The best online savings bank with a high APY

[MissExcellentCredit]

What's up everybody.  I'm looking to save more, and spend less. My current savings account has a measly .05 APY. That should be a felony.  At bankrate.com and kiplingers.com, they say that the online banks with savings accounts will give me the highest APY right now.  Suze Orman recommends:

Emigrant Direct

First National Bank of Omaha

HSBC

ING Direct

As of 11/26/10, kiplingers.com says Sallie Mae online bank has a savings account with 1.4 APY. For so long, I just always assumed Sallie Mae was student loans. 

Just wondering what anyone else's experience has been.  I'm trying to choose the best online bank. I've never had an online savings account before.  Thanks guys.

[Lel]

I've had an account with ING Direct for a few years.  When I first joined, I think the APY was around 4.0%, maybe a bit higher.  But it has come down considerably with interest rates in general, and currently pays just 1.1% APY.  It's still better than the 0.05% that my regular bank pays.  I use this account primarily for emergency cash reserves.

[OnTheRebound]

I believe American Express Bank (or whatever they call themselves) is at 1.30%.

[trumpet-205]

I have a savings account with American Express FSB right now. Here is pro and cons about it

Pros

* No minimum balance requirement

* High Interest rate - APR 1.292%

* Free

Cons

* Very long deposit hold time (at least six business days). But interest starts compounding the day they withdrawl the money.

* Weird process on opening an account (you have to call them after filling out application online (3 business days) to get verified and account number, then you have to set up online access)

* They take back the two small deposits used to verified linked account (Paypal doesn't do that)

* Online interface is too simple.

You can also look into Discover Bank for savings account, though opeing balance is $500 minimum.

Alternatively, if you have a Capital One CC, you can open a Cap 1 savings account with $1000 deposited and enjoy 1.30% APR plus 10% bonus on INTEREST when you use Cap 1 CC at least once per month.

BTW - That 0.05% APR savings account, is it Wells Fargo?

[vanillabean]

I'm reminded of why I haven't thought of savings rates for many years. The difference between 1.30% and 1.20% for a whopping $10,000 is less than the difference between a restaurant meal and eating at home.

The least likely reason that my savings account money is growing stems from the account itself, including its interest rate. Just about anything else in life from any direction exceeds that contribution.

I'm not sure actually why I have a savings account. The money might just as well be in the checking account. The habit probably goes back to earlier more traditional times. But it does make sense keeping a rate to withstand inflation.

If the underlying topic is emergency fund though, I have just enjoyed reading about Suze Orman’s Secret Savings Account.

[MissExcellentCredit]

Hi Trumpet 205

Yes, the account with .05 is Wells Fargo.  Do you know if the 10% bonus on interest with Capital One is done monthly or at the end of the year?

[trumpet-205]

This is from Capital One website,

"You'll get a 10% bonus on your interest earned four times a year. To qualify, just keep an average balance of $10,000 in your savings account each month or use a Capital One credit card at least once a month.

The bonus will be paid to your InterestPlus Online Savings account within 4-8 weeks after the end of each quarter and will be reflected on your statement."

[shiftomnimega]

I have a personal savings account AMEX as well and I find the interface very barebones ala penfed.  What I find more frustrating is that the account is not linked to my AMEX credit accounts.  I only opened it because I needed to build an emergency fund and it had the highest interest rate of any bank I was familiar with.

May want to also check ALLY in addition to the other names mentioned.  I have read that they offer good CDs in addition to high yield savings accounts.

[Peach8321]

---

@MissExcellentCredit wrote:

What's up everybody.  I'm looking to save more, and spend less. My current savings account has a measly .05 APY. That should be a felony.  At bankrate.com and kiplingers.com, they say that the online banks with savings accounts will give me the highest APY right now.  Suze Orman recommends:

Emigrant Direct - They are ok but not the best, some people have reported poor customer service and hard to get money back out

First National Bank of Omaha - don't know about them

HSBC - International bank so useful if you travel overseas and want access to your funds, I believe they are the first to lower rates though when they do drop

ING Direct- a very popular choice and easy to open multiple accounts with

As of 11/26/10, kiplingers.com says Sallie Mae online bank has a savings account with 1.4 APY. For so long, I just always assumed Sallie Mae was student loans. - IF you have any loans with SM, I wouldn't open an account with them, I don't like the idea of them seeing that I can pay them off and haven't... otherwise this is an alternative

Just wondering what anyone else's experience has been.  I'm trying to choose the best online bank. I've never had an online savings account before.  Thanks guys.

---

Personally, I use Ally bank and I like them.  True, the rate isn't great, but it is fairly high.  They do a hard credit pull though so be aware of that.  Like ING, they also let you set up multiple accounts really easily (all under the giant header of YOUR NAME so when you log in, you can see them all but they have different account numbers).

Alternatives:

Discover Bank

Smarty Pig

Super Alternative:

Lending sites (ie, put the money into someone else's loan, rates higher but so is risk)

Keep in mind with an online bank:

There is no place to go, you will need to link to another bank's site to get your money transfered back and forth

Some of them have an ATM card (Ally, ING)...get a bank with this so you can access the money fast

Rates will eventually go up but right now the differences between the banks doesn't matter much, play with the websites and pick your favorite (also, test out the customer service and see if you like it)

I do think it's worth it and, although it still won't beat inflation, it's better to earn more than 0 or close to 0!

[Anonymous]

I have a savings account with Alliant Credit Union. They pay 1.35% APY at the moment, both for savings and checking (with some small direct deposit). I'm very happy with them.

I opened this one when Wells Fargo went down to next to zero, so I know how you feel .