One of the most important things to realize about savings accounts is that you should never pay any fees to open one. It would be best if you never had to pay any bank or credit union to entrust your savings to them. Interest is another essential factor to consider. Any good bank for savings account should be willing to pay you a bit of interest, which will accumulate and help you build your savings up over the years.
Most online banks are offering competitive rates to gain new customers. The introductory rate is much higher with online banks than they are with any regular ole’ bank that might be down the street from you. When there are fewer physical facilities to maintain, the overhead is lower, which means that online banks have more money to give back to their customers.
As you are probably already aware, there is the FDIC (Federal Deposit Insurance Corporation) that insures consumers who put their money into federally-accredited banks and the NCUA (National Credit Union Administration), which is the credit union equivalent. Don’t just search for a good bank for a savings account – look into credit unions as well, as their rates can be just as competitive.
If you do not see that a particular “bank” or “credit union” is not FDIC or NCUA backed, then avoid it at all costs. It will always say (usually at the bottom) on a bank’s website if the FDIC backs it.
Good Bank for Savings Account Online and Offline
The better online savings account providers will not charge any monthly fees or maintenance fees. However, they might have a minimum balance requirement to qualify for the high introductory rate. The minimum deposit balance might be anywhere from $1 – $1,000, depending on the specific bank.
What *IS* an excellent introductory rate for an online bank? Anything over 0.45% right is ideal. When the economy is good, the APY% can be 2x or more times than that. When the economy recovers and interest rates start to climb back up, it’s a good idea to “stay liquid”. That means you should put it in a flexible savings account instead of a CD account, as the latter requires that you lock the rate in for a specific period.
Having this said, where is a good bank for a savings account and decent APY %s? One that gets a lot of great reviews is CIT Bank. It’s FDIC backed, offers at least 0.45%, has no fees to worry about, and has a reasonably low deposit and balance minimum requirement.