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The Best Online Savings Accounts for June 2022: Take Advantage of Rising Rates with These High Yield Accounts

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Savings account interest rates are on the rise, as the Federal Reserve continues to raise rates in its fight against runaway inflation.

If you’re looking for a high-yield savings account with a competitive rate in today’s rising rate environment, online banks offer some of the best options. The best savings account rates available today all come from online banks, and offer 10x or more the national average savings rate

Online banks can offer flexibility in how you access your account, and typically have robust online banking and mobile app features. Some are even partnered with brick-and-mortar financial institutions or offer ATM access if you prefer to make transfers in-person. Online banks also have fewer overhead costs, which means they can pass on those savings to you in the form of better interest rates, lower fees, and lower minimums, experts say.  

Here’s more information about our picks for the best online savings accounts, and how you can start saving today:

Best Online Savings Accounts

Experts have consistently told us the best online savings accounts are secure, high yield savings accounts with no monthly maintenance fees and low or no minimums. Because of their flexibility, low fees and minimums, and high interest rates, all of the savings accounts on our list of the best high yield savings accounts are online accounts. 

Here’s an overview of our favorite online high yield savings accounts right now, and the annual percentage yield (APY) you can currently earn on your balance:

Best Online Savings Account Summary

Online BankAccount NameMonthly FeesMinimum Requirement
Ally BankAlly Bank Online Savings AccountNoneNone
American Express National BankAmerican Express High Yield SavingsNoneNone
BarclaysBarclays Online Savings AccountNoneMaintain at least $0.01 to earn interest
Bread SavingsBread Savings High Yield Savings AccountNone$100 minimum balance
Capital OneCapital One 360 Performance SavingsNoneNone
CIT BankCIT Bank Savings Connect AccountNone$100 minimum opening deposit
Discover BankDiscover Online Savings AccountNoneNone
Dollar Savings DirectDollar Savings Direct Dollar Savings AccountNoneNone
FNBO DirectFNBO Direct Online Savings AccountNone$1 minimum opening deposit, maintain at least $0.01 to earn interest
Lending Club BankLending Club Banks High Yield Savings AccountNone$100 minimum opening deposit
Live Oak BankLive Oak Bank Savings AccountNone Maintain at least $0.01 to earn interest
Marcus by Goldman SachsMarcus Online Savings AccountNoneNone
Prime Alliance BankPrime Alliance Bank Personal SavingsNoneNone
Salem Five DirectSalem Five Direct eOne SavingsNone$10 minimum opening deposit
Synchrony BankSynchrony Bank High Yield SavingsNoneNone
TAB BankTAB Bank High Yield Savings AccountNoneMaintain at least $1 to earn interest
UFB DirectUFB SavingsNoneNone
Varo BankVaro Savings AccountNoneMaintain at least $4.95 in any 31-day month and $5.12 in any 30-day month to earn interest

You can read even more about each bank on our list of best high yield savings accounts.

How Does an Online Savings Account Work?

An online savings account works like any other savings account. The biggest difference is that you may not have the option to make deposits or withdrawals in person at a bank branch.

You can open an online savings account online, and you’ll usually have a few different options for funding the account:

  • Bank transfer: This is one of the most common and seamless ways to transfer money to an online bank account. Through your online account, you can transfer money from an existing checking or savings account with any bank to your online savings account, using the account and routing numbers.
  • Mobile check deposit: If your online bank offers mobile account access, you may have the option to deposit a paper check using the mobile app. 
  • ATM deposit: Some online banks offer ATM access for deposits and withdrawals, and may even waive fees for certain ATMs. Check the terms of your account or call your online bank to find out if you have ATM access and which ATMs are compatible with your account.
  • Mail or wire transfer: Even if it doesn’t have a bank branch you can visit, your online bank may have a location to which you can send a paper check or wire transfers with the funds you’d like to add to your account. Just keep in mind, using this method will likely take much more time for your money to appear in your account than other options. 

Once your online savings account is funded, you’ll begin earning interest on the balance. Your interest may be compounded daily, weekly, or monthly, depending on the bank — you can find more about how often your online bank will compound interest in your account terms. 

Over time, you’ll be able to withdraw funds from your account as you need them, or add more money to your balance. Experts recommend setting up direct deposit automatic transfers to your savings if you’re working to build an emergency fund, so you don’t have to think about moving the money regularly.

Finally, make sure you understand any limitations your bank may have on the number of transfers you make. The Federal Reserve used to limit the number of transfers on savings accounts to six per month, but as of 2020 that rule has been lifted. However, some banks may still impose their own limits on the number of withdrawals or deposits you may make per statement cycle.

Online Savings Accounts vs. Traditional Savings Accounts

Both an online savings account and a traditional savings account can be a solid place to keep your emergency savings or money you want to put away for short-term goals. Because both types are insured by the Federal Deposit Insurance Corporation (FDIC), they’re also among the safest places to store your cash. 

Here are a few of the major differences between the two:

Online Savings AccountsTraditional Savings Accounts
Offered by online banks or online divisions of traditional banks — may only be accessible through your online or mobile accountUsually offered by traditional brick and mortar banks, usually with in-person branch access
High yield savings accounts with competitive interest ratesVery low interest rates, if any at all
Generally no monthly service fees May charge monthly service fees or require certain account activities to waive fees
Typically have low or no minimum opening deposit or minimum balance requirementsMore likely to have a minimum opening deposit or minimum balance requirement
Easily accessible online account and often comes with a robust mobile app Usually has online account access, but mobile app may not have as robust features
FDIC insuredFDIC insured

In general, online high yield savings accounts are a great option to keep your money safe and earn interest on your balance. Traditional bank accounts may be a good option if you prefer the convenience of an in-person transaction or your brick-and-mortar institution has other features that are more important to you — but online banks can help you earn more on your balance over time.

Can Online Savings Accounts Be High Yield?

Many online savings accounts are high yield accounts.

Online savings accounts are more likely to have high yields than traditional savings accounts from brick and mortar banks. That’s because online banks can save on many of the expensive costs it takes to run branch locations of a traditional financial institution. 

Online banks are often the most competitive account types when it comes to APYs, and many online banks will be among the first to increase the interest rates they offer in a rising rate environment. In fact, all of the accounts on our list of best savings account rates are offered by online banks.

Requirements for Opening an Online Savings Account

Just like any savings account, you’ll need to provide some personal information when you open an online savings account. Here’s some of the info you should be prepared to enter when you apply:

  • Full name
  • Birth date — depending on the bank you choose, you may need to be at least 18 or 21 years old to open an account
  • Social Security number — some banks may also accept a tax identification number
  • Whether you’d like to open a single-owner account or joint account
  • Home address
  • Phone number and other contact information
  • The bank name, account number, and routing number of an existing bank account — you can use this account to transfer funds for your initial deposit to your online savings account. Typically, checking accounts and savings accounts are accepted.

What to Look for in an Online Savings Account

When you’re searching for an online savings account, the first thing you should do is make sure it’s insured by either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). 

These agencies ensure consumer deposits up to $250,000 held in certain accounts, including a checking account, savings account, or money market account, among others, are insured against any bank failure. There are some differences — FDIC insurance provides separate coverage for different account categories, for example, while NCUA insurance for credit union accounts covers up a total $250,000 held in any account type at the same credit union. If your account is held at an FDIC-insured or NCUA-insured bank, you can rest assured that your money is secure.

Beyond that, there are a few details you should look for in a new online savings account, which may depending on your individual financial situation and goals:

First, make sure you know the annual percentage yield (APY) the account has. Online banks — whether they’re online-only banks or online divisions of other banks — are often some of the best places to find high yield savings accounts, since they don’t have the same overhead costs as brick-and-mortar institutions. Right now, the best online savings accounts offer 10x or more the national average interest rate, with some exceeding 1% APY.

You’ll also want to consider any costs associated with the savings account you choose. Some banks charge monthly maintenance fees for account holders. However, there are plenty of options — especially among online banks — that are fee-free. None of the accounts on our list of best online savings accounts, for example, charge monthly maintenance fees. 

Minimum balance requirements are another thing to look for. Check whether the savings account you choose has either a minimum opening deposit requirement, or minimum balance requirement. Some online banks may require you to deposit a certain amount when you open the account, while others may require a minimum ongoing balance. In some cases, not meeting the minimum balance may result in fee charges; in other cases, you may not earn the account’s full interest rate if you have less than the minimum in your account.

On the other hand, some online savings accounts — especially those with the highest APYs — may only pay the advertised APY up to certain maximum balances. For instance, you may be able to earn a stellar 2% APY on your savings, but only on up to $500. Before opening a new account, consider how much savings you’re starting with and how much you intend to keep in your account long-term, to make sure the account you choose aligns with your goals.

Finally, you may also want to consider what other account types the online bank you open a savings account with offers. If you like the bank, or find its website or mobile app easy to use, it can be simple to keep your checking account, savings account, or any future CDs all in one place. Some online banks offer more different types of deposit accounts than others, so make sure you understand all the offerings available to you if you’re considering consolidating your accounts with one bank.

How to Open an Online Savings Account

Opening an online savings account is fairly straightforward. Once you’ve found the account that works best for your goals, you can go to that bank’s website and find the “open account” button on its savings account page. 

You’ll need to input some personal information and more than likely a routing and account number for an existing bank account. Some information to have on hand includes your contact information, Social Security number, and and home address. 

If the account you choose has a minimum opening deposit, you’ll need to make sure you transfer at least that much from your existing account. Some online banks may offer mobile check deposit or ATM access for future transfers. 

Finally, if you plan to contribute to your savings account regularly, it’s helpful to set up automatic transfers. In fact, experts we’ve spoken to recommend this method for anyone who’s trying to build an emergency fund or other short-term savings. Decide how often you’d like to make transfers to your new savings account, and you can set up those transfers upon account opening. 

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