By their technical nature, savings accounts are akin to time deposits. Technically, the bank can require the depositor to notify the bank before withdrawing the funds or charge a penalty when the account holder withdraws the money before a specified date. While banks do not usually exercise this right, some institutions restrict the number of transactions that a depositor can make in and out of a savings account per month. They also charge fees that depend on the average balance an account holder keeps in his account. Banks do not provide checks for a savings account as a general practice.
It is relatively easy to transfer funds to and from a savings account but a depositor must observe the federal limits on the number and types of withdrawals he can make per statement cycle.
While deposits are without limits (you can make as many as you wish), the law restricts some types of telephone and electronic withdrawals (exclusive of ATM withdrawals) and transfers to only six per statement cycle.
Here are The Smart Investor Select’s picks for savings account:
1.00% APY, $0 minimum
Chime offers a savings account feature that offers a high annual percentage yield of one percent. This is an optimal savings account program with its lack of monthly fees or minimum balance requirements. There is no cap on the amount of interest you can earn in your savings account as long as you have at least one penny in your account you are eligible to earn interest.
Another added benefit to opening a savings account is the lack of minimum deposit requirement for opening an account. To open a savings account you need to have at least one chime spending account to open a savings account. This promotes loyalty and using the added features within the Chime checking system.
Because of the high yield interest rate of one percent, this is one of the best online savings accounts available. Not only can you access high-quality features, but you will also earn the best interest rate.
Chime uses two optional programs to improve your ability to save money. The program is Save When You Spend. This program allows you to save small amounts when you make purchases. Whenever you make a Chime debit card purchase, Chime rounds the transaction up to the nearest dollar and transfers the difference to your savings account.
0.81% APY, $0 minimum
Positioning itself as a mobile-only bank, they penetrated the fickle and volatile banking market with an aggressive marketing thrust that countered traditional bank offerings.
This savings account is a virtual account so there is no physical bankbook. To monitor your transactions and balances, the Varo App has a utility that lets you view, download, and print your bank statement.
In Save Your Change, they simply round off eligible transactions to the nearest dollar and put the change into your savings account. In Save Your Pay, customers can nominate a percentage of their earnings that the bank will transfer automatically to their savings account. Like the Varo Account, this savings account does not require depositors to maintain a minimum balance. This means you can keep a very, very low amount in your account and the bank won’t charge a fee.
Live Oak Bank
0.70% APY, $0 minimum
The bank offers competitive deposit rates and often pay higher interest than their competitors. Because they are practically an online bank, they don’t have the expenses that come with an extensive banking network. This enables them to give out an above-average APY to their depositors.
In the competitive world of deposit rates, Live Oak consistently lands among the bunch near the top. They don’t offer the highest rate in the market but they’re better than good.
Their savings account has no minimum balance and no monthly fee. Even if you only have $1.00 in your account, it’s still good enough to earn interest. Even better, the bank compounds interest daily.
This is straight online savings account that you can access through a mobile app. The app works with non-Live Oak Bank accounts so you don’t need another app
Synchrony Bank is one of the highest APY in the market today.
However, take note that while most other banks’ savings accounts offer either a fixed interest rate or a tiered rate, Synchrony has a variable rate. This means that your interest rate can change at any time. The good thing about it is that their high rates merited the bank several awards from a few groups. That gives a little assurance that customers can expect above-average rates even if the bank does make an adjustment from time to time.There is no minimum balance that customers have to maintain but you need a hefty $5,000 to open an account.
Unlike other banks that would have several options in savings account alone, Synchrony Bank offers only one type of savings account. And don’t even bother to ask for a checking account because that one didn’t make it on their list for whatever reason. Customers can access their accounts online, via mobile app, or through the thousands of ATMs that carry the Visa Plus or Accel logos.
American Express® High Yield Savings Account
0.60% APY, $0 minimum
American Express Personal Savings offers an online-only bank where you can store your savings at a competitive rate without any complicated features or maintenance fees. To use your savings account all you need to do is apply and once it is operational you can move your funds in and out through an electronic transfer.
You can link any major United States bank account to an American Express Personal Savings account using your account or routing numbers. There are no monthly service fees or minimum balance requirements to avoid a charge. Because there is no debit or ATM card, there are also no ATM or overdraft fees. The only fee you can accumulate is a five-dollar fee for a returned deposit.
The High Yield Savings Accounts offered through American Express National Bank include competitive interest rates, no minimum balance or monthly fees. This is an easy to access savings account that you can monitor and link with any other banking account.
The benefit of having a savings account through American Express is a simple way to open and maintain your savings account. It is easy to navigate and organize your savings plans that offer a high-end rate that is one of the highest available from both online and offline banks.
Discover Bank Online Savings
0.60% APY, $0 minimum
Discover Banking offers competitive offers for their savings accounts. The rates premium because they are five times higher than the national average. These rates are highly competitive and benefit the customer exclusively. Discover savings accounts earn 0.60 APY. If you have $10,000 in your savings account, you would earn over $60 from interest annually. Your interest compounds daily and pays out monthly.
Another added benefit of opening a savings account with Discover Banking is there are no fees associated with online savings accounts. There is also no minimum balance requirement. This start contrast is directly related to Bank of America’s Advantage Savings account, which requires a minimum of $500 to waive their eight dollars monthly fee.
This is a great example of why the Discover Banking savings account is a great option to build and grow your finances. The mobile app is easy to use when you want to deposit a check, you can easily transfer and view your financial status. This is an incredibly user-friendly system that comes highly recommended.
Barclays Online Savings Account
0.60% APY, $0 minimum
Barclays offers high-interest rates that apply to all of its products that provide a great advantage compared to other competitive online banks. Barclays offers two different savings account options. The two options are the Barclays Online Savings Account and the Barclays Dream Account. Both earn 0.60% APY with no fees or minimum deposit.
The Dream account earns more interest over time. You can potentially earn a 5% bonus on earn interest every six months so long as you avoid any withdrawals and make one deposit a month. This is a great option for anyone that is smart with the savings and can keep themselves engaged with the overall process of long-term savings.
There is no other bonus offered to other savings accounts to any other online banking institution. The Dream Account does put a limit on your monthly deposits. You can only deposit $1,000 a month. If you make zero withdrawals and deposit the maximum $1,000 every month you still need to keep the same pattern for a full year for the benefits to kick into effect.