Author: Kelly Carter
At the very least, you might want to reevaluate the bank you use for a portion of your savings. There is a chance that you might be leaving money on the table if you hold a savings account with one of the country’s big brick-and-mortar banks.
Customers are starting to receive better interest rates from high-yield online savings accounts than they did in the past. Several online savings accounts have begun to offer higher interest rates after maintaining depressingly low rates throughout the pandemic and the first half of 2022.
This article will review why you should choose a savings account and the best high-yield options available.
Why should you put your savings in an online savings account?
According to Ken Tumin, founder of DepositAccounts.com, the typical online savings account saw its most significant monthly increase in at least five years between August and September.
Tumin predicts that many high-yield savings accounts presently paying more than 2% would surge above 3% as the Fed prepares to raise interest rates again this week.
However, he does not believe that conventional banks will adopt this strategy.
There is a wide range of interest rates because they are not regulated; ultimately, it depends on how much a bank wants your money. Most physical banks currently charge an average interest rate of roughly 0.13%.
How much could you potentially earn by putting your savings in an online savings account?
Your balance will increase more quickly without any more work on your side if your money is in an account earning a high rate. A savings of $20,000 would make little more than $400 after a year at a 2% APY (annual percentage yield).
Although it might not make you wealthy, your earnings will increase over time. Additionally, the yields are substantially higher than those with accounts receiving 0.13% APY, which would be about $26 after a year.
How to choose the best online savings account
Search for accounts with high-interest rates and minimal service fees – make sure there aren’t any monthly fees involved. While some financial institutions don’t impose monthly fees, some do but will eliminate them, provided you maintain a certain minimum amount.
Also, be open to looking beyond bigger and more popular banks. Several online banks and applications offer low deposit minimums and favorable rates.
Top 3 high-yield online savings account in 2022
These are some of the best online savings accounts you should consider in 2022:
1, Varo savings account
Varo Bank offers a reasonable rate of 2% APY on all balances. Additionally, savers who fulfill specific criteria can receive up to 5% APY. Among the requirements are:
- Receiving a $1,000 minimum total direct transfer for each qualifying period
- Keeping your savings account balance at $5,000 or less per day for the whole month
- Keeping your bank and savings account balances at least $0.00 for the entire month
There are no minimum balance requirements or monthly fees for this account. Additionally, it includes automated saving options to make saving simpler.
2. Marcus by Goldman Sachs high-yield online savings account
No minimum deposit is needed to start an account with Marcus’ high-yield online savings account, which offers an outstanding APY (1.90%). There aren’t any monthly or domestic wire transfer fees.
Additionally, it permits same-day transfers of no more than $100,000 to or from other banks. Marcus credits interest every month after daily compounding.
3. Synchrony bank high-yield savings account
The high-yield savings account from Synchrony Bank features a 2.05% APY and low fees. Additionally, wire and electronic transfers to and from accounts at Synchrony and other banks are available. There is no monthly charge or minimum balance requirement to create this account.
Key Takeaways
Savings are essential. while you should select the best account to deposit your funds, eonline savings account seems to be the best option. High-yield online savings accounts pay better interest rates than most traditional big banks, with some providing as much as 5% APY.