Top Online Banks: Savings or Checking Accounts

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The key to finding the best online savings account at the best online bank comes down to interest rates. The bells and whistles are nice but ultimately it’s about the money and the bank with the highest interest rates will win. That’s why we’ve included a table of the best interest savings account rates followed by a review of some of the more popular online banks. The best online bank for you may depend on a lot of factors outside of the interest rate, which is why minimum balances, fee, and other details are included in the table. One thing is clear, online savings accounts always pay more than a regular brick and mortar.

This is brief review of the best online banks, specifically those with a high interest savings account available (high interest refers to the interest rate). Given the recent economic uncertainty, interest rates have come down from their earlier highs and so the term “high interest” is more a relative term than an absolute one. Gone are the days of 5% and 6% APYs, today the best ones are in the 1-2% range. While not incredible, they are certainly better than the 0% your local bank is likely giving you on your savings accounts nowadays. In this post, EverBank, Ally Bank, E*Trade, HSBC Direct and WTDirect are given brief looks to see how strong they are in the current rate environment.

When there are dozens of online banks offering all manner of savings and checking accounts it’s hard to sort the good from the bad right? Some banks you’ve heard of before and some you’ve never heard of, makes you wonder what the best online bank is huh? Here’s my short list of the best online bank savings accounts with high interest rates.

Before you ever deal with any bank of any kind, online or in person, be sure to double check that they have FDIC insurance (lookup) and that they’re a legitimate bank. That being said, all of the banks on this list are legitimate, have FDIC insurance, and have been in the business of banking for a few years. These aren’t no-names but their names may not be familiar to you (if you read a lot of personal finance, all of these names will be recognizable) and they’re all banks that I’ve dealt with personally or talked extensively with someone who has dealt with them personally. (oddly enough, these high interest savings accounts tend to pepper the lower end of the best CD rates)

One thing you always need to be aware of when dealing with these accounts is whether or not the bank has any hidden fees or gotchas. The ones on this list don’t, but there are some banks out there that will offer you a high interest rate because they know they can sneak a few fees in there on the back end to make up for it. Always keep an eye out for those sorts of games, especially when there are so many banks out there vying for your business.

There you have it, my list of top online banks (though one was brokerage first and several of them have brick & mortar presences) according to my experience with them or my research of them. Please feel free to share your opinion and vote for which of these banks (or ones I left off the list) you think makes for the best online bank. (If you’re interested, here is more discussion about the best interest rate banks.)


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83 Responses to “Top Online Banks: Savings or Checking Accounts”

  1. Bos says:

    What happened to FNBO Direct? wasn’t it the top rated bank not too long ago? is there a reason it’s not even listed any more?

    • Jim says:

      They’ve asked me not to list them this month (and last month).

      • Bos says:

        Do you still think it’s a good bank? I was thinking of setting up an account with FNBO based upon its review until I noticed it was no longer listed. Should i opt for a different bank?

  2. Dee says:

    Thanks everyone, very helpful!

  3. Dee says:

    Wait. Jim, I noticed you said in the article that Everbank was your #2 choice… which is your #1? Maybe you can’t tell us because they told you not to name them?

  4. Heide says:

    I just looked at Bank of Little Rock. While the rate is published as 4.51% APY on checking and 3.01% APY on savings, you only get those rates if you make 10 debit card purchases a month, direct deposit, and a valid email. If you do not use debit cards, the rates are 0.60% and 1.00%, respectively. I am not a fan of debit cards.

    FNBO, which asked to not be included, is at 1.75%.

  5. Alice says:

    I opened the on-line savings with Discover bank. Their service is extremely slow. I registered on- line but they haven’t sent me the password for more than one week, so I can’t still check the balance. In addition, I requested the Discover CD which matured be transferred to savings account. Again they haven’t done so for more than a week. The money is somewhere without any interests for one week. The phone consultant said the money will be transfered on the CD mature date. He didn’t know what he was talking about!

  6. Anonymous says:

    Forget the savings accounts… invest in good growth mutual funds with a dieverse portfolio. 1/4 of all your savings vested in the four different risks categories. Savings accounts cant compete with the long term benefits of mutual funds.

    • Gehlen says:

      Errr…What about if the savings is short-term as in a timeframe of less than 5 years? In that case, your advice would be ill-advised. However, if it is long-term savings (ie. retirement), then your advice is golden.

  7. JUAN GONZALEZ says:

    I recently tried opening an account with Discover Bank since there 2% on savings accounts seems good. The bad part is that their system just does not work. Everything apparently runs slow and when you call you wind up talking to 4 different people who ask you the same security questions but still can’t access your account. I wasn’t even able to transfer money into a new account. Basically you have no access to your account information online until they decide to approve you. You can’t even give them your money because they won’t do anything until your account is approved and that can take a week. This is after they tell you that you have already been approved. This bank just seems like a joke with employees that have no idea who the system works because it’s so complicated or they are just poorly trained. I would avoid this online bank at all costs.

  8. Martha says:

    Hi, I just opened an account to get away from WA-MU, ever since they started to be taken over by chase they have let their customer service to down the toilet. Our direct deposit that hits our bank thursday night is now not available untill Tuesday AM, used to post Friday AM, they (Chase) is a corporation set out to screw the working class americans. What ever happened to Honest Banking….

  9. lyn says:

    Wamu has been sending out free 100.00 opening balances for new customer accounts-that’s a sure sign of desperation.

  10. Bev says:

    I had an unpleasant experience with ING. I’ve met people who were pleased, but I found them cumbersome to deal with. Their customer service was unfriendly & unhelpful. Setting up the account was tedious, but I got through it. Then I found out that I could never write a check on the checking account. Granted, I usually make electronic payments, but I sometimes need an old fashioned check.

    You rated FNBO #1 for all the reasons I can’t stand ING. I’m setting up an account now.

  11. amy says:

    does anyone have an acct. w/. #1 Everbank high rates???

  12. Gjohnson2128 says:

    HSBC recently turned me off. I have had an excellent CC account with them and several others for years. NO derogatory marks. I had recently been seeing many favorable articles concerning them and was seriously considering openining an on line account with them and to sign up for credit monitoring through them. Then suddenly they cut my credit limit affectivly immediately and consequently a charge which was being processed was rejected for $1.00 over the new limit costing me several thousand dollars. I’m paying off and closing my account with them


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