Online banks especially online savings accounts (OSA) are becoming more popular with time. According to a recent report by Fortunly, more customers in the U.S. are using online baking services. From 2014 to 2019, the numbers have increased by an extra 20% and the total tally is now at 160 million Americans – which is almost 77% of the adult population.
Therefore, what is enticing about online banking (compared to the regular in-person banking) that’s making more people to sign up for it in droves? The high interest rates and great benefits.
After considering some important criteria the following banks offer the highest ratings in the industry. If you can’t decide between two banks that have great savings accounts, take a look at this review on credit unions and banks so that you can settle on one. We considered different variables which will help you figure out the bank that is more suitable for your needs. This is our methodology.
1. CIT Bank’s Savings Builder – 0.40% APY
CIT Bank rewards customers who add more money in their savings through the Savings Builder Account which helps customers increase the savings they have in their account and develop great saving culture at the same time. The minimum amount for opening this account is $1,000, but you’ll not be charged for maintenance and all the transactions you make should be performed through the bank’s app. (Full review)
2. Discover Online Savings Account – 0.40% APY
If you’re new to online banking, opening an account in an established and reputable institution such as Discover Bank allows you to have peace of mind. Discover Bank is the best choice because they don’t charge for checking, savings money market products. They also have the best interest rates for online banking in the industry. (Full Review)
3. Chime High Interest Savings – 0.50% APY
Theoretically, a banking service provider, Chime provides you with a great deal of features as well as a high interest savings account. The bank doesn’t have physical branches but they have partnerships with more than 60,000 ATM locations (which are free of charge) across the country. (Full Review)
4. Ally Bank – 0.50% APY
Savings boosters, crystal clear fee structure where applicable, account buckets. (Learn More)
5. Barclays Bank – 0.40% APY
No monthly maintenance charges or minimum deposit. You can access your funds 24/7. (Learn More)
6. Synchrony Bank – 0.50% APY
This is not only a simple and straightforward savings account option; it’s also offers you with high- interest rates with no minimum balance or service fees. (Learn More)
7. Marcus by Goldman Sachs – 0.50% APY
This bank also provides you with a savings account that is simple and straightforward. You won’t be charged for services and there’s no minimum balance as well. (Learn More)
8. American Express National Bank – 0.40% APY
No minimum account balance required or service fees. However, there’s daily compounding automatically attached to available deposits. (Learn More)
9. Citizens Access – 0.40% APY
Requires a minimum deposit of $5,000 with no teaser or promotional rates. (Learn More)
10. PurePoint – 0.40% APY
Requires a minimum deposit of $10,000, no fees for all services. No teaser or promotional rates. (Learn More)
How to Open an Online Savings Account
Once you finish comparing and researching about the available options for a saving account, you can now proceed to open an actual account. You’ll be required to perform a couple of things.
- Put together all your documents. The most important document to have include your driver’s license and Social Security number or any other photo ID issued by the government. If you’re not a resident of the U.S., you might be required to submit or scan you immigration credentials.
- Double-check your selections. It’s a good idea to perform one last check on all the banks you selected before you settle on a specific account. Ensure you confirm that the bank is insured by the FDIC, their current APY and other terms such as the minimum deposit amount. You might discover that one of the banks has a new financial incentive in regards to account opening (or another removed theirs).
- Fill out your application completely. Apart from your Social Security card and photo ID, you may be required to give proof of employment, your address or other details. Note that most bank need their customers to provide a signature page containing a live signature. For example, you may be required to print and mail the page instead or scanning it or wait for the bank to send you one that has a return envelope that’s stamped. The process can take a couple of days before it becomes complete, meaning it might be a few days before you finish opening your account.
- Fund your account. This is the final step for opening and making a deposit. This can easily be done by transferring a bit of money from an account that you linked to it. When your new account has been confirmed and verified, you can start making recurring and regular deposits.
Advantages of Online Savings Accounts
Opening a savings account is a great way of securing your finances and earning interest at the same time. online savings accounts are reliable, safe option for storing money and you’ll be able to track the remaining balance as you make more deposits and increase your wealth.
Online savings accounts have other benefits like:
- Lower fees: This is an additional benefit of having an online savings account because banks don’t really charge people excessive or extraneous fees.
- Higher interest rates: Online banks normally have lower overhead (this is because most of them don’t have a physical location, bank tellers, etc.). Since the banks don’t have a lot of expenses, they are able to provide their customers with higher APYs compared to regular banks.
- Convenience: Most online banks provide services 24/7 and you’ll also be to access your account from your computer or mobile phone. They save you from having to driving to the bank during rush hour before they close or during the weekend.
Disadvantages of Online Savings Accounts
Like expected, relying on online banking comes with several limitations. The following are some of the most common drawbacks of using online banking:
- Hard to get money. If you make frequent withdrawals and deposits in your account, online banking might not be the best option for you. Since the banks don’t have physical locations, you won’t be able to walk into the banking hall and make a deposit. There are online banks that have ATM networks but they aren’t easy to located.
- Next to no personal service. Of course, online banks come inclusive of online chat service as well as a customer service hotline. This is not the same as walking into a banking hall and talking to a banker face-to-face.
- Technology glitches. You may experience some challenges with the website or app’s performance, a linked account can be unlinked or transfers refusing to go through for some reason. This can be very inconvenient and frustrating when you’re trying know your account balance or withdraw some money.
Select an Account According to Your Needs
The best online account is one that fulfills all your needs and requirements. For example, if you’re looking for an account with high interest rates as well as a large ATM network, consider using Ally or Synchrony. On the other hand, if you want one with a popular name and comprises of additional products to select from, Discover will be suitable for you.
A hybrid approach is the best choice if you don’t want to commit fully to online banking. For instance, you can use your account for a large percentage of your savings and still have an account with a credit union or local bank for instances when you in-person or cash services are required.
Depending on the features you prefer, you can always find an online savings account that suitable for you. Don’t forget to get an account that fulfills all your needs so that you’re able to make saving money a frequent habit.
How Millionable Rates Online Savings Accounts
We consider several important factors when evaluating online savings accounts that help us find where they fall on the rating scale:
- Customer service
- Annual percentage yield (APY)
- Mobile app reviews
- Account balance requests
- Fees and possibility of incurring them
The most important things to consider when opening a savings account, fees and APY play a big role when we’re rating banks than most of the other factors since they affect your entire financial well-being.