Saving money is essential to building your net worth. Savings accounts and money market accounts are meant to hold your liquid assets, or funds that you expect to use within a year. You may think, â€œIf you’ve seen one high-yield savings account, you’ve seen them allâ€ â€“ but, actually, higher interest rates and certain features can make one account a better choice than another.
Online high-yield savings account and money market account rates
As online banking has evolved, consumers can find a high yield and still hope to get the mobile and digital banking convenience they need. They’re free to shop and compare interest rates and account features in search of the best online high-yield savings account for their liquid assets.
When you want to set up an emergency fund or other savings account for short-term liquidity, an online savings account usually offers higher interest rates than many brick-and-mortar banks. In addition, online banking is much more convenient.
Online bank savings account leader – Week of December 11, 2016
|Synchrony Bank’s High-Yield Savings Account offers a 1.05% APY (rate as of December 11, 2016). There is no minimum balance required to earn the advertised APY or open an account. Of course, deposits are FDIC-insured.|
Money market accounts
While money market accounts are similar to savings accounts, they used to earn higher interest rates and their restrictions then were more stringent than they appear to be today. Our research is showing that, in some respects, the differences between the two types of accounts are blurring.
In your search for the best money market account, you may find that interest rates are quite similar to savings account rates, and the minimum balance requirements and number of withdrawal transactions allowed may be on par with savings accounts these days as well. All of this underscores the need to personally investigate the specifics of any account you open.
Online bank money market account leader – Week of December 11, 2016
|Ally Bank’s Money Market Account offers a 0.85% APY (rate as of December 11, 2016) with no minimum deposit to open and no monthly fees. Deposits are FDIC-insured.|
Even though rates are low right now, they will eventually rise as the economy recovers. Regardless, it is important to develop the habit of saving. Keeping track of the latest interest rates is the research part of that habit, but the payoff is that the best interest rates and services can help you make the most of your savings in any economic environment.
Featured bank offerings – Week of December 11, 2016
It takes time to research banks, so here is a synopsis of what some of the major banks offer with a direct link to their individual website. That way you can easily learn more and open an account when you are ready.
|Synchrony Bank’s High-Yield Savings Account offers a 1.05% APY (rate as of December 11, 2016) There is no minimum balance required to earn the advertised APY or open an account. Of course, deposits are FDIC-insured.|
|Barclays’ Online Savings Account offers a 1.00% APY (rate as of December 11, 2016) with no minimum deposit to open and no monthly maintenance fees. Barclays also tied for â€œBest Savings Accountâ€ by Money Magazine in 2013. Interest is compounded daily, funds can be moved electronically to external accounts, and deposits are FDIC-insured. Barclays is a large bank that has been around for over 300 years and operates in 50 different countries.|
|Ally Bank’s High-Interest Online Savings Account offers a 1.00% APY (rate as of December 11, 2016) with no minimum deposit to open and no monthly fees. Ally Bank won top honors in the MoneyRates survey of â€œBest Savings Accounts for 2014â€³ which recognizes banks that consistently offer high rates over an entire year. In addition, it was also rated the â€œBest Online Bankâ€ by Money Magazine in both 2012 and 2013. The bank’s other consumer-friendly policies include daily compounded interest, 24/7 customer service, and no charges for ATMs. (Ally actually reimburses ATM fees charged by other U.S. banks at the end of each statement cycle.) They also have an award-winning-mobile-banking application. Deposits are FDIC-insured.|
|Capital One 360 has the 360 Savings Account, which earns 0.75% APY (rate as of December 11, 2016). It’s an online savings account with no minimum deposit to open an account and no monthly maintenance fees either. Interest is compounded daily, and deposits are FDIC-insured. The 360 Savings Account helps make it easy to save with its mobile app that lets you deposit checks using your phone or computer. You can also track and grow your savings goals by setting up multiple sub-accounts and automatic transfers from your checking account.|
Tip: Sometimes smaller banks have better rates than the large online banks.
- This week’s high-interest savings account leader is Ultima Bank, offering 2.02% APY on their SMART savings account for young adults 18 years of age or younger. (Rate as of December 11, 2016.)
- This week’s high-interest money market account leader is Sallie Mae Bank, offering 0.90% APY on their money market account that requires no minimum deposit to open an account. (Rate as of December 11, 2016.)
Comparing high-interest account features
When it comes time to research which online high-yield savings account or money market account is best for you, take a look at the information we consistently maintain on this page and bookmark it. Plan to come back frequently to check that your accounts are still performing the way you want them to in light of any new rates and terms being offered.
An online savings account or money market account is a safe and convenient way to earn interest on funds that you may need easy access to, and either is a far better choice than simply keeping extra sums in cash or in a checking account.
Now that online banking is mainstream, many accounts offer some pretty nifty bells and whistles. But each bank is different, and so it pays to shop for the best rates, the best service, and the best policies regarding their fees and services. Here are some of the most important factors to consider:
Banks are not required to be insured by the Federal Deposit Insurance Corporation (FDIC), but most are FDIC-insured up to the legal limit of â€œ$250,000 per depositor, per insured bank, for each account ownership category.â€
Monthly maintenance fees, statement fees, and ATM charges are just a few of the ways banks charge for their services. Since these costs can quickly exceed the interest you earn in your account, it is very important to compare each bank’s fee structure to find the most competitive terms.
Minimum deposit requirements
Banks may require that a certain amount of money be deposited when you first open a new savings account, but many now waive that requirement and allow you to fund your new account with whatever balance you choose. A minimum deposit requirement is more common with money market accounts, however.
Minimum balance requirements
Likewise, some banks require that you maintain a certain minimum balance in your account at all times in order to avoid paying their monthly maintenance fee.
You can make up to six withdrawals or transfers without charge from your savings account during any statement cycle according to Regulation D of the Code of Federal Regulations, Title 12, Part 204.
Even though many money market accounts allow check-writing privileges and debit-card transactions, Regulation D applies to this type of account as well.
Many online banks make it easy to transfer money between your various accounts â€“ even if they are with a different bank â€“ which is especially convenient when you open your new online savings or money market account.
One of the best features of online accounts is that you can manage your money whenever you like â€“ 24/7/365. You don’t have to travel to a branch or wait for it to open.
Mobile banking apps
It is possible to do your banking from anywhere with some of the mobile banking applications available at an online bank as well. In addition, online banks invest heavily in making sure that every transaction is secure.
We’re working hard to find the best possible savings account rates and money market account rates to share with the readers of Get Rich Slowly. Do your homework and choose an online savings or money market account that works for you, and then share that knowledge with others in the comments.