering high yields, brick-and-mortar banks and credit unions in your search.
What impacts savings rates?
Institutions typically alter their rates in response to changes in market interest rates, which are in turn driven by the federal funds rate set by the Federal Reserve. The federal funds rate influences the rates banks lend money to each other. When the Fed increases the federal funds rate, financial institutions respond by increasing the interest rates they offer on deposit accounts. When the federal funds rate falls, interest rates decrease.
If you’re not keen on tracking the federal funds rate, changes to the APY on your savings account may come as a surprise. Luckily, 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. Online savings accounts outperform most brick-and-mortar rates any day.
What are the best banks for high-yield online savings accounts?
Here’s a summary of our top picks:
- 0.60% APY – American Express National Bank
- 0.60% APY – Ally Bank
- 0.60% APY – Synchrony Bank
- 0.50% APY – Marcus by Goldman Sachs
- 0.45% APY – Barclays Bank
- 0.50% APY – Capital One
- 1.00% APY – Affirm
- 0.85% APY – Ftiness Bank
- 0.80% APY – SmartyPig
- 0.70% APY – ConnectOne Bank
Savings Account FAQs
There is nothing inherently unsafe about a high-yield savings account. As long as you make sure you’re depositing your money into an FDIC-insured bank or NCUA-insured credit union, your money will be insured up to legal amounts in case your institution fails.
You may also want to double check an institution’s security measures before signing up for an account. Check whether their website and information is protected by encryption and firewalls. Reputable institutions will also include anti-virus and anti-fraud measures. Other protections include biometric logins (fingerprints or face match), two-factor verification and security questions.
There is often not much difference between high-interest savings accounts and money market accounts. A money market account is a type of savings account that also tends to have higher rates than traditional savings accounts.
Some money market accounts set themselves apart by offering a debit or ATM card and/or check-writing capabilities. These accounts offer further accessibility to your money. However, money market accounts still fall under the six-limit “convenient” transaction requirement, like regular savings accounts.
High-yield savings accounts are taxed like regular savings accounts. However, your earnings from a high-interest savings account are more likely to be taxed, as you are more likely to be earning more in that account than a traditional low-rate account.
Savings account earnings are taxed if you make $10 or more. Regardless of your earnings, your institution should send you and the IRS a copy of Form 1099-INT, which details the interest you’ve earned in a year. Even if you don’t receive that form, the IRS will, and they will expect you to report your interest income on your tax return.
If you earn $1,500 or more in interest income in a year, you will also need to detail those sources of income on Schedule B of Form 1040.
Thanks to the Federal Reserve’s Regulation D, you can withdraw up to six times per statement cycle from a high-yield savings account, like any other savings account. This includes pre-authorized and automatic withdrawals and transfers, and transfers made by debit card, check or other similar ways.You can get around this limit by performing “less convenient” withdrawals, like those made in person at the bank or ATM. Exceptions to the rule also include withdrawals and transfers requested by mail and those initiated over the phone if you receive the withdrawal as a mailed check.
74% of Americans don’t know online-only banks generally offer better savings rates
A new survey by MagnifyMoney has found that Americans largely misunderstand online savings accounts and the financial opportunities they offer.
- 74% of Americans don’t know online-only banks typically offer higher interest rates than traditional brick-and-mortar banks.
- Additionally, 16% believe online-only banks charge more fees than traditional brick-and-mortar banks, which is generally false. To see our picks for the best high-yield online savings accounts, scroll up.
- Another 11% believe money deposited in an online bank isn’t insured, which is most often untrue. All the online banks listed above — and more — are FDIC insured. Even many fintechs and neobanks offer FDIC insurance on their cash management accounts, via partner banks.
- Just over 143.3 million consumers are likely missing out on higher interest rates for their savings by not banking with online-only financial institutions. Of those without an account, complacency is the primary reason, as 55% are satisfied with their brick-and-mortar bank.
- Less than half of Americans (44%) have an account with an online-only bank. Their main reasons for the switch are better interest rates (30%), fewer fees (28%) and recommendation by a financial advisor (27%).
- Who’s most likely to have an online-only savings account? Generation Xers (61%), those earning $75,000 or more a year (58%), college graduates (57%) and men (57%).
- More than 44% of respondents fear online banking puts them at risk for data breaches, while 40% are concerned hackers will have an easier time accessing their data. Still, of those without an online bank, just 19% said it was because they don’t trust the bank with their money.
MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,029 Americans, with the sample base proportioned to represent the overall population. The survey was fielded on Aug. 25, 2020.
For the purposes of our survey, generations are defined as the following ages in 2020:
- Generation Z: 18 to 23
- Millennial: 24 to 39
- Generation X: 40 to 54
- Baby boomer: 55 to 74
- Silent generation: 75 and older
While Gen Z and the silent generation were surveyed — and their answers were factored into the overall percentage totals among all respondents — they were omitted from generational comparisons, due to the low sample size among both groups.
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