Are you tired of your local bank having a near zero percent interest rate and annoying fees? It does not have to be like this. The best high-yield savings accounts earn up to 1.70 percent and can convert your interest earnings from pennies to dollars. A higher interest rate makes it easier to save for emergencies and big purchases like a house or a car. You also have more incentive to earn passive income.
Now is the perfect time to find the best savings rates for online banks. The earlier you start, the more income you can earn. The top high interest savings accounts usually have higher interest rates than most local banks.
List of the best high interest savings accounts in 2020
It only takes a few minutes to compare high-yield savings accounts with the best interest rates and minimum deposits. The best internet savings accounts do not charge account fees. Everyone has Federal Deposit Insurance Corporation (FDIC) insurance for the first 250.000 USD of your account balance.
1. CIT Bank
CIT Bank has two options for the best high interest savings accounts. Your Premier High Yield Savings currently yield 1.00 percent of the total account balance. With a Savings Builder account, you can earn a higher interest rate. If you make a monthly deposit of at least $100, you can earn 1.15 percent of your account balance. Your total account balance, however, earns only 1.03 percent APY if you skip a recurring deposit.
With a daily account balance of more than 25.000 USD you can also earn the interest rate increase. You can avoid the Savings Builder account if you don't make recurring deposits over $100 USD. Both accounts require a minimum deposit of $100 and have no monthly account fees. Read our CIT Bank Review to learn more about CIT's other banking services.
2. Axos Bank
An Axos Bank High Yield Savings yields 1.35 percent on all deposits, which is about 20 times the national average. Get a free debit card upon request. Axos Bank offers a "switch kit" that allows you to transfer your current bank account. There are no monthly account fees or minimum balance requirements. However, the initial $250 deposit is higher than other high interest rate savings accounts.
3. chime bank
Chime Bank offers one of the best online savings accounts and free checking account. You open a chime account first before requesting a chime account. Both accounts are free and require no minimum balance. You can also get your direct deposit check up to two days early. SpotMe feature can prevent overdraft fees on qualified debit card purchases. The spending account can round up your debit card purchases to the nearest dollar. Chime transfers these summaries from your spending account to your savings account.
Unlike the other options in this list, your savings account balances earn only 0.06 percent. However, it was 1.60 before the pandemic. Read our Chime Bank review Learn about free ATM access and overdraft protection.
4. Improving daily cash reserve
Improving the daily cash reserve pays 0.40 percent on all deposits. This rate is at the low end of the best savings rates with high returns. Like Chime, the pandemic has affected Betterment's rates. You do, however, get FDIC insurance of up to $1 million. Joint accounts are insured up to $2 million. Most banks do not offer such comprehensive coverage. There are no account fees or minimum accounts. You can make unlimited account transfers, which is unique because most banks have a monthly limit of six transactions under federal law. A cash reserve account can be a good option if you invest with Betterment. This fully automated robo-advisor invests in stock and bond index funds. The robo-advisor has also recently added review of improvement as a feature. Like the Cash Reserve account, it has no minimum accounts or fees. They also reimburse all ATM fees from ATMs that accept Visa. Read our review of the improvement to learn more about the platform.
5. Discover
One of the best online savings account rates can be found at Discover the bank. Your high-yield savings account offers a total return of 1.40 percent. There is no minimum deposit or running balance. You also don't pay monthly service fees. Discover provides free month-to-month updates for Track your FICO credit score.
6. Synchronbank
Synchronbank is known for having some of the best high interest savings accounts available. Your total account balance at Synchrony High Yield Savings earns 1.50 percent. The lack of account fees and no minimum deposit make this a good option build an emergency fund. You can request an optional debit card to make up to six monthly withdrawals. Most online savings accounts do not offer debit cards, but money market accounts do. Synchrony offers up to $5 for out-of-network ATM refunds. Withdrawals from ATMs in the network are free of charge.
7. UFB Direct
Can you maintain an account balance of at least 10.000 USD maintained? If so, the UFB High Yield Savings account is one of the best online savings accounts as you can earn up to 1.70 percent. The only catch is that only credits over 10.000 U.S. dollars earning interest. The first 9.999 US dollars will not earn interest, but you will not pay account fees with a small balance.
8. Radius Bank
- Credit up to 2.499.00 USD: Zero percent
- Balance between 2.500 and 24.99.99 USD: 0.15 percent
- All credits over 25.000 USD: 0.25 percent.
After the first deposit of 100 USD there are no monthly account fees or minimum account requirements.
9. PenFed Credit Union
PenFed Credit Union is one of the few credit unions that offers online savings accounts with high interest rates. Premium online savings account has no fees and all balances earn 1.40 percent.
The minimum deposit is 5 USD. However, this account is online only and does not offer local branch access.
Your account has 250.000 dollars of National Credit Union Association (NCUA) insurance instead of FDIC insurance, which is for banks.
Credit unions have stricter membership requirements than online banks. You must provide your personal information during the PenFed application process. However, no military service is required to become a member.
10. HSBC Direct
HSBC Direct is the online-only savings account for HSBC. This option may be a good choice if you have an HSBC checking account to keep your money under one roof.
Direct savings account does not have local branch access. Your entire balance earns 1.70 percent.
There are no account service fees and a first deposit of 1 USD opens your account.
11. Nationwide my savings
Nationwide my savings is a top contender for best high-yield savings accounts. Your total account balance earns 1.70 percent, one of the best high-yield interest rates.
You must make an initial deposit of $100, but do not have to maintain a minimum balance.
Another unique feature is that Axos Bank offers Nationwide's banking services. Like Axos' high-yield account, there are no account fees, but Nationwide earns a higher interest rate.
You don't need a nationwide insurance policy. However, you may see quotes for Nationwide's various insurance products.
Frequently asked questions about high-yield online savings accounts
Most banks with high-yield savings accounts are transparent about possible fees. However, internet bank accounts work differently than a standard bank account.
How does an online savings account work?
Many online savings accounts offer above-average interest rates, low minimum account balances and no monthly fees.
However, you may only be able to access it through a bank website or mobile app. Banks like Capital One with online savings accounts don't offer access to on-site branches.
Many of the best high-yield savings accounts are from online-only banks. You must link your savings account to a checking account or make a direct deposit to fund your account.
You can also make mobile check deposits.
In exchange for a higher interest rate, you can only make up to six withdrawals per month, according to federal law. These savings accounts can not be used as a checking account for you daily expenses.
What makes a savings account high yield?
High interest accounts offer interest rates that are significantly higher than standard bank accounts.
Most standard savings accounts have an annual rate of return between 0.01 and 0.10 percent. The best online high interest savings accounts have interest rates above 1.00 percent and even 1.70 percent.
This is how much APR you can get for a deposit of 1.000 USD earned:
High-yield interest savings accounts are an effortless way to boost returns when bank interest rates are at historic lows.
Is my money safe in an online bank?
No online or local bank is risk-free. However, the online banks we recommend are up to 250.000 US dollars FDIC-insured.
This coverage is the same protection offered by local banks. If your online bank fails, you can get the first 250.get back 000 USD of your account balance.
Credit unions have a similar coverage of 250.000 USD, but instead through the NCUA.
What is a limit on withdrawing my money from an internet savings account?
Federal law allows up to six withdrawals per month for online-only savings accounts. Most banks charge a small fee for each excess transaction.
This withdrawal restriction does not apply to online checking accounts or standard savings accounts. The good news is that you can earn a higher interest rate and avoid bank fees.
What is a promotional APY?
The standard interest rate you earn on savings accounts is an annual percentage yield (APY). Most local bank savings accounts have a current APY between 0.01 and 0.10 percent.
Many banks with high-yield savings accounts have interest rates between 1.00 and 1.70 percent.
Banks may offer a limited-time APY on new accounts. For the first 12 months, you may receive an APY of 5.00 percent.
Your deposits earn the current APY after the promotional period ends.
These promotions are an excellent way to INCREASE your savings quickly. Read the promotion terms and conditions to make sure you qualify.
How does a savings account compare to a money market account or CD?
There are two common characteristics between savings accounts, money market accounts and CDs:
- FDIC-insured up to 250.000 USD (some banks offer more coverage)
- All accounts can earn interest
Savings accounts and money market accounts are most similar. You can make penalty-free monthly withdrawals. Banks may offer higher interest rates on savings accounts.
Money market accounts are more likely to offer an ATM card and paper checks. However, some banks do not offer ATM card of savings accounts.
Bank CDs can earn the most interest of all three account types. However, you may not be able to withdraw your money until the end of the CD term if you pay an early redemption fee.
For example, a 12-month CD means you can't touch that money for a year.
Can I lose money on a high-yield savings account?
High-yield savings accounts are a low-risk way to earn passive income with money you don't have investing in the stock market.
Most high-yield accounts are fee-free, so your monthly interest earnings will exceed your monthly account costs.
Each savings account has FDIC insurance of up to 250.000 USD, but the amount of coverage may be higher. If the bank fails, you can get the insurance amount back.
You should open several accounts if you have more than 250.Have $ 000 in cash savings.
A "hidden loss" for high-yield savings accounts is inflation. Even the best savings rates for online banks have an APY that does not exceed the actual inflation rate.
The official US inflation rate is between two and three percent.
Best online savings accounts: Conclusion