My first online savings account was with a little-known Dutch bank making its foray into the United States. They were orange, not a typical banking color (most prefer blues and greens here), had an acronym for their name (or was it just the name?), and people were still skeptical about online banking.
I.N.G.? Ing? For a while, no one knew!
I loved them. ING (which is actually an acronym for Internationale Nederlanden Groep) was and is still fantastic, under the new post-acquisition name of Capital One 360.
Nowadays, online savings accounts are commonplace and extremely versatile. The interest rates are all within striking distance of each other, so it's not much of a differentiator, so to find the best you need to look at the different perks.
All the banks on this list are FDIC insured. You can confirm that by searching the FDIC's Bank Find tool and confirming the FDIC numbers listed. These banks are presented in no particular order.
Table of Contents
Synchrony Bank – 1.20% APY
Synchrony Bank (FDIC #27314) is probably the least well known name on this list but they were formerly GE Capital Retail Bank, a part of GE Capital.
Their savings account is tied for the highest interest rate with no minimum balance and no maintenance fees.
They don't have a “checking” account but instead what is known as a money market account. This account pays a higher interest than similar online checking accounts and has no minimum balance and no maintenance fees either.
Their CD rates are competitive with others on this list.
Discover Bank – 1.15% APY
Discover, the credit card folks, also have an online bank! Discover Bank (FDIC #5649) may not be a familiar name to you but they've been actively insured by the FDIC since 1934!
Their savings account has one of the highest interest rates, no maintenance fees, and no minimum balance.
The checking account also has no minimum balance, access to over 60,000 ATMs in the ATM network, plus a generous reward structure. You can 10 cents cashback whenever you use the debit card, pay a bill online, or write a check that clears (up to 100 such cashback transactions a month)
Until August 21st, 2017, open an online savings account with offer code NW717 and get a $100 Bonus with $15,000 deposited.
Learn more about Discover Bank
Ally Bank – 1.20% APY
Ally Bank (FDIC #57803) is the online bank I use and I've been a fan of theirs for years. I opened my account shortly after they rebranded from GMAC (General Motors Acceptance Corporation) in the late 2000s.
Their savings account has a solid interest rate (it recently was increased to this rate from 1.15%), no maintenance fees, and no minimum balance.
Their CD rates are also competitive, the early termination period is only 60 days on a short term CD (versus the more typical 90 days), and they often give you an interest rate bonus if you roll your maturing CD into a new one.
They offer a free checking account with no minimum balance, they refund up to $10 in ATM fees each statement, have a large ATM network, and they have a competitive interest rate on the checking accout too.
Their app is solid too. It has all of the typical bells and whistles plus a great remote deposit feature for when you have checks to deposit. If you need to deposit checks and don't want to use the app, there are postage-paid deposit envelopes for you to use too (absolutely free).
Finally, they also recently acquired TradeKing, rebranding it Ally Invest. This gives you access to a low cost stock broker too.
Goldman Sachs Bank – 1.20% APY
Goldman Sachs Bank (FDIC #33124) is the online bank of Goldman Sachs, most well known as an investment banking firm. They do quite more than that and Goldman Sachs Bank USA handles their online bank offerings.
They currently have the highest interest rate for savings accounts, at 1.20% APY, and they have no minimum deposits and no transaction fees (there do not appear to be maintenance fees either). They were named the Best Stand-Alone Account for Savings by MONEY® Magazine ‘Best Banks' 2016 issue, for whatever that's worth.
Learn more about Goldman Sachs Bank
Barclays Bank – 1.20% APY
Barclays is a British based international banking corporation and the online bank is part of their US subsidiar, Barclays Bank located in Delaware (FDIC #57203).
Their online savings account product has a competitive interest rate, no minimum balance to open, and to earn interest you need to keep enough such that the interest rate earns you a penny each period (so you won't earn fractional interest, this is typical).
They also have a Dream Account, where you can earn interest bonuses based on your saving activity. You can deposit up to $1,000 each month into the account. Every time you make consecutive deposits for 6 months, you get a 2.5% bonus on the past 6 months of interest. If you make no withdrawals for six consecutive months, you get another 2.5% bonus on the past six months of interest.
Alliant Credit Union – 1.11% APY
Alliant Credit Union is the only credit union on this list and they are NCUA insured (NCUA is the equivalent of the FDIC for credit unions, same protections and same amounts – NCUA #67955).
The account minimum to open is $5 (but they will give you $5 to open an account!). The interest rate is available if you have $100 or more in your account and there are no maintenance fees if you elect estatements (many of the online banks do not even offer paper statements, so this is not a huge distinction). They have 80,000+ ATMs in their network.
The same terms exist for their checking account too but their interest rate on the checking account is slightly higher than many others. There is no minimum balance required on the checking account and you can get $20 in ATM surcharge refunds per month.
Why bother including a credit union? Because this credit union offers two remarkable products – a Kid's Savings Account and a Free Teen Checking Account. They are joint accounts with perks to help teach your kids responsible money habits – fantastic idea.
Learn more about Alliant Credit Union
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Funny, I used to work for ING Direct and then very briefly for Capital One 360. Then was definitely a change in culture when Capital One took over.
These days I use Ally and I’ve been very happy with Ally’s rates and service.
I was kind of excited when Ally acquired TradeKing, it put two services I enjoyed under one umbrella.
Great summary, Jim! I started reading the intro on your home page, and as soon as I read “Acronym” and “Orange”, I knew you were talking about ING. I was torn back when I was moving to an online bank between ING and Ally, but I also ended up going with Ally.
I’ve actually written to them a few times about setting up an affiliate program, but unfortunately I don’t think I have the clout to get them to move on it. But I know lots of bloggers that love Ally, and would love to promote them more. I’m thinking we all need to band together and see if we can get them to create a program. Granted, I’ll keep promoting them, regardless.
I wonder if they’ll start dabbling because they acquired TradeKing and kept that affiliate program as Ally Invest, so maybe that’ll get them into the space!
Surprised to see Goldman Sachs on the list, but that’s cool that they have a high interest account. Lots of good options on this list. Hard to complain about 1%+ for a savings account.
I know! 1% is fine… but you are still behind inflation. But you’re less behind than 0.05%!
Plan out savings goal for yourself and think about setting up an automatic deduction from your bank account each month to go towards your savings.
I use Ally and Cap 1 360 .
I’m looking to open another online saving account but I can’t find a bank that will allow the account to be under revocable living trust.
Ally is the only bank that allows it. I don’t want to keep more than FDIC insurance limits in one bank.
Any ideas ?