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.)