Online banking is a system that lets you access your account and make transactions on the internet instead of in person. It provides nearly every service that would traditionally only be available in a branch.
This includes viewing balances, sending funds, paying bills, making deposits, and much more. All you need is a bank account, a device, and an internet connection. Banking online has several benefits, with one of the biggest advantages being convenience.
You can bank on your own terms, and won’t be restricted by the hours set by the bank itself. It gives you 24/7 access to your accounts and makes it quick and easy to conduct transactions in seconds from anywhere. Also, an entirely online bank will generally have fewer overhead expenses and thus be able to offer lower fees and better rates.
A savings account is a deposit account designed to hold onto funds you don’t need right away and are saving for the future. These accounts pay a modest interest rate and thus are generally a better option for putting money aside than a checking account.
People use savings accounts to set aside money for an upcoming vacation, to buy a home, make a vehicle purchase, and more. Many also use them as an emergency fund to cover situations like medical emergencies, car troubles, or job loss.
Savings accounts are generally safe and reliable places to store funds, and your money is easily accessible when you need it. Here are a few pros and cons to help understand more about savings accounts:
While every bank has its own eligibility criteria, generally, if you’re over 18 years old and able to confirm your identity, you can open a savings account. However, if you’ve had prior issues with a bank account (e.g. not paying overdraft fees, bouncing checks, etc.), you may face some difficulties when attempting to open an account.
A high-yield savings account (HYSA) is a savings account that offers higher interest rates than a traditional savings account. The best HYSAs have APY rates that are often 10 to 12 times higher than other savings accounts.
Another difference between savings accounts and high-yield savings accounts is that online banks often provide HYSAs. So if you like to bank in-branch and be able to use ATMs, these HYSAs may not suit your needs.
Online banks won’t always offer comprehensive financial services, either. So to get the best HYSA, you may need to have your checking account with one bank and your savings with another.
SoFi secured its bank charter in 2022, and now presents a range of online banking services—notably a combined checking and savings account. With this account, you benefit from an APY of up to 4.60%, and zero overdraft or transaction fees.
Discover offers no-fee checking and savings accounts with no minimum balance requirement. The checking account provides 1% cash back on debit card purchases and lets you get your paycheck two days early when you set up direct deposit. Its online savings account has a generous APY and no minimum opening deposit. The accounts are easy to open, and you can manage them on the go in the app. Discover also provides 24/7 customer support.
Raisin is a digital financial platform and marketplace with exclusive partnerships offered through various partner banks. Your money is held with Western Alliance, but you manage the account through the Raisin platform. You can apply online in minutes and feel secure knowing your data is protected and the account is FDIC insured up to $250,000.
If you want to open a savings account, you’ll have to submit an application. It’s typically a straightforward process, but you’ll need to provide the following details to the bank:
Also, if the bank offers joint savings accounts, you’ll have to specify whether you want to open an individual account for yourself or a joint account with someone else. If you’re opening a joint account, the co-signer has to provide their information, too.
Keep in mind that the exact requirements can vary from bank to bank.
When researching savings account options, pay attention to the following important features.
First, keep your eyes out for the best savings account rates possible. If you have a savings account with a high APY, your money grows quicker than in one with a subpar rate. However, the highest-yield savings accounts may have fees or a minimum deposit or balance requirement, so keep that in mind.
Speaking of fees, look for savings accounts that don’t charge any, as they can cut into your ability to grow your wealth. When it comes to minimum balances and deposits, look for an account that either has no minimums or one that is easy for you to maintain.
Make sure to choose a high-interest online savings account with good customer service, too. You don’t want to be stuck waiting days for assistance if there’s an issue.
Look for a highly-rated and fully-featured app, too. An app is an accessible and convenient way to manage your online savings account on the go. It should include features like notifications/alerts, the ability to transfer funds, biometric authentication, and others.
You can also consider an account that offers CD options. A CD is another savings instrument, where you earn interest on a deposit that you leave untouched for a time. While you can’t access your funds for this predetermined period, the interest is normally higher than for savings accounts.
Keep security in mind, as well. Make sure the bank you work with is legitimate, protects customer data, and is FDIC-insured. This FDIC insurance protects your account for up to $250,000 in the case of a bank failure.
Chime
Chime is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.
1 The Annual Percentage Yield ("APY") for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.
2 SpotMe® on Debit is an optional, no fee overdraft service attached to your Chime Checking Account. To qualify for the SpotMe on Debit service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your physical Chime Visa® Debit Card or secured Chime Credit Builder Visa® Credit Card.
Qualifying members will be allowed to overdraw their Chime Checking Account up to $20 on debit card purchases and cash withdrawals initially but may later be eligible for a higher limit of up to $200 or more based on Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Debit limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime's sole discretion. Although Chime does not charge any overdraft fees for SpotMe on Debit, there may be out-of-network or third-party fees associated with ATM transactions and fees associated with OTC cash withdrawals. SpotMe on Debit will not cover any non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe on Debit Terms and Conditions .
Current
Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Member FDIC, and Cross River Bank, Member FDIC. Cryptocurrency services are not provided by Choice Financial Group or Cross River Bank, and cryptocurrency is not insured by or subject to the protections of the FDIC. The Current Visa Debit Card is issued by Choice Financial Group pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Current Visa® secured charge card is issued by Cross River Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see back of your Card for its issuing bank. Current Individual Account required to apply for the Current Visa® secured charge card. Independent approval required
Current is a financial technology company, not an FDIC-insured bank. FDIC insurance up to $250,000 only covers the failure of an FDIC-insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply. Banking services provided by Choice Financial Group, Member FDIC, and Cross River Bank, Member FDIC.
1. Debit card: Fees may apply, including out of network cash withdrawal fees, third-party fees, cash load fees, inactivity fees, account closure fees, international transaction fees, replacement card fees, express mail fees and escheatment fees.
Build Card: Some fees may apply, including out of network ATM fees of $2.50 per transaction, late payment fees of 3% of any total due balance outstanding and past due for two or more billing cycles, foreign transaction fees of 3% of the full transaction amount (minimum $0.50), card replacement fees per card of $5 for regular delivery and $30 for expedited delivery, cash deposit fees of $3.50 per deposit, and third party processing fees.
2. Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to timing of payer's submission of deposits.
3. Actual overdraft amount may vary and is subject to change at any time, at Current’s sole discretion. In order to qualify and enroll in the Fee-Free Overdraft feature, you must receive $500 or more in Qualifying Deposits into your Current Account over the preceding 30-day period. For more information, please refer to Fee-free Overdraft Terms and Conditions (https://current.com/overdraft_protection_terms_of_service/).