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Online Savings & Money Market Account Rates 2018

Highest Online Bank Rates for Savings And Money Market Accounts - July 21, 2018

Savings Account National Average Rate: 0.17% ?

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Bank5 Connect
2.05% 11.99x $10
Citizens Access
2.00% 11.70x $5,000
Sallie Mae Bank
1.90% 11.11x $0
Cibc Bank Usa
1.90% 11.11x $0
Purepoint Mufg Union
1.90% 11.11x $10,000
Incredible Bank, A Division Of River Valley Bank
1.88% 10.99x $25,000
1.85% 10.82x $100
Ablebanking, A Division Of Northeast Bank
1.85% 10.82x $1,000
Sfgi Direct, A Division Of Summit Community Bank
1.81% 10.58x $0
Dollar Savings Direct, A Division Of Emigrant Bank
1.80% 10.53x $0
Vio Bank, A Division Of Midfirst Bank
1.80% 10.53x $0
Live Oak Banking Company
1.80% 10.53x $0
Ebsb Direct
1.80% 10.53x $10,000
American Express Bank, Fsb
1.75% 10.23x $0
Barclays Bank Delaware
1.75% 10.23x $0
Ally Bank
1.75% 10.23x $0
Fnbo Direct
1.75% 10.23x $1
Synchrony Bank
1.75% 10.23x $30
Capital One 360
1.75% 10.23x $10,000
My Banking Direct, A Division Of New York Community Bank
1.75% 10.23x $25,000
Bbva Compass Bank
1.70% 9.94x $0
Hsbc Direct
1.70% 9.94x $1
Discover Bank
1.65% 9.65x $0
1.60% 9.36x $5
Ufb Direct, A Division Of Bofi Federal Bank
1.60% 9.36x $5,000
Nationwide Bank
1.55% 9.06x $10,000
Northern Bank Direct
1.51% 8.83x $0
Ridgewood Savings Bank
1.50% 8.77x $0
Bac Florida
1.50% 8.77x $5,000
Northpointe Bank
1.50% 8.77x $25,000
Tiaa Bank / Everbank
1.50% 8.77x $250,000
Cross River Bank
1.46% 8.54x $0
Dime Community Bank
1.35% 7.89x $1,000
Bankpurely, A Division Of Flushing Bank
1.30% 7.60x $0
Amboy Direct
1.26% 7.37x $3,000
Colorado Federal Savings Bank
1.25% 7.31x $1
Bank Of Internet, A Division Of Bofi Federal Bank
1.05% 6.14x $0
My Savings Direct, A Division Of Emigrant Bank
1.00% 5.85x $1
Mutual Of Omaha Bank
1.00% 5.85x $1,000
Clear Sky Accounts
0.90% 5.26x $1
Virtualbank, A Division Of Iberiabank
0.80% 4.68x $100,000
Zions Bank
0.75% 4.39x $1,000
New Dominion Direct
0.70% 4.09x $50,000
Onewest Bank, A Division Of Cit Bank
0.40% 2.34x $100,000
Cnb Bank Direct
0.26% 1.52x $100
0.25% 1.46x $1,000
Kirkpatrick Bank
0.15% 0.88x $1
0.15% 0.88x $10,000
All rates listed are Annual Percentage Yield (APY). The APY rate in a savings account or money market account is a variable rate that is subject to change at any point. The Min listed is the minimum deposit account balance required to obtain the rate listed.

If you have cash in a large bank, or any bank with low savings rates, you are making less in interest than you could be and should be making. There are FDIC-insured banks that will pay you more through higher savings rates on your deposits. Take a few minutes to explore the table above that presents an unbiased list based on the best savings rates currently offered by online banks. You may be able to boost your annual interest earned from savings by more than 10X. Banks are always competing for your money. Take advantage of it!

Summary: Highest Savings Accounts

Bank Institution Interest Rate (APY) Minimum Balance
for APY
Best For
Bank5 Connect 2.05% $10 Connect Savings
Virtualbank, a division of Iberiabank 2.01% $100 eMoney Market
Citizens Access 2.00% $5,000 Citizens Access 2.00% $25,000 IGoMoneyMarket
Sallie Mae Bank 1.90% $0 Online Money Market Account
CIBC Bank USA 1.90% $0 Agility Savings Account


How Do Online Savings Accounts Work

Over the last two decades, online banks have emerged to offer depositors higher rates on their online savings and money market accounts than are available in the major money center banks and in smaller brick-and-mortar banks. Since these online banks do not have expensive branch networks to maintain, they usually pass some of their savings back to depositors in the form of higher rates. All online banks and local banks listed on BestCashCow are FDIC Insured.

Unlike certificates of deposit (CDs) or time deposits, money in savings and money market accounts accrue interest on a daily rate. The best yielding savings rates can conceivably change from day-to-day with new online banks emerging or existing banks more aggressively seeking to raise the capital accounts. It is important to check back on BestCashCow regularly to be sure that your savings accounts continue to earn the most competitive rates, no matter what the rate environment is.

The table above lists the highest yielding online savings account rates.

Recent Performance of Online Savings And Money Market Accounts

BestCashCow data has shown that the highest yielding online savings account rates have increased over the past year. The Federal Reserve remains committed to raising The Fed Funds Rate over the next year. This should cause leading savings rates to continue to increase through 2018 and into 2019.

The average online savings or money market rate exceeds the national average rate quite dramatically. The graph below shows how the average rates for online savings and money market accounts have trended over the last several years.  Even while online savings rates have improved, the the average rate of all online and locally offered savings accounts in the BestCashCow rate database has remained much lower at 0.14%. (The BestCashCow rate database, the largest in the world, contains rates on over 2,000,000 bank products from all 8,000 banks and 7,700 credit unions in the US.)

Best High Yield Savings or Money Market Accounts

Depending on where you live, there may be banks and credit unions offering rates still higher than the best online savings rates. Check BestCashCow’s list of the highest yielding local bank rates and the highest yielding credit union rates.

Best Online Bank Accounts with High Interest Rates

In the above table, you will find a list of the highest online savings account rates, ranked in descending order by interest rate currently offered. Online bank accounts are slightly different in terms of their features and the services offered. By reading the reviews of each bank, accessible from the rightmost column, you will be able to determine which bank is the best for you. Please also refer to the section below entitled “Best Online Savings Account Rates".

Are Online Savings Accounts Safe?

All bank accounts listed on BestCashCow are insured by the Federal Deposit Insurance Corporation ("FDIC"). The FDIC is a federal government chartered institution that provides insurance to a maximum amount of $250,000 per individual per institution (or $500,000 for joint account holders). All deposits (CDs, Checking, Savings Accounts) held in the same type of ownership at a single financial institution are only insured to $250,000. However, funds held in different types of ownership (Individual, Joint, Trust, Retirement) may fall under separate FDIC insurance provisions. strongly recommends that you deposit savings in only FDIC insured institutions and that you do not exceed FDIC coverage limits. Please visit the FDIC's website to determine your coverage limits based on your circumstances.

Advantages of Online Savings Accounts:

  • Higher interest rate.
  • Often top notch online functionality with 24/7 access, 365 days a year. You can check your balance, update your contact info, make transfers, and order deposit slips at any time. For more pressing issues, customer support is also usually accessible 24/7, so you can talk to an actual human instead of your computer screen.
  • Superior online and mobile access. Many traditional banks have been slow to adopt the best web and mobile features to improve the customer experience online. 
  • Easy money transfer capabilities to and from a primary checking account.
  • Liquidity. Depositors can withdraw their money at any time.

Disadvantages of Online Only Banks:

  • A variable interest rate. Most leading online banks have not lowered rates significantly in the past 18 months, there are often new entrants to the market that can disappear as quickly as they arrive on the scene. Any savings rate can conceivably be lowered at any time.
  • Interaction is only via phone or Internet. You cannot walk into a branch and talk to a customer service representative if you have a problem with your savings account. Nonetheless, the leading, high profile online banks provide virtually instant phone access at all hours to a representative. However, interaction with some of the smaller online banks can be more difficult as it is ordinarily limited to business hours in their area of operation.
  • You cannot get money cash or cashier's checks instantly as you can in a branch bank, and matters where you need to rely on the US Postal system can lead to significant delays and obstacles.
  • There is no opportunity to build a relationship with a banker should you need a loan or additional services in the future.

What is the best account for easy access?

Depending on where you live and how accessible the branch is, you may find that the best account for easy access is through a local bank or credit union. However, today many high yielding savings and money market accounts provide such easy accessibility, including through mobile apps, and can enable such easy transfers to a correspondent account at a local bank through ACH transfers, that more and more people are opening accounts for cash and savings that they do not need immediately.

Is a high-yielding online savings account your best option?

High-interest savings accounts are always an ideal place to keep your emergency fund or any money to which still you need ready access. Your money will be safer than if you stuffed it under your mattress, and it will grow a bit, too. Investors will find that keeping large amounts of money in savings and CDs provides them with lower returns but cushions them against market crashes like we experienced in 2000 and 2001 and again in 2008 and 2009.

Compare Online Savings Accounts

Savings Rates at Most Recognized Online Banks

To see how savings and money market accounts compare with CDs or time deposits and bonds, view the BestCashCow income guide here.


What is a savings account?

A savings account is one of the simplest types of bank accounts. It allows you to store cash securely and earn interest on your money.

What is a money market account?

The differences between a savings account and a money market account are largely arcane. Some savings accounts are limited by US federal regulations to six outbound transfers per month (the bank may allow additional access for a fee). Money market accounts are technically not bound by those limitations and offer more ways access deposits by issuing checks and debit cards. Prudent consumers will compare the two interchangeably, focusing primarily on rates and service among FDIC-insured banks (or NCUA-insured, for credit unions). Consumers who maximize their use of online savings and money market accounts access these accounts through ACH transfers that are easily set up on the online bank’s website so the additional ways to access deposits that money market accounts offer are rarely valuable.

How to Open a Savings Account?

The process of opening an online savings account or money market account is usually very simple. Banks ordinary ask you a few questions to verify your identify. These questions include seeking information from a state or government issued ID, such as a driver’s license. Due to increased US anti-money laundering rules and Department of Homeland Security requirements, it is very likely that you will also be asked to produce a photocopy of your license and a picture taken from your iPhone or other smartphone and emailed to the bank will ordinarily suffice. The bank may ask for information regarding a correspondent account from which you intend to have them draw the money to provide the initial funding. You therefore will need the ABA number and account number from an existing account that you have. They will verify this account by having you log back in to confirm the amounts of one or two small deposits to your correspondent account before they draw the funds from this account. Finally, many banks do a “soft” credit pull from Experian, Equifax or some other credit rating agency. While your credit rating will ordinarily not be affected, the application process may involve your answering questions about where you have lived, loans you may have had, past employers or cars you may have owned. Many people do not enjoy providing the amount of personal information required over the internet; therefore, some of the larger online banks have 24-7 customer service to guide you through the process. You can see the experiences of others with a given online savings bank that you are considering by reviewing the comments left in BestCashCow’s table above.

Are online savings rates always better than rates at brick-and-mortar banks?

No. Online banks often offer higher savings and CD rates because they have lower expenses from not having to maintain brick-and-mortar locations. You should also check rates at local banks and credit unions. Unlike other websites, compiles all of these rates, listing them in an unbiased manner that shows the proximity of each bank or credit union to you. Please access these rates using the tabs above.

Why do savings rates vary so much?

Even though rates are at levels that are historically very low, there is competition for your money. Like any active marketplace, there are buyers and sellers of goods and services at different prices.

How do I choose the right savings or money market account?

Begin your search with the table here on In addition to checking online savings rates, you should also check local bank rates and local credit union rates.

What is the Best Fixed Rate Savings Account?

BestCashCow strongly encourages people to avoid very short-term promotional rates. The very nature of a savings or money market account is that the rate can change from one day to the next. Savings rates may be guaranteed not to change for some very short length of time, but they are not fixed. If you require a fixed rate or greater certainty that the rate that you are making will not change, you should consider CDs, which represent a time deposit, for some or all of your savings.

Should I consider CDs?

If you are unlikely to require access to your cash for some time, you may also consider certificates of deposit (CDs). While CDs have penalties for early withdrawal that may even eat into your principal, the rates on 2, 3, 4 and 5 year CDs are ordinarily significantly higher than savings rates. CDs also offer the certainty of rate stability for the term of the CD. Several sections and articles on BestCashCow can also help you to identify your proper cash allocation between savings and CDs.

With savings rates at such low levels, does earning a higher savings rate or the best savings rate really mean anything to me?

Even a difference of a couple of basis points (hundredths of percentage points) can really add up over time, especially on large sums of money. You may wish to familiarize yourself with the BestCashCow Savings Calculator in order to understand the importance of compounding interest at higher rates on your savings over time.

If you are too lazy to access the BestCashCow Savings Calculator or to bother with the magic of compounded earnings, here is the plain and simple truth:
  • $250,000 deposited at a major money center bank like Chase, Citibank, Bank of America or Wells Fargo is likely earning less than 0.10% APY. That money is therefore making no more than $250 a year in interest.
  • That same $250,000 deposited at a leading online bank is earning over 1% or over $2,500.
  • Even though the increased earnings from high yield savings (in this example, $2,250 annually) is fully taxable at the federal and state and local levels, wouldn’t you like to be earning that extra income from high-yielding savings accounts?

What does APY mean?

“APY” stands for annual percentage yield. Savings rates are displayed in terms of APY to indicate the effective annual-interest return, including the compounding of interest, of the course of a single year. $100,000 deposited in a savings or CD account with a 1.20% APY will earn $1,200 in the course of the year, but monthly interest in the first few months may be less than $100 a month (this also depends on the number of days in the month). Hence, the APY rate is ordinarily a couple of basis points above the real interest rates. Unlike with a CD, your actual APY in a savings account or money market account may vary if the rate changes.

Are you still afraid to open a high interest-earning online savings account?

Here are some common reasons people hold off:
  • You need to make more than six withdrawals a month. Avoid potential problems by either opening a high earning online money market account (some of the best rates available in the table above are actually from online money market accounts), opening a savings account at a bank which does not enforce the 6 transfer limit, tying your account to a correspondent bank’s money market account or checking account at a major money center bank (like Chase, Citibank, Wells Fargo, or Bank of America) where you make one larger transfer each month.
  • You like having access to a physical branch. Find out what the minimum balance required to avoid fees on your account at your physical branch, then transfer the excess balances to a high yielding online savings or money market account. You’ll continue to have access to the physical interaction and services of the bank with which you are used to banking, but you will also be dramatically increasing the interest earned on cash you don’t need over time.
  • You need to deposit large sums of cash or checks in excess of the online bank’s mobile deposit limit. In this case, you need access to a physical branch. See point 2, above.
  • You want one institution to handle all of your financial matters. While most online banks do not offer mortgages, credit cards and brokerage services. But, in 2018, there is no financial advantage to keeping all of your financial transactions in one or even a handful of institutions.

What is a health savings account?

A health savings account (or HSA) is a tax advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. According to IRS Publication 969 (2016), the interest or other earnings on the assets in the account are tax free and distributions may be tax free if you pay qualified medical expenses or other expenses not covered by health insurance such as dental or vision care. Due to the tax advantages of a health savings account, these accounts should be set up separately through banks offering them (such as Chase or Bank of America) and their assets should not be comingled with a high yielding online savings account. We know of no online banks currently offering HSAs.

What is an education savings account?

Education savings accounts, such as Coverdell Education savings accounts and 529 plans are accounts allowed family members to obtain certain tax advantages through setting aside for a child’s future education. 529 programs are administered at the state level and you must invest in programs they administer; Coverdell education savings accounts are move flexible (and generally following the same rules as IRAs), however we know of no online banks currently offering Coverdell Education savings accounts.

What is a child savings account?

A child savings account is a savings account in the name of the child with a parent or guardian named as the custodian on the account until the child reaches the age of 18 or 21 (depending of the child’s state of residency). A child savings account can be a great way to teach your child the importance of saving money from a young age. More information on child savings accounts can be found here. Ally and Capital One 360 are among the few online banks offering child savings accounts.


Finding the best high interest online savings or money market account is a highly subjective exercise. The best account for your neighbor may not be the best account for you. To help you determine which account is best for you, we have created the following 7 point checklist:
  • A competitive interest rate. BestCashCow maintains the most comprehensive list of deposit account rates. The rates above are the best available rates for online savings accounts. In order to ensure that your money continues to grow over time, you may wish to avoid banks which rely heavily on very short term promotional rates (such as EverBank). If you open an account with a promotional rate or even if you open an account where the rate isn’t promotional in nature, you should check back with BestCashCow regularly to be sure that your bank continues to offer one of the most competitive rates.
  • Full functionality through online and mobile access. Most of the accounts listed above have robust websites and mobile access that enables full functionality. Read the comments from other users before opening an account as they often highlight problems with access.
  • Access how the bank provides customer service. Many of the leading online banks now have customer service representatives who are U.S. based and available 24/7 with low wait times. This is often a distinguishing feature that makes a well-recognized bank significantly more attractive than a smaller bank trying to enter the online banking arena.
  • Absence of fees. Be sure that you are opening an online account with a bank that doesn’t charge fees and has very low minimum balance requirements. American Express, CIT, GS Bank, Barclays and Ally are all well known for low minimum requirements and the absence of any unusual monthly fees.
  • Easy Access to your Cash through Immediate Online Transfers. The reason why you keep money in savings is for access in an emergency or to take advantage of immediate financial opportunities. You need access to your cash. Yet, some banks impose strict limits on the amount of cash that you can access from your account in a single transfer or limit the numbers of transfers you can conduct over a given time period. Other banks can delay your transfers for days while they make money on the float. You should check with the bank where you are considering opening an online account to understand the restrictions before you open an account. You may also read the comments from other users above as they can highlight any which banks enable the best access to your cash.
  • Stay within FDIC limits! See the section above and read this article.
  • Use the BestCashCow Savings Calculator to see how important it is to be maximizing your interest on savings accounts over time.


Find out how much extra money you can earn by moving your bank money into an account that pays more.

Use or Change these Amounts And Rates

June 2018 Savings and CDs Update: Federal Raises Fed Funds Target to 1.75% to 2.00%, 5 Opportunities to Look At

June 2018 Savings and CDs Update: Federal Raises Fed Funds Target to 1.75% to 2.00%, 5 Opportunities to Look At

Rate information contained on this page may have changed. Please find latest savings rates.

The Federal Reserve raised the Fed Funds rate by 25 bps to a target of 1.75% to 2% this afternoon. The move marks the seventh such move since the Fed began moving the Fed Funds rate from zero in December 2015, and the second in Jay Powell’s tenure as Chairman.  Barring some sort of dramatic and unforeseen development it won't be the last raise. 

The Fed’s language became more hawkish with the Fed raising median outlook for 2018 since it last meeting.   The Fed is now guiding towards two more rate hikes (instead of 1) before the end 2018 (for a total of 4 versus 3 hikes in 2018).  While the long-range Fed funds forecast remains at 2.90%, the Fed funds rate is now forecast at 3.125% at the end of 2019, and 3.375% at the end of 2020.

Against this backdrop, BestCashCow continues to find savings and money market accounts and short-term CDs substantially more attractive than longer-term CDs and bonds.

Here are five products worth taking a look at:

  1. CIT Bank Online Money Market – 1.85% 

CIT Bank has been around for a long time, and is generally very positively reviewed on BestCashCow.  Over the years, they have always been faster to move their savings and money market rates than others, and their savings rate is currently one of the highest.   With only $100 required to open an account, CIT works for just about everyone.

Editor’s Note:  CIT Bank is an advertiser on BestCashCow.   Please read our Advertiser Disclosure here.

  1. CIT Bank 11-Month No Penalty CD – 1.85%

If you are a contrarian and believe that savings rates may fall over the coming year, or have seen enough over the last decade that you want to protect yourself from that unlikely eventuality, CIT Bank is also offering a solution for you in the form of an 11-Month No Penalty CD.

While this product pays the same as CIT’s online money market account, it guarantees that it will pay that amount for almost a year.   In the meantime, it can be terminated and moved to the money market account at any time and without penalty.  With this product, CIT is essentially offering depositors a free option.

(Ally Bank also offers a product like this, but they have dropped the rate from 1.75% in January to 1.50% now.)

Editor’s Note:  CIT Bank is an advertiser on BestCashCow.   Please read our Advertiser Disclosure here.

  1. Radius Bank Online Savings – 1.86% 

Radius Bank is a new entrant to the online savings arena, but seems to be committed to making it work.  The 1.86% online savings rate is only good for depositors who bring $25,000 or more; the bank is worth a look as this account can be easily partnered with a high interest checking account packed with features that can enable depositors to migrate virtually all of their branch banking to online banking.

Editor’s Note:  Radius Bank is an advertiser on BestCashCow.   Please read our Advertiser Disclosure here

  1. Purepoint Bank Online Savings – 1.90%

Purepoint has to be listed here because they currently have a 1.90% online savings rate.   However, Purepoint may not work for everyone as they haven’t always been so fast to raise their rates and they may be focused more on trying to build out a branch network.

  1. Marcus One-Year CD – 2.30% 

While the direction of rates is clearly up, there is little risk in locking some money that you won’t need into a one-year CD, and there may even be a small upside.  Marcus, the online banking division of Goldman Sachs, has recently raised all of their CD rates and is now offering a 2.30% one-year CD.  Marcus is well reviewed by BestCashCow users, and as we noted in our May 2018 note, Goldman Sachs’ ownership and commitment to the space makes it a good and a safe place to do your baking business.

Editor’s Note:  Marcus is an advertiser on BestCashCow.   Please read our Advertiser Disclosure here

Rates can change.  See the latest online savings and money market rates here.   See the latest online one-year CD rates here.

Image: US Army Corps of Engineers

May 2018 Brings Higher Savings Rates – Here are 5 That We Think Will Continue to Go Up

May 2018 Brings Higher Savings Rates – Here are 5 That We Think Will Continue to Go Up

Rate information contained on this page may have changed. Please find latest savings rates.

As we begin May 2018 and approach the second and third meetings of Jay Powell’s tenure as Chairman of the Fed, we are continuing to see savings rates firm up.

While savings rates are improving, they are not where we expect to see them this time next year and still well below any historical norm.  To boot, the yield curve is lacking slope.  So while BestCashCow is the most comprehensive site listing savings and CD rates, we continue to urge caution when it comes to CD rates, especially those longer than one year.  

This month, we’d therefore prefer to focus just on five savings and money market products that we find particularly interesting.   We’re highlighting these products not only because the current rates are attractive, but because there has been some discussion in our conference rooms about banks that offer teaser rates and then lower them.   We don’t believe either that these five banks have engaged in such tactics or that they will be lowering their rates as the Fed moves the Fed Funds rate higher.

So, here are five savings accounts that we would bet will continue to be competitive.

1.   EBSB Direct – 1.80% Online Money Market rate

EBSB Direct is a familiar name to many who have followed the online deposit account space for the last few years.  At various points, they have aggressively courted savers, and this rate represents a consistency in that approach.   Earlier this year, their rate had been 1.57% and 1.44%.   EBSB Direct has great reviews on BestCashCow.  High net worth depositors will appreciate the fact that the rate is extended to all deposits up to $2 million, and that as a subsidiary of East Boston Savings Bank, a Massachusetts chartered bank, DIF insurance covers that amount.

Editor’s Note:  EBSB Direct is an advertiser of BestCashCow.   Please read our Advertiser Disclosure here

2.   Purepoint – 1.75% Online Savings rate

We wrote about Purepoint in April and we have written about the bank before.  As a subsidiary of one of Japan’s largest financial institutions and as an aggressive player in the US market that seems determined to gain market share, we’d bet on Purepoint to continue to raise rates as the Fed moves.  

3. Marcus – 1.60% Online Savings rate

With generally outstanding reviews on BestCashCow, we think that Marcus is a good place to stash cash.  Marcus is also a subsidiary of Goldman Sachs and if you listen to their executives on Bloomberg or CNBC, you’ll see that they have made a real commitment to the online savings and CD spaces and we doubt they will be doing anything other than raising rates as the Federal Reserve moves.  To boot, Marcus is perhaps the only one of the major online banks where it seems very safe to go well over FDIC-insurance limits.

Editor’s Note:  Marcus is an advertiser of BestCashCow.   Please read our Advertiser Disclosure here

4.   Personal Savings by American Express – 1.55% Online Savings rate

Amex’s online savings product was once the highest rate around in 2009 and 2010 when they were offering 0.90% while other rates had fallen below that level.  While Amex hasn’t been as quick to raise rates out of the zero-rate environment as many others have, their reviews on BestCashCow indicate that they provide outstanding customer service.  It certainly isn’t a bank that is going to be treating its current long-standing savings customers any worse than new customers.

5.   Ally Bank – 1.50% Online Savings rate

While Ally occasionally offers some great 11-month No Penalty CD products, the rate on their savings account has trailed their competitors a little bit for the last half a year.  That’s OK, because we have every bit of confidence that Ally will always remain among the highest offered savings rates.  We also know that they won’t be quietly lowering their savings rates while they give new customers better ones.   Their TV advertisements promise as much.

Before opening an online savings or money market account, we also encourage you to check local bank rates and local credit union rates.

The Six Biggest Crimes of Online Banks

The Six Biggest Crimes of Online Banks

Rate information contained on this page may have changed. Please find latest savings rates.

It has been over 15 years now since I opened my first online savings accounts with ING Direct (now Capital One 360) and HSBC Direct (now HSBC Advance).   In that time, I have experienced a lot of different service levels and experienced certain frustration (many that I share with BestCashCow readers as I see from the comments on our tables).  

Let me begin by saying that I can deal with not making my funds immediately available through long hold times, although 10 business days at Sallie Mae Bank is the absolute maximum I will tolerate.  I can also deal with ACH transfers that take a couple of days, although I find Marcus’s and Purepoint’s immediate outbound transfers to be a real selling point versus their competitors.

What I cannot deal with are the following.

1. Touching my Money with Silly Fees.  A paper account maintenance fee that users cannot get out of is a pure outrage in an online bank (Incredible Bank).   Even with a deposit of $250,000, it reduced the interest earned by about 5% a month (and much more than that for lower deposit amounts).  While I am not aware of any banks that are currently charging outbound transfer fees, I have seen banks in the past charge fees of $3 to $5 per transfer.   I find it attractive when a bank like Marcus says “We will never ever charge you a fee”.

2. Limiting my Ability to Access My Money.   While I am a co-founder of BestCashCow, I have never ever had my portfolio entirely in cash.   Rather, I am a self-directed investor who frequently needs to access my cash in order to buy bonds and equities.   The very nature of a savings or money market account is that you are getting liquidity.   A CD sacrifices liquidity.  If I need $100,000 from a savings account, and a bank tells me that I can only have $3,000 right now, I find it patronizing and condescending regardless of their savings rate.  I have seen this a lot from some of the lesser known banks on BestCashCow’s tables, but the major online banks (Marcus, Synchrony, Ally, Purepoint, CIT, Barclays, Amex) have never played this game.

3. Not Providing a Fully Functional Website.  The major online banks are competing to provide the best interfaces and the best mobile apps (at the moment, I believe Ally has the best mobile apps).  But, some banks cannot even seem to offer a working website with high availability times (for example, Banco Popular).   Others are angling for your deposits with websites that haven’t been enhanced since 1998 (IGobanking, VirtualBank, Colorado Federal).   It is 2018 already!  I might be inclined to open an online CD with a bank that doesn’t offer a fully functional website, but I wouldn’t put my savings and money market money in one that doesn’t.

4.  Not Showing Inbound Transfer Information Instantaneously.   When a online bank takes $500 from a corresponding bank, that information should be listed immediately as a credit to the online account or at the very least as a pending inbound transfer.  With some smaller online banks, I’ve had to make a phone call to confirm that they have drawn the money and will credit me.   That’s time on the phone that I could be spending doing something else.

5.  Providing limited phone support.   The great news here is that with most of the major online banks, it is virtually never necessary to pick up the phone to speak with someone.  However, if you ever need to, it is nice to know that someone is there.  I have been surprised by the absence of phone hour support at some major online banks on the weekend (eg. Sallie Mae Bank).  But there are comments in the BestCashCow tables from users who have been simply unable to access phone support at some of the smaller online banks (AbleBanking, VirtualBank).

6. Excluding existing customers from receiving the best savings and money market rates.   I have saved the one fault that I really find terribly outlandish until the end.  Now that rates are rising, some banks have found it profitable to advertise their new rates, but continue to give existing depositors a lower rate.   Of the major online banks, only CIT Bank has incorporated this game into their business model (even now drawing customers in with a savings rate and then to turn and offer a still higher money market rate to new customers).  The good news with CIT is that they do allow you to “upgrade” to the higher rate with a phone call.  Other banks (like Flushing Bank, through its IGoBanking and BankPurely subsidiaries) require that you apply for an entirely new account to get the higher rate.  Still others simply treat existing account holders like pariahs (BestCashCow and our affiliates do not classify Salem Five as an online bank as a result of their long history of quietly lowering the rates that they provide to existing customers without providing any disclosure or evidence of the new rate on their website, as well as their violations of numbers 1 and 2 above).

Now that online savings rates are going up so much faster than those of the major money center banks (Citibank, Chase, Wells Fargo and Bank of America), opening an online savings account as a place to stash your cash makes more sense than it ever has before.  But, you should also carefully consider the experience of others.   For this reason, we recommend looking at the star system and the comments provided by other BestCashCow users with a bank listing on our rate tables.

Always check savings and CD rates from banks and credit unions near you.

The above article mentions online banks that have been or are current advertisers on BestCashCow and our affiliates.   Please read our Advertiser Disclosure.