2017 Guide to Finding the Best High-Interest Checking Accounts & High-Interest Online Savings Accounts
There’s more to finding the perfect high-interest checking account than simply comparing rates. Savings accounts with interest rates high enough to be considered money-makers are really a thing of the past, and finding high-interest accounts today presents more than a few problems, as well.
The average interest rate on a savings account over the last few years in the U.S. was 0.06%.
Image Source: Best High-Interest Checking Accounts
Finding accounts like this is as easy as executing an internet search. Understanding the different features and benefits that many accounts offer and deciding which are most important can be considerably more difficult.
Read on to learn how choose from the many high-interest savings accounts online available today and see how we narrowed the long list of candidates down to six that could meet your needs.
Pay attention to these questions when evaluating high interest bank accounts
Choosing a new bank account is a research project that can quickly get out of hand. Don’t be a victim to paralysis by analysis. Focus on these questions when choosing your top six high-interest bank accounts.
Does the bank offer bill pay services online at no charge?
A Federal Reserve Survey conducted in November of 2015 shows that 43% of mobile phone users in the United States who have a bank account use mobile banking. Free bill pay services are key to many banks’ success in drawing in new customers, as demand for convenience and fast access to personal financial information continues to rise.
Sixty-five percent of consumers surveyed that use mobile banking indicated that they use a bill payment service offered by their bank, as well.
Before putting a financial institution offering high-yield online savings accounts on your shortlist, make sure they offer online bill pay at no charge. It’s a nice perk, and even if you haven’t used it in the past, it’s worth a try for the convenience factor.
How does the customer support team extend services?
The customer service you receive from a big bank is likely to be better now than it would have been just a few years ago. The J.D. Power 2016 U.S. Retail Banking Satisfaction Study, published in April of 2016, indicates that large banking institutions are leading the way in customer satisfaction. Mid-sized and smaller banks are lagging behind.
Having this information may help you decide between a smaller local bank and a banking giant. Customer service probably isn’t that important day-to-day, but when there’s a security breach, a lost wallet, or even a simple question about your account, it can make all the difference.
Big banks are currently leading the pack in new account acquisitions as they draw in millenials with their high-tech offerings and on-the-spot 24/7 customer service.
What are the fees on the account?
One of the most important questions when creating a short-list of possibilities for high interest rate accounts is about the fees. A bank is required to disclose their fees in their account application.
This information is usually easy to access online. If you can’t find it but are interested in the account, contact customer service to evaluate both their customer support team’s performance and the account fees.
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Is transferring money online a simple process?
Moving money from one place to another should be a painless, straightforward, and inexpensive proposition. Some financial institutions advertise overdraft protection and will set it up so that if a high-yield checking account becomes overdrawn, the negative amount will be automatically covered by a linked high-yield online savings account. Pay attention to the steps in this process as it may be important in the future.
Bank of America charges a $10 “transfer fee” to move the money. This fee is less than the $35 overdraft fee, but it can still be an unpleasant surprise.
Does the bank offer balance alerts?
Knowing when your bank account reaches a certain balance is valuable information to have at your fingertips. Whether you are on the go much of the time, on vacation for awhile, or just unwilling to constantly log into your account, balance alerts are a convenience that banking customers expect.
Make sure your new high-interest checking account candidates offer this type of convenience so you can stay on top of your account activity. Ally Bank offers high-interest online savings accounts with an APR of 1.00% on all balances. Their high-yield checking account offers balance alerts and a 0.85% APR.
Is there a charge for using an ATM machine?
When it’s $2.50 here and $3.50 there, ATM fees can really add up. Understanding the terms of a bank’s ATM fees is crucial when choosing high-interest accounts.
Bank of Internet with headquarters in San Diego charges a 2% service fee for ATM withdrawals all over the world, except in the U.S. ATM transactions in the lower 48 states are free, and Bank of Internet even reimburses its customers for fees charged by ATM owners. With a high-yield checking account that offers 1.25% APR in a tiered system that requires direct deposit and 15 debit card transactions over $3 each month, this bank has earned its spot on our top six list.
Ally Bank is another great candidate that offers reimbursement of ATM fees up to $10 per statement cycle.
If you are looking for a credit union to add to the list, consider Alliant Credit Union based in Chicago. There are 80,000 surcharge-free ATMs available to their customers. The APY on their high interest checking accounts is 0.65%, but there are no minimum balance requirements, and the account is fee-free.
Can you write paper checks with this account?
Just when you think you’ll never need to write another check, and that electronic banking has completely taken over, here comes your niece with a school fundraiser — and she can’t take cash. Many free high-yield checking accounts online and with brick-and-mortar locations offer the convenience and occasional problem solving power of paper checks.
USAA Bank’s Free Checking account offers free checks and no monthly fees. This internet-only bank has a low interest rate of 0.01% APR, though. Capital One 360 also offers free checks, but their rate is a much higher 0.90% APR.
What paperwork and documentation is required to open high-interest savings accounts online?
Opening a high-interest savings accounts online is a seamless process. You’ll need to gather the following documentation and information to begin:
- Minors under the age of 18 will need a parent standing by
- If you are including other applicants, it’s convenient to set up the account at a time when they are easy to reach
- Your date of birth and driver’s license (if you have one), passport (if you have one), and Social Security numbers
- Current permanent address (make sure you have this exactly correct right down to the abbreviations), phone number, and email address
- Access to money via another online account
How a sign-up bonus can help take the hassle out of switching to a high-yield checking account
If you are on a quest to narrow a long list of high-interest savings accounts online down to just six, adding banks that offer sign-up bonuses in the form of cash or merchandise can really sweeten the deal and may even offer a conveninent tie-breaker.
Banks that regularly offer sign-up bonuses
TD Bank has a reputation for offering sign-up bonuses. This account is not available in every state, however. TD Bank has monthly fees, but they’ll waive them for customers that maintain a $100 daily average balance.
Image Source: High-Interest Online Savings Accounts
Chase Bank offers regular and varying levels of cash bonuses for brand new customers who qualify for a new Chase Total Checking® account and/or a Chase Savings(SM) account. You’ll probably need to get a coupon online and walk into a branch to cash in on this deal, but the bonuses tend to hover in the area of $200-$300, so it may be worth the trip.
Keep an eye on local deals, as well. As credit unions and mid-sized banks try to compete with the big kids, their sign-up bonus offers may earn them a place on your top six high-interest bank accounts list. They also often offer high-interest checking accounts and high-interest online savings accounts.
How to find out which banks are offering sign-up bonuses
A simple internet search will yield a list of websites that specialize in providing up-to-date lists of banks offering generous sign-up bonuses on high-interest online savings accounts and high-yield checking accounts. Many of these sites put tables and charts together to make the process of evaluating the options quick and painless.
The Penny Hoarder often has a recent list, as does NerdWallet. HustlerMoneyBlog updates their lists of high-interest checking accounts regularly, as well. It’s important to put the month and year into your search engine inquiry when looking for information on high-interest accounts that offer bonuses as the terms and time limits are always changing.
Evaluating high-interest bank accounts
Making a master list of high-interest bank accounts that meet the most important criteria on your list is a great start to discovering your personal top 6 high-interest rate accounts. Websites like The Simple Dollar offer up-to-date lists of high-yield checking accounts offered by banks that serve as a great reference point.
These lists often offer valuable information about fees and terms, as well. Having all of the information in one place saves you from conducting hours of research and reading endless terms and conditions documents.
How to use the information you find in bank account reviews to evaluate a high-yield checking account
Evaluating a high-yield checking account is a simple matter of reading a few online reviews. Rather than sifting through poorly written consumer reviews that may or may not reflect true events and that may reflect many colorful personalities, it could be more helpful to focus on professional reviews conducted by impartial financial websites that specialize in advising consumers who are searching for their ideal high-interest bank accounts.
For example, MySavingsDirect is on online division of Emigrant Bank based in New York City that gets great reviews. Customers who have one of their high-interest online savings accounts enjoy a 1% interest rate. There are no monthly maintenance fees on this account and electronic transfers are easy.
Another bank that professional reviewers are fond of is Barclays. This British megabank’s U.S. division offers high-interest online savings accounts with a 1% APY with no minimum balance or monthly maintenance fees. If you need a place to park a savings balance that you don’t plan to touch for six months or more, check out their Dream Account that offers a 1.05% APY. If you make deposits up to $1,000 and leave it alone for six months, you’ll be eligible for a 2.5% bonus on interest. Leave it alone for an additional six months, and you’ll get another 2.5% bonus.
To get the 0.095% APY offered by Discover Bank, you’ll need to make an initial deposit of $500. High-interest online savings accounts through this bank do not have monthly maintenance fees, and customers enjoy 24/7 customer service with a mobile-banking app with mobile check deposit.
Giving high interest bank accounts a “test run” to reduce the top six list
Once you have a comprehensive list of six high-interest rate accounts, giving each a “test run” will help you make a final decision. Go into the website of each bank and learn about how they help customers open a new account. Can you go through the entire process online? If not, is that a deal-breaker for you? If online account opening is a high priority, eliminate accounts that require an in-person branch visit.
Next, highlight any bank accounts that offer a sign-up bonus. Look at the terms and conditions of each bonus. Can you meet any necessary criteria for direct deposit, regular account use, and minimum balances? If there are accounts on the list that you think are out of reach, eliminate them now.
Become familiar with the fee structures (or lack of fees) for each account left on the list. Carefully evaluate your past spending and savings habits to determine which fees you are comfortable with and which may become problematic. For example, if you frequently forget to bring cash with you for a night of club-hopping downtown, an ATM-friendly bank may be the best bet for you.
When you have narrowed your list down to six or fewer ideal high-yield checking accounts and/or high-interest online savings accounts, simply choose the one with the highest APY.
Choosing from the available high-interest bank accounts is a process that deserves your time and attention. Making the right choice could mean accruing interest on your money while avoiding fees and perhaps even enjoying a hefty sign-up bonus.
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