There are many places to open a savings account these days. The internet has paved way for the option to store save money digitally, so there is no need to physically go to a bank anymore – unless you really want to. It’s not surprising that there are many, many online banks popping up to offer savings opportunities, as well as CDs, retirement accounts, and so forth. But what is the best place to open a savings account? How can you determine what is the right choice for you?
When it comes to high-yield savings accounts, online banks tend to be superior to traditional banks on both fees and rates. The national average interest rate has been around 0.09%, which is exceeded with most online savings accounts. The online banks that have no physical branches to worry about funding are the ones that are able to afford giving out the highest APY percentages. For those investors who are primarily concerned about getting the highest rate possible, this kind of bank is the best place to open a savings account.
However, you’ll still have to dig in a bit deeper to discover possible hidden fees, whether or not a particular bank offers savings accounts that are backed by the FDIC, the minimum requirements, and if there are several tiers, each with its own rate. This means some homework on your part, but it shouldn’t be too difficult as long as you take the time to look over each bank’s website for an understanding of what each offers.
The Best Place to Open a Savings Account is FDIC Backed
In case you are wondering if high-yield savings accounts are safe, as mentioned above, they are as long as they are backed by the FDIC, and there is usually a maximum of $250,000 that can be backed in a bank for one customer. This means that regardless of whether your internet-only bank operates 100% online or actually has some physical offices, it should carry FDIC insurance.
Highly-yield savings rates are subject to change. Even if you are guaranteed a fixed rate for a certain period of time, that doesn’t mean that the rate won’t go down afterwards. On the other hand, it could also go up, depending on the market and economy.
To help you decide on the best place to open a savings account, here are a few of the best options right now:
• UFB Direct – 1.70% on $10,000+ accounts
• Popular Direct – 1.60% on $5,000+ savings (1.70% on CDs)
• VIO Bank – 1.60% – all savings accounts (only $100 minimum)
• HSBC Direct – 1.60% – $1 minimum
• CIT Bank – 1.45% on Savings Builder accounts – either $100 monthly deposits or minimum $25,000
Of all of these, CIT Bank is probably your best bet. Their APY is usually higher and there are different tiers and options on all Savings, Savings Builder, and CD accounts. It’s also the best place to open a savings account as it has no fees and offers excellent customer support.