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Best Online Savings Accounts of 2022

Victoria Daniel

Whether you are saving for a big purchase or growing your funds, these online savings accounts can help you achieve your goals. We’ve evaluated the top options on fees, minimums, APY, customer service, digital experience, and overall quality.

Access to checking writing

3.83%

Est. APY

$0

Min. To Earn APY

Overview

UFB Direct comes with check-writing capabilities and a free ATM card with a national network of fee-free ATMs.

What we like

  • Competitive interest rates
  • No minimum deposit
  • No recurring maintenance fees
  • Nationwide fee-free ATMs
  • Check writing capabilities
  • FDIC insured

What we don't

  • No physical branches
  • Account options are limited

Nationwide access to ATMs

3.00%

Est. APY

$0

Min. To Earn APY

Overview

A Discover Online Savings Account can be a great option for the avid saver where you can take advantage of daily compounding.

What we like

  • High APY
  • No minimum deposit
  • No recurring maintenance fees
  • 60,000+ Nationwide fee-free ATMs
  • No insufficient funds fee
  • User friendly mobile app

What we don't

  • Out-of-network ATM fees

Bank online with no monthly fees

3.25%

Est. APY

$0

Min. To Earn APY

Overview

This savings account is unique where you need to deposit $100 a month to get the highest APY. If you don't deposit $100+ a month, then you need to maintain $25,000 in the account. If you don't do either, you won't receive the higher end APY.

What we like

  • No monthly fees
  • FDIC Insured
  • No minimum balance fees
  • Online banking

What we don't

  • Minimum opening deposit
  • No ATM access
  • Tiered APY

Track savings on the mobile app

3.00%

Est. APY

$0

Min. To Earn APY

Overview

Quontic Bank high yield savings account provides you with the opportunity to accrue interest at a rate 15x higher than the national average. Interest compounds daily and is paid into your account every month.

What we like

  • Mobile and online banking
  • Competitive interest rate
  • No monthly service fees
  • Interest compounded daily

What we don't

  • Limited access to physical branches
  • No sign up bonus
  • $100 minimum deposit requirement

No monthly and minimum fees

0.61%

Est. APY

$0

Min. To Earn APY

Overview

This savings account will provide a flat APY regardless of your balance, and you won't worry about monthly fees. A great perk with this account is you can request a free ATM card.

What we like

  • No monthly fees
  • Interest compounded daily
  • Free ATM card

What we don't

  • No physical branch
  • No sign up bonus

Why should you open an online savings account?

Saving money is an essential part of any financial plan. But even if you diligently put money away every month, how you save can make a big difference. The best option for most people is to open an online savings account. Here are some of the most significant benefits:

  • Higher interest rates: Some savings accounts offer higher interest rates on your money than others. Online banks can offer higher rates than traditional banks because they have lower operating costs. They don’t need as many branches or employees as brick-and-mortar banks and can pass the savings onto you in the form of higher interest and lower fees. Over time, even a 0.10% rate difference can add up.
  • Fewer fees and better terms: Most online banks don’t charge monthly maintenance fees or minimum balance requirements. In addition, they typically won’t charge overdraft fees if you accidentally spend more than you have in the account (instead, they simply won’t honor the transaction).
  • Easily add money: Automated transfers are a great solution if you’re worried about how much to save every month. You simply set up auto-transfers from your checking account into your online savings account, and the bank does all of the work for you each month. You won’t have to remember to transfer money yourself or risk overspending because the amount is already set aside for saving. If you have a direct deposit set up at work, you can have some of each paycheck automatically deposited into your savings.
  • Easy to open and use: An online savings account is easy to open and use. You can apply for one in just a few minutes, even if you don’t have a bank account. Opening an online account doesn’t require a lot of time, and you can do it from anywhere as long as you have your computer or your smartphone that is connected to the internet.
  • Easy to withdraw: You can withdraw your money whenever you want without (usually) paying extra fees, unlike certificates of deposit or other savings accounts that may charge penalties for early withdrawal. If something comes up unexpectedly or suddenly (like getting sick), there’s no need to worry about having your cash locked up. This is because you can withdraw your money from your account anywhere and anytime while using your online savings account.
  • Protection: The FDIC will protect your money when you open a savings account at an online bank (if the account is FDIC insured). If something happens to the bank where you have your money invested (like if it goes bankrupt), you won’t lose your savings up to $250,000.

What do you need to open an online savings account?

Opening an online savings account is extremely easy. You’ll need the following information (but not limited to):

  • Proof of identity: You can use a passport or another government-issued ID to prove your identity. If you don’t have one, you may be able to use a combination of two different types of ID. For example, if you don’t have a driver’s license, you might be able to bring in your birth certificate and Social Security card.
  • Proof of address: You need to prove your current address, such as a utility bill.
  • Funding account: You’ll have to fund your account by a certain amount, usually between $50 – $100 to officially open the account.

How often do savings rates change?

Banks are constantly trying to stay competitive in the marketplace. This is why you may see some banks offer a special rate that is higher than the standard rate. Sometimes these special rates come with conditions.

Federal law says that banks can only change their rates once every 180 days or six months. Of course, there are always exceptions, but you should generally expect to see savings rates vary every six months.

Your bank may not raise its rate every time it has the chance, or it may introduce them more than once every 180 days.

These rates are usually determined by the central bank (known as the FED). If the central bank rate goes up, then your savings rates will go up.

Are online savings accounts safe?

Online savings accounts, including at banks with no branches, are safe and secure if it is FDIC insured, but there is a risk that any bank could go out of business. Fortunately, if the bank goes bankrupt, the FDIC will insure your money for up to $250,000.

The FDIC only covers checking, savings, CDs, and money market accounts. The National Credit Union Administration (NCUA) has similar coverage for credit unions.

You could open additional savings accounts under the same name at different online institutions and have more than $250,000 protected ($250,000 per account per bank). For example, you can open an account at Bank A and store $250,000 and then open another account at Bank B and store $250,000. You’ll have a combined protection of $500,000 in this case, but if you were to store the full $500,000 at Bank A, only $250,000 will be protected.

What are the common savings account fees?

Opening a savings account is pretty straightforward, but it’s essential to understand the potential fees. Here are some standard fees that may apply at certain institutions:

  • Minimum balance fee: Some savings accounts require you to keep a minimum amount of money in the account or be charged a monthly fee. This amount varies. If you think you might have trouble keeping up with this requirement, look for an account that doesn’t have a minimum balance requirement.
  • Monthly maintenance fee: Some banks charge this fee to cover expenses related to processing transactions and maintaining your account. Like the minimum balance fee, it can usually be avoided if you meet specific requirements such as maintaining a set minimum balance or depositing a certain amount each month.
  • Overdraft fee: If there isn’t enough money in your account, you’ll be hit with an overdraft fee when a transaction goes through. You can avoid these by linking your checking and savings accounts so the money will be transferred automatically if necessary.
  • ATM fees (out-of-network): If you use an ATM owned by another bank, you’ll likely pay two fees: one charged by your bank and the ATM owner. You can avoid this fee by using your bank’s ATMs or partners.

Why are most high interest savings accounts online?

Online financial institutions can offer higher interest rates because they have lower overhead and don’t have to maintain a network of physical branches or hire tellers and other branch staff. That saves them money, which they pass to their customers at higher interest rates. In addition, online banks are more efficient than traditional banks when managing accounts. These factors also help them offer higher interest rates.

How to choose the best online high-interest savings account

When it comes to finding the best high yield savings accounts, you’ll want to look into these factors:

  • A good interest rate: One of the most significant benefits of using a high-interest savings account is to earn more interest, so make sure that whatever account you choose has a competitive interest rate compared to its competitors.
  • No monthly fees: Most banks waive the monthly service fee for savings accounts, but some banks still charge this fee on their accounts. Find an account that charges no monthly fee.
  • Low minimum deposits: If you’re opening up an account for the first time, look into an institution that doesn’t charge a high minimum deposit amount, as most will let you open an account with no minimum deposit amount.