The 10 Best Online Banks for Savings

Anyone wanting to open a savings account as part of their financial plan had to visit a local bank or credit union for many years. You typically got a passbook to record your savings. The interest rate you earned was usually much the same from institution to institution. However, the advent of online banking has changed the face of savings.

Online banking has forever changed the way people approach their finances. Savings accounts have undergone a revolution. Anyone opening a savings account has more choices. These choices make it critical to understand your savings goals, expectations, and needs.

Shopping for the features, services, and interest rates that best fit your savings goals can be overwhelming. The number of online banking services offered online makes it difficult to find what you think you need. We have searched for what we consider the ten best online banks for savings.

Which Bank is Best to Open an Online Savings Account?

Overall, our search for the best overall online savings account came down to Marcus by Goldman-Sachs. Marcus offers a host of valuable features that make it a standout in the online savings field. However, there are some downsides to Marcus to consider. No banking organization will be a fit for everyone’s needs. You must understand your own goals and needs before selecting an online savings bank.

Is It Possible to only use an Online Bank Vs. In-Person?

Many people wonder if it is possible to use only an online bank. Can you manage your personal finances without a local bank you can visit in person? Some people may find it easy having an online bank as their only financial institution. However, online banks may not offer all the services that some people need to manage their financial affairs.

In general, an online bank may be sufficient as your only banking institution in these instances.

If you don’t make regular cash deposits, then an online bank may fit your needs. If you routinely need to deposit cash, finding a local bank is a better choice.
If you move or change locations regularly, using an online bank is much easier since you don’t have to find a new bank with each move.
Online banks tend to offer higher interest rates and lower fees than brick and mortar banks.

However, there are cases where finding a local bank you can visit in person has its advantages.

If you operate a business and take checks that you need to cash rather than a deposit, you should look for a local brick-and-mortar bank.
Many online banks will not open accounts for businesses, especially sole proprietors who operate under another name with a DBA.
Maintaining a personal relationship with a person at your bank can be an advantage if you anticipate needing loans in the future. Most online banks don’t offer home loans, car loans, or personal lines of credit.

Understanding your current and future needs in a bank is crucial to making a wise decision about opening an online savings account or traditional savings account with a local bank.

The Ten Best Online Banks for Savings

Since the question is the best online banks for savings, we focused our investigation on those online banks that offer the highest returns and best features. There may be other banks online that offer savings accounts, but these are the online savings banks that we found give the best rates, top-notch service, and belong to the FDIC.

Marcus by Goldman-Sachs

Marcus by Goldman-Sachs tops our list of online savings banks for several reasons. Not the least of these reasons is the level or returns paid by Marcus. Typically, Marcus offers returns on your savings that are four times the national average. Marcus also provides other services and features.

FDIC insured
No fees and no minimum deposits
Same-day transfers on sums less than $100,000
Free mobile app

Marcus does fall a bit short in some areas. In particular, many customers of Marcus note these shortcomings.

No support for digital check deposits
Limited customer service hours

Marcus bank’s high rates of returns and the lack of fees and minimum deposits lift Marcus to the top of our list. Marcus bank is a prime choice if you don’t routinely need to deposit paper checks or cash.

Ally High Yield Savings Account

In a new market, Ally has been around since the beginning. Ally features high APY accounts and has garnered many online awards and honors for its business and service. Users comment positively on the ease of use and services offered. Some of the pros cited by users of Ally are:

FDIC insured
No minimum deposit and no monthly fees
High APY
Check deposit support through the Ally app

Some customers of Ally find a few things lacking with Ally. Among these cons are:

Limited transactions per month. Exceeding the maximum transactions results in steep fees.
Ally does not support cash deposits

Reputation says a lot about any company, and Ally enjoys an excellent reputation for its online savings operations. If you make only a few transactions per cycle and don’t deal with cash, Ally is an excellent choice as an online savings bank.

CIT Bank

CIT Bank is one of the few online banks that offer a full suite of banking functions to online users. In addition, their savings programs are some of the most innovative in the industry. If you want more than just online banking, you should investigate CIT bank further. If savings is your main interest, you can expect features such as:

Competitive APY rates
FDIC insured
No opening or maintenance fees
Interest is compounded daily for maximum returns

CIT Bank does have some requirements that can be a barrier for some people. In particular, some people may have issues with the following requirements from CIT Bank.

You must have an existing CIT Bank e-checking account to open a savings account
There is a $100 minimum deposit to open a CIT savings account

If you need more than just an online savings account, CIT bank can provide all the features and services you need.

American Express High Yield Savings Account

Very few people are not familiar with American Express. It should come as no surprise that American Express is a leader in high yield online savings account. The online savings accounts offered by American Express are backed by the reputation and experience of American Express. These accounts feature such items as:

FDIC Insured
No monthly maintenance fees or minimum opening balance
No excess transaction fees
24/7 phone support
High APY

We found very few complaints about the American Express high yield savings accounts. However, some uses did mention these disadvantages.

There is no mobile app for the online banking services
You must deposit to the account within the first sixty days of opening the account

If stability and history determine your decision on a banking institution, American Express is a smart choice. In addition, you can count on a high APY to grow your savings rapidly.

AXOS High Yield Savings Accounts

If high APY is a priority in your savings plan, AXOS bank should be near the top of your list. Some AXOS accounts pay as much as a .61 percent APY. This APY represents one of the highest APY rates in the industry. Among the other features that make AXOS a prime choice is:

FDIC insured
No monthly service fees
Free debit card
High APY

There are some disadvantages to an AXOS savings account. Among these are:

$250 minimum deposit to open an account
The mobile app has limited functionality

Axos offers some of the industry’s highest APY’s, making them popular with anyone seeking rapid growth. However, support for online services may be lacking.

Discover Online Savings Account

Did you know Discover is also a bank? Many people aren’t aware you can do all your banking business with Discover online. Discover offers competitive APY and a full list of features and options. For an online savings account option, Discover offers these benefits.

FDIC Insured
.4 percent APY
No monthly fees
No minimum deposit to open an account
No Insufficient funds fees

Before you rush to open a Discover savings account, you should also consider the downsides

If you use your Discover debit card on any other ATM, Discover will not reimburse the ATM fees charged by the ATM company.
To get a debit card, you must also open a checking account with Discover.

Discover offers many benefits to its customers. However, there may be some hidden fees, and you may have trouble depositing cash to your account.

Capital One 360 Savings

Capital One is another company offering full-featured banking services online. Their savings platform is geared toward savings with a goal in mind and offers tools and services to make achieving your savings goal easier. In addition, Capital One 360 offers customers a full suite of options and features.

Competitive APY
No minimum first deposit
No monthly service fees
FDIC insured

Some users mention a few downsides to the Capital One 360 savings plan.

Customer service by phone is limited
Some services are only available if you open a checking account as well

Capital One 360 offers a special rate to children who open a savings plan. Opening a Capital One 360 savings account for your children is a terrific way to teach them financial responsibility.

VIO Bank Online High Yield Savings Account

Vio bank is not as well-known as some others on our list. However, Vio bank offers some of the best APY rates in the market. Customers of VIO speak highly of the customer service and rate VIO in the top ten of online banks in the US.

High APY
No minimum balance to continue to draw interest
FDIC Insured
No monthly service fees

You should consider these factors before selecting Vio as your online savings bank

A minimum initial deposit of $100 to open an account
Vio doesn’t accept cash deposits

Vio is certainly an option for anyone seeking a high-yield online savings account.

Chime Online Savings Account

Another online bank that is not as well-known as many others are Chime. However, Chime brings a wealth of benefits and features with its online savings bank. Customers of Chime will find these features and benefits part of their customer package.

.5 percent APY
FDIC Insured
No monthly fees
No minimum initial deposit
Automatic savings with the Chime rounding up program on their debit card

There are some disadvantages to using Chime for your online savings.

You must open a Chime spending account before you can open a savings account
You can deposit cash at some locations, but a service fee applies to cash deposits.

A chime is a reasonable option for some people. The high APY is popular, and many customers report the customer service is above par.

Varo Online Bank and Savings

A high APY is a great benefit offered by Varo bank and savings. In addition, Varo bank and savings offers a rich list of features and benefits for its customers. Opening a Varo savings account, you get these features.

No Monthly fees
FDIC Insured
Paychecks may arrive as much as two days early if you use direct deposit
No hidden fees, including no monthly fees, no ATM fees, and no fees for international transactions.

There are always a few negatives to mention about any service. Varo is no exception.

A fee is charged for making cash deposits.
Certain minimums must be met each month to get the best rates.

Varo bank savings is appealing to those who want to get their paychecks early. The direct deposit program can have your money as much as two days earlier than usual.

How Much is Typically Needed to Open an Online Savings Account

Many of the online banks on our list do not require a minimum deposit to open an account. However, you may be required to deposit between $100 and $250 when you open an account with some online banks.

Online Banking – The Future of Savings for Many People

Online banking and online savings are the future of banking for many people. With a highly mobile population, the growth of online services, and a growing dependence on smartphones for business, no one should be surprised that banking services will be at the forefront of the trend.