Best High Yield Savings Accounts

by JT on Managing Money

If you’re like me, you must be just a tad bit frustrated with the low-yielding accounts we’re seeing these days. Savings accounts have been offering anemic interest rates, with three month CDs languishing with returns of under 1% APY. So what can we do with our short term savings? Where can we stash our emergency funds and those savings we have that need to be absolutely safe and liquid?

I’ll start with giving you a list of good high yield savings accounts that have relatively higher yields than their traditional counterparts. Here’s a short list of popular savings accounts:

Best High Yield Savings Accounts

EverBank Money Market Account   EverBank: This account has no fees but requires a $1,500 minimum deposit. For the first 3 months after you open an account, the EverBank Yield Pledge Money Market Account will return 2.25% APY. After this period, your new rate will be 1.51% APY for the first year.
WTDirect Savings             WT Direct: This account has no fees and no balance limits. The WTDirect Savings Account offers a 1.21% APY but under these conditions: you’ll receive 1.21% as the interest rate for the first 60 days. Thereafter, you’ll need to retain a balance of at least $10,000 in order to continue receiving the 1.21% APY. Any account that falls under $10,000 will be readjusted to return 0.50%.
FNBO Direct             FNBO Direct: Again, you won’t have to worry about monthly fees or a minimum balance to maintain your FNBO Direct Online Savings Account which is currently yielding 1.10% APY. FNBO Direct is recognized as one of the most well respected, highly awarded online banks out there: they’ve been cited by Kiplinger’s as a top online bank with the “best online savings account”. For more information, please visit their page.
HSBC Advance             HSBC Advance: This account has no monthly fees and no balance requirement as well. The HSBC’s Online Savings Account offers a 1.10% APY. What I like about this account is that it is backed by one of the most solid banks you’ll come across.
ETrade Savings             E*Trade Bank: This account has no fees and doesn’t require a minimum balance. The E*Trade Bank Complete Savings Account yields 0.40% APY which is still comparatively better than the interest rates of many savings accounts from well-known banks.
ING Direct Electric Orange             ING Direct: This account has no fees and no balance limits either. The ING Direct Electric Orange Account currently returns .25% to 1.25%, which is on the low end of the scale. Alternatively, there’s also the ING Direct Orange Savings Account, which yields 1.10%. Still, if you’re interested in joining one of the most reputable banks around, then ING Direct should be something to consider.
Ally Bank Savings   Ally Bank: This account has no fees and no required minimum balance. The Ally Bank Online Savings Account yields a 1.25% APY (Updated 09/08/10), and is only one among many bank products available from Ally Bank.
Bank of the Internet Savings             Bank of Internet: This account has no fees and no balance limits or requirements. The Bank of Internet High Yield Savings Account yields a reasonable - APY. As for the bank itself, it’s not one of the more familiar banks around and does not have as recognizable a name as the others on this list.
Dollar Savings Direct Account             Dollar Savings Direct: This account has no fees but requires a minimum balance of $1,000 to open. The Dollar Savings Account returns a 1.30% APY, which is still above 1%. And like many other accounts, it can be linked to any existing external account you own. Dollar Savings Direct is a division of Emigrant Bank.

Why Online High Yield Savings Accounts Are Good Choices

In my opinion, high yield savings accounts that you can open at online banks can work out pretty well for your liquid funds. Many financial shows and articles have been trumpeting the benefits of online banks, while more customers have been flocking to these financial institutions in recent years as they’ve become more comfortable with using the Internet. Now there are a lot of solid reasons why online savings accounts are worthy of your review. Here are some justifications for parking your money in online accounts:

  • Fewer or lower fees because most of your business can be conducted online. Online banks don’t have the extraneous expenses that come with operating brick and mortar banks.
  • Higher yields than what you’ll see in products from traditional savings institutions. Online banks are able to pass some of their savings off to their customers in the form of higher returns.
  • Quick access to your accounts. You don’t have to call and wait for a customer service representative to access your bank account information. It’s quick, easy and convenient to log on and check your reports online.
  • Secure access. Online banks have taken pains to ensure that your accounts are highly secure.

Frankly, I’m not sure why more people aren’t using online banks because even major banks have their own online Internet banking divisions. These establishments have become much more ubiquitous and are growing their businesses at a healthy clip, over time. So if you’re looking for a little bit more from your savings, internet savings account products may be something to think about; online banks cover much more than savings accounts as well — certificates of deposit, money market accounts and checking accounts may be available from some of these places.

Our interest rate environment is no doubt a tough one right now, but I hope you’re still able to find what you’re looking for on our list! Happy saving!

Tip: If you’d like to review more savings options, please check these top online savings accounts. This list includes high yield checking, money market accounts and high yield CDs for your consideration.

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{ 5 comments… read them below or add one }

1 Vickie Thornton September 1, 2009 at 12:19 pm

Looking for savings with interest rate of return over 9%. Do you know how to acquire these accounts?

2 SVB September 1, 2009 at 1:36 pm

You can get a rate of return of over 9% but it involves investment risk. You can invest in Lending Club Notes. See these articles:

Lending Club Review: Lending Money For Profit
Lending Club Return On Investment

Lending Club notes have an annual rate of return of 9.6%.

Or you can buy an index fund that invests in the U.S. stock market. If you need to open a brokerage account, then check here:

Online Stock Brokers With Cheap Brokerage Fees
Best Online Stock Brokers For Cheap Stock Trades

Or check out mutual fund companies like Vanguard.com, Fidelity, T.Rowe Price or Charles Schwab. You’ll encounter more volatility with stock investments, of course.

Note that there is NO savings or investment vehicle that will guarantee you 100% safety while offering you high returns. You will always be assuming some amount of risk when you invest — but if you manage your investments well, the returns you earn are well worth the risks you take.

3 Rate Chaser October 21, 2009 at 9:36 pm

Not sure where the 9% Vickie is looking for, probabaly one of those lending programs between individuals. I did find SFGI Direct Online Savings. It has been paying 2.25% since July….very consistent when others have dropped dramatically. Best online savings account program I see right now

4 The Smarter Wallet October 21, 2009 at 11:13 pm

I like Everbank: they have a lot of products beyond online savings accounts that I find pretty compelling. Plus their rates for checking, money market, CDs and savings accounts are pretty high.

5 Savings Account Comparison February 5, 2011 at 7:02 am

9% is quite high. In Au it’s closer to around the 6% mark.

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