Online banks are a great place for all those looking to park some savings without risk. I’ve been using Ally Bank (not sponsored, or affiliated), and have been very pleased with the consistent increase in paid out interest. It’s a great place to put an emergency account, sinking funds or college savings that you will be needing within a year or two.
Many bloggers/YouTubers suggest Capital One, which is another online bank with the same type of services. There is an opportunity to make money by being an affilliate with Capital One that Ally does not offer, however, that doesn’t help the average person looking for the best rate. Since both banks offer the same service, it really comes down to rate. For a quick comparison between the two – Capital One is currently offering 1%, up to $10,000, then 2.0% with a balance of $10,001. Ally is offering 2.20% with a minimum of $1.
There are other online banks that offer even higher rates, such as MemoryBank (2.4%) and MySavingsDirect (2.40%). You can find other banks and rate comparisons here. Either way, most online banks offer much higher rates than the average brick and mortar bank and would be worth a look.