Online savings accounts have been one of our favorite destinations to stow away your emergency fund for a few reasons. First, if you are just starting out, the temptation of having money available in the same financial institution as your primary checking account can cause more harm than good, as you end up dipping into the money earmarked for a rainy day. Second, you potentially have the ability to automate your savings via direct deposit at your employer, having funds sent to an account and forgetting about it, in the same manner we have monies invested in our retirement accounts.
The current landscape of online savings accounts can be overwhelming, however GoodMoneyAdvice.com has selected five banks to consider if you are looking to open an account before the New Year.
Synchrony’s High Yield Savings Account is one of our favorite products available, as it provides 1.90% APY with no minimum balance, with a very simple and effective online interface, and access to thousands of ATM’s if you need to withdrawal your funds.
Ally doesn’t provide the highest interest rate, however they are our pick for the best customer service of the group we recommend. Ally’s Online Savings Account currently offers 1.70 APY, along with a host of free benefits, including free incoming wires, cashiers checks, ACH transfers, and more.
Digital Credit Union
If you are thinking of joining a credit union to stash away your emergency fund, consider joining DCU if for no other reason than to park your first $1,000 in their online savings account. DCU offers an amazing 6.17% APY on balances up to $1,000, and 0.25% APY on balances above that. If you are following Dave Ramsey’s baby steps, you know that the first thing you need to do is set aside $1,000 and to not touch it. No better place to hide money from yourself, and maximize your return on it than here.
Capital One’s 360 Performance Savings is ideal for those who are still potentially interested in having a savings account with a bank that has a brick and mortar presence. You will earn 1.80% APY on any balance, with no monthly fees and no minimums to maintain in the account. The mobile app Capital One offers is the best of the bunch here, and aside from the ease of banking online, you can visit any of the hundreds of Capital One Bank locations if needed.
Barclays Online Savings Account offers up 1.80% APY, and many of the same benefits and features of others highlighted, although we will note opening an account with them was among the most painless and fastest. Their Savings Assistant tool is a seamless calculator that helps you select from a drop-down a number of popular goals you could be saving towards, along with fields where you can type in the amount you need, and the total you can set aside to reach your target.
No matter which online savings account you decide is best for you, our suggestion is always to take action and open one today.