Best Online Savings Accounts 2024
Many online banks offer extraordinarily high yields and digital tools for their savings accounts compared to accounts at traditional banks. These five, in particular, stand out among the crowd.
Written by
Luke Daugherty
Luke Daugherty is a freelance writer, editor, and former operations manager. He covers personal finance, operations, marketing, and sustainable business, as well as many of his personal passions. His work, bylined and ghostwritten, has appeared in The Balance, CNET, CIO Magazine, Entrepreneur, and more.
Last Update on Jan 19, 2024
Table Of Contents
Savings accounts have always offered a trade-off: You limit your money’s earning potential because you value easier access to your money than a certificate of deposit or other long-term investment option offers.
In the age of online banking, that trade-off isn’t quite so clear-cut. Many of today’s online savings accounts offer yields of 10 times the national average for savings accounts, plus the benefits of intuitive digital tools for managing and tracking savings goals. If you want to earn a high yield on cash without sacrificing access to your money, you’ve got options.
The following five high-yield, online savings accounts offer dividends well above today’s 0.40% average. We’ve listed them here with the highest dividend first, but they’ve all made the cut due to a mix of other factors, including online customer service, digital tools and more.
Comparing The 5 Best Online Savings Accounts Of 2024
| Savings Account | APY | Minimum Deposit | Monthly Fee |
|---|---|---|---|
| Varo Savings Account | 3.00% to 5.00% | $0 | $0 |
| Marcus by Goldman Sachs High-Yield Online Savings Account | 4.15% | $0 | $0 |
| Sallie Mae Bank SmartyPig Account | 3.75% | $0 | $0 |
| Consumers Credit Union Smart Saver | 0.25% to 2.00% | $5 | $0 |
| Axos Bank High Yield Savings Account | 0.61% on balances less than $25,000 | $200 | $0 |
Varo Savings Account
Very high potential yield for a savings account
No monthly fees or minimum balance
Automated savings tools
APY
3.00% to 5.00%
Minimum deposit
$0
Monthly maintenance fee
$0
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Varo has been a step ahead of other online accounts for years. It was the first U.S. consumer fintech company to receive a national charter and full FDIC insurance, and its customer service rankings are consistently among the best. For small balances, you’re hard-pressed to beat its 5.00% APY.
Pros
- Very high APY for low balances
- Top-notch digital services and automated savings tools
- No monthly fee or minimum deposit
Cons
- Highest APY reserved for balances below $5,000
- $2.50 fee for out-of-network ATM transactions
- Must have a Varo Bank checking account
Additional Details
- To earn 5.00% APY, you must have direct deposits totaling at least $1,000 per month, maintain a balance of $5,000 or less throughout the month, and keep your checking and savings balances above $0
- Interest compounded daily and credited monthly
- Use “Save Your Pay” and “Save Your Change” to accelerate your savings
Marcus by Goldman Sachs High-Yield Online Savings Account
High yield potential with no balance caps
Large same-day transfers
No fees for domestic wire transfers
APY
4.15%
Minimum deposit
$0
Monthly maintenance fee
$0
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For a more straightforward online savings approach, Marcus by Goldman Sachs offers one of the best yields in its class. With no minimum deposit, monthly fees, or earnings limitations, get a strong 4.15% APY on your deposits.
Pros
- High 4.15% APY with no balance limits
- Transfer up to $100,000 same day
- No monthly fees or domestic wire transfer fees
Cons
- No mobile check deposit
- No physical branches
Additional Details
- Access your account via mobile app, web, or phone
- Online access 24/7
- Interest compounded daily and credited monthly
Sallie Mae Bank SmartyPig Account
Competitive yield on all balance levels
Top-notch digital experience
Tools for tracking savings progress
APY
3.75%
Minimum deposit
$0
Monthly maintenance fee
$0
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Think of the Salle Mae Bank SmartyPig Account as your digital piggy bank. With smart online tools to manage and track your savings goals, you can put the competitive APY to work to grow your savings balance quickly.
Pros
- Competitive yield with tiered structure
- No maintenance fee or minimum deposit
- Great digital experience
Cons
- Customer service only available on weekdays
- Tiered yield structure may be limiting
- No physical branches
Additional Details
- Tiered balance structure often has different rates for accounts up to $10,000, $50,000 and higher, but all levels currently receive 3.75% APY
- Interest compounded daily and credited monthly
- Use online tools to set, manage and track savings goals
Consumers Credit Union Smart Saver
Competitive rate for smaller savings goals
Earn top yields on up to $1,000 in deposits each month
Low minimum deposit required to join
APY
0.25% to 2.00%
Minimum deposit
$5
Monthly maintenance fee
$0
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If you prefer the benefits of a credit union with the convenience of online banking, Consumers Credit Union (CCU) offers a Smart Saver account with a competitive yield. You’ll have to jump through a few hoops to earn the top rate, but this account is ideal for small savers who value credit union membership and want to earn steadily each month.
Pros
- Competitive dividend yield for a credit union account
- Top-rated mobile app
- Low minimum deposit
Cons
- Must jump through hoops to earn the top yield
- Requires credit union membership with a Membership Share Savings account
- Not ideal for large deposits or savings goals
Additional Details
- $5 minimum deposit to cover membership fee to join the credit union and open a Membership Share Savings account
- To earn the top yield, you must enroll in eDocuments, have at least $500 in monthly direct or mobile deposits to a CCU checking account, and deposit at least $50 into your Smart Save account
- When you don’t meet these requirements, you’ll earn 0.25 APY
- Deposits over $1,000 will be automatically transferred to your Membership Share Savings account, which pays 0.03% APY
- No maximum total balance you can accumulate when you meet these deposit requirements
Axos Bank High Yield Savings Account
More traditional banking experience
Rate still competitive compared to standard savings accounts
Minimum $250 deposit
APY
0.61% on balances less than $25,000
Minimum deposit
$250
Monthly maintenance fee
$0
Show More Details
Axos Bank’s High Yield Savings Account toes the line between a traditional savings account and an online high-yield account. And with a competitive yield, full-service banking, and a huge national ATM network, that’s just right for some customers.
Pros
- Network of around 91,000 surcharge-free ATMs
- Full-service bank with 24/7 customer service and top-rated mobile app
- Few fees
Cons
- Best rate reserved for balances below $25,000
- Requires a $250 minimum deposit
- Low APY compared to other online banks and credit unions
Additional Details
- 0.61% APY for balances of less than $25,000, 0.25% APY for balances between $25,000 and $100,000, 0.15% APY for balances of $100,000 or more
- Interest compounded daily and credited monthly
- One of the best nationwide ATM networks of any online bank
What Makes The Best Savings Accounts Stand Out?
The best savings accounts distinguish themselves by offering substantial interest rates, often around 5% as of August 2023, which is significantly above the national average of 0.42%. This higher rate can lead to remarkable earnings over time. For instance, a savings balance of $10,000 at 5% would accumulate approximately $500 in a year, compared to a mere $42 at 0.42% APY. These standout accounts also excel in providing easy access, minimum fees, and strong customer support, further enhancing their appeal.
Why Choose A Savings Account?
A high-rate savings account is an excellent choice for those who routinely have excess funds in their checking accounts. It acts as a financial cushion for emergencies and offers the potential to earn much more interest than a standard checking account. It’s wise to maintain an adequate balance to evade monthly fees, a concern mitigated by many online savings accounts that typically waive these charges.
Interested in a higher APY? Check out the best high-yield savings accounts.
Fees Associated With Savings Accounts
Unlike traditional banks, the top savings accounts, especially those provided by online institutions, often avoid monthly maintenance fees. This fee-free structure aids in steadily growing your balance through compounded interest, allowing your money to work for you rather than being diminished by unnecessary charges.
The Advantage Of Online Savings Accounts
Online banks and nonbank providers are generally where you’ll find the best savings accounts. Without the expenses tied to maintaining physical branches, they can afford to offer higher interest rates and fewer fees. The convenience of online banking, including 24/7 account access and robust customer service options, also adds to their attractiveness.
Safety Of Savings Accounts
Savings accounts are considered a safe option, particularly if they are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). Unlike investment portfolios that may fluctuate in value, your money in a savings account remains intact, barring any fees or authorized withdrawals.
Variability Of Savings Account Interest Rates
Interest rates are subject to change, though such shifts are relatively rare. Monitoring them at least once a month is advisable, especially following significant economic events like Federal Reserve rate adjustments. Some savings accounts even provide rate-lock options to secure your interest rate for a specified period.
Alternatives For Earning High Interest
- Money Market Accounts: These accounts function similarly to savings accounts but might offer additional features like check-writing capabilities.
- Certificates of Deposit (CDs): CDs allow you to lock in a higher interest rate for a specified term but usually penalize early withdrawals.
Tax Implications Of Savings Accounts
Interest earned from savings accounts is typically subject to taxation if it exceeds $10 during the tax year. High-yield savings accounts, owing to their higher interest rates, are more likely to accrue interest that must be reported to the IRS. Thus, it’s essential to consider these tax obligations when selecting a savings account, especially if you are leveraging high-interest options.
Frequently Asked Questions (FAQs)
Is Money Safe In An Online Savings Account?
As long as an online bank is insured by the Federal Deposit Insurance Corporation (FDIC), your funds are protected up to $250,000 per depositor per bank for each type of account, just as they would be at a physical bank. For an online credit union, look for similar insurance from the National Credit Union Administration (NCUA).
How Much Should I Keep In My Savings Account?
Most financial experts recommend keeping three to six months’ worth of expenses in a high-yield savings account. This will ensure you have access to needed cash in the event of an emergency or job loss and allow you to earn interest while you have the cash on hand.
Luke Daugherty
Author
Luke Daugherty is a freelance writer, editor, and former operations manager. He covers personal finance, operations, marketing, and sustainable business, as well as many of his personal passions. His work, bylined and ghostwritten, has appeared in The Balance, CNET, CIO Magazine, Entrepreneur, and more.
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