Best Online Savings Accounts of 2020

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Getting an Online Savings Account:

One of the most important factors in finding the best online savings account is considering the APY return on your money.

The best online savings accounts are a safe place to store your money, with decent interest rates, customer-friendly interfaces and no extra costs or fees. If you’re not sure where to store your hard-earned money, consider an online savings account. They’re usually easy to set up and often have competitive rates much higher than the national average. Many online savings accounts also come with additional savings tools and customer perks.

 

6 best online savings accounts of 2020

Marcus by Goldman Sachs – Best for no fees

Marcus is the online-only branch of the bank Goldman Sachs, and it offers a variety of products, including personal loans and high-yield online savings accounts. Marcus prides itself on charging no fees, ever, which can be a big benefit for price-conscious investors looking for a place to store their savings. Marcus has a 1.30% APY, as well as other perks like no minimum deposit, no fees and the ability to link other bank accounts. It’s quick and easy to set up an account and you can start saving right away.

Synchrony – Best for customer perks

Synchrony offers a high yield online savings account with 1.30% APY. You can access your cash online, via phone or by ATM, which makes it easy and convenient to manage your money. You can also access your accounts anytime online using its mobile app. Synchrony doesn’t require a minimum balance, but it will close your account if you have a $0 balance for over 60 days.

PNC – Best account integration

PNC’s high yield savings account seamlessly integrates your other accounts for an easy, intuitive online savings process within its Virtual Wallet. Along with the APY of 1.25%, there’s no minimum balance requirement and no monthly service charges. You can transfer money into your savings from any external or PNC checking account and you can even set up automatic transfers. You can also deposit checks using the PNC mobile app.

Ally Bank – Best savings tools

Ally is an online banking service with a great customer-friendly platform and easy to use savings tools. These tools let you use buckets to visualize your savings, set up boosters to optimize and maximize your savings and get personalized recommendations to help you save more and make the most of your account. Ally offers a high yield savings account of 1.50% APY. The savings account also features no minimum balance requirement, no monthly fees and 24/7 support.

Capital One – Best for online bill pay

Capital One offers a high yield, fee-free online savings account that’s easy to set up and even easier to use. The savings account has a competitive rate of 1.50% APY and there is no minimum balance required. The account also features a mobile app, savings tools, easy account transfers and mobile check deposit. You can open an account online, at a Capital One branch or a Capital One Café.

Varo Bank – Best for highest APY

Varo Bank offers one of the best online savings account rates. It has an initial baseline APY of 1.61% and subsequent APY of 2.80% if you meet certain conditions. These include making at least five debit card purchases in a calendar year, receiving total direct deposits of $1,000 or more in one calendar month and keep no more than $50,000 in your savings account. Varo Bank does require that you get a Varo Bank Account before you can set up a high yield Varo Savings Account, so it might not be the best choice if you’d prefer to use another bank for checking. However, if you’re interested in growing your savings, Varo Bank offers some of the absolute best rates around.

Compare the 6 best online savings accounts of 2020

BankAPYBBB/JD Power RatingBest For
Marcus by Goldman Sachs1.3%A+No fees
Synchrony1.3%A+Customer perks
PNC1.25%3/5Account integration
Ally Bank1.5%A+Savings tools
Capital One1.5%4/5Online bill pay
Varo Bank1.61% – 2.80%AHighest APYs

What is an online savings account?

An online savings account works in pretty much the same way as a regular savings account — you store your savings in a bank account and it gradually accumulates interest over time. The best savings accounts offer rates that keep up with or exceed the rate of inflation each year. While savings accounts may not see as dramatic returns as investing your money in other places, they’re a safe, convenient way to store your savings while also being easily accessible. Online savings accounts are useful for short to medium-term savings goals, like a big vacation, a new car or the down payment on a house. These types of savings accounts are a good option for when you know you’ll need to use your savings within a few years, or when you’re interested in pursuing higher rates than traditional savings accounts but still want your money to be easily accessible. Use our savings calculator to estimate your total savings over a specific period of time.

Online savings account vs. other savings engines

Online savings account vs. traditional savings account

The main difference between an online savings account and a traditional savings account is that an online savings account is accessed entirely on the internet, while traditional savings accounts are usually attached to a brick and mortar bank. Online savings accounts tend to have more competitive interest rates than traditional savings accounts. If you appreciate face-to-face interaction with a bank teller, however, a traditional savings account may be more appealing.

Online savings accounts vs. cash management app

Online savings accounts and cash management apps are fairly similar, but with a few key differences. Cash management apps are usually provided by investment firms and other financial services providers, while online savings accounts are usually provided by online banks. Online savings accounts also have an FDIC-imposed limit of six withdrawals per billing cycle, while cash management apps generally do not. However, both have similar high interest rates. If you transfer money in and out of your savings account frequently and don’t mind setting up an additional account with a financial services provider, a cash management app is a good option. If you mostly let your savings stay put and prefer the ease and convenience of an online bank, an online savings account might work better for you.

Online savings account vs. online certificate of deposit

Online savings accounts and online certificates of deposit are both good ways to store your money for long periods of time. Certificates of deposit often have even higher rates than online savings accounts, but will limit your access to your savings for a one-month to a 10-year term. While online savings accounts don’t have rates as high as a CD, they’re still usually higher than a traditional savings account and you can access your money at any time.