Best Free Online Savings Accounts of 2023

Best Free Online Savings Accounts of 2023 – Saving money is a smart financial habit that can help you achieve your goals, whether it’s buying a house, paying off debt, or funding your retirement. But where should you keep your savings? If you want to earn some interest on your money without paying any fees, you might want to consider opening a free online savings account.

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What is a free online savings account?

A free online savings account is a type of bank account that lets you deposit and withdraw money online, without charging any monthly maintenance fees, minimum balance fees, overdraft fees, or other charges. These accounts are usually offered by online-only banks or fintech companies that have lower operating costs than traditional brick-and-mortar banks.

Free online savings accounts also tend to offer higher interest rates than regular savings accounts, which means you can grow your money faster over time. The average interest rate for savings accounts in the U.S. is 0.06% as of July 2023, but some free online savings accounts offer rates as high as 5.25%.

How to choose the best free online savings account for you

There are many factors to consider when choosing the best free online savings account for your needs, such as:

Interest rate

This is the percentage of interest that the bank pays you on your balance. The higher the rate, the more money you can earn over time. However, interest rates are variable and may change at any time, so you should also look at other features of the account.

Deposit and withdrawal options

You should check how easy it is to deposit and withdraw money from your account. Some accounts may offer direct deposit, mobile check deposit, electronic transfers, wire transfers, or ATM access. You should also check if there are any limits or fees for transactions.

Customer service

You should look for an account that offers reliable and convenient customer service, especially since you won’t be able to visit a physical branch. You may want to check if the bank offers phone, email, chat, or app support, and how responsive and helpful they are.

Security and insurance

You should make sure that your account is secure and protected from fraud and theft. You should look for features such as encryption, two-factor authentication, fraud alerts, and password protection. You should also check if your account is insured by the Federal Deposit Insurance Corporation (FDIC), which covers up to $250,000 per depositor per bank in case of bank failure.

Extra features

Some accounts may offer extra features that can help you save more or manage your finances better, such as budgeting tools, automatic transfers, cash-back rewards, or investment options.

Best free online savings accounts of 2023

Based on these criteria, we have selected some of the best free online savings accounts available in 2023. Here are our top picks:

Affirm Savings

This account offers a high-interest rate of 3.75%, with no minimum balance or deposit required. It also offers a debit card for purchases and a mobile app that lets you pay on the go. However, it does not offer ATM access or a checking account option.

American Express High Yield Savings Account

This account offers a competitive interest rate of 0.40%, with no minimum balance or deposit required. It also offers 24/7 customer service and FDIC insurance. However, it does not offer ATM access or a checking account option.

Bask Interest Savings Account

This account offers a unique feature that lets you earn American Airlines AAdvantage miles instead of interest on your balance. You can earn one mile per dollar saved annually, with no minimum balance or deposit required. It also offers FDIC insurance and no monthly fees. However, it does not offer ATM access or a checking account option.

Capital One 360 Performance Savings

This account offers a decent interest rate of 0.40%, with no minimum balance or deposit required. It also offers FDIC insurance and a checking account option with no fees. However, it does not offer ATM access directly from the savings account.

Discover Online Savings Account

This account offers a solid interest rate of 0.40%, with no minimum balance or deposit required. It also offers FDIC insurance and a checking account option with no fees and cash-back rewards. However, it does not offer ATM access directly from the savings account.

Marcus by Goldman Sachs High Yield Online Savings

This account offers a good interest rate of 0.50%, with no minimum balance or deposit required. It also offers FDIC insurance and 24/7 customer service. However, it does not offer ATM access or a checking account option.

MySavingsDirect MySavings Account

This account offers one of the highest interest rates of 5%, with no minimum balance or deposit required. It also offers FDIC insurance and no monthly fees. However, it does not offer ATM access or a checking account option.

Sallie Mae High-Yield Savings Account

This account offers a respectable interest rate of 0.45%, with no minimum balance or deposit required. It also offers FDIC insurance and a checking account option with no fees. However, it does not offer ATM access directly from the savings account.

SoFi Checking and Savings

This account offers a generous interest rate of 5.25%, with no minimum balance or deposit required. It also offers FDIC insurance, a checking account option with no fees, a debit card with ATM access and cash-back rewards, and investment options. However, this rate is only available for new customers with qualifying deposits and terms apply.

Synchrony Bank High Yield Savings

This account offers a competitive interest rate of 0.50%, with no minimum balance or deposit required. It also offers FDIC insurance, ATM access with a fee reimbursement program, and a loyalty rewards program. However, it does not offer a checking account option.

How to open a free online savings account

To open a free online savings account, you need to follow these steps:

  • Choose a bank or fintech company that offers a free online savings account that suits your needs. You can use the list of best free online savings accounts of 2023 in this article as a reference, or you can do your own research online.
  • Visit the website or app of the bank or fintech company and click on the option to open a new account. You will need to provide some personal information, such as your name, address, email, phone number, and social security number. You may also need to verify your identity by uploading a photo of your ID or answering some security questions.
  • Link your existing bank account or debit card to your new online savings account. You will need to enter your routing number and account number or your card number and expiration date. You may also need to confirm a small deposit or withdrawal that the bank or fintech company will make to your linked account.
  • Transfer some money to your new online savings account. You can choose how much you want to deposit and how often you want to make transfers. You can also set up automatic transfers from your checking account or paycheck to your savings account.
  • Start earning interest on your savings and enjoy the benefits of your free online savings account.

Pros and cons of free online savings accounts

Free online savings accounts have many advantages, but they also have some drawbacks. Here are some of the pros and cons of free online savings accounts:

Pros:

  • No fees: Free online savings accounts do not charge any monthly maintenance fees, minimum balance fees, overdraft fees, or other charges. This means you can save more money without worrying about losing any to fees.
  • High-interest rates: Free online savings accounts usually offer higher interest rates than regular savings accounts, which means you can grow your money faster over time. For example, MySavingsDirect MySavings Account offers a 5% interest rate, while the average interest rate for savings accounts in the U.S. is 0.06%.
  • Convenience and accessibility: Free online savings accounts let you deposit and withdraw money online, without having to visit a physical branch. You can also access your account anytime and anywhere through a website or app, and check your balance, transactions, and statements easily.
  • Security and insurance: Free online savings accounts are secure and protected from fraud and theft. They use encryption, two-factor authentication, fraud alerts, and password protection to safeguard your account. They are also insured by the Federal Deposit Insurance Corporation (FDIC), which covers up to $250,000 per depositor per bank in case of bank failure.

Cons:

  • No ATM access: Most free online savings accounts do not offer ATM access directly from the savings account. This means you cannot withdraw cash from your savings account at an ATM unless you have a linked checking account or debit card that offers ATM access. Some accounts may also charge fees for ATM transactions or limit the number of withdrawals per month.
  • No checking account option: Some free online savings accounts do not offer a checking account option, which means you cannot use your savings account for everyday spending or bill payments. You will need to transfer money from your savings account to another account or card to make purchases or pay bills.
  • Limited customer service: Some free online savings accounts may not offer 24/7 customer service or have limited options for contacting them. You may have to rely on email, chat, or app support, which may not be as responsive or helpful as phone support. You may also face delays or difficulties in resolving issues or disputes with your account.
  • Variable interest rates: The interest rates of free online savings accounts are variable and may change at any time, depending on market conditions and the bank’s policies. This means you may not always get the same rate as advertised or expected, and your earnings may fluctuate over time.

In conclusion, Free online savings accounts can help you save money without paying any fees or maintaining any minimum balances. They can also offer higher interest rates than regular savings accounts, which can help you grow your money faster over time. However, not all free online savings accounts are created equal, and you should compare different features and options to find the best one for your needs. We hope this article has helped you narrow down your choices and find the best free online savings account for you. Happy saving!