How to find the right online banking for you

Question: I want to open a high yield savings or money market account online. But because it’s new to me, I try to do due diligence one way or another. Is there anything I need to know or pay attention to before registering?

Responnse: Start your search at Where Online banks don’t have branches that you can go to for help, but you can find one that offers 24-hour customer service, like Ally Bank or Discover Bank. Test the website of any bank that interests you to make sure it is user-friendly; some online banks run awkward and rudimentary websites that are difficult to navigate.

Transferring funds from your traditional bank’s savings account to a new account at an online bank can pay off big. According to, interest rates on savings accounts at online banks were on average 1.52% at the end of 2018, compared to 0.26% at physical institutions. Consider both savings accounts and money market deposit accounts, which can have relatively high returns. “Online banking has taken giant leaps in the ease with which someone can open and transfer accounts,” says Aaron Graham, certified financial planner at Abacus Planning Group, in Columbia, SC.

Don’t be tempted by only the highest returns; choose an institution that has been around for many years and is used to paying competitive rates. Sometimes banks open new accounts with attractive, but short-lived promotional rates for new customers. Well-established online banks these days offer savings account rates between 2.1% and 2.3%, with no minimum balances or monthly fees, says Ken Tumin of

To view a bank’s rate history, visit and select “Savings accounts”, then “Personal savings accounts”. Scroll through the sponsored accounts and click on the “Details” arrow for each bank to view a historical rate chart.

If you plan to make frequent transfers between your online savings account and your checking account at a traditional bank, look for an online institution that has a high daily or monthly cap on the dollar size of external transfers. And if you value easy access to your money, look for an account that offers a debit card or ATM (like Synchrony Bank’s High Yield Savings) or check writing privileges (like Sallie’s Money Market Account). Mae Bank).

Finally, make sure the bank you choose is insured against default by the Federal Deposit Insurance Corp., or FDIC. (Online banks typically state that they are covered by the FDIC at the bottom of their home page.) The FDIC will insure up to $ 250,000 per depositor, per bank, per category of property. For example, an individual savings account is insured up to $ 250,000; a couple with a joint account is insured up to $ 500,000.

If your balance is teetering on the edge of this limit, you can open another account in another bank or use the tool on, which will spread your money into high-yield savings accounts at reputable banks, keeping balances below FDIC limits. But you’ll pay a quarterly fee of 0.02% on your cash balance for convenience.

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David A. Albanese