I frequently receive e-mails asking my opinion as to which online bank has the best high-yield savings account. With that in mind, I decided to ask FiveCentNickel readers to list their favorite online savings banks. Even though the interest rate landscape is constantly changing, I thought that it would be worth compiling the results into a handy list of the best online savings accounts. Here goes…
ING Direct was far and away the most popular option. The “Orange Savings” account comes complete with no fees, no minimums, a competitive interest rate, and a slick web interface. It’s also incredibly easy to create sub-accounts for different savings goals. It’s also worth noting that ING was recently rated as the safest online bank.
Emigrant Direct was another popular choice, although it ranked as a distant second to ING Direct. Emigrant features no fee, and no minimums. While Emigrant has long been popular for it’s high interest rate, it has slipped somewhat as of late, and is no longer on top of the heap.
WaMu gets high marks for their competitive interest rate, ease of use, and the fact that they have a brick and mortar presence. Your WaMu savings account has to be opened in conjunction with a free checking account, and the accounts must be linked to get the best interest rate. No fees, no minimum, though a $1 deposit is required to open your account.
HSBC Direct, which was rated as the best online bank by Kiplinger’s Personal Finance, features no fees and no minimums (though it requires a $1 deposit to open an account). HSBC has traditionally been amongst the leaders in terms of interest rates, and it’s where we currently have most of our savings.
E*Trade offers a highly competitive interest rate, no fees, quick transfers, integration with their brokerage accounts, and an automatic savings plan. There’s no minimum, though you have to deposit at least $1 to open your account.
FNBO Direct features no fees and no minimums (though they require a $1 deposit to open the account). Readers liked it for it’s consistent interest rate.
Readers compared AmTrust’s online interface to that of ING Direct, though I’m not sure about the ability to easily create sub-accounts. Nonetheless, AmTrust has no fees or minimums, but it requires an initial $1 deposit.
Several readers liked Bank of America, primarily as a matter of convenience. Like WaMu, Bank of America has a strong brick and mortar presence. However, their rates pale in comparison to those of WaMu.
WT Direct is a relative newcomer to the online banking marketplace. While they offer highly competitive rates, you need to keep a minimum of $10k in your account in order to receive this rate. Dip below that and your interest rate drops dramatically. It’s not for everyone, but their rate has been among the very best in the past, so they might be worth checking out if you have a substantial amount of cash on hand.
Finally, USAA was a popular option amongst those that have access to it. I did not, however, include it in the main list, as it’s only available to members of the armed services (active duty, reserves, or retired) and their families.
HSBC isn’t a bad choice, though ING seems to be the favorite. I personally shy away from anyone that doesn’t offer ATM access because some emergencies can’t wait 3-5 business days.
Comment by Frugal Dad — Apr 3rd 2008 @ 8:58 am
I’m on board with ING since it’s really simple and easy.
Comment by Fiscal Musings — Apr 3rd 2008 @ 9:04 am
I have been researching a thing called rewards checking accounts. They offer high yields but come with a catch- minimum of 10 debit card transactions, online statements delivery and direct deposit or bill pay setup.
You also have to live in the area of the bank.
Comment by Dividend growth investor — Apr 3rd 2008 @ 10:15 am
I stash my cash in Vanguard Prime Money Market Fund. There’s a $3000 minimum, but I can write checks from it.
Comment by Kyle — Apr 3rd 2008 @ 10:56 am
I did a lot of research, and decided to try out savingssquare.com. No minimum, and the rate is still the best one I could find out there (currently 3.5% vs. ING Direct at 3.0%). It’s definitely not as user-friendly as ING, but it’s not bad for longer term thinking.
Comment by Ken O. — Apr 3rd 2008 @ 11:22 am
Love ING! Though I’ve been thinking about WaMu since I may get a new checking account. I’m not too happy with BofA these days.
Comment by FFB — Apr 3rd 2008 @ 11:51 am
I have used HSBC, ING, and now Wamu. ING has by far the best customer service. However I’m sticking with Wamu for now out of convenience (free account transfers online and brick/mortar visits) and the fact that it has a slightly better APY than the other two.
Comment by El Cheapo — Apr 3rd 2008 @ 11:55 am
FNBO Direct got some flack awhile back for allegedly not being very customer-friendly, but I have never had a problem with them. They do tend to maintain fairly high rates, though it’s currectly only 3.25%.
For the “convenience” factor, I use my local credit union paying a whopping 0.8%, but the majority of my cash savings (emergency fund, CC arbitrage money) is in FNBO.
Comment by Rick — Apr 3rd 2008 @ 1:57 pm
I’m surprised CapitalOne isn’t on this list. I find their APY is comparable to other banks, and they sent me an ATM card and checkbook to use for the account, which is what sold me. No minimums or fees. I also use ING Direct.
Comment by Chris — Apr 3rd 2008 @ 2:22 pm
I love ING Direct, but also Citibank offers a high yield savings account. You must have a checking account linked, but there are no fees, and you have the benefit of bricks and mortar branches. Their checking account may have fees, but the amount after a certain balance of assets (including your high yield savings), it may be free.
Comment by Greg — Apr 3rd 2008 @ 4:50 pm
My experience with the three internet savings accounts I use: VirtualBank has the best rate, and they are fairly quick about delivering withdrawals. Next best rate is HSBC, but they are slow to credit deposits and are the slowest of the three to deliver withdrawals. HSBC’s account account does come with a free debit card so you can get fast access to a few hundred if needed, however, larger withdrawals can take an irritatingly long amount of time to be delivered to my credit union - up to a week.) ING provides quick service (about the same as Virtual Bank), but is typically about .25 percent below Virtual Bank for the interest rate. ING’s web interface is easiest to use.
Comment by Saver — Apr 3rd 2008 @ 4:56 pm
hate ING, well i’m a fair weather ING fan when the rates are high; otherwise, don’t see the justification to stay with them. maybe it’s me, but i don’t find much difference between any on the list, having had or have accounts with most of them.
Comment by Tim — Apr 3rd 2008 @ 6:24 pm
I love USAA (thanks for mentioning it)… their customer service is amazing. Their savings interest rates aren’t too bad, but also not at the top, but the convenience and the service more than makes up for it. (And we got a mortgage in 2005 with a rate so low that when we tried to get other quotes, the mortgage companies/brokers just told us flat-out they could never match it.) Also, they pay you back any ATM fees you get charged by other banks, and charge none of their own. We can deposit checks at home by scanning them in as well. Now THAT’s free checking.
I read in their magazine that some members of other gov’t agencies might qualify…they mentioned the CIA and FBI.
Comment by Cindy — Apr 3rd 2008 @ 6:52 pm
I have Emigrant, E*TRADE, ING, and Citibank (ok, yeah, I signed up to get a bunch of bonuses), and as far as actually using the accounts, I like ING the best. It’s just nice, clean, and easy, and I like having both the checking and multiple savings accounts.
Comment by Stephanie @ PoorerThanYou — Apr 3rd 2008 @ 11:05 pm
WAMU online savings rocks!!!
Comment by quizzer — Apr 4th 2008 @ 7:19 pm
I tested 5 banks last year for online savings, mainly for “free” money. I will say that ING is the slickest and has a great UI, but my vote goes for WAMU. Higher rates (ING just drops them way too fast, and is slow to raise), Brick and Mortar, and UI are all high marks. HSBC used to have a higher rate, but their website was a pain due to multiple login processes and site was clunky.
although the different between 3% and 3.3% is relatively nothing until you are talking 50k+ balances, go with what works for you. It would be a shame to chase a nickel if you have to go through hoops for it.
Comment by thomas — Apr 6th 2008 @ 6:27 pm
ING’s simplicity, ease of use, and customer service is hard to beat. I had a nightmare of a time with Emigrant a few years ago, it is good to see that they are up on the list - maybe they have gotten a bit better?
Comment by ChristianPF — Apr 7th 2008 @ 5:17 pm
I am a big AmTrust fan. In addition, I have an ING, Emigrant Direct and CapitalOne MMA. AmTrust consistently pays more than the others. It is the easiest to link external accounts with.
Best Wishes,
D4L
Comment by Dividends4Life — Apr 8th 2008 @ 8:34 pm
Well, what about Igobanking guys? their 3.28% no minimum, no fees definitely beats the 3% orange savings account…
Comment by SJunior — Apr 11th 2008 @ 9:57 am
ING does offer ATM access! If you open their Electric Orange account, you get an ATM/Debit card. The checking account actually has an interest rate attached to it and you can freely move money from the Orange Savings account to it online. So when you need money, just xfer cash from your savings to the electric orange, then go to the ATM and take money out. no waiting 3-5 days.
Comment by steve — Apr 11th 2008 @ 11:48 am
I have ING Checking & Savings accounts, and I absolutely love them. The web site is cool and easy to use, and the counter that tracks how much interest you’ve earned over the month/year is nifty.
I also have an HSBC savings account, but I’ve come to enjoy the ING experience much more.
Comment by Jinx — Apr 11th 2008 @ 12:17 pm
I use ING for checking but hate the general ledger. Positive and Negative pending transactions are grouped together. Another way to confuse clients and charge for NSF.
US Bank has a great checking interface ledger but pays no interest.
ING savings had the best rate in 2003 but has steadily declined.
Switched to Emigrant and eTrade for better Savings rates.
Waiting to see new rates after end of April FOMC meetings before checking out other banks like IGoBanking, etc.
Comment by Mike — Apr 13th 2008 @ 4:26 pm
Opened a CD with First National Bank of Omaha, parent of FNOBDirect, and they low-balled me on the interest rate advertised (5.10 > 4.90) and the term (18 months). They completed the transaction without informing me of the rate/term change.
They claimed the change was because I am from another state. I am not a banker, CPA, or Lawmaker so I do not understand how that would matter.
I closed the account mainly out of principle and have avoided FNOBDirect because of the parent bank’s behavior.
I consequently found a better rate (5.35) and similar term (16 months) locally.
Comment by Mike — Apr 13th 2008 @ 4:39 pm
eTrade’s interface is quirky. I have CDs and Savings. They project your savings contributions and I have found them to calculate them strangely, ie. not in order of transfer if they are within the same week. They have a decent rate so I am mostly satisfied.
Like others have posted here: the interfaces are basically the same or same ease of use. Go for the money.
Comment by Mike — Apr 13th 2008 @ 4:45 pm
I am looking to start my emergency fund and I was looking at the money market accounts offered by EverBank and Nationwide.
-Everbank is offering an intro rate of 4.01%APY for 3 months then 3.01%APY.
-Nationwide is offering 3.65%APY.
Anyone have any experience with these accounts?
What sorts of questions should I be asking when I am comparing high yield savings accounts?
Are there practices in high yield savings accounts that I should watch out for?
Thanks for any help you can offer,
Sci
Comment by Sci — Apr 15th 2008 @ 2:25 am
Since when is BoA a “high yield savings” bank? Their savings accounts earn less than 2%, and much much less if you don’t keep $50,000 in the account.
Comment by Mickey Blue Eyes — Apr 17th 2008 @ 12:06 pm