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How to Find the Best Savings Account in 2014


Looking for places to grow your money without much risk is difficult these days, but finding the best savings account might be a good place to start. Although your money will be safe there, the average American is hardly capitalizing on any gains.

According to CNN Money. the average savings account last year had only a 0.06% APY (annual percentage yield, or interest). Many of the nation’s biggest banks have rates as low as 0.01%. That’s a hard pill to swallow for savers who want to have their cash in a safe account far from the effects of the global market turmoil we have experienced over the last few years.

The key to finding the best online savings account is to look for rates close to 1% APY.

The good news is there are several quality options for you. Get started by checking out this tool that includes a list of banks and displays daily rate updates for all the best savings accounts.

Understanding Interest Rates

Due to the extremely low interest rate policy (which directly impacts your bank’s savings rates) from the Federal Reserve, low interest rates on savings accounts will be here for a while.

The Fed Funds rate is the rate that banks lend money to each other overnight. This rate, which affects all other interest rates, has been held artificially low in my opinion. and is now effectively zero.

As I mentioned, there are some accounts that pay yields closer to 1% and others with short-term promotions that pay even greater than that. These accounts can provide some relief, especially to seniors who have retirement incomes that may have been decimated by low interest rates.

The best savings accounts are mostly found online where costs are much cheaper than traditional brick-and-mortar banks.

Where to Look for the Best Online Savings Account

Deregulation has enabled many different types of finance companies to compete for savings deposits. In addition to your traditional local bank, you may be surprised to find that you can open a savings account with one of these types of companies:

  • Auto finance companies (Ally – formerly GMAC)
  • International banks (Barclays)
  • Large commercial finance companies (CIT, GE Capital)
  • Credit card companies (American Express, Discover)
  • Insurance companies (USAA, Farmers Insurance)
  • Online brokerages (Charles Schwab, Fidelity)
  • Smaller regional banks with internet banking arms (EverBank)
  • Credit unions

Why choose an online savings account?

Today, almost every financial institution with personal banking products has an online presence. People simply want to bank when they want, where they want, and how they want with minimal interference. The best online savings accounts deliver this experience through several key advantages.

Advantages of Online Savings Accounts

Higher yields: Online banks boast less overhead because they don’t need to maintain physical branches. Online banks are able to pass on this savings to their savings account holders in the form of higher interest rates.

A word of caution:  These rates can and do change. As with any savings account, banks often run promotions to get you hooked, then lower the rates later. However, the best online savings account will still handily beat out the yield of a traditional bank over the long term.

24/7 access: You can check your balance, update your contact info, make transfers, and order deposit slips at any time. Most online accounts will give you access to your account 24/7, 365 days a year. This enables you to access your information when you want. For more pressing issues, customer support is also usually accessible 24/7, so you can talk to an actual human instead of your computer screen.

Self-maintenance: Why drive to a branch and talk to a banker to transfer money, update personal information, make payments, or check your balance? You can perform all of these functions and more from your computer screen or mobile device without even getting dressed.

Superior online and mobile experience: Many traditional banks have been slow to adopt the best web and mobile features to improve the customer experience online. Because online banks’ users are exclusively on the Internet, greater attention is paid to the usability of the website and mobile tools.

The Best Savings Accounts for 2014

Since rates are always changing, I recommend using the tool earlier in the post to check what your top choices are. However, I also created a list of savings accounts that I believe are worth your consideration, depending on your situation.

I took some of the top savings accounts and analyzed what each was best for so you can hopefully find the right account for you.

All-Around Best Online Savings Account: Ally

Ally is formerly known as the commercial financing and leasing giant GMAC which, a decade ago, may have made it an unlikely candidate as the best savings account. Today, however, Ally’s online offering is its key to winning consumers’ deposit dollars. Their savings account currently yields 0.87%, which is high by today’s standards.

You can deposit checks with the mobile app by taking a picture and link to any number of external accounts to move money around easily. All of these features come with no minimum deposit and no monthly fee.

Ally at a Glance

  • No minimum deposit to open
  • No monthly maintenance fees
  • Earn a higher rate than traditional savings accounts
  • Deposit checks remotely with Ally eCheck Deposit?
  • Grow your money faster with interest compounded daily
  • Your deposits are insured by the FDIC up to the maximum allowed by law

Best Online Savings Account for High Balances: CIT Bank

CIT’s savings account offers a tiered interest rate structure, so higher balances earn higher interest. Currently, their industry best 0.95% APR goes to customers who can maintain a balance of $25,000 or higher in the account.

CIT’s lower rates are still some of the best around, so

if you plan on growing your savings significantly in the near future, it might pay to open this account now and take advantage of the tiered structure as your savings grows. CIT Savings has no monthly fees and requires just $100 to open a new account.

CIT at a Glance

  • Minimum deposit of only $100
  • Premium rate for accounts with a daily balance of $25,000 or more
  • No account opening or monthly maintenance fees
  • Daily compounding to maximize your earning potential
  • Make deposits and withdrawals easily by linking to your existing accounts at another bank
  • Manage your account and view statements online

The 2 Best Online Savings Accounts with No Monthly Fee: Barclays and GE Capital


Barclays is a relative newcomer to the U.S. online banking market. They are actually a British bank that has been around since 1690! Their savings account rate is currently one of the best in the nation, at 0.90%. There’s no minimum balance requirement or monthly fee. Even with no monthly fee and high rates, Barclays manages some great online banking features like online transfer, external account linking, and remote deposit using your smartphone or home computer scanner.

Barclays at a Glance

  • No minimum balances to open
  • No monthly maintenance fees
  • Daily compounding

GE Capital OptimizerPlus

GE Capital Bank’s Online Savings account offers one of the highest yields in the nation at 0.95%. This account carries a monthly fee of $5, which is modest by comparable standards. The fee is waived if you maintain just a $50 average balance per month. OptimizerPlus rewards long-term customers with perks on travel discounts, ATM fee reimbursements, and special rate offers.

GE Capital OptimizerPlus at a Glance

  • Great rates
  • FDIC insured
  • Free Identity Theft Resolution Services

The 2 Best Online Savings Accounts for Check Writing: EverBank and GE Capital


EverBank is built to give you a better banking value. Not only do they provide check writing through their money market account, they make a pledge that their rate will always be in the top 5% of competitive bank offers nationwide. For first-time clients, EverBank is running a six-month promotion yield of 1.10% on balances up to $50,000. $1,500 is needed to open an account, but simply having a positive balance will waive any monthly fee. In the tech department, EverBank delivers mobile check deposit and other features on iOS and Android.

Note: Federal regulations limit the number of electronic, telephone, and check transactions you can make with your Money Market account to six withdrawals per monthly statement cycle.

EverBank Money Market Account at a Glance

  • Mobile check deposits
  • Anywhere, Anytime access
  • 4 Star stability

GE Capital OptimizerPlus

If you need check writing from your savings account, the GE Capital OptimizerPlus Money Market account has you covered. This account gives you easy access to your money over the phone, with an optional ATM card, or by transferring funds to another account online. Savings accounts do not have the ATM card or check features. For this capability, the GE Capital OptimizerPlus Money Market account differs from their savings account by having a slightly lower rate of 0.85% for balances over 10,000, and you need to maintain a $1,500 minimum balance to avoid a $15 monthly service charge.

GE Capital OptimizerPlus Money Market Account at a Glance

  • Great rates
  • FDIC insured
  • Free Identity Theft Resolution Services

How I found the best online savings accounts

Here is how I got started:

  • I started my search by first looking at different offers from traditional banks.
  • I realized that other types of financial institutions also offer savings accounts online so I expanded my search beyond traditional banks.

Once I had a good list of online accounts built up, I started adding filters to my search. First and foremost, I filtered by APY. Any bank not advertising an APY over 0.6% was eliminated from the list.

The APY rate of 0.6% is a good starting point because it is approximately 10 times the national average, so I felt comfortable drawing the line here.

My next steps were to add in additional, more granular criteria:

  • I looked for accounts that advertised low monthly fees, plus easy ways to have those fees waived.
  • You’ll notice that not one of the best savings accounts mentioned here carries a mandatory monthly fee. This still left me with many possibilities.
  • I then analyzed other factors, such as low minimum balances, low administrative fees, and superior mobile tools.

Understanding that rates and banks change over time, I decided to develop situational groupings to display where certain accounts currently held an advantage over others.

Mainly, I grouped the best online savings accounts the following criteria:

  1. High balance: I found that some savings accounts were better for people who carried high balances.
  2. No monthly fees for any balance: You shouldn’t have to carry a high balance to avoid a monthly fee!
  3. Check writing ability: Some people like the ability to write a check from their savings account — a great feature to have if your account is online.

From this process, Ally came out as the all-around best for the majority of people. While the Ally Bank Online Savings Account does not have every feature (it lacks check writing), it has a solid combination of high yield, no fees, low minimum balance, and technical prowess.

Written by Michael Gardon

Category: Bank

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