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A high-yield savings account is one of our best financial tools. It’s a place that we can keep our emergency funds, travel funds, down payment funds, remodel funds, etc.
It acts as a secure space in between the safety of a checking account and the riskiness of investments.
But not all savings accounts are created equal.
The national average interest rate (or APY - annual percentage yield) on a savings account is 0.09%. But there are much better options now, offering much higher yields.
There has been a major influx of online banks offering significantly higher interest rates through their online savings accounts.
They offer rates ranging from 1.60% to 2.0%, making them much more competitive for your money.
Online banks are able to offer rates like these since they do not have the costs of operating physical locations.
But fear not, these banks are insured by the FDIC just like the bank down the street and offer great digital tools to make accessing and transferring your money a breeze.
And remember, once you have enough cash stored away in a savings account, you should look to invest. Consider using a robo-advisor if you aren’t 100% confident in your investing abilities.Summary of Best High-Yield Online Savings Accounts in 2020
Product | APY | Header |
|---|---|---|
 Betterment Everyday | 1.85% With $0 minimum balance | at Betterment, Member, FDIC |
 CIT Bank Savings Builder | 1.85% With $100 minimum balance | at CIT Bank, Member, FDIC |
 Goldman Sachs Bank USA Online Savings | 1.70% With $0 minimum balance | at Goldman Sachs Bank USA, Member, FDIC |
 Ally Bank Online Savings Account | 1.70% With $0 minimum balance | at Ally Bank, Member, FDIC |
 Barclays Online Savings Account | 1.80% With $0 minimum balance | at Barclays, Member, FDIC |
 SoFi Money | 1.60% With $0 minimum balance | at SoFi Money, Member, FDIC |
 Citizens Access Online Savings Account | 1.85% With $5,000 minimum balance | at Citizens Access, Member, FDIC |
 Capital One 360 Bank | 1.80% With $0 minimum balance | at Capital One 360 Bank, Member, FDIC |
 HSBC Direct Bank | 2.05% With $1 minimum balance | at HSBC Direct Bank, Member, FDIC |
 UFB Direct | 1.90% With $0 minimum balance | at UFB Direct, Member, FDIC |
The High-Yield Savings Account Advantage
High-yield savings accounts have an advantage over their lower-yielding counterparts because money held in these accounts grows so much faster.
For example: 2.0% on $10,000 of savings is $200 per year in interest. Compared to the national average of 0.09%, the same $10,000 would net only $9 per year in interest.
In this example, a high-yield savings account produces over 22x more interest than the national average.
10 Best High Yield Savings Accounts
*Note: All rates accurate as of November 21, 2019
Betterment Everyday
APY: 1.85% (if signed up for Betterment Everyday Checking, otherwise 1.60%)
Minimum account balance: None
ATM Fees: Reimbursed worldwide
Review: While not technically a bank, Betterment offers a cash management account where they provide up to 1.85% interest on any balance held in the account.
Because Betterment is not a bank - rather they are an online financial institution that provides investment services - they store your deposits with their network of partner banks and therefore have the protection of an FDIC insured savings account.
Betterment’s Everyday Cash Reserve account benefits from the sleek design of Betterment’s entire website and mobile app.
Their services are easy to use and easy to sign up for. In addition to the Everyday Cash Reserve, Betterment will soon be offering an Everyday Checking account that reimburses all ATM fees and allows unlimited transfers each month.
CIT Bank
APY: 1.55% - 1.85%
Minimum Account Balance: $100
Review: CIT Bank offers two different high-yield savings accounts: the Premier High Yield Savings and Savings Builder.
The accounts function in slightly different ways, but they are both FDIC insured, are free to open and maintain, and offer mobile check deposit and transfers with the CIT Bank mobile app.
The Premier High Yield is their standard high-yield savings account, offering 1.55% APY after a minimum opening deposit of $100.
The Savings Builder account takes a different approach to savings and offers a 1.85% APY if you make at least one monthly deposit of $100 (or more) or maintain a balance of $25,000 or more.
The Savings Builder account encourages you to save consistently, and for that reason, it’s the clear recommendation here from CIT Bank.
Marcus by Goldman Sachs
APY: 1.70%
Minimum Account Balance: None
Review: Marcus by Goldman Sachs is the consumer banking and lending arm of Goldman Sachs, the investment banking giant.
Their savings account offers a competitive interest rate, does not require a minimum balance to open, and does not charge any monthly fees.
But the bank does not offer any checking accounts or access to an ATM network, so all transfers in and out of the bank must be made through a separate bank account.
In addition to competitive savings account rates, they also offer strong CD rates for longer-term savings goals. Their customer service center is also open 7 days a week.
Ally Bank
APY: 1.70%
Minimum Account Balance: None
Review: Ally is often touted as one of the best online banks overall, so it is no surprise to see them on this list.
They offer a competitive APY on their savings account in addition to 24/7 support via chat, email, or phone, and one of the better online user interfaces through their website and mobile app.
On top of this, they offer excellent online banking services in general, so it’s realistic that all of your banking could be done in one place if you used Ally.
Barclays Bank
APY: 1.90%
Minimum Account Balance: None
Review: Barclays offers one of the highest interest rates in the industry right now, instantly making a serious contender for your savings. They feature a nice savings tools on their website that helps you set and track your savings goals. On top of that, there is no minimum to open an account and there are no monthly maintenance fees.
SoFi Money
APY: 1.60%
Minimum Account Balance: None
Review: SoFi’s online savings feature comes in the form of a cash management account since they are not a bank.
It is standard practice for cash management accounts to use a process called “sweeping” whereby the financial institution (SoFi) sweeps your deposited money into partner banks, who then hold it.
Because your money is swept into a licensed bank, it carries the full FDIC protection that you’d receive at any other bank.
Access to SoFi’s cash management account is free, with no minimum or monthly account dues.
SoFi offers a debit card and unlimited reimbursed ATM fees along with automated bill pay and access to SoFi member benefits like career coaching and financial advising.
Citizens Access
APY: 1.85%
Minimum Account Balance: $5,000
Review: Citizens Access offers a competitive APY on their online savings account, however, they require a $5,000 minimum deposit to open an account.
If your balance drops below $5,000 you will earn a lower interest rate and they reserve the right to close your account at any time should your balance remains below the $5,000 threshold for an extended period of time.
Outside of this, their offering is on par with the rest of the industry, including no account fees and FDIC insurance.
In addition to their online savings accounts, Citizens Access offers very competitive rates on their CDs for those interested in a longer-term savings plan.
Capital One 360 Bank
APY: 1.80%
Minimum Account Balance: None
Review: Capital One 360 provides an excellent online banking service with the added bonus of some physical locations in cities across the US.
Their online savings account offers a competitive rate and, unlike most other banks, their checking accounts carry decent interest rates as well.
In addition to their competitive savings rates, Capital One offers excellent tools, customer service support, and mobile app.
HSBC Direct Bank
APY: 2.05%
Minimum Account Balance: $1
Review: HSBC Direct is offered by HSBC, the international mega-bank.
HSBC Direct is an online-only bank that offers one of the highest rates on their savings accounts in the industry (and highest on this list).
HSBC Direct offers mobile check deposit, live chat support, and money management tools to help you organize your finances.
UFB Direct Bank
APY: 2.00%
Minimum Account Balance: $25,000
Review: While offering a very competitive interest rate, UFB Direct requires a minimum balance of $25,000 to take advantage of it. Amounts lower than that will earn significantly less APY.
That said, there are no monthly maintenance fees on a UFB Direct account and they offer mobile deposits and banking through their app.
Overall, UFB Direct should only be considered if you are a high earner or have a large sum of savings that you would want to put into an account with them.
What Are You Waiting For?
High-yield online savings account are the hands-down best savings account option currently available today.
It is a safe place to store your cash for:
An emergency fund
A downpayment
Travel funds
Future large purchases (like an automobile)
Home renovation funds
Etc.
Not only are these accounts insured by the FDIC, but their interest rates make them much more attractive than a checking account or savings account that does not offer as high a yield.
But remember, you shouldn’t store all of your excess cash here. If you feel like you have enough stored away for whatever purpose, you should look to invest anything extra.
Investing in low-cost index funds has historically returned anywhere from 7-10% annually, which is much greater than these accounts.
But investing carries a lot more risk, so these high-yield online savings accounts are a great option for any cash you expect you might need in the near future.
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Jacob holds a bachelors degree in finance and has spent his professional career crunching numbers and mastering spreadsheets in the corporate world. He moonlights as a fantasy football commissioner, back-yard bbq amateur, and freelance writer/money blogger.
