The best online savings accounts offer more than safety and a substantial rate of return. They complement your financial goals and habits while lacking hefty fees, keeping minimum deposit and balance requirements low, offering easy-to-reach customer service and providing innovative online and mobile banking technology.
In This Post
- Online Savings Account Promotions for 2021
- Best Online Savings Accounts
- Varo Bank: Best for High Yields
- Sallie Mae Bank: Best for Savings Goals
- Capital One 360: Best for Digital Banking
- American Express National Bank: Best for Access to Funds
- Discover Bank: Best for Avoiding Fees
- Marcus by Goldman Sachs: Best for Same-Day Transfers
- Ally Bank: Best for Customer Experience
- nbkc bank: Best for Combined Savings and Checking
- Axos Bank: Best for Full-Service Banking
- Salem Five Direct: Best for High Balances
- How to Choose an Online Savings Account
- Summary of Best Online Savings Accounts 2021
- Methodology
- Frequently Asked Questions (FAQs)
- Next Up In Banking
Online Savings Account Promotions for 2021
Best Online Savings Accounts
We’ve compared 70 savings accounts at 56 nationally available banks and credit unions to find some of the best accounts available. Click on the individual View Details button for each featured account to learn more about why we picked it, the pros and cons and to access individual bank reviews.
Annual percentage yields (APYs) and account details are accurate as of January 4, 2021.
Varo Bank: Best for High Yields
Varo Savings Account
0.40% to 2.80%
$0
$0
N/A
Sallie Mae Bank: Best for Savings Goals
Sallie Mae SmartyPig Account
0.55% to 0.80%
$0
$0
N/A
Capital One 360: Best for Digital Banking
Capital One 360 Performance Savings Account
0.40%
$0
$0
N/A
American Express National Bank: Best for Access to Funds
American Express® High Yield Savings Account
0.50%
$0
$0
N/A
Discover Bank: Best for Avoiding Fees
Discover Bank Online Savings Account
0.50%
$0
$0
N/A
Marcus by Goldman Sachs: Best for Same-Day Transfers
Marcus Online Savings Account
0.50%
$0
$0
N/A
Ally Bank: Best for Customer Experience
Ally Bank Online Savings Account
0.50%
$0
$0
N/A
nbkc bank: Best for Combined Savings and Checking
nbkc bank Everything Account
0.40%
$0
$0
N/A
Axos Bank: Best for Full-Service Banking
Axos Bank High Yield Savings Account
0.61%
$250
$0
N/A
Salem Five Direct: Best for High Balances
Salem Five Direct eOne Savings Account
0.61%
$100
$0
N/A
How to Choose an Online Savings Account
The APY may be what catches your eye when shopping for a savings account, and rightfully so. It’s crucial to find an account that helps you get the most for your money.
But there are other important criteria to keep on your comparison checklist. One account may suit your financial goals and banking habits better than another, even if it offers a slightly lower APY. In addition to APY, here are some other features to pay attention to when shopping around:
- Fees. Monthly fees and excess transaction fees can eat into your earnings. And some online savings accounts even charge fees if your balance falls below a minimum balance threshold anytime during the billing cycle.
- Minimums. Banks and credit unions vary on the minimum deposit they require to open an account and the minimum balance they require to earn interest. Generally, lower minimum requirements make it easier to maintain the account.
- Customer service. Especially if you’re using an online bank with no branch access, it’s important to make sure you can access a customer care representative whenever you need to—and that they’re responsive to your requests.
- Digital experience. Look for banks with solid online and mobile experiences and consider the features you use most often. For instance, if you frequently deposit checks, make sure mobile deposit is available.
- Withdrawal options. Banks and credit unions vary in how they allow you to withdraw funds from a savings account. And although the Federal Reserve Board has suspended Regulation D, which restricts the number of transactions a saver can make per cycle from their savings account, each institution has its own policies. Check withdrawal options and the excess transaction fee of each institution before you open an account.
- Safety. Look for an account insured by the Federal Deposit Insurance Corporation (FDIC), which provides up to $250,000 in insurance per depositor, per bank, for each account ownership category. At credit unions, make sure the account is insured by the National Credit Union Administration (NCUA).
It’s also important to consider your financial goals and needs to figure out which savings account features are most valuable to you.
For example, if you need help setting and tracking financial goals, choose an account that offers savings tools. If you often need to bank while on the go, find an account with a highly rated mobile app. Your needs and behaviors can help guide you toward the savings account that’s right for you.
Summary of Best Online Savings Accounts 2021
| Bank | Best For |
|---|---|
| Varo Bank | Best for High Yields |
| Sallie Mae Bank | Best for Savings Goals |
| Capital One 360 | Best for Digital Banking |
| American Express | Best for Access to Funds |
| Discover Bank | Best for Avoiding Fees |
| Marcus by Goldman Sachs | Best for Same-Day Transfers |
| Ally Bank | Best for Customer Experience |
| nbkc bank | Best for Combined Savings and Checking |
| Axos Bank | Best for Full-Service Banking |
| Salem Five Direct | Best for High Balances |
Methodology
To create this list, Forbes Advisor analyzed 70 online savings accounts at 56 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. We ranked each institution on 11 data points within the categories of APY, fees, minimum requirements, customer experience, digital banking experience and availability. All of the accounts on our list are online-based accounts.
Here’s the weighting assigned to each category:
- APY: 45%
- Fees: 15%
- Minimums: 15%
- Customer experience: 10%
- Digital experience: 10%
- Availability: 5%
We also considered whether there were complex tier structures or requirements to earn the APY or stipulations to earn the APY. Minimum deposit requirements of $10,000 or higher affected scores negatively, as did high minimum balance requirements to avoid fees. To be on this list, the online savings account must be nationally available.
Frequently Asked Questions (FAQs)
What is an online savings account?
Online savings accounts are opened and maintained primarily online.
These accounts stand out from regular savings accounts in that they tend to pay significantly more than the average savings account rate, which is 0.05% APY as of January 4, 2021, according to the FDIC.
You’ll find that the best online savings accounts are frequently offered by online banks and credit unions, which don’t typically have the costs associated with operating traditional brick-and-mortar banks. Without the expense of physical branches, online banks can pass those savings on to their customers in the form of higher yields and lower fees. But some banks offer both online and brick-and-mortar savings options.
Keep in mind that the bank or credit union offering an online savings account may have only a few products, which means your checking account may be separate from your savings account. Fortunately, digital technology makes it easy to transfer money and automate your finances.
How do I open an online savings account?
The process to open a savings account online differs slightly by bank and credit union.
Generally, you can fill out an application online via the bank or credit union’s website. You’ll provide information including your name, Social Security number, date of birth and other contact information. Once you’ve chosen your account type and get approved, you can start funding the account. Funding options may include bank transfer, check or wire transfer.
You may open more than one savings account. It can be helpful to have different accounts for different savings goals.
Are online savings accounts safe?
Yes, so long as the account is insured by the FDIC (Federal Deposit Insurance Corporation) at a bank or the NCUA (National Credit Union Administration) at a credit union.
Online financial institutions come with the same protections as savings accounts opened at a bank or credit union with branches. They are insured up to $250,000 per depositor, per bank, for each account ownership category, in the event of a bank or credit union failure. Before opening a savings account, confirm that the financial institution is FDIC or NCUA insured.
How frequently do interest rates on savings accounts change?
Rates on savings accounts tend to be variable. Banks and credit unions adjust interest rates for various reasons. Typically, financial institutions change their rates when the Federal Reserve adjusts the federal funds rate.
On March 15, 2020, due in part to concerns about the coronavirus (Covid-19) and its effect on the U.S. economy, the Federal Reserve lowered its target range for the federal funds rate to zero to one quarter percent, where it has remained ever since. Even in the current very low interest rate environment, savings APYs are still being reduced. However, this doesn’t necessarily mean that switching banks to get a better interest rate makes sense for you.
How do I make deposits and withdrawals to an online savings account?
Online savings account customers generally have several options for making deposits and withdrawals. These include online funds transfer with another bank account, wire transfer, phone transfer or physical check. Some online accounts also offer ATM or debit cards.
Is savings account interest taxable?
Interest earned from your savings account is generally considered taxable by the IRS. If you earn $10 or more in interest in a year, your bank or credit union will provide you with a 1099-INT to include in your tax filings.
Even if you don’t receive a 1099-INT from your financial institution, you still must report all earned interest income.
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