The key factor with all of these outstanding options is that the returns, while still small are worlds better than dropping that yearly bonus or tax return into a standard bank savings account.
Online Savings Accounts
This one’s a no-brainer and the perfect place to start your online savings adventure. Look, this isn’t some quick turnaround situation, this is your rainy day/emergency fund. An online savings account lets you put away money that you don’t need for everyday expenses, so that it can grow over time. Geared towards anyone who wants higher interest rates than they’d find at a brick-and-mortar bank, easy access to their money (although the feds only let you have six transactions a month with savings accounts), and those who might not be saving for a specific amount of time.
Sachs GS Bank Online Savings: While Goldman Sachs is one of the most widely recognized names in corporate finance and private equity (maybe some of you even work there), its online bank, GS Bank, offers a savings account for everyone. There’s no minimum deposit, and you get a fantastic 1.05% APY.
Synchrony Bank High Yield Savings Account: This is an online savings account that comes with an ATM card, which can help you get your saving in the form of cash a lot quicker than waiting to transfer it to your linked checking account. (The website unfortunately doesn’t say whether you get reimbursed for ATM fees.) The account earns 1.05% Annual Percentage Yield (APY), and doesn’t require a minimum balance.
Money Market Accounts
A money market account combines the common features you know from savings accounts and checking accounts. You’ll get an awesome APY and account holders usually get checks and debit cards. Traditionally, you had to maintain a balance around $1,000 for money markets, but online-only accounts have loosened this requirement. They’re best for people seeking higher rates than online savings accounts offer, and who are generally willing to be limited in some ways in how often they can access their money.
Ally Money Market Account: You can open an account here with no minimum balance and get unlimited deposits and withdrawals plus six additional banking transactions per statement cycle. You’ll also earn 0.85% on your money and can make mobile check deposits. Like their checking accounts, Ally will reimburse you up to $10 per statement cycle for ATM fees for banks that are outside of their Allpoint ATM network.
Sallie Mae Money Market Account: Although this name strikes fear in the heart of anyone with a student loan, Sallie Mae offers a really great money market account. It has an APY of 0.90%, doesn’t require a minimum balance, and allows mobile check deposits. Account holders are limited to only six transactions a month.
Certificate of Deposits (CDs)
Once you’ve established an online savings account or money market account, your next step is probably looking at a CD. A CD is savings with a set date for when you can get the funds again. They traditionally required minimum balances around $1,000 and up, but online banks have disrupted the industry and made them much easier to access and not as restrictive. CDs tend to have a variety of saving periods ranging from 3-60 months. With CD laddering, you can split your savings across several CDs with different terms—say one year, two years and three years—which would allow you access to some of your money, while another portion of it continued to grow. CDs are best for people with a decent sized amount of money saved, who are seeking really high interests rate—more than they would typically find with an online savings account or money market account—and who can afford to put money away for a set amount of time, since CDs come with penalties for early withdrawal. So, if you’re interested in a safe, slow growing return and fairly certain you won’t need immediate access to your money, a CD is a hell of a lot better than stashing your cash in a plastic bag under your mattress.
apital One Online CDs: Capital One doesn’t require a minimum deposit, and it offers great rates for short CD periods. The 6-month and 9-month CDs here have a 0.90% APY, which is the same for its 12-month one. The 24-month and 36-month ones have an APY of 1.10%.
Ally No Penalty CD: Ally has an 11-month CD that allows for early withdrawal without losing the interest you’ve earned. There’s no minimum balance required to open an account.
Barclays Online CDs: There’s no minimum deposit required. The APY for the 12-month, 24-month and 36-month CDs are 1.20%, 1.35% and 1.50%, respectively.