The Best Online Savings Accounts Updated October 2009

FNBO Direct
Emigrant Direct
HSBC Direct
ING Direct
National Average

Note: With WTDirect, the 1.51% rate is for the first 60 days. After that the rate is only active if you have over $10,000 in your account.

Competition among online high yield saving account providers is very high. In fact, each of the banks listed below are more then eight times higher then the national average for saving accounts. It’s important to point out that these are strictly savings accounts and not money market accounts or CDs. They operate much like traditional saving accounts.

This list doesn’t include many banks with changing terms. Because competition is so high many companies offer fantastically high rates. These rates only apply for an introductory period. After the introductory offer expires the companies I researched weren’t clear on what their fees or default rate would be. To be fair I’ve left these accounts off the list.

As a word of advice on these savings accounts I would use these accounts as a “rainy day” or emergency fund. Too often people start using these accounts as investment vehicles. They offer great rates but you’d be better off investing in stocks, bonds, or mutual funds in the long term. While FDIC insured savings accounts are the least risky they can hurt your overall wealth substantially in the long run.

Some basic information about these online savings accounts is that they are all FDIC insured. Every one of them will link up to your existing checking account. Signing up for each of them takes less then ten minutes (usually). These banks are market leaders and are trusted institutions. Deposits are unlimited and withdrawals are limited to 6 a month.

Everyone on the list meets the following criteria:

  • No Fees – No maintenance fees and low balance fees. In other words, if you wanted to open the account and then forget about it you wouldn’t pay a penny.
  • No Minimums to earn the high yield interest rate – If you have $100 or $100,000 you will get the highest rate they offer.
  • $1.00 is the minimum amount of money required to open an account
  • Market leader – They continually have the highest interest rates and are well known in the industry

*APY Updated October 2009

If you have any experience with online saving accounts please we’d love to have your feedback.