What is a online savings account? The best savings account lets you earn a high-interest rate and has low fees. To find the best savings accounts, look for an online bank or credit union with low minimum balances and no hidden charges. You should also ensure that your money is fully insured by the Federal Deposit Insurance Corporation (FDIC).
Find the Right Online Bank or Credit Union
When choosing a high-yield savings account, it’s important to find one that is FDIC-insured and has low or no monthly fees. It would help if you also looked for a bank or credit union with competitive rates, good customer service ratings, and transparency about their financial practices. If you’re not sure how to do this, ask your friends for recommendations—or read reviews online from other customers who have used the bank before.
Look for an FDIC-insured Institution
You can find a list of all FDIC-insured institutions on the FDIC website, although you’ll have to search for your state if you’re looking for a local bank. Banks that the FDIC doesn’t insure will usually be clear about this; if not, consider moving on to another bank or credit union.
The most important thing here is to make sure that the institution is insured by either an agency of the U.S. government or an approved private insurance company (such as Lloyd’s of London), which ensures that your deposits at each bank are fully protected against loss in case something happens to it.
Avoid Monthly Fees
When comparing banks, make sure to look at the terms of each account. You want a high-interest rate but also no monthly fees. Some banks offer free checking accounts that come with a low balance requirement (usually $500). But be careful: often, these accounts have minimum balance requirements to avoid monthly fees, and many will charge you if your account falls below the threshold.
Choose a Bank with a Competitive Rate
You can do several things to get the best savings account rate online. The first step is choosing a bank with a competitive rate.
- Find out if the interest rate is fixed or variable. This will determine how much money you earn on your savings over time. If it’s variable, you should monitor the rates regularly to ensure they stay competitive and high enough to make it worthwhile.
- Check the annual percentage yield (APY). The APY tells you what percentage of interest will be earned on your savings each year; this number is important because some banks advertise top-tier APYs that may not be achievable if they don’t meet certain requirements such as having multiple accounts with them, maintaining a minimum balance and not withdrawing all at once during any given month.
There are a lot of factors to consider when choosing your high-interest savings account. First, you want to ensure that it’s FDIC-insured, has low or no fees, and offers competitive rates on deposits. Finding an institution that offers all these features can be challenging, but it can be worth the time and effort if you have the funds to invest in one place.
