Updated May 27, 2020

Welcome to Bank Insider’s 2020 Best Online Savings Account Guide. While perhaps the least interesting product in the personal finance toolkit, you may be leaving money on the table if you don’t use one.

With interest rates on most savings accounts at nearly 0% since 2000, you probably figured, why bother shopping around? While we don’t encourage readers to leave too much money in uninvested, in these uncertain times, it’s prudent to keep 3-6 months of expenses in cash (or more, if you’re nervous).

With the typical household spending $5,100 per month, six months’ expenses would be just over $30,000. If you stash that money in a high yield online savings account, you could earn an extra $500 a year, based on current rates.

Advertiser disclosure

Advertiser Disclosure Bank Insider may receive compensation from companies or products reviewed on this website. This may impact the product categories and products we choose to review, and their placement on this site. Any page that includes links to a partner that compensates us will include a prominent disclosure. 

This does not impact our advice or recommendations, which are editorially independent and grounded in our years of experience in financial services and independent research.

Rates as of May 27, 2020.

Close

Hot take: High Yield Savings Accounts

With high yield online savings accounts, there’s little difference among the offerings. All offerings are FDIC insured up to $250,000. If the minimum balance requirement isn’t an issue, look to maximize your return by choosing the product with the highest interest rate (APY). Note that these rates do change overtime with market conditions.

While this comparison focuses specifically on high yield savings accounts, most banks listed here also offer online CDs (certificates of deposit), which may offer higher rates (or at least lock in current rates) for committing your money for a set period of time.

Top High Yield Online Savings Accounts

Ally Bank

Ally Bank is a multi-product online-only bank offering checking, savings, lending, and investing products.

APY: 1.25% APY
Minimum balance:
None
Monthly maintenance fee:
None
Debit card or ATM access:
No
FDIC Insured:
Up to $250,000

American Express National Bank

American Express is a well known credit card issuer that also offers high yield online savings options.

APY: 1.30% APY
Minimum balance: 
None
Monthly maintenance fee: 
None
Debit card or ATM access: 
No
FDIC Insured:
Up to $250,000

Barclays Bank

This is the US subsidiary of Barclays, a large, multi-national UK bank. The US Barclays primarily issues white label credit cards and also offers online savings accounts.

APY: 1.30% APY
Minimum balance: 
None
Monthly maintenance fee: 
None
Debit card or ATM access: 
No
FDIC Insured: 
Up to $250,000

CIBC Bank USA

CIBC Bank USA is the US subsidiary of its Canadian namesake. In the US, it focuses on commercial and small business banking and also offers high yield online savings options. 

APY: 1.45% APY
Minimum balance: 
$1,000
Monthly maintenance fee: 
None
Debit card or ATM access: 
No
FDIC Insured: 
Up to $250,000

CIT Bank

CIT has long offered one of the highest savings account interest rates. While its current rate of 1.25% APY is a bit lower than some competitors, if you make a $100 deposit monthly, you’ll earn 1.45% APY. 

APY: 1.25% APY (1.45% with $25,000 balance or $100 monthly deposit)
Minimum balance: 
$100
Monthly maintenance fee: 
None
Debit card or ATM access: 
No
FDIC Insured: 
Up to $250,000

Citizens Access

Citizens Access is a subsidiary of Citizens Bank, a regional bank headquartered in Providence, Rhode Island.

APY: 1.30% APY
Minimum balance: 
$5,000
Monthly maintenance fee: 
None
Debit card or ATM access: 
No
FDIC Insured: 
Up to $250,000

Comenity Direct

Comenity Direct is a subsidiary of Comenity Capital Bank, which focused on issuing white label credit cards and also offers high yield savings options.

APY: 1.45% APY
Minimum balance: 
$100
Monthly maintenance fee: 
None
Debit card or ATM access: 
No
FDIC Insured: 
Up to $250,000

Marcus by Goldman Sachs

Marcus by Goldman Sachs is the consumer-focused offering of the 150 year old investment bank. It offers personal loans and high-yield savings options.

APY: 1.30% APY
Minimum balance:
None
Monthly maintenance fee: 
None
Debit card or ATM access: 
No
FDIC Insured: 
Up to $250,000

Synchrony

Synchrony focuses on white label credit cards and health care lending, in addition to offering high yield savings accounts.

APY: 1.30% APY
Minimum balance: 
None
Monthly maintenance fee: 
None
Debit card or ATM access:
Yes
FDIC Insured: 
Up to $250,000

Varo

Varo is a startup offering app-based banking, including an online savings account. Varo partners with The Bancorp Bank to offer its products, and, like any other savings account, your funds are FDIC insured up to $250,000. 

APY: 1.41% APY (up to 2.80% if you have a Varo Bank Account and meet additional requirements)
Minimum balance: 
None
Monthly maintenance fee: 
None
Debit card or ATM access:
 No
FDIC Insured: 
Up to $250,000

Coronavirus (COVID-19) and Online Savings Accounts

With the worldwide spread of the coronavirus pandemic and the uncertain economic outlook, it makes sense to re-evaluate your financial outlook and banking choices. Some common questions we’ve gotten related to high yield online savings accounts and coronavirus include:

Are online-only banks safe?
In a word, yes. Bank failures are exceedingly rare occurrences. Increased regulation and capital requirements stemming from the 2008 collapse further reduced risk in the banking sector. From 2015-2019, no more than eight banks failed in a single year. The online savings accounts presented here are all from well-established banks. Even if the bank were to run into trouble, your deposits are backed by FDIC insurance up to $250,000.

Should I change my budget because of coronavirus?
It’s impossible for us to give tailored financial advice without knowing your full circumstances. While the coronavirus pandemic is better understood now than it was a few months ago, it is difficult to predict how it will continue to unfold and what the ongoing impact to the economy will be. As a precaution, keeping 3-6 months of living expenses in cash (or cash-like products, like a money market account or CD) can help provide you a cushion if you lose your job or your income is reduced.

How to Compare Online Savings Accounts?

Because high yield online savings accounts are a pretty vanilla product, there are few differences between different banks here. We generally recommend maximizing return by looking for a higher APY. Here are the key attributes to consider when looking for an online savings account.

Interest rate (APY)
The number one differentiator is the Annual Percentage Yield (APY). This is a standardized calculation taking into account the interest rate and compounding frequency of a savings account. For banks with physical branches, this could be as low as 0.01% APY. Note that the APY offered can change with market conditions.

Minimum balance requirement
Many online savings accounts have no minimum balance requirement, which is great for those just getting started with saving. If you have a larger cash cushion, shop around, as some banks do offer slightly higher APYs for those willing to meet a higher minimum balance requirement – usually a minimum of $5,000 or $10,000.

Ability to access savings
The process to access your savings is going to be nearly identical with most online savings accounts. Because these are not transactional accounts, you will need to move the money, usually via an ACH transfer, to your main checking account. Less common is a high yield savings account offered by a bank that also offers checking accounts or an ATM card to make withdrawals directly from the savings account. All high yield savings accounts are limited to six fee-free transactions per month by federal regulations.

Account opening process
The account opening process will vary by bank. While they will all ask similar account opening questions, the exact features and requirements may vary. For instance, some may support joint accounts while others may not. Some may allow opening via mobile app or by phone, though the standard account opening process is via website.

FAQs about Online Savings Accounts

What is a high yield savings account?
The term “high yield” is used because banks offering these accounts typically pay significantly higher interest rates (APY) than your local bank (or large national bank with physical branches) do. Currently, Chase pays 0.01% APY, while “high yield” savings accounts are paying around 1.20-1.70% APY. Some will use the term “online savings account” interchangeably with “high yield”, as these accounts are typically offered by banks with few or no branches – instead, you open and use the account only online. We wrote an entire post about why online savings accounts offer better rates.

What information do I need to open an account?
You probably know almost everything you need to open and fund an online savings account by memory. You’ll need to supply your name, address, date of birth, Social Security Number, phone number, and email. To fund the account (make a deposit), you’ll need the routing and account number you’re using to make the deposit (probably your primary checking account).

What determines the interest rate (APY)?
The bank offering the online savings account determines what interest rate and compounding (together, the APY) it wants to offer. However, the rate banks offer is commonly linked to and impacted by the Federal funds rate. While the exact mechanics are beyond the scope of this FAQ, if you hear about “the fed” raising or lowering interest rates, keep an eye on your online savings account, as the rate there may change as well. 

What are common fees?
Online savings accounts typically have very few fees. For accounts with a minimum deposit or balance requirement, you may not receive the advertised APY if your balance is below the minimum. All savings accounts have a six per month restriction on the number of “convenient” or fee free transactions, due to federal regulations. Most charge an outbound wire fee (if you wish to wire funds OUT of the account). Other miscellaneous fees may apply.

Are there limits on an online savings account?
With any online savings account, your deposits will be insured up to $250,000 by the FDIC. Some banks cap the amount you can hold on deposit at $250,000, while others will let you hold more than $250,000, though any combined cash balance above this amount would not be FDIC insured. 

Do you have to pay taxes on your savings?
On the savings themselves, no. But on interest earned on your savings, yes. The bank should send you a 1099-INT form around late January, showing how much you’ve earned in interest on your account. If the amount of interest earned was very small (less than $10), the bank may not send this form, but you should still check and include the interest income on your tax return.

What does FDIC insured mean?
The FDIC is the Federal Deposit Insurance Corporation. In general, nearly all banks carry FDIC insurance for their depository products – checking accounts, savings accounts, certificates of deposit, and money market accounts. All savings account products reviewed here are FDIC insured. Learn more about the FDIC.

Get Bank Insider in Your Inbox
Sign up today to receive free, once weekly updates with our latest advice in your inbox. No spam, and we never sell your data.