Looking for a place to stash your personal or business cash savings? I spend a lot of time discussing the need to have your money in a high-interest or high-yield savings account. I thought it was about time I put together a list of the best high-yield savings accounts with a focus on small business owners like me.
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$200 Bonus
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4.23%
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4.11%
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4.05%
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3.75%
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3.50%
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3.30%
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Where I’m Saving Right Now
I currently use Ally as my primary personal savings account (mainly because I use them for checking; they are old and solid). I’ve got a small amount in SaveBetter testing their platform (see my full review of SaveBetter, the revolutionary platform offering several banks with an APY above 4%).
And I recently turned to Live Oak Bank for all my business savings (and checking) needs.
Until a few months ago, none of these banks, Ally included, were paying a decent interest rate. So, I’ve sent a big portion of my cash emergency savings to a few different places (all are NOT FDIC insured):
- I have savings with Peerstreet in their Pocket account, earning 4%. Note you need to be accredited to use Peerstreet. See my full review on Peerstreet and Pocket.
- Also, I’ve got more invested in my Vanguard taxable investing account. This is sitting in their S&P 500 index fund.
Other Online Savings Accounts to Stash Your Personal and Business Cash
Now for the safe money. Any of these accounts below would be great compared to the savings accounts held at traditional brick-and-mortar institutions. Don’t forget that these high-yield online savings accounts are FDIC insured.
There are many online high-yield savings accounts now available across the Internet. All contain different features, both positive and negative. But most, if not all, are FDIC insured, contain no fees, and pay an interest rate significantly better than traditional savings accounts.
You should find one that’s right for you and get started saving. And don’t just consider this list. These are just some of my favorites.
Okay, here are the rest of the best savings accounts:
What are the Best High-Yield Savings Accounts?
Let’s dig into some of the details of these high-yield savings accounts. When possible, we’ve linked to their full review.
1. SaveBetter
SaveBetter is a savings platform that allows users to access the best savings rates without jumping from bank to bank.
It acts as a custodial account for multiple financial products such as accounts, CDs, and money market funds; customers can sign up for these products without visiting partner banks or credit unions. SaveBetter was created by Raisin (formerly Deposit Solutions). Full review of SaveBetter…
2. UFB Direct
UFB Direct offers a superior high-yield savings account. It has no minimum deposit requirements and charges no maintenance or service fees.
UFB Direct is big on security too. They are active with fraud and anti-virus protection and utilize SSL encryption to protect your account. Automatic logouts also protect against unauthorized use. Not only is your account information safe with UFB Direct, but your money is safe too. Money in your UFB Direct account is FDIC insured up to $250,000.
Other features that make UFB Direct a great choice for your next savings account include a complimentary ATM card, online and mobile banking options, and free transfers between direct deposit accounts.
3. CIT Bank
You can turn your everyday savings into much more with a CIT Bank Savings Direct account. Get competitive rates with maximum growth and earn 13x the national savings average.
Easily access your funds with remote deposit checks and make transfers through the mobile app without any account opening or maintenance fees. Moreover, take advantage of daily compounding interest to maximize your earning potential, all while being FDIC insured.
4. SoFi Bank
A SoFi bank account comes with no account fees, no overdraft fees, no minimum balance fees, and no monthly fees. It also has 55,000+ fee-free ATMs within the Allpoint® Network. Members with direct deposit can earn a strong APY on their savings and Vaults balances and similar APY on their checking balances.
There is also a two-day early paycheck feature when users set up a direct deposit and a no-fee overdraft coverage for up to $50 with qualifying direct deposits. Lastly, users have access to cashback at local establishments of up to 15%, as well as automatic savings features like Vaults and Roundups. Learn more about their $275 bonus.
5. Live Oak Bank
Live Oak offers competitive interest rates, no monthly maintenance fees, and FDIC insurance up to $250,000. Their Savings Account offers 11x the National Average APY with no minimum balance requirements and daily compounding interest.
Customers also enjoy North Carolina-based customer support and online banking with no maintenance fees and convenient access through their mobile app.
6. Ally Bank
Ally Bank offers some pretty lovely services aimed at treating their customers responsibly. I’ve been with them for several years and enjoyed their service.
They have both a savings and an interest checking account. They also offer some of the best CDs available today. Not just because of rates but because of their flexibility. They have a no-penalty CD and a one-time rate adjustment CD. They are FDIC insured and charge no ridiculous fees. Full review of Ally Bank…
See more banks? Click show >> show
Don’t Need a Full Savings Account? See the Best Automatic Savings Apps
Why We Need High-Yield Online Savings Accounts
I love the online savings account. It has so many uses. Mainly it will simply help you start saving more of your money. When I first started getting passionate about my finances and making changes in managing my money, one of the first things I did was open up an online savings account.
Here’s why I did and some of the benefits of having one. Hopefully, this list will convince you to open one.
Put Your Savings Behind a Wall
Since these high-yield online savings accounts are usually online-only, getting to your funds isn’t as easy as a regular savings account. With regular savings accounts, you can walk into the bank or move the money in a second to a checking account using an online feature.
Online banks typically don’t have physical locations. To get your savings in and out of these accounts, you’ll usually need to transfer your money to another bank and then withdraw or use the ATM.
I know this sounds like a negative, but it isn’t. You should only need your savings for emergencies or a short-term savings goal. It wouldn’t kill you to have a 1-2 day barrier to getting your money.
Learn more about why online bank transfers take so long here.
I’ve found that this barrier often dissuades me from spending money that I shouldn’t or keeps me from raiding the emergency fund for something frivolous. So you see, this faux wall to your savings helps you to save more in the long run.
No Fees or Minimums to Worry About
Let’s face it. The big guys on the banking block have run the show for far too long. A big bank checking and savings account can cost you hundreds of fees yearly.
There’s no reason you should put up with ridiculous fees and minimums from banks so that you can lend them your money. They should be paying you. But they can’t because they are fat and bloated and need your money and fees to cover their fat cat expenses.
Don’t play that game any longer. Move to an online bank where you can enjoy a fee-free environment.
High Interest / High Yield
If you do like I did for so long and keep your savings in a regular savings account, you will earn a very small interest on your savings. Typically this is something like 0.10%. That stinks.
With a high-interest online savings account, you can earn much more. Look at the rate chart above to see these accounts’ current annual percentage yield.
These rates also fluctuate with the LIBOR rate. So as interest rates rise, you’ll see these rates shoot back up. I remember when the rates were something like 5.00%. Wow!
Calculate Your Annual Interest Earned
This calculator allows you to see the amount of interest you will earn over a year.
Steps:
- Enter the principal (the amount of money in the savings account) and
- enter the APY (the annual percentage yield) in the appropriate input fields, and
- Click the “Calculate” button
The result is displayed in the “Interest” field below the button. Try it!
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How much will you earn?
Will They Always Be High-Yield Savings Accounts?
I had a reader comment asking whether these savings accounts would still be classified as “high-yield” if the rates dropped back down again. It’s a fair question that I thought I would tackle here.
Interest rates are currently hovering around 4%, give or take a bit. I remember when these high-yield savings accounts were at their highest a decade ago. They were touting rates in the 5% range. It certainly appears that rates are going to fluctuate for a bit.
But you can’t stop your comparison there. These accounts are so special because they don’t have the internal expenses that most brick-and-mortar banks have. As a result, they are consistently able to offer a better rate on savings accounts than banks like Chase and Bank of America, neither of which come close to even 1%.
All that to say, across the industry, banking rates are up and down. So the question then becomes, where do you turn to get a better rate without sacrificing the security of FDIC-insured banking products?
You can’t turn to the stock market or peer lending. Both are too risky. Some have turned to reward checking, which is probably a good move for those who can work within the requirements of such an account.
My money is staying put in my high-yield savings account. I’m there first and foremost for the FDIC insurance I get. I also like that these accounts provide clear separation from my checking account, and they provide the liquidity to use the money if needed.
If my account gets too full, then I’ll take the excess and put it in equities.
Rates will come and go. Once the major banking rates mentioned above return to normal levels, the high-yield rates will be back. I’m fine sticking around till they do.
The post The Best High Yield Savings Accounts [for Business Owners] appeared first on Part-Time Money®.
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