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 4.00%, and zero overdraft or transaction fees.
CIT Bank is an online bank that offers multiple fee-free savings accounts with rates up to 5.00% APY. All CIT Bank savings accounts compound interest daily, increasing the amount you earn. You can also deposit checks straight to your CIT Bank savings account and transfer money easily. It only takes a few minutes to open a new account, and the minimum deposit for all savings accounts is only $100.
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.
Western Alliance
* 4.95% annual percentage yield (APY) is accurate as of 9/23/2024 and subject to change at the Bank’s discretion. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.
Accurate as of the time of publication. The national average rate referenced is from the FDIC’s published National Rates and Rate Caps for Savings deposit products, accurate as of 7/15/2024. See the FDIC website for more information.
*SoFi
1. Up to $300 Bonus Tiered Disclosure
New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.
SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
2. APY disclosures
SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
3. Fee Policy
SoFi do not charge any account, service or maintenance fees for SoFi Checking and Savings. SoFi do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. SoFi's fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/ .