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Online Savings & Money Market Account Rates 2022

Highest Online Bank Rates for Savings And Money Market Accounts - September 27, 2022

Savings Account National Average Rate: 0.10% ?

The Federal Reserve has raised the Fed Funds target rate by 75 basis points to a target rate of 3.00% to 3.25%.   This is the highest it has been since 2008. The rate represents the third successive 75 basis point rate increase as the Federal Reserve moves desperately and late to try to get control of inflation in the US.   The (...read more in the Recent Articles section below the rate table).

ONLINE BANKS APY? MIN?
Sponsored Advertiser Disclosure
No fee online savings account with a great rate. Member FDIC.

| Sep 1, 2022

updated review - The bank managed to finally provide the requested document listing the beneficiary after a number of calls. So will add a few stars. The website still needs some work to be more descript... Read More

Bank does not offer ACH processing. Customers need to initiate ACH from outside bank.

| Aug 3, 2022

No ACH processing, what is this the 1960's? No customer service team, just one person.

| Sep 27, 2022

has strange old rules for link external bank , takes more time and difficult for no check writing today, just want advised for their name and dont want you deposit money to their bank for 3% interest. Read More

| Sep 21, 2022

I opened an account with Bask, a subsidiary of Texas Capital Bank, funded the account, and several days later, Bask "disabled" my account without notifying me or providing any explanation. In other words, ... Read More

External transfers are limited to $30,000 per week.

| Sep 24, 2022

Was going to open a savings acct ----- after reading the reviews, NO WAY. Don't make it difficult for customers, (or potential customers), to do business with you. Read More

| Jul 15, 2022

I received an email today that the transfer limits are now $100k per transfer, that transfers will take 3 days, and that the limit resets as soon as it settles after 3 days, and that thereafter it is $250k...

| Sep 20, 2022

Prime Alliance Bank has a single branch (outside Salt Lake City) and does an excellent job with distance banking (we are based in Washington state). It stands out in several ways: (1) Interfacing with the...

| Aug 20, 2022

Great experience with Ivy Bank! They are constantly updating their rate to stay competitive. Since I've opened my account they've increased my rate 4 or 5 times. It's easy to apply and open and have had no... Read More

| Mar 19, 2022

Problem with ties to puppy mills. I closed a cct. https://www.americanbanker.com/news/tab-bank-dragged-into-seedy-world-of-puppy-mill-loans-by-fintech-partner

| Sep 23, 2022

I know that the bank is supposedly FDIC insured but the entire soft money lending thing upon which this business is predicated is about to go go under so look out below!

Bank reports that this rate is for new customers only. Inbound and outbound transfers may take 3 to 6 business days. External transfer limits are $75,000/day and $250,000/month.

| Sep 26, 2022

Contacted the BrioDirect help line today and was told the following reason for why they made opening a new account called BrioDirect Savings Plus a requirement to get the 2.61% interest rate. Note: The ol... Read More

Rate requires download of bank app and recording of over 12,500 average daily steps (or 10,000 if over age of 65).

| May 8, 2022

If you have any device that is tracking your steps (phone, watch, fitbit) then I recommend this acct and this bank. Lots of fun and the competitions keep my husband and me motivated. Enjoying a rate which ... Read More

External outbound transfers are limited to $25,000 per day.

| Aug 26, 2022

Too slow to raise rates. Read More

| Jun 2, 2022

I've been a customer since CIT emerged from the financial crisis as a real competitor in this space (14 years or so). Zero complaints about anything over this time ... until today. Now they are offering a... Read More

| May 19, 2022

I was a long time customer. I took balances down below $200 in 2020 in order to buy a house during pandemic. I had always planned to deposit again in a rising rate environment. I logged back on today and ... Read More

| Sep 11, 2022

If I could leave a -10 star review I would do it in a. This is a classic example of a ridiculously unmanaged government program with zero oversight and zero sensibility. In April 2022 I applied for a st...

External transfers may take up to 3 business days and may be limited to $25,000/day.

| Jun 13, 2022

3 days for an ach is not market when most banks on this list do it instantly. even frigging rising bank. customer service is beyond dreadful. Read More

Rate available for new accounts only.

| Apr 10, 2021

I opened an account a couple of years ago and had a dreadful experience. I saw two weeks ago that the rate was better than at Citizens so I closed that account for this one. I cannot access my money now or... Read More

External transfer may take up to 3 business days. External transfer limits are $50,000/day and $200,000/month.

| Sep 18, 2022

Complete amateurs. Save the aggravation and stay away. Read More

Online transfers limited to $1,500 per day and $10,000 per month.

| Apr 30, 2022

I opened an account here last year. I have enjoyed getting a rate that is above Marcus, Ally or any of the better known names. What I have not enjoyed is having my mailbox flooded (and I mean flooded) with... Read More

| Jun 23, 2022

ING was better. They were bought by CapitalOne and ever since, my rates have steadily dropped. Now that rates in general have been rising for months, mine has been flat at 0.30%. No sign of them going up, ... Read More

| Aug 6, 2022

The idea that they aren't competing is wrong. They'll give you 1% more on your savings if you run around promoting their brand and get a friend to sign up. Great marketing scheme actually, since those so i... Read More

| Jul 1, 2022

not really an onllne bank. compare this interface that gives you no information with that of any other bank (I cannot even confirm the rate). cannot switch in and out of cds or np cds. just not an online b... Read More

| Sep 23, 2022

So much promise as a rate leader but now just peters out so I need to figure out how to get my money out and move along. Read More

| Aug 16, 2022

ally is still the gold standard in online banking, but the rate needs to get more competitive and the wait to speak to someone on the phone is just ridiculous. Read More

| Sep 14, 2020

two thumbs up Read More

| May 2, 2022

Barclays is the worst. Transfer speeds even worse than Synchrony now. Service is worse than anything. Save yourself the trouble of getting sucked into rates that are sometimes competitive and choose anythi...

| Nov 12, 2020

Rate has remained competitive and they are easy to work with.

| Jul 29, 2022

Been with Etrade-Morgan Stanley for decades. Always fantastic service & can move funds online in a second from savings to brokerage for trading. Very competitive on saving rates. Very happy customer in ... Read More

| Apr 22, 2015

Hello, I am interested in a line of credit against my home. I have a high interest credit card that I want to move to this credit. I have a wells fargo mortgage which is only a few years old which I do no...

| Aug 31, 2022

never had a problem moving money in/out. After trying a couple banks with higher rates but less service will be moving my money back here. Read More

| Dec 31, 2020

I’ve filed a complaint with the FDIC. This bank keeps rearranging my transactions, even if they’ve posted and are not pending. They also will deny a transaction and charge a non sufficient funds fee ... Read More

| Nov 2, 2020

Got the account opened after weeks and finally got it funded and then they dropped the rate the next day and it is no longer competitive.

| Jul 15, 2021

I finally closed my account. Was great back in the day as everbank but now it is a joke in every way. Read More

| Oct 27, 2021

I joined this bank and went through the process of applying for a HELOC. Everything seemed to be going well with only the paperwork needing to be signed and when I contacted them about having a POA and the...

| Mar 14, 2018

Poor service. Condescending attitude. Savings application denied without giving reason (Equifax file had a freeze because of hacking history) and not advising customer of need to unfreeze credit file for a... Read More

| Jun 26, 2022

ACH transfers are not allowed. Called and was told that I had to set up wire transfers (and pay fees) or I could come in to the bank and get a bank check.

| Jun 12, 2022

I have a small question Read More

| Sep 17, 2020

It is a complete game between MySavings, DollarSavings and Emigrant. Some days one has a competitive rate, the next day the rate on that one has dropped to zero and it is one of the other brands that has... Read More

| Aug 10, 2022

While they offered good rates, I got nothing but the runaround on membership. Twice submitted required forms in which they said were not clear enough, but only after I called them to see what the holdup w...

| Jul 17, 2021

I've been with this bank for 6 months and have not had any problems. Bill pay works good. The 24 month investing CD is another vechile I use. Rates are above average considering the national rate. I'd reco... Read More

| Jun 12, 2022

I have a small question Read More

ConnectionPlus Savings. New customers only, but existing customers may transfer assets online to new account.

| Apr 30, 2022

Customer service is actually pretty helpful if you can ever reach anyone.

| Jun 1, 2021

Update: STAY AWAY FROM THIS BANK! They have no clue how to run an online bank. This bank is not ready for prime time. Nothing but problems. Customer service is dismal at best.

New money only.

| Sep 6, 2019

Went to bank yesterday this is not a good rate. Needs to be updated. Read More

Seattle Bank

0.85%

$0

Learn More

| Sep 1, 2022

awful POS. Sucks. Bad. crappy. Read More

| May 21, 2021

avoid this Read More

| Mar 30, 2021

These guys are the best local bank. Very responsive.

| Apr 30, 2019

No issues. I feel confident using them. Read More

| Jun 20, 2018

Their website says the offer is going away tomorrow at 9AM EST. Hurry! Read More

| Oct 11, 2020

You probably thought - as did I - that you were looking at a site that belongs to and was the responsibility of Gateway First. After all it includes their headings, selected financial statements, many pag...

Zions Bank

0.45%

$1,000

Learn More

Amboy Direct

0.45%

$30,000

Learn More

| Aug 10, 2019

I did not appreciate getting pulled into the 2.53% offer on $100k only to have the rate lowered by the time I finally got the money in.

Norwood Bank

0.45%

$100,000

Learn More

Freedom Bank

0.40%

$0

Learn More

Not available to residents of states with PNC branch locations.

| Oct 25, 2020

Online Savings rate was dropped to 0.65% a week ago from 0.80% and BestCashCow still showing former rate. Read More

| Jun 10, 2022

This bank hasn't raised their rates! Maybe I was sleeping but I need to get out of here fast. Read More

| Jan 24, 2020

This rate is not accurate as it is 2.25%

Inbound transfers limited to $25,000/day and $100,000/month.

| Aug 28, 2022

Rates are totally uncompetitive now.

| Mar 10, 2021

Northpointe -- my most favorite bank -- held their rate when others dropped -- nice people to deal with -- and -- COURAGE + INTEGRITY.

| Jul 28, 2020

Dropped rates again with restrictive transfer limits and poor service. Better rates and liquidity elsewhere. Beware!!! Read More

Signature Bank of Georgia

0.30%

$200,000

Learn More

| Sep 14, 2022

you need open new account once interest going up, keep in mind your savings account only go down never go up unless you open new account. Read More

| Apr 8, 2019

Their online interface is circa 2004. They limit the number of accounts you can set up for ACH. And they sit on ACH transfers.... for days. Not sure if the good rates are worth it. Read More

| Aug 13, 2019

I filled out the application 10 days ago answering all questions and sent a file with a copy of my drivers license to Western Bank. I received an email saying that a banker would call me within one busines...

| Mar 25, 2020

I was told on the phone by a bank rep that my present money market acct interest rate would continue at 2.25% until June 30, 2020 and would be FDIC covered up to $250,000. Please verify if this is true???...

| Jan 4, 2020

Be aware, when cd comes due, they mail a check to your home which takes 7-10 business days. That is a long time to have money not drawing any interest. Read More

OneWest Bank, a division of First-Citizens Bank and Trust

0.15%

$100,000

Learn More

Rate not available in all states.

| Aug 7, 2020

Had a car loan with them. Paid it off because I was selling the vehicle. They told me it would take 10 business days to clear the transaction (it was immediate via electronic) and was out of my account th... Read More

| Jan 24, 2020

This rate is not accurate as it is 2.25%

| Apr 18, 2018

Worst experience of my life. Did not fund and gave $25 to my own charity. Read More

| May 26, 2017

Before009 Read More

| Feb 12, 2020

WILL YOU CASH MY EE SAVINGS BONDS? PLEASE ADVSE.

Promotional rate for new depositors only. Prior depositors may receive a lower rate.

| Apr 14, 2020

I call HSBC they told me they don't have 1.85 1 year CD. current CD is 0.8 / year Read More

New Dominion Direct

0.05%

$100,000

Learn More

Edu Federal Credit Union

Restrictions

0.01%

$1

Learn More
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.

Best Online Savings Account Rates

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.
  • Assess 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 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.

Why You Can Trust BestCashCow

Every year, Americans collectively lose at least $80 billion in income just by putting their savings in the wrong bank accounts. BestCashCow is the most comprehensive and unbiased bank rate site on the Internet and our mission is to help you to avoid your share of these losses. We monitor over 30,000 rates from over 8,000 FDIC-insured banks and 7,700 NCUA-insured credit unions. Take a few minutes to explore the table above to see the best savings rates currently offered by online banks, or use the tabs to explore local bank rates or local credit union rates if your prefer to do your banking locally.

By using BestCashCow to move your money to a new bank from one with a low savings rate 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!

You can learn more about BestCashCow here.

Recent Articles


Federal Reserve Moves Fed Funds Rate to a 3.00% - 3.25% Target

The Federal Reserve has raised the Fed Funds target rate by 75 basis points to a target rate of 3.00% to 3.25%.   This is the highest it has been since 2008.

The rate represents the third successive 75 basis point rate increase as the Federal Reserve moves desperately and late to try to get control of inflation in the US.   The rate is now dramatically higher than it was at the beginning of 2022, at which point Fed Chairman Jerome Powell was still holding its target at 0 to 0.25% as part of its COVID-19 emergency stimulation measures.

More importantly, the Fed has sharply raised its Fed funds target for the end of 2022 and into 2023.   Its target rate for the Fed Funds future rate in three months time is now 4.40% (versus earlier guidance of 3.40%), meaning we now have another 125 basis points or so of additional rate hikes in October, November and December.  And, into 2023, the Fed will hold rates higher for longer to fight inflation.

As the Fed Funds rate increases and as liquidity is removed from the system, you should expect to see more competition for your cash.   If you bank is not increasing its savings rate commensurately in order to stay competitive, consider moving to a more competitive online savings or money market account.

Most major online savings and money market rates can be opened in a matter of minutes through their website or mobile application.  Compare the best rates among these online banks on BestCashCow here.


Is Your Online Bank Giving You Their Best Savings Rate As Savings Rates Increase?

More than a decade ago, when GMAC Bank had just rebranded as Ally Bank, they ran a series of commercials designed to build the Ally brand around integrity of treating their customers equally, and not giving preferential treatment to new customers over existing customers.   I’ve only been able to find a handful of these commercials on YouTube, but there were many more than these:

 

 

The commercials were outstanding.   They set Ally apart as a bank that could be trusted to treat its customers fairly, and they also set a paradigm for the online banking industry which virtually all of Ally’s customers were forced to follow for more than a decade.

But, now as interest rates are increasing, some banks feel the need to attract new capital by offering new customers better rates than existing customers.   This practice enables them to keep their cost of capital lower as rates rise.  To be clear, it is perfectly legal to segment your market, but as Ally understood, it is just really bad business.

Here are four culprits who are at it already.

First, Flushing Savings Bank.   This bank has been in the online space for quite a while and it operates IGoBanking, BankPurely and GiftsforBanking.  The bank has a bit of a checkered history of moving rates around between the different banks in order to segment the brand (as does Emigrant Direct which does the same thing through the parent brands, MySavingsDirect and Dollar Savings Direct).   Segmenting the market with different brands, however, is at least transparent.   The IGoBanking and BankPurely brands have been increasing their rates, but the new rates are only available to new customers.  I personally had been a customer for many years through one of the brands and when rates started to rise, I reached out and asked them to extend the new rate to me, and was invited to haggle for something midway)   I obviously closed the account.

Second, Sallie Mae Bank.  This bank has been competitive over the years, and this year as rates have started to rise, they’ve rolled out a whole series of No Penalty rates through a third-party broker that are much higher than those available to existing customers.  I had been a customer for over a decade and when I asked them to make one of these products available to me, I received a curt email which made it clear that I was no longer valued as a customer.

Third, Goldman Sachs or Marcus or Goldman Sachs Marcus, or whatever they have decided to brand themselves this week, has been very competitive since the business was bought from GE Capital a few years ago, and always treated its customers very fairly.   However, as rates began to increase in 2022, they decided to be competitive only for those customers who are hawking the bank to their neighbors and social media acquaintances (i.e., you only get their most competitive rate if someone signs up with your referral code).   Those long-term customers who don’t have quite the following of a Kardashian are left out in the cold with an uncompetitive rate.  Not exactly the kind of loyalty that you would expect from a brand like Goldman Sachs.

Ally’s ads of a decade ago were right!   Banking is a people business and people expect to be treated fairly.   We are in a rising rate environment and there are banks that are desperate for your hard earned capital.  There is no reason to play gotcha and there is no reason to allow a bank that you’ve been loyal to for many years to give you anything but their best rate.

If that is happening to you, find a new bank here

Did you have an experience where you were extended a lower rate than a new customer?  Let us know below.


Fed Funds Rate Raised by 75 bps to a 2.25%-2.50% Target; Savings Rates Should Get Sweeter

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

To absolutely nobody’s surprise, the Federal Reserve has voted unanimously to raise the Fed Funds rate by 75 basis points today, setting a Fed Funds rate target of 2.25% to 2.50%.  The move follows a similar 75 basis point increase six weeks ago and is the Fed’s fourth move since beginning the year at a 0-0.25% target.

We’re still suffering from a Fed that held rates at zero for too long in the aftermath of the pandemic and then has moved too late and too slowly to address the inflationary pressures caused by Putin’s invasion of Ukraine.

While this will be the Fed’s last move until September, the Fed Funds rate is still likely to be at least one percent higher than where it is right now at the end of the year as the Fed tries to play catch up.

Savings and money market accounts will probably move up toward the new Fed target, although some well-known online banks are flush with deposits and are not moving aggressively.  We have seen banks stall out, such as Purepoint which is still at 0.40% APY, in spite of having been one of the most aggressive competitors for your online deposits just three years ago!  For this reason, it is important to regularly compare your online savings rate with the best rates here.

We’ve seen a lot of skepticism about savings accounts and the value of getting 2% on your money while inflation is burning at 9% plus.   The difficulty in maintaining purchasing power parity underscores the insidious nature of inflation, and how important it is for the Fed to move still more aggressively to get it under control.  And, while you may be losing purchasing power, a guaranteed 2% is a whole lot sweeter than anything we’ve seen for a while.  It is well worth reaching for, especially in a bubbly environment where asset prices in the US are still stretched.


Frequently Asked Questions About Online Savings Accounts

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 to 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 Do Online Savings And Money Market 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.

How Do I Open An Online Savings or Money Market 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.

What are the Best 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 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 by not having to maintain brick-and-mortar locations. You should also check rates at local banks and credit unions. Unlike other websites, BestCashCow.com 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.

Depending on where you live, there may be banks and credit unions offering rates still higher than the best online savings rates.BestCashCow maintains the largest rate database – including rates on over 2,000,000 bank products from all 8,000 banks and 7,700 credit unions in the US – in enable you to compare online rates with local rates in your area.

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. BestCashCow.com 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.

What are the 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.

What are the disadvantages of Online Only banks?

  • A variable interest rate. While most leading online banks have not lowered rates significantly in past years, any savings rate can conceivably be lowered at any time.
  • There are often new entrants to the market that can disappear as quickly as they arrive on the scene.
  • 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 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.

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 BestCashCow.com. 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.

Recent Performance of Online Savings And Money Market Accounts

BestCashCow data shows that the highest yielding online savings account and money market rates increased from a base around 0.75% through 2017 and 2018 to a peak just over 2.00% in mid-2019. The Fed Funds rate was lowered in July 2019 and then brought to zero in early 2020 in response to COVID-19. As the Federal Reserve raises the Fed Funds rate in 2022 and 2023, online savings rates may eclipse their mid-2019 highs.

The graph below shows how the average rates for online savings and money market accounts have trended over the last several years.  In addition to the broad movement that we see in online savings and money market account averages according to economic circumstances and the Fed Funds rate, there is wide variability among rates offered by the leading online banks. Even while the online savings average has remained below 0.40% for most of 2020 and 2021, we have seen some banks offer rates as high as 0.65% or 0.70% during this time.

Online Savings and Money Market Average Chart 2022

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 a percentage point) 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 have not accessed the BestCashCow Savings Calculator or mastered 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, over 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 hesitant 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 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. Most online banks do not offer mortgages, credit cards and brokerage services. 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 this kind of 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 that allow family members to obtain certain tax advantages through setting aside funds 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 follow 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.

SAVINGS & CD CALCULATOR

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

Online Savings & Money Market Account Rates

Recent Articles


Federal Reserve Moves Fed Funds Rate to a 3.00% - 3.25% Target

The Federal Reserve has raised the Fed Funds target rate by 75 basis points to a target rate of 3.00% to 3.25%.   This is the highest it has been since 2008.

The rate represents the third successive 75 basis point rate increase as the Federal Reserve moves desperately and late to try to get control of inflation in the US.   The rate is now dramatically higher than it was at the beginning of 2022, at which point Fed Chairman Jerome Powell was still holding its target at 0 to 0.25% as part of its COVID-19 emergency stimulation measures.

More importantly, the Fed has sharply raised its Fed funds target for the end of 2022 and into 2023.   Its target rate for the Fed Funds future rate in three months time is now 4.40% (versus earlier guidance of 3.40%), meaning we now have another 125 basis points or so of additional rate hikes in October, November and December.  And, into 2023, the Fed will hold rates higher for longer to fight inflation.

As the Fed Funds rate increases and as liquidity is removed from the system, you should expect to see more competition for your cash.   If you bank is not increasing its savings rate commensurately in order to stay competitive, consider moving to a more competitive online savings or money market account.

Most major online savings and money market rates can be opened in a matter of minutes through their website or mobile application.  Compare the best rates among these online banks on BestCashCow here.


Is Your Online Bank Giving You Their Best Savings Rate As Savings Rates Increase?

More than a decade ago, when GMAC Bank had just rebranded as Ally Bank, they ran a series of commercials designed to build the Ally brand around integrity of treating their customers equally, and not giving preferential treatment to new customers over existing customers.   I’ve only been able to find a handful of these commercials on YouTube, but there were many more than these:

 

 

The commercials were outstanding.   They set Ally apart as a bank that could be trusted to treat its customers fairly, and they also set a paradigm for the online banking industry which virtually all of Ally’s customers were forced to follow for more than a decade.

But, now as interest rates are increasing, some banks feel the need to attract new capital by offering new customers better rates than existing customers.   This practice enables them to keep their cost of capital lower as rates rise.  To be clear, it is perfectly legal to segment your market, but as Ally understood, it is just really bad business.

Here are four culprits who are at it already.

First, Flushing Savings Bank.   This bank has been in the online space for quite a while and it operates IGoBanking, BankPurely and GiftsforBanking.  The bank has a bit of a checkered history of moving rates around between the different banks in order to segment the brand (as does Emigrant Direct which does the same thing through the parent brands, MySavingsDirect and Dollar Savings Direct).   Segmenting the market with different brands, however, is at least transparent.   The IGoBanking and BankPurely brands have been increasing their rates, but the new rates are only available to new customers.  I personally had been a customer for many years through one of the brands and when rates started to rise, I reached out and asked them to extend the new rate to me, and was invited to haggle for something midway)   I obviously closed the account.

Second, Sallie Mae Bank.  This bank has been competitive over the years, and this year as rates have started to rise, they’ve rolled out a whole series of No Penalty rates through a third-party broker that are much higher than those available to existing customers.  I had been a customer for over a decade and when I asked them to make one of these products available to me, I received a curt email which made it clear that I was no longer valued as a customer.

Third, Goldman Sachs or Marcus or Goldman Sachs Marcus, or whatever they have decided to brand themselves this week, has been very competitive since the business was bought from GE Capital a few years ago, and always treated its customers very fairly.   However, as rates began to increase in 2022, they decided to be competitive only for those customers who are hawking the bank to their neighbors and social media acquaintances (i.e., you only get their most competitive rate if someone signs up with your referral code).   Those long-term customers who don’t have quite the following of a Kardashian are left out in the cold with an uncompetitive rate.  Not exactly the kind of loyalty that you would expect from a brand like Goldman Sachs.

Ally’s ads of a decade ago were right!   Banking is a people business and people expect to be treated fairly.   We are in a rising rate environment and there are banks that are desperate for your hard earned capital.  There is no reason to play gotcha and there is no reason to allow a bank that you’ve been loyal to for many years to give you anything but their best rate.

If that is happening to you, find a new bank here

Did you have an experience where you were extended a lower rate than a new customer?  Let us know below.


Fed Funds Rate Raised by 75 bps to a 2.25%-2.50% Target; Savings Rates Should Get Sweeter

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

To absolutely nobody’s surprise, the Federal Reserve has voted unanimously to raise the Fed Funds rate by 75 basis points today, setting a Fed Funds rate target of 2.25% to 2.50%.  The move follows a similar 75 basis point increase six weeks ago and is the Fed’s fourth move since beginning the year at a 0-0.25% target.

We’re still suffering from a Fed that held rates at zero for too long in the aftermath of the pandemic and then has moved too late and too slowly to address the inflationary pressures caused by Putin’s invasion of Ukraine.

While this will be the Fed’s last move until September, the Fed Funds rate is still likely to be at least one percent higher than where it is right now at the end of the year as the Fed tries to play catch up.

Savings and money market accounts will probably move up toward the new Fed target, although some well-known online banks are flush with deposits and are not moving aggressively.  We have seen banks stall out, such as Purepoint which is still at 0.40% APY, in spite of having been one of the most aggressive competitors for your online deposits just three years ago!  For this reason, it is important to regularly compare your online savings rate with the best rates here.

We’ve seen a lot of skepticism about savings accounts and the value of getting 2% on your money while inflation is burning at 9% plus.   The difficulty in maintaining purchasing power parity underscores the insidious nature of inflation, and how important it is for the Fed to move still more aggressively to get it under control.  And, while you may be losing purchasing power, a guaranteed 2% is a whole lot sweeter than anything we’ve seen for a while.  It is well worth reaching for, especially in a bubbly environment where asset prices in the US are still stretched.