American Flag

Online Savings & Money Market Account Rates 2021

Highest Online Bank Rates for Savings And Money Market Accounts - July 29, 2021

Savings Account National Average Rate: 0.10% ?

 

As I write, in July 2021, we are living in a strange time.   We are facing extraordinary risks to our democracy in the US, risks to our health as COVID-19 variants appear, and risks to our environment as it becomes increasingly clear that the human race has delayed far too long to expect any meaningful investment to counteract climate change. Yet, the US stock (...read more in the Recent Articles section below the rate table).

ONLINE BANKS APY? MIN?

| Mar 30, 2021

These guys are the best local bank. Very responsive.

Requires download of bank app and recording of over 12,500 average daily steps (or 10,000 if over age of 65). Inbound transfers are limited to $2,500/week and take 4 days.

| Mar 29, 2021

It seemed compelling but too many hoops with an app that didn't load right and I was never able to get the account funded. I will opt for a little less and maintaining my sanity. Read More

| Jun 23, 2021

I am 83. Had no problem opening this account online.

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

| Jun 3, 2021

not perfect, but the rate is consistently at the top and therefor worth the effort Read More

| Jul 9, 2021

On Credit Card. Crooks got paid through "PayPal" for a non-delivered item. Alliant insisted I go through PayPal to get a chargeback. The crooks used a no-longer-existing fake account to receive money. So P...

| Jun 15, 2021

I was so pleased with the service and so frustrated by low rates everywhere that I was thinking about moving from a savings to a 1 yr CD and they have a 180 day penalty so I held off Read More

| Jul 6, 2021

I cannot believe that I opened an account online and read all fo the documentation and only then learned that I cannot get a single penny into the account without going to a branch. On the positive side, t... Read More

| Jun 15, 2021

I saw the bad reviews here and elsewhere but I need to say that I opened account 3 mos ago and find Brio to be at the same level as any of these. Read More

| Jul 7, 2021

Avoid unless you want to spend your life on hold arguing about fees. They eventually reimburse them, but the hours needed to do it ended up valuing my time around 20 cents each. Read More

| May 20, 2021

opened the account because it is the only name on the list that sounded familiar ... works fine, no problems Read More

| Jul 7, 2021

This is s a crap organization run by kids that abused PPP, and are now about to boil themselves on crypto. You should not give them your money at 51 basis points!

| 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

| 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

| Dec 12, 2020

"keeping their savings rate competitive" - they aren't. Read More

| Jun 25, 2021

A clear case of bait and switch advertising there CD rates and then constantly dropping then before anyone can open an acocunt. I have filed a complaint with CFPB.

| May 18, 2021

What an idiot name.

| May 29, 2021

Not a bad experience to open the account. I only learned that interest is credited quarterly and that is at least a nuisance. I wish I had known.

Freedom Bank (NJ)

0.50%

$0

Learn More

| Jul 15, 2021

Marcus is the very best online banking experience that I have ever had. Read More

| Jan 23, 2021

In terms of service, you cannot do anything online. On every other bank, you can message someone online and get a quick response. You need to call Synchrony and speak with someone in the Philippines. N... Read More

| Jun 20, 2018

great find Jason, looks like this really was a to good to be true rate 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...

New money only. External transfers limited to $10,000 per week.

| Apr 23, 2021

AVOID, INSECURE,IRRITATING. Application for SAVINGS and no credit. Invasive personal information. PHOTO of driver license--no scanning into "secure" application. It did not like original Photo, so was req...

| Jun 25, 2020

I can tell you nothing of this bank. I can tell you the rate posted here is incorrect (FIFTH one today!) I only wish I could review BestCashCow. Read More

| Aug 25, 2020

Bank is owned by a Florida bank and yet I wasn't able to open an account because I live in Florida. Go figure! Read More

| 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.

| Feb 7, 2021

I cannot comment on Bankdirect, but I can comment on the Bask Bank subsidiary. Opening this account to earn AAdvantage miles is the best move I've made in years! I am getting 100,000 frequent flier miles... Read More

New account holders only.

| Jan 3, 2021

This is the worst online banking I have seen. Without any warning they restricted access to withdrawals to $1000. Representative said they implemented on ALL accounts for ALL customers due to “fraud”... Read More

| Nov 18, 2017

This is a decent account until you need to withdraw something and then it is hell on wheels. Read More

CNB Bank Direct

0.49%

$25,000

Learn More

| Nov 18, 2020

I've been very pleased over the first six months - now feel cheated by silent .05% drops. How difficult is it to send a blast email notifying customers as a courtesy?

| Apr 30, 2019

No issues. I feel confident using them. Read More

| Sep 6, 2020

Yes, Pentagon had good rate initially, but it disappeared at renewal. We have top credit score (835).

| Jul 21, 2020

Opened account a month ago. I've already seen the rate fall a couple of times, but have no other complaints. Easy process and a clear easy to use site (unlike Ally where I was before). Read More

Zions Bank

0.45%

$1,000

Learn More

Dime Community Bank

0.45%

$1,000

Learn 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

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

| Dec 5, 2020

I know rates are variable, at their discretion*, but in the time frame of 9 months their rates have dropped to 1/3 of what they were ! is that what some call a teaser rate in the beginning ??? Read More

| Aug 3, 2020

There is a lot to like about this account. American Express is a real organization and you are not playing with a bunch of amateurs like with a lot of these banks. However, they will be sure to lower the ... Read More

| Dec 11, 2020

All the good reviews on this site are planted by the bank. This is the worst. It used to be good and the transfer speed is good. Still they lower their rates below anyone else and do it without the notice ...

| Aug 4, 2020

Sallie Mae is going to absolutely be the right bank for you if you enjoy calling during normal business hours and speaking with a automated voice response system that gives you no information and refuses t...

| Sep 14, 2020

two thumbs up Read More

| May 4, 2018

I opened an account about 1.5 years ago and the employees have always been nice and never had an issue with any teller saying they will put a hold on my deposit or being rude in any way shape or form. But.... Read 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

| 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

Bank charges ACH transfer fees and routinely lowers rates for existing customers below those advertised.

| Dec 8, 2020

Everyone here in Boston raves about Salem Five but it is shithole operation filled with nasty entitled people. As for this online savings product, the fees are ridiculous, the transfer charges are obnoxiou... Read More

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

| Mar 25, 2021

Completely excessive number of customer service phone calls after setting up account. Well meaning, but over the top.

| Aug 25, 2020

I cannot say that I am too happy about the rate, but the service on this one is excellent. Read More

| May 20, 2021

Lost in all of these reviews is that Purepoint is the bank that let's you have tons of corresponding accounts to which you can ACH money (their limit is something like 10). So, if you want to play this ga... Read More

| May 21, 2021

avoid this Read More

| May 10, 2021

Dollar Savings Direct is as close as anything gets to a scam without being labeled a scam. CDs renewing below market rates at no notice. Savings rates going above market levels and then way below (again no... Read More

| 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

| Mar 10, 2021

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

| Feb 28, 2021

The info in this comment is misleading. Bank is located in Willmar MN (not Minneapolis), but account may be opened online regardless of where you live. FDIC insures $250K, and eCentive account pays prem...

CNB Bank Direct

0.26%

$100

Learn More

| Apr 19, 2021

more problems than i or anyone should have time for Read More

| Nov 18, 2017

This is a decent account until you need to withdraw something and then it is hell on wheels. Read More

Promotional rate for new account holders only.

| May 8, 2019

One of the worst experiences I have ever had. Do not use them for loans, their servicing department is lazy, unorganized and terrible to work with. Sent in check over 3 months ago to get PMI removed and...

| 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

| 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

New money only.

| Dec 26, 2018

I think it is 1% on 1-year CDs and 2% on anything between 1 and 4 years. Not great, but not the worst I have seen. Read More

MainStreet Bank

0.25%

$1,000

Learn 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...

| May 19, 2017

Such a difficult experience and unpleasant experience that I would have been happier leaving my money at Wells fargo for 0.000001%. Read More

| 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

| Feb 28, 2021

The info in this comment is misleading. Bank is located in Willmar MN (not Minneapolis), but account may be opened online regardless of where you live. FDIC insures $250K, and eCentive account pays prem...

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

| Oct 8, 2018

Their promotional rate is just for a limited time and afterward their rate go down to close to 0.1% or so. For a consistently higher rate, look for more decent bank like CapitalOne360 or Discover. Read More

| Apr 18, 2018

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

| Jul 28, 2020

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

OneWest Bank, a division of CIT Bank

0.15%

$100,000

Learn More

Rate not available in all states.

| May 21, 2018

I wish I had never heard of or seen BBVA. It has been a disaster. Came to this site to find something else. Read More

| May 26, 2017

Before009 Read More

| Feb 12, 2020

WILL YOU CASH MY EE SAVINGS BONDS? PLEASE ADVSE.

| Sep 8, 2019

Opened an account and did $1000 for my initial deposit. If your balance averages below $1000 they charge you $10 a month. ETrade withdrew the $1000 from my checking account then, without reason, abruptly...

New Dominion Direct

0.05%

$100,000

Learn More

Edu

Restrictions

0.01%

$1

Learn More

| Feb 28, 2021

ACH transfers limited to $3,000, unsecured website, emailing acct numbers, hours to reach customer service. Need not say 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


Why It Might Not be Such A Bad Idea to Earn 0.40% On Your Money Right Now

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

As I write, in July 2021, we are living in a strange time.   We are facing extraordinary risks to our democracy in the US, risks to our health as COVID-19 variants appear, and risks to our environment as it becomes increasingly clear that the human race has delayed far too long to expect any meaningful investment to counteract climate change.

Yet, the US stock market sits at a valuation level where by any metric it is more richly valued than it has been at any point in our lifetimes (or at least in our memories).   In addition, every asset imaginable, including worthless coins, property rights and going concerns without any economically viable business model can be easily bid (manipulated) to a level where it can no longer be justified by even the most ardent of CNBC cheerleaders.

In our COVID times, cash has become trash.  The Federal Reserve began lowering the benchmark Fed funds on July 31, 2019 (before the virus), brought it to zero quickly when the virus hit, and seems to be willing to hold it there until 2023 while cravenly denying the existence of any inflation. 

The challenge with the current scenario is that while it seems like a ridiculous time to be holding anything in cash, asset valuations are so high that they could fall dramatically at any moment as a result of things that are foreseeable (a change in Fed policy), things that are not foreseeable or nothing at all.   And, we know from history that this can happen so quickly that very few will have a chance to save their assets.

Hence, I continue to say that it still seems like a good time to be protective and to keep some of your money in cash.   But, true cash alternatives are very unattractive.  Your broker at Morgan Stanley or Merrill Lynch is going to offer you 0.10% on brokered CD at the moment, which in addition to being a low rate is illiquid without a loss of principal.

A more attractive option – albeit still painful – is to put your money in an online savings account, as long as you stay within FDIC (or NCUA) limits.   Multiple banks that are part of the most solid financial entities in the world are offering these accounts at 0.40% APY at the moment.    And, the best thing about these accounts – particularly the accounts at American Express, Purepoint (MUFG) and CitizensAccess – is that you can transfer your cash back to a local bank account in order to take advantage of whatever opportunities or needs may arise in the near future.  (Other well-known and solid banking entities such as Barclays or Capital One also offer 0.40% online savings accounts, but reviews on BestCashCow indicate that transfers may take a little longer and service may be a little worse).  In fact, if you just take a few minutes to look at our list of the best online savings rates, you will find that there are also many banks that are willing to offer you more than 0.40% right now.

As you look out one or two years, you just do not want to find yourself in a position where you regretted not being a little more cautious.   And, if you are so young that you’ve reached the end of this article without appreciating the level of uncertainty we face ahead, then you might want to seek out someone who lived through 2000-2001 or who lived through 2008-2009.


Fed Leaves Fed Funds Target Rate at 0 to 0.25%, but Pencils In Two Hikes for 2023

The Federal Reserve today continued with its current rate stance and its current bond buying program, but is now indicating that it will back away from these easy-money policies in 2023 as inflation surges and growth accelerates.

While rates are not going up immediately, this means that investors should begin to prepare for higher rates over the coming years.

Preparation for higher rates should involve continuing to seek out the best savings rates on cash.   Rates on fixed income investments will begin to rise as we get closer to the Fed’s move, and certainly if the Fed is forced to advance its timeline due to continued inflation.   As a result, Investors should be very cautious about fixed income investments and avoid CDs longer than one-year.  

 Even though today’s move likely guarantees that borrowing costs will remain low for products like mortgages and home equity for another year, if you are considering remortgaging or taking out home equity loans related to properties you currently own, this would be a good time to check rates.


Major Banks are Just Awash in Cash

The Wall Street Journal has an interesting article today which highlights how banks have become so completely awash in deposits that they are discouraging major companies from continuing to increase their cash deposits.   It notes that CFOs and treasurers at companies, such as Verizon, ATT and Advanced Auto Parts, believe that the current economic circumstances require them to increase their allocation to cash, and that, in turn, is causing capital allocation problems for major banks.

The article is well worth a read, but it also raises the question of whether retail customers can expect to see any competition for their savings and CD dollars any time in the near future.

Given that total commercial deposits at US banks exceed $17.09 trillion according to the Federal Reserve, increasing by $411 billion over the last 2 months and by almost 50% over the last 3 years, and that the Federal Reserve seems intent on holding rates at zero for the coming two years, it seems unlikely that retail customers are going to see any competition among major banks for their deposits in the short term.

This is highlighted by the fact that the financial manager at ATT is quoted in the third paragraph of the article as saying that they really aren’t interested in optimizing their yield.  So, if ATT is just trying to hold their cash, should you give up and do the same?

The answer is no.   While the underlying economic circumstances are the same, as a retail depositor, you still have more avenues available to you to try to maximize your cash.  

First, major online banks, such as Ally, Citizens Access, Synchrony, CIT, Purepoint and Marcus (Goldman Sachs) have invested tremendous amounts over the last several years in advancing their banks among retail consumers.   So far, they have decided that there is a floor of about 0.40% APY below which they will not go for risk of eroding the retail investor goodwill and deposit basis that they have spent years building. 

Compare the best online savings rates here.

Second, retail consumers have access to local banks and local credit unions that may not be able to even meet capital requirement rules required to service large corporate customers.  Moreover, these banks are interested in retail customers that they can draw into other financial management and lending products and are therefore willing to remain competitive through the current environment.

Compare local bank savings rates near you here and compare local credit union savings rates near you here.

Certainly some depositors are going to be led to accept nothing or virtually nothing on their deposits, but for those who are willing to take the time to open new accounts within FDIC limits for banks and NCUA limits for credit unions, there continues to be incremental interest to be gained.


Product Information For High Interest Online Savings Accounts

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 shows that the highest yielding online savings account and money market rates increased through 2017 and 2018. Rates have stabilized with the best rates well above 2.00% in mid-2019, and the next move in the Fed Funds rate as set by the Federal Reserve is uncertain.

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 increased more slowly and now sits at 0.22%. (The BestCashCow rate database, the largest in the US, contains rates on over 2,000,000 bank products from all 8,000 banks and 7,700 credit unions in the US.)

Online Savings and Money Market Average Chart 2020

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. 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.

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. 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.

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

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 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 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.

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.

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


Why It Might Not be Such A Bad Idea to Earn 0.40% On Your Money Right Now

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

As I write, in July 2021, we are living in a strange time.   We are facing extraordinary risks to our democracy in the US, risks to our health as COVID-19 variants appear, and risks to our environment as it becomes increasingly clear that the human race has delayed far too long to expect any meaningful investment to counteract climate change.

Yet, the US stock market sits at a valuation level where by any metric it is more richly valued than it has been at any point in our lifetimes (or at least in our memories).   In addition, every asset imaginable, including worthless coins, property rights and going concerns without any economically viable business model can be easily bid (manipulated) to a level where it can no longer be justified by even the most ardent of CNBC cheerleaders.

In our COVID times, cash has become trash.  The Federal Reserve began lowering the benchmark Fed funds on July 31, 2019 (before the virus), brought it to zero quickly when the virus hit, and seems to be willing to hold it there until 2023 while cravenly denying the existence of any inflation. 

The challenge with the current scenario is that while it seems like a ridiculous time to be holding anything in cash, asset valuations are so high that they could fall dramatically at any moment as a result of things that are foreseeable (a change in Fed policy), things that are not foreseeable or nothing at all.   And, we know from history that this can happen so quickly that very few will have a chance to save their assets.

Hence, I continue to say that it still seems like a good time to be protective and to keep some of your money in cash.   But, true cash alternatives are very unattractive.  Your broker at Morgan Stanley or Merrill Lynch is going to offer you 0.10% on brokered CD at the moment, which in addition to being a low rate is illiquid without a loss of principal.

A more attractive option – albeit still painful – is to put your money in an online savings account, as long as you stay within FDIC (or NCUA) limits.   Multiple banks that are part of the most solid financial entities in the world are offering these accounts at 0.40% APY at the moment.    And, the best thing about these accounts – particularly the accounts at American Express, Purepoint (MUFG) and CitizensAccess – is that you can transfer your cash back to a local bank account in order to take advantage of whatever opportunities or needs may arise in the near future.  (Other well-known and solid banking entities such as Barclays or Capital One also offer 0.40% online savings accounts, but reviews on BestCashCow indicate that transfers may take a little longer and service may be a little worse).  In fact, if you just take a few minutes to look at our list of the best online savings rates, you will find that there are also many banks that are willing to offer you more than 0.40% right now.

As you look out one or two years, you just do not want to find yourself in a position where you regretted not being a little more cautious.   And, if you are so young that you’ve reached the end of this article without appreciating the level of uncertainty we face ahead, then you might want to seek out someone who lived through 2000-2001 or who lived through 2008-2009.


Fed Leaves Fed Funds Target Rate at 0 to 0.25%, but Pencils In Two Hikes for 2023

The Federal Reserve today continued with its current rate stance and its current bond buying program, but is now indicating that it will back away from these easy-money policies in 2023 as inflation surges and growth accelerates.

While rates are not going up immediately, this means that investors should begin to prepare for higher rates over the coming years.

Preparation for higher rates should involve continuing to seek out the best savings rates on cash.   Rates on fixed income investments will begin to rise as we get closer to the Fed’s move, and certainly if the Fed is forced to advance its timeline due to continued inflation.   As a result, Investors should be very cautious about fixed income investments and avoid CDs longer than one-year.  

 Even though today’s move likely guarantees that borrowing costs will remain low for products like mortgages and home equity for another year, if you are considering remortgaging or taking out home equity loans related to properties you currently own, this would be a good time to check rates.


Major Banks are Just Awash in Cash

The Wall Street Journal has an interesting article today which highlights how banks have become so completely awash in deposits that they are discouraging major companies from continuing to increase their cash deposits.   It notes that CFOs and treasurers at companies, such as Verizon, ATT and Advanced Auto Parts, believe that the current economic circumstances require them to increase their allocation to cash, and that, in turn, is causing capital allocation problems for major banks.

The article is well worth a read, but it also raises the question of whether retail customers can expect to see any competition for their savings and CD dollars any time in the near future.

Given that total commercial deposits at US banks exceed $17.09 trillion according to the Federal Reserve, increasing by $411 billion over the last 2 months and by almost 50% over the last 3 years, and that the Federal Reserve seems intent on holding rates at zero for the coming two years, it seems unlikely that retail customers are going to see any competition among major banks for their deposits in the short term.

This is highlighted by the fact that the financial manager at ATT is quoted in the third paragraph of the article as saying that they really aren’t interested in optimizing their yield.  So, if ATT is just trying to hold their cash, should you give up and do the same?

The answer is no.   While the underlying economic circumstances are the same, as a retail depositor, you still have more avenues available to you to try to maximize your cash.  

First, major online banks, such as Ally, Citizens Access, Synchrony, CIT, Purepoint and Marcus (Goldman Sachs) have invested tremendous amounts over the last several years in advancing their banks among retail consumers.   So far, they have decided that there is a floor of about 0.40% APY below which they will not go for risk of eroding the retail investor goodwill and deposit basis that they have spent years building. 

Compare the best online savings rates here.

Second, retail consumers have access to local banks and local credit unions that may not be able to even meet capital requirement rules required to service large corporate customers.  Moreover, these banks are interested in retail customers that they can draw into other financial management and lending products and are therefore willing to remain competitive through the current environment.

Compare local bank savings rates near you here and compare local credit union savings rates near you here.

Certainly some depositors are going to be led to accept nothing or virtually nothing on their deposits, but for those who are willing to take the time to open new accounts within FDIC limits for banks and NCUA limits for credit unions, there continues to be incremental interest to be gained.