Best online savings accounts
An online savings account can be one of the most efficient ways to save money and maximize your return on investment. Online savings accounts tend to offer better annual percentage yields (APY) than traditional brick-and-mortar banks. Many accounts also feature zero or low fees and no minimum balance requirements.
Unlike some other forms of investments, an online savings account is relatively risk-free, as long as you save with an FDIC-insured institution. Additionally, many online companies feature helpful tools, such as budgeting options, which can help you stay disciplined to reach your savings goals.
What are the top 3 best savings accounts?
When narrowing down our top picks for good online savings accounts, we considered important factors like:
- High APY
- Lack of fees
- Fee forgiveness policies
- Minimum balance requirements
- Apps that help with ease of access
- Sign-up bonuses
- Excellent customer service
All of our chosen companies have highly favorable interest rates compared with savings accounts offered by traditional banks. Our choices for the best online saving accounts are:
- Best sign-up bonus: Discover
- Best ATM availability: Synchrony Financial
- Best savings tools: Ally Bank
- No minimum balance
- 3.30% APY
- Outgoing wire transfer charge
While Discover is commonly known for its wide range of credit card products, it also offers a high-APY savings account and money market account. Discover’s high-yield savings account has no monthly balance requirements or monthly maintenance fees. Additionally, your account will not incur fees for insufficient funds or excessive withdrawals.
For those who can deposit over $15,000 into a savings account, there is a sign-up bonus ranging between $150 and $200. If you have an Automated Clearing House (ACH) direct deposit attached to your savings account, you will get it up to two days early.
The Discover banking app allows you to manage your savings account, deposit checks and pay bills online. It also has an ATM finder which will locate one of the 60,000 no-fee ATMs near you. The Discover app works on several wearable devices, too, such as the Apple Watch.
What we like
- Sign-up bonus
- Early ACH payments
- 60,000-plus ATMs
What to consider
- No physical branches
- No cash deposit
What reviewers say
Several people have had issues with their accounts being closed or frozen due to fraudulent activity, even when they didn’t report fraud. Many other negative reviews revolve around Discover’s line of credit cards.
- No minimum balance
- 3.75% APY
- Outgoing wire transfer fee
Synchrony, which owns CareCredit (a credit card for health care and wellness expenses) and partners with major retailers for credit card financing, also has a high APY savings account. With Synchrony, you can open up an online savings account without a minimum balance. There are no monthly fees. Sending a wire transfer costs $25.
Synchrony’s online savings account comes with a debit card, which can be used to make purchases. It partners with Plus and Accel ATMs to offer fee-free withdrawals. There are over 70,000 ATM locations across the country with a Plus or Accel logo. Users are also reimbursed up to $5 per month for fees accrued at out-of-network ATMs.
While there is no account minimum with a Synchrony savings account, if your account remains at $0 for 60 or more days, it is subject to closure. Unlike other online banks, Synchrony only offers an online savings account, money market account and certificates of deposit (CDs). It does not offer a checking account.
Through the Synchrony mobile app, you can access and manage your savings account. You can also deposit checks into your account, but you are only allowed to deposit up to $2,000 per day.
What we like
- No fees for excessive withdrawals
- Debit card for purchases
- ATM fee reimbursement
What to consider
- $25 wire transfer fee
- Low daily deposit maximum
- No checking account
What reviewers say
Most of the negative complaints are regarding Synchrony’s partner retail credit cards, with reviewers saying accounts were closed unexpectedly or that there wasn’t enough support against fraud.
- No minimum balance
- 3.30% APY
- Fees for outgoing wires, expedited delivery and account research
Ally Bank offers several saving vehicles, including a high-APY savings account and money market account. Both the online savings account and money market account have no minimum balance. Both also are free of monthly maintenance or overdraft fees.
Ally Bank’s savings account comes with an interactive app that allows you to manage your savings account, as well as tools that make saving for specific goals possible. The Buckets feature allows you to create mini-accounts within your main savings account so you can save for a family vacation or holidays separately. You can also enable the Surprise Savings feature, which will find safe-to-transfer money in your linked checking account to transfer to your savings.
The money market account does not offer savings tools, but the account comes with a debit card and checks to make it easier to use your money at stores.
Ally Bank is 100% online, so you won’t be able to deposit cash into your account or visit an in-person branch. You will still have convenient access to your account through mobile check deposits and over 43,000 no-fee ATMs across the country. A real person is also always available 24/7 to help with account issues or questions.
What we like
- Higher-than-average APY
- Savings features
- 24/7 customer support
What to consider
- No cash deposits
- No physical branches
- $25/hour fee for research on transaction history
What reviewers say
Some recent reviewers complain about their accounts having issues with Zelle and depositing checks. Others have said that the call wait times can be longer than 30 minutes.
How to choose an online savings account
Before choosing an online savings account, take a few minutes to consider your financial goals. Do you want to earn the highest interest rate and quickly grow your savings, or are you looking for an account that can help you be better at managing money?
Ideally, you want to look for a savings account that has a high interest rate, little to no fees or account minimums, and convenient tools to make money management simple. If you also need a checking account, it can be easy to find an online bank that offers both a savings and checking account you like so you can manage both accounts in the same app.
Here are a few tests you can do before choosing an online savings account:
- Find out the fees and how likely you are to incur these fees.
- See if there are special tools or benefits that other banks do not offer.
- Check how many in-network ATMs are near you.
- See what reviewers are saying about the account.
- Check reviews about the bank’s app through the app store.
- Know what type of customer service is available.
Online saving account pros and cons
An online savings account is a low-risk way to set money aside and earn interest on it. You can designate short-term and long-term savings for things such as vacations, home projects and emergency funds. Plus, with an online savings account, you can manage your account any time of day without leaving your home. Consider these pros and cons of opening an online savings account:
Pros
- Higher interest rates
- 24/7 account access
- Mobile check deposit
- Large ATM networks
Cons
- Fluctuating APY
- ATM availability varies by area
- Possible account fees
- Can have limited or no in-person service
» MORE: Alternatives to savings accounts: where is the safest place to keep my money?
FAQ
How does an online savings account work?
After opening your online savings account, you can deposit money through mobile check deposits, mailed checks, direct deposit or electronic transfers from other bank accounts. Online banks typically offer higher APYs on savings accounts, but in-person banking features are limited. Most online banks are partnered with a large ATM network, so it is easy to find a no-fee ATM near you, no matter which state you live in.
While there are no fees to open a savings account, the account may be charged a fee if the balance falls below a minimum amount. Many banks have suspended fees for withdrawals in excess of six per month after the Board of Governors at the Federal Reserve issued a rule amending Regulation D.
What is a high-yield savings account?
A high-yield savings account is an FDIC-insured deposit account that earns a higher interest rate than regular savings accounts. A high-yield savings account works just like a regular savings account, allowing deposits and withdrawals anytime.
Big banks with large loan portfolios offer high-yield savings accounts because they need funds to bankroll their loans. Online banks can afford to offer high-interest rates because they have fewer overhead expenses.
Are online savings accounts safe?
Online savings accounts are safe, provided the FDIC insures them. To determine if your bank has FDIC insurance, look for the “Member FDIC” banner in its logo or official documents, or go to the FDIC website for the list of FDIC-insured institutions. Make sure that any bank you select offers two-factor authentication as well as secure encryption technology for all transactions and communications.
It is also essential to check an online bank’s fraud protection policy to understand what happens if there is fraudulent activity associated with your account.
Can I make payments from my savings account?
Technically, you can make payments from your savings account, but you are probably better off not doing so. Savings accounts are intended for long-term savings, not spending. Moreover, some banks charge for withdrawals in excess of six per month — even after the suspension of Regulation D by the Board of Governors of the Federal Reserve System.
It’s much better to open a checking account and make payments from there. You can link the checking account to your savings account for money transfers.
Bottom line
Online savings accounts will give you more reward for your money, offering APYs 2% to 3% more than traditional brick-and-mortar banks and credit unions. Most online banks also offer a wide network of ATMs and online app features, making it convenient and fee-free to access your money at any time.
Article sources
- Federal Reserve, “ Federal Reserve Board announcers interim final rule to delete the six-per-month limit on convenient transfers from the ‘savings deposit’ definition in Regulation D .” Accessed Jan. 19, 2023.
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