An online account is a great way to secure your money while also letting it grow. If you have some expendable income then consider putting it into a savings account, where you can forget about it and let it build month after month, growing into sizable sum that you can use for your kids’ college education, a vacation, or some other major expense.
Why Get an Online Savings Account?
Online savings accounts tend to offer higher interest rates because they have smaller overheads. They don’t need to pay for the upkeep of brick-and-mortar locations and for the staff that work in them, and this allows them to pass some of their savings onto the customer in the form of high interest.
Many customers still prefer to deal with big name banks because they believe that their money is safer with a bank that they know and trust. It only makes sense. But providing you choose carefully an online savings account is just as secure and trustworthy.
The Best Online Savings Accounts
What follows is a list of the best online savings accounts that can be trusted with your money and offer some of the best rates in the industry:
1. Alliant Savings Account
Alliant is a credit union, and a very good one at that. What’s more, it’s not restricted by area like so many other credit unions and you can join with a $10 charitable donation if you fail to meet membership criteria.
As a credit union, Alliant is non-profit and offers a wealth of options for borrowers, with terms that are there to help you, not hinder you.
The Alliant Savings Account provides:
- 1.50% APY on balances over $100
- $1 monthly fee; $0 if you opt for e-statements
- $5 bonus when you open an account
- Support is available around the clock
2. Barclays Online Savings Account
We feel like we don’t give Barclays enough respect. We overlooked many of their credit cards in our guides to business credit cards and student credit cards, because we just didn’t feel like they cut the mustard, but it is a different story with their online savings account.
As you can see from the list below, it has a great rate of interest and a few other interesting features:
- 1.65% APY
- No minimum balance
- No monthly fee
- Customer service available at all hours
3. American Express National Bank
If you have read our guides to premium credit cards and rewards cards then you’ll know just how much love we have for American Express. And they have excelled again here with one of the best online savings accounts around.
Just take a look at all of these benefits:
- 1.65% APY
- No monthly fees
- No minimum balances
- Great companion to an AMEX card
4. Discover Bank Savings Account
With no maintenance fees and a solid APY, Discover have one of the best online savings accounts around. They also have some great apps for both iOS and Android, helping you to keep track of your savings at all times as you watch them grow.
Enjoy all of the following benefits with the Discover bank:
- 1.60% APY
- No monthly fees and no setup fees
- Great apps for iOS and Android
- No minimum account opening amount
- Support available all hours of the day
5. 360 Savings by Capital One
Capital One have banks, credit cards, prepaid cards and more, so we have covered them extensively on DebtReviews. Not all of their financial products are worth your time, but this one definitely is, with features that let you set savings goals and easy access to multiple different accounts.
The only downside is that the interest rate of 1.60% is only for accounts above $10,000. If you have less than you’ll only get 1%.
The 360 savings account by Capital One provides:
- 1% APY; 1.60% on amounts over $10,000
- Trusted supplier
- Many great features, including savings goals
- No minimum balance
- No monthly fee
More Great Online Savings Accounts
There are many more great online savings accounts out there, some of which have even better interest rates than those mentioned above. They have other features that we believe makes them less worthy, but if it’s all about the interest rate and you have a lot of money to put aside, they are well worth a look:
- Northpointe Bank: You can get an interest rate of 2.03% if you have at least $25,000 in your account. This is the highest we have seen in 2018.
- Virtual Bank: An interest rate of 1.99% comes with a balance of just $100. You will need to pay a monthly fee of $5 though.
- Investors Bank: A balance of $5,000 will unlock an interest rate of 1.88%, with no fees and no other nasty surprises.
- CiT Bank: You need $500 to avoid fees and $5000 to get a 1.84% rate, but there are some cool features here that make this one a solid choice.
- IncredibleBank: An incredible rate of 1.81% is available, but only if you have $25,000 sitting in your account.
- DollarSavings Direct: You can get 1.78% with this online savings account and there is no minimum balance and no monthly fee.
- Sallie Mae: One of the most trusted names in finance, Sallie Mae have an interest rate of 1.73% and you can unlock this regardless of how much you have in your account. It’s a solid offer from a big name and one you should definitely consider.
- Goldman Sachs Bank: Another big name and another decent offer, with an interest rate of 1.69%. You only need $1 in your account to get this money and there are no minimum fees or balance requirements.
Online Savings Account FAQ
Still got a few questions about owning a savings account? Take a look at the following frequently asked questions before you signup to one of the best savings accounts listed above.
Is a Savings Account Taxable?
Yes, but you only pay tax on the amount of money that the savings account earns you, not the amount of money that it contains.
As an example, let’s say you get a $10,000 bonus from your work and decide to put all of this in your savings account. You will need to pay income tax on the initial amount that you added to the account, but from that moment on you only pay tax on the interest earned on that $10,000. So, if you earn 5% over the course of a year, that’s $500. If you’re in the 25% tax bracket, that’s $125 you owe in extra tax.
To learn more, take a look at our guide to Capital Gains Tax.
Is a Savings Account Safe?
Savings accounts are insured by the federal government for up to $250,000. They are also operated by banks that use safe and secure online and offline security measures.
What is Compound Interest?
Compound interest is interest that is paid out based on the initial deposit and on the interest that it earns. The more frequently that compounded interest is added, the faster your savings account will grow.