Rate requires download of bank app and recording of over 12,500 average daily steps (or 10,000 if over age of 65).
Last change: ↓0.10% on December 2.
Rate History: 4.75% → 5.00% → 4.90%
JGothelf | Oct 11, 2022
Glad to have found this one and thanks to bestcashcow for not hiding the best rates like bankrate does
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Surge Money Market. Bank reports that this rate is available for new accounts only. External transfers are limited to $5,000/day and are not free.
Last change: ↓0.50% on September 19.
Rate History: 4.65% → 5.35% → 4.85%
Jason T | May 30, 2023
They really do pay this amount, but the account lacks any functionality and they are constantly looking for some sort of add-on fee to enable them to claw back the interest. Any bank with a higher rate an...
Read More
Online Savings Account. Not currently accepting new accounts.
Last change: ↓0.15% on December 13.
Rate History: 5.30% → 5.15% → 5.00% → 4.85%
redstate jeff | Oct 29, 2024
Agree with the prior review even though it is 10 years old. It is shady and it doesn't show up on other sites. However, they did pay me 5.30% and although it is recently lowered to 5.15% it is still the b...
Last change:
↓0.25% on October 17.
Rate History: 5.10% → 5.25% → 5.05% → 4.80%
lrcbob | Jul 26, 2024
Multiple roadblocks trying to set up a savings account with Jenius Bank and my application was ultimately declined, in spite of my multiple CDs among three banks, stock investments, eleven credit cards, an...
Read More
LevelUp Savings Account. Requires direct deposit of at least $250/month. Bank's standard online savings rate is 3.75% APY.
Last change: ↓0.25% on November 26.
Rate History: 4.80% → 5.30% → 5.15% → 5.00% → 4.75%
overdrawn | Nov 12, 2022
I was shopping for deposit rates in August, and NerdWallet, a site I had previously trusted, had it on their list. I was unaware they took deposits. They are the only bank that ever duplicated a transactio...
Money Market Premier. Bank reports that this rate is for new customers only.
Last change: ↓0.10% on November 17.
Rate History: 4.95% → 4.85% → 4.75%
Mike Brown | Jul 6, 2023
This is an example of a bad bank. Their online process for purchasing a CD is horrible. You fill it out and it rejects it after all of your private information is disclosed. They there customer service is ...
Read More
Online Savings Account.
Last change: ↓0.05% on December 19.
Rate History: 4.75% → 4.70%
American Banker | Apr 7, 2023
Good luck deploying those high yield savings into profitable investments. It’s always a bad strategy … unbridled growth using volatile deposits forcing them to go out on the risk spectrum to make a dec...
Direct Money Market Account.
Last change: ↓0.19% on December 27.
Rate History: 5.26% → 5.11% → 5.01% → 4.86% → 4.67%
79Thru | Mar 21, 2023
Parent seems to be owned by a large Chilean bank. Not saying this is good or bad, but it is complication, especially in the current environment.
Read More
Cornerstone Money Market Account. Bank reports that this account is available to new customers only. Old account holders in the savings product are earning 1.10%.
Last change: ↓0.11% on December 12.
Rate History: 5.20% → 5.05% → 4.90% → 4.77% → 4.66%
Jim S | Dec 21, 2023
Very easy to setup 6 month 5.35% CD from cornerstone account
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Last change:
↓0.40% on November 18.
Rate History: 5.15% → 5.30% → 5.00% → 4.60%
lrcbob | Jul 26, 2024
Multiple roadblocks trying to set up a savings account with Forbright and my application was ultimately declined, in spite of my multiple CDs among three banks, stock investments, eleven credit cards, and ...
Direct Savings. Bank reports that this rate is available for new accounts only.
Last change: ↓0.16% on November 18.
Rate History: 5.05% → 5.01% → 4.90% → 4.76% → 4.60%
Neil | Dec 18, 2023
I submitted a CD application 18 months 5.50 APY over a week ago and my application was declined no reason was given, I have the funds in another bank for transfer, credit score over 800. I think the reason...
Read More
Bank was bailed out by Steven Mnuchin in March 2024 but may still fail. External transfers take at least 3 business days and are limited to $50,000/day and $200,000/month.
Last change: ↓0.10% on December 27.
Rate History: 5.00% → 4.85% → 4.75% → 4.65% → 4.55%
smithy1968 | Apr 20, 2024
Even staying well within FDIC limits, the frustration isn't worth your time! Dopey bank trying desperately to avoid govt closure.
Read More
High Yield Money Market. External transfers are limited to $30,000 per week.
Last change: ↓0.13% on December 19.
Rate History: 5.00% → 4.90% → 4.80% → 4.65% → 4.52%
TJK | Sep 30, 2023
CFG overs very competitive Interest rates on their High Yield Savings account.
I did everything ONLINE and have not had any issues with their service.
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High-Yield Savings Account. Outbound transfers limited to $10,000/day or less.
Last change: ↓0.10% on December 20.
Rate History: 4.95% → 4.75% → 4.65% → 4.60% → 4.50%
lrcbob | Jul 26, 2024
Multiple roadblocks trying to set up a savings account with Bread Financial, even though I already have a CD with them. My application was ultimately declined, in spite of my multiple CDs among three banks...
Read More
Jumbo Savings.
Last change: ↓0.10% on December 23.
Rate History: 4.99% → 4.95% → 4.60% → 4.50%
BW | 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
New money only. Requires Direct Deposit. Account carries a $15 monthly service charge.
Last change: ↓0.26% on November 11.
Rate History: 5.34% → 4.72% → 4.46%
tjgarnett | Mar 2, 2024
Attracted to the name, but the service had too many steps so I didn't open an account.
not really an onllne bank. compare this interface that gives you no information with that of any other bank (I cannot even confirm the rate). cannot switch in and out of cds or np cds. just not an online b...
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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
Last change:
↓0.35% on December 20.
Rate History: 4.75% → 5.15% → 5.05% → 4.75% → 4.40%
redstate jeff | Oct 29, 2024
Same ole Neverbank. They changed the name and then changed it back but nothing has changed in 20 years. First they loop you in to some sort of teaser rate (now it is 5.05%, but it has been lower). Then th...
Read More
High Yield Savings Account.
Last change: ↓0.15% on December 23.
Rate History: 5.27% → 5.02% → 4.52% → 4.37%
Yat 1965 | Mar 19, 2022
Problem with ties to puppy mills. I closed a cct. https://www.americanbanker.com/news/tab-bank-dragged-into-seedy-world-of-puppy-mill-loans-by-fintech-partner
MySavings Account.
Last change: ↑0.45% on December 16, 2022.
not perfect but | Apr 25, 2023
with all of these online bank, including the well known ones, delaying transfers forever in order to fund these high rates, this one still executes inbound and outbound transfers immediately.
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Platinum Savings. Bank reports that this rate is available for new accounts only.
Last change: ↓0.20% on December 20.
Rate History: 5.00% → 4.85% → 4.70% → 4.55% → 4.35%
MrBond | Feb 25, 2023
I have been working for this company more than 5 years. I would not recommend any investment with First Citizens Bank. They are the worst performer on the market based on the customer and employee reviews...
Read More
UFB High Yield Savings. Bank reports that this rate is for new customers only.
Last change: ↓0.26% on November 28.
Rate History: 5.25% → 5.15% → 4.83% → 4.57% → 4.31%
Miles Jacobsen | Jul 18, 2023
I got into this one back in early April for the rate. It was the first to hit 5%. I put up with all sorts of annoying thing getting the account funded (including a 5-day wait period during which they had...
Read More
Last change:
↓0.05% on August 7.
Rate History: 4.35% → 4.30%
Azoic | Feb 25, 2022
I joined Citi with a Costco-VISA card. An Accelerate followed, and then a checking account.
Costco-VISA is necessary for using a credit card at Costco, otherwise cash is necessary.
Accelerate Savings w...
Read More
Last change:
↓0.15% on December 17.
Rate History: 5.10% → 4.60% → 4.45% → 4.30%
Jenny Kingston | Jun 10, 2024
I guess customer service is in the US (not sure). I'd rather that someone in the Philippines answered though. These people are so poorly trained and ill informed that I do not trust them with my personal...
Read More
ConnectionPlus Savings. New customers only, but existing customers may transfer assets online to new account.
Last change: ↓0.30% on November 18.
Rate History: 4.90% → 5.40% → 4.90% → 4.60% → 4.30%
praveen raj | Jan 18, 2024
Hi,
We've noticed your website is at risk due to spammy comments and contact form submissions, making it susceptible to issues like spammy backlinks and data breaches. Don't worry—there's a simple sol...
Last change:
↓0.60% on November 25.
Rate History: 5.00% → 4.85% → 4.25%
J Dally | Jun 13, 2023
I'll steer clear of Dollar Savings Direct and My Savings Direct until they guarantee users at both online divisions their best rates. Banks have the right to segment their customers yes, but these games w...
Read More
eMoneyMarket Special. Bank reports that rate is extended for new money only.
Last change: ↓0.25% on December 23.
Rate History: 5.00% → 5.25% → 4.75% → 4.50% → 4.25%
Bank reports that this rate is for new customers only. Bank also charges ACH transfer fees and routinely lowers rates for existing customers below those advertised.
Last change: ↓0.25% on November 17.
Rate History: 5.01% → 4.41% → 4.50% → 4.25%
LarryMass | 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
Last change:
↓0.50% on December 3.
Rate History: 5.00% → 4.75% → 4.25%
H | Apr 25, 2021
It has some of the most inept, cold workers. They do not return calls. You have trouble using payments or transactions by phone as they charge you. For months during COVID no hand sanitizer was present ...
Money Market Account. Bank does not offer ACH processing; customers need to initiate ACH externally.
Last change: ↓0.25% on December 23.
Rate History: 5.00% → 4.75% → 4.50% → 4.25%
65JimmyJay | Dec 12, 2022
Developed buyers remorse after they stopped raising the rate and switched to Brilliant.
Online Savings Account.
Last change: ↓0.35% on December 18.
Rate History: 5.00% → 5.30% → 5.00% → 4.60% → 4.25%
lrcbob | Jul 26, 2024
Multiple roadblocks trying to set up a savings account with Ivy Bank and my application was ultimately declined, in spite of my multiple CDs among three banks, stock investments, eleven credit cards, and c...
Read More
Last change:
↓0.50% on November 18.
Rate History: 4.65% → 4.75% → 4.25%
an | Apr 25, 2022
We would not be having all this trouble with people sealing money out of other people's bank accounts if we were to just stop using fancy banking like onlinebanki
Last change:
↓0.25% on December 23.
Rate History: 4.45% → 4.20%
NRB | 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
Last change:
↑0.36% on August 7.
Rate History: 3.81% → 4.17%
Electra McCain | 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
High Yield Money Market Account.
Last change: ↓0.35% on December 23.
Rate History: 5.15% → 4.85% → 4.50% → 4.15%
Jean-Marc | Nov 10, 2023
Just found out after submitting all my personal information:
"Western also allows one free outgoing wire per month."
"External transfers from Western State Bank Online Banking: After 60 days you will h...
Personal Savings Account.
Last change: ↓0.35% on December 29.
Rate History: 4.50% → 4.15%
JBaker65 | May 6, 2023
Fully functional bank account that would be great for my needs, but the quarterly interest payment thing is a real nuisance. I wish they would change it. It isn't market.
Last change:
↓0.10% on December 7.
Rate History: 4.35% → 4.20% → 4.10%
LenaL | May 2, 2022
Barclays is the worst. Transfer speeds even worse than Synchrony now. Service is worse than anything. Save yourself the trouble of getting sucked into rates that are sometimes competitive and choose anythi...
Last change:
↓0.10% on December 9.
Rate History: 4.60% → 4.55% → 4.50% → 4.20% → 4.10%
HAL1975 | Aug 2, 2023
Sallie mae is just a horrible institution. We've done business with them before and swore on the holy bible not to go near there again, but a 18 mos cd at 5.55% brought us back.
External transfers may take up to 3 business days and may be limited to $25,000/day.
Last change: ↓0.20% on December 7.
Rate History: 4.50% → 4.65% → 4.50% → 4.30% → 4.10%
mcriss | Oct 23, 2023
Synchrony Bank recently closed 3 of my accounts with them and this decision was completely unwarranted. I had two Guitar Center cards and one Levin Furniture card. I found out about this through a push not...
Read More
Last change:
↓0.15% on November 20.
Rate History: 4.50% → 4.25% → 4.10%
FROZE-ACCOUNT | Jan 10, 2024
Account was frozen (over 400K) after they confused our account with another account / person whose name was not even very similar. We were treated like dirt after 12 years and "Guilty until Innocent". I ha...
Read More
Last change:
↓0.10% on October 28.
Rate History: 4.35% → 4.30% → 4.25% → 4.10% → 4.00%
Dev1ldog | Nov 8, 2023
I see nothing exciting about AmEx Bank. Sign on is a hassle and the rates are adequate. Multiple accounts are not summarized. To cancel maturing CDs require phoning in or snail mail. Above average serv...
Read More
Quontic Money Market Account.
Last change: ↓0.75% on December 19.
Rate History: 4.75% → 5.00% → 4.75% → 4.00%
JuanVelasco | Mar 17, 2023
STAY AWAY !
They closed my accounts with no warning.
After multiple successful direct deposits and mobile checks deposits, they claimed one of the three checks I deposited a few days ago was fake. No...
Last change:
↓0.30% on December 25.
Rate History: 4.30% → 4.20% → 4.30% → 4.00%
redstate jeff | Oct 29, 2024
Same ole Neverbank. They changed the name and then changed it back but nothing has changed in 20 years. First they loop you in to some sort of teaser rate (now it is 5.05%, but it has been lower). Then th...
Read More
Last change:
↓0.10% on December 17.
Rate History: 4.30% → 4.25% → 4.10% → 4.00% → 3.90%
AVOID_ READ_CAREFULLY | Jan 10, 2024
AVOID at all costs. We read the addendum to the final page of the LENGTHY account agreement mailed to us after completing the online portion. Guess what? It gives this sweet seeming Discover Bank access to...
Read More
Last change:
↓0.35% on November 18.
Rate History: 5.15% → 4.75% → 4.25% → 4.25% → 3.90%
NRB | 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
Online Money Market Account. Ally's Online Savings account rate is only 3.75% APY.
Last change: ↓0.15% on November 21.
Rate History: 4.35% → 4.25% → 4.20% → 4.00% → 3.85%
Rad | Aug 13, 2023
Been a customer for a couple of years now with interesting checking, been a happy customer. They give you a $10 reimbursement on atm fees per statement cycle. They pay you to leave your money there curre...
Read More
360 Performance Savings Account. Rate available for new account holders only.
Last change: ↓0.10% on December 7.
Rate History: 4.25% → 4.10% → 4.00% → 3.90% → 3.80%
highstream | Jan 2, 2024
Like others, I've been with Capital One and its predecessor ING Direct since 2007. I've also been getting cheap bank rates on my savings account and didn't realize that there was something better, although...
Read More
Online transfers limited to $1,500 per day and $10,000 per month.
Last change: ↓1.00% on December 19.
Rate History: 4.75% → 4.00% → 4.80% → 4.75% → 3.75%
AEM | Sep 18, 2023
I agree with another user, this bank is very poorly put together, and may very well be an operation in large part used to extract and sell people's personal information. I called customer service and had ...
Read More
Last change:
↓0.45% on December 23.
Rate History: 4.15% → 3.70%
james | Nov 18, 2023
bad bank hold your deposit over months without credit in your account, no interest, they don’t want pay you interest , they want your money with 0% interest.
Read More
Last change:
↑2.06% on August 7.
Rate History: 1.50% → 3.56%
Beenthere | Jan 29, 2024
Tried to enter information on line to open a 5 year CD, multiple time and wasn't accepted. Talked to a live person who was of no help at all. My credit score is over 800 and I have plenty of money in oth...
Read More
Last change:
↑0.25% on November 21.
Rate History: 3.45% → 3.50% → 3.00% → 3.25% → 3.50%
an | Apr 25, 2022
We would not be having all this trouble with people sealing money out of other people's bank accounts if we were to just stop using fancy banking like onlinebanki
Last change:
↓0.50% on September 22.
Rate History: 3.90% → 3.40%
norich@aol.com | Mar 19, 2024
I have 5 other cd's at competing banks and have not had trouble. I tried 3 times today to open one w/ bradesco and it repeatedly declines my app after I input the code they sent me. Customer service was no...
Read More
Last change:
↓0.10% on November 4.
Rate History: 3.50% → 3.40%
JohnC | Oct 11, 2020
You probably thought - as did I - that you were looking at a site that belongs to and was the responsibility of Gateway First. After all it includes their headings, selected financial statements, many pag...
Read More
Their CD rates are reasonable and their Visa rewards is very good at 2.5% on all purchases up to 10K/month.
Their customer service is polite and helpful.
However, their IT department must need some serio...
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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.
Finworth looks legit, but their online disclosures and incomplete and you cannot reach them by phone and they don't respond to inquiries. I am moving along and you should too.
Read More
Last change:
↓0.35% on October 11.
Rate History: 2.60% → 2.25%
Zman111 | Jun 26, 2022
ACH transfers are not allowed. Called and was told that I had to set up wire transfers (and pay fees) or I could come in to the bank and get a bank check.
Synchrony Bank recently closed 3 of my accounts with them and this decision was completely unwarranted. I had two Guitar Center cards and one Levin Furniture card. I found out about this through a push not...
Read More
HORRIBLE SERVICE. My son's campus checking account was hacked and over $9000 was stolen. Fraud department was impossible to reach and we waited on phone several days for over 2 hours at a time. They too...
Last change:
↓0.10% on November 11.
Rate History: 5.25% → 0.55% → 2.50% → 2.27% → 2.17%
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.
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!
As expected, the Federal Open Market Committee has ended its December 2024 meeting by cutting the Fed Funds rate by 25 basis points to a 4.25% to 4.50% target. The Fed's decision follows a 50 basis point cut in September and a 25 basis point cut in November. The Fed funds rate now stands a full percent below where it was just three months ago and where it had stood for most of 2024 (the Fed raised interest rates by 25 basis points in January for its final move of this cycle).
The December decision was not unanimous with Cleveland Fed President Beth Hammack voting against the move and preferring to keep rates steady. Hammack's dissent is indicative of an underlying unease with the pace of inflation remaining above the Fed's 2% target. Chairman Jerome Powell's statement indicated concern as well, guiding to only two cuts in 2025 (previous guidance had been for four). Powell also refused to rule out further rate hikes, saying: "You don't rule things completely in or out in this world." Monetary conditions may also need to remain tight as a precaution should tariffs and mass deportations result in dramatic changes in costs and labor conditions.
As a result, the 2-year Treasury rates quickly moved from around 4.23% to 4.35%.
It seems pretty clear - at least for now - that the era of very low interest rates that existed from 2008 to 2020 is gone. It also seems pretty clear that the era of inverted yield curves that existed since 2021 is also going to be leaving. With Treasuries of 2 years and longer now yielding more than short term Treasuries, those willing to tie up their cash for longer periods will begin to see a time premium. We expect to see banks begin to compete for deposits by offering 1-year CDs and 2-year CDs that offer a significant yield premium to online savings rates.
The Federal Reserve has ended its November 2024 meeting with a 25 basis points cut.
This cut follows 50 basis point cut in September and the Fed Funds rate now sits 75 basis points below its 5.25 to 5.50% range which marked the high for this cycle.
The pace of Fed cuts is now very much in question following the second election of Donald Trump. Whereas the Fed was previously focused entirely on incoming inflationary data, it now needs to focus as well on fiscal policy issues - including the possibility that tariffs, deportations and increased deficit spending - may be inflationary.
Even prior to Trump election, all Treasury rates longer than 6 months stood at much higher yields than they had for several months. It is more clear than before that the Fed's rate cutting efforts to bring rates down to around 2% will play out over quarters or years and not monthly meetings.
Now that the uncertainty of the election is over, we'd expect to see banks become much more competitive with their 1-year CD and 2-year CD offerings, even as the best savings rates may fall.
The Federal Reserve acted as expected to lower the benchmark Fed funds rate for the first time in this cycle. Market observers had fully expected a rate cut going into the September 2024 meeting, but had been divided between a 1/4 point and a 1/2 point hike. The Fed chose to start with a larger move, which Federal Reserve Chairman characterized as a decisive recalibration towards a more neutral stance (as opposed a restrictive stance), lowering the rate by 50 basis points to a target of 4.75 to 5.00%.
While the decision was not unanimous, the Fed's large move indicates that it believes that it has largely restored price stability with inflation measurements indicating that the pandemic price burst has eased and inflation is well on its way to the Fed's 2% target.
The Fed has been somewhat reluctant to provide further guidance on additional rate moves. Bond markets is clearly pricing in at least one additional 25 basis point cut before the end of 2024 and several additional cuts in the first half of 2025.
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 Do Online Savings And Money Market 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.
How Do I Open An Online Savings or Money Market 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.
What are the Best 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 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.
Depending on where you live, there may be banks and credit unions offering rates still higher than the
best online savings rates.BestCashCow maintains the largest
rate database – including rates on over 2,000,000 bank products
from all 8,000 banks and 7,700 credit unions in the US –
in enable you to compare online rates with local rates in
your area.
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.
What are the 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.
What are the 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.
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.
Recent Performance of Online Savings And Money Market Accounts
BestCashCow data shows that the highest yielding online savings
account and money market
rates increased from a base around 0.75% through 2017 and 2018 to a peak just over 2.00% in mid-2019.
The Fed Funds rate was lowered in July 2019 and then brought
to zero in early 2020 in response to COVID-19.
As the Federal Reserve raises the Fed Funds rate in 2022
and 2023, online savings rates may eclipse their mid-2019 highs.
The graph below shows how the average rates for online savings and money market accounts have trended over the last several years.
In addition to the broad movement that we see in online savings and
money market account averages according to economic circumstances
and the Fed Funds rate, there is wide variability among rates
offered by the leading online banks.
Even while the online savings average has remained below 0.40% for
most of 2020 and 2021, we have seen some banks offer rates as high
as 0.65% or 0.70% during this time.
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.
As expected, the Federal Open Market Committee has ended its December 2024 meeting by cutting the Fed Funds rate by 25 basis points to a 4.25% to 4.50% target. The Fed's decision follows a 50 basis point cut in September and a 25 basis point cut in November. The Fed funds rate now stands a full percent below where it was just three months ago and where it had stood for most of 2024 (the Fed raised interest rates by 25 basis points in January for its final move of this cycle).
The December decision was not unanimous with Cleveland Fed President Beth Hammack voting against the move and preferring to keep rates steady. Hammack's dissent is indicative of an underlying unease with the pace of inflation remaining above the Fed's 2% target. Chairman Jerome Powell's statement indicated concern as well, guiding to only two cuts in 2025 (previous guidance had been for four). Powell also refused to rule out further rate hikes, saying: "You don't rule things completely in or out in this world." Monetary conditions may also need to remain tight as a precaution should tariffs and mass deportations result in dramatic changes in costs and labor conditions.
As a result, the 2-year Treasury rates quickly moved from around 4.23% to 4.35%.
It seems pretty clear - at least for now - that the era of very low interest rates that existed from 2008 to 2020 is gone. It also seems pretty clear that the era of inverted yield curves that existed since 2021 is also going to be leaving. With Treasuries of 2 years and longer now yielding more than short term Treasuries, those willing to tie up their cash for longer periods will begin to see a time premium. We expect to see banks begin to compete for deposits by offering 1-year CDs and 2-year CDs that offer a significant yield premium to online savings rates.
The Federal Reserve has ended its November 2024 meeting with a 25 basis points cut.
This cut follows 50 basis point cut in September and the Fed Funds rate now sits 75 basis points below its 5.25 to 5.50% range which marked the high for this cycle.
The pace of Fed cuts is now very much in question following the second election of Donald Trump. Whereas the Fed was previously focused entirely on incoming inflationary data, it now needs to focus as well on fiscal policy issues - including the possibility that tariffs, deportations and increased deficit spending - may be inflationary.
Even prior to Trump election, all Treasury rates longer than 6 months stood at much higher yields than they had for several months. It is more clear than before that the Fed's rate cutting efforts to bring rates down to around 2% will play out over quarters or years and not monthly meetings.
Now that the uncertainty of the election is over, we'd expect to see banks become much more competitive with their 1-year CD and 2-year CD offerings, even as the best savings rates may fall.
The Federal Reserve acted as expected to lower the benchmark Fed funds rate for the first time in this cycle. Market observers had fully expected a rate cut going into the September 2024 meeting, but had been divided between a 1/4 point and a 1/2 point hike. The Fed chose to start with a larger move, which Federal Reserve Chairman characterized as a decisive recalibration towards a more neutral stance (as opposed a restrictive stance), lowering the rate by 50 basis points to a target of 4.75 to 5.00%.
While the decision was not unanimous, the Fed's large move indicates that it believes that it has largely restored price stability with inflation measurements indicating that the pandemic price burst has eased and inflation is well on its way to the Fed's 2% target.
The Fed has been somewhat reluctant to provide further guidance on additional rate moves. Bond markets is clearly pricing in at least one additional 25 basis point cut before the end of 2024 and several additional cuts in the first half of 2025.
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