Frugal Joe

If you’re looking for a high-yield savings account, you generally have two options: online bank accounts or small banks and credit unions.

(i) Online savings account.

If you’re comfortable with online banking, an online savings accounts may be your best bet. You usually have to link it to a checking account in order to use it. Some banks may require you to also have a checking account with them. Other banks are okay with you having your checking account at another institution.

In addition to offering high yields, most online savings accounts come with no fees or minimums.

Here’s a list of some of the major players:

-  ING Direct Orange Savings Account

-  HSBC Direct Online Savings Account

-  E-Trade Bank Complete Savings Account

-  Charles Schwab Bank Savings Account

-  Emigrant Direct Savings Account

-  WT Direct Savings Account

-  FNBO Direct Online Savings Account

-  GMAC Bank  Online Savings Account

Since their rates change periodically, it makes no sense to list them here but you can visit their websites to check their current rates.

(ii) Small regional bank or credit union.

If you’re not comfortable with online banking, regional banks and credit unions are another alternative. However, the deals you can get at these institutions vary periodically. You will need to call around and ask for current promotions.

You may be wondering why I did not discuss the savings accounts you can open at the branch offices of the major commercial banks. The reason is quite simple: their rates are simply not competitive.  The rates at commercial banks like Bank of America, Citibank, and Chase are typically less than 1%. You can visit their websites and check for yourself. They might go back up as interest rates rise again, but I’d be very surprised if they will ever come close to the rates offered by online savings accounts.

Related posts:

1. Best High-Yield Checking Accounts