This makes it a solid option for those who want to earn interest on their checking account funds but don't have a large enough balance to open an interest-bearing checking account or qualify for high APYs with other banks. Many ways to manage your money: Ally has online banking features and a user-friendly mobile app for Android and Apple devices so you can quickly view your transaction history, transfer funds, pay bills, and remotely deposit checks from anywhere.
You can also use your Ally Interest Checking Account with third-party payment services to send money directly to others. Those with an Amazon Alexa device in their homes can enable the Ally skill and manage their funds without lifting a finger. Few other banks offer this many options for managing your money, so move Ally up on your list if easy access is a priority.
Most people probably aren't going to keep that much money in their checking accounts, and those who do would probably be better off stashing that money in a high-yield savings account. These are your options for depositing money into and withdrawing money from your Ally Interest Checking Account:.
You can add money to your Ally Interest Checking Account in any of the following ways:. Ally doesn't have a minimum opening deposit, so you don't have to fund your account right away if you're not ready to. You can set up direct deposit with your employer and wait for your next paycheck to fund the account.
Funds transferred electronically are usually available on the same or the next business day. However, transfers from another bank to your Ally Interest Checking Account could take up to three business days if you initiate the transfer through Ally. Here are your choices for withdrawing money from your Ally Interest Checking Account:.
The Ally Interest Checking Account is a good fit for those who want to earn interest on their checking account funds but don't have a lot of money to put in their account. It doesn't have a minimum opening deposit or a minimum balance requirement to earn interest. It also offers monthly ATM fee reimbursements, plus a nationwide ATM network, so it's a great choice for those who don't want to pay to access their cash when they need it.
Kailey has been writing about banks, credit cards, loans, and all things personal finance since She's a graduate of the University of Wisconsin and happily lives in the woods of northern Wisconsin where she grew up. The Ascent does not cover all offers on the market. Still, with rates so low, some people are bound to look around for better returns. The "main alternative nowadays is high-yield reward checking accounts," Tumin says.
To get the rate, account holders will typically have to make a set number of debit card transactions each month. These accounts offer the same protections as savings accounts, but account holders should make sure that they are comfortable with using a debit card, and that the money is more easily accessible than a standard savings account.
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He also suggests looking into no-penalty CDs at online banks that lock in interest rates for a set term, often six, eight or 12 months. While rates will be similar to savings accounts, a CD's rate isn't variable like a savings account's, so it won't change. That the money is essentially as easily accessible as it would be in a savings account, especially, is "a nice feature. A high interest rate can yield tens or hundreds of dollars in earned interest, depending on how much money you have saved.
Interest rates are always changing, and they have been relatively low since the U. In other words, a great interest rate for a high-yield savings account is relative, and based on how it compares with other available options. At the moment, interest rates for high-yield savings accounts average around 0. In comparison, traditional brick-and-mortar banks tend to have savings accounts with rates around 0. Given that emergency savings should be kept on reserve in an account with easy access, putting that money into a low-risk vehicle like a high-yield savings account is a smart move.
While the accounts we featured here are standouts, there are many good options available. In August , NextAdvisor conducted a representative survey of 1, U. To get a comprehensive overview of the online bank landscape, we compiled a list of the 25 most commonly reviewed and searched-for high-yield savings accounts. We then evaluated them based on more than 20 different factors, including minimum opening deposit, minimum balance requirement, overdraft fees, customer service options and availability, and what other accounts each bank offers.
None of the banks we recommend charge any monthly service or maintenance fees. Because so many reputable banks offer good APYs on free accounts, we think people should take a hard pass on any banks that do charge a monthly maintenance fee to keep a savings account.
This is because interest rates are constantly in flux and can change based on market conditions. Rather, we took a more holistic approach to our review, looking at non-rate features like the quality of customer service, ATM access, and other conveniences to make the banking experience better.
For detailed, up-to-date interest rate information, check out our Best Savings Account Rates page. Yet they offer considerable perks. Compared to national bank chains with a network of physical locations, online-only banks have far less overhead.
This helps explain why they offer more competitive interest rates, and typically charge fewer and lower fees. Many of them also forgo common fees such as monthly maintenance fees or offer other benefits such as early direct deposit , in line with their role as banking industry disruptors. High-yield savings accounts are all-purpose, allowing you to save for both short-term and long-term goals. They offer competitive interest rates while also keeping your funds liquid in case of an emergency.
Here are some ideas for how you can use your high-yield savings account:. In March , the Federal Reserve cut target interest rates to near-zero, causing nearly every lender and bank to lower their rates in turn. Interest rates have taken a nosedive in , and what used to be touted as "high-yield" savings accounts are now offering a pretty mediocre APY.
High-yield savings accounts have surged in popularity over the past few years due to a combination of being fee-free and offering relatively high returns for an account that gives you easy and immediate access to your money. They've become the go-to for stashing short-term savings, like an emergency fund. While this is still better than what big brick-and-mortar banks usually offer 0. In light of this fall in interest rates, a lot of savers are talking about moving their emergency funds to other types of accounts that could earn them better rates.
Here's why my money is staying put. It's true that interest rates on pretty much every high-yield savings account have plummeted. When I first opened a high-yield savings account with Ally Bank as a place to stash my emergency fund, I was earning 2. I even transferred those funds over to Betterment for a while to take advantage of a whopping 2.
Within about a week of opening my Betterment account, my rate dropped to 2. As the Federal Reserve continued to lower interest rates in late and early , my Betterment rate continued to drop until it hit 0. At that point, I transferred everything back to Ally Bank , where I'm currently getting 1. What I learned from all of this is that trying to chase the highest rates is ultimately kind of pointless.
As soon as you get a good rate, other accounts catch up to compete, or rates are lowered again. All comparatively similar online banks are bound to offer similar rates in the end, and they're all going to be tied to fluctuations in the Federal Reserve rate. So, I'm leaving my money with Ally Bank because their rates are generous enough, and I really like their interface and customer service.
My favorite thing about Ally is how easy it is to open multiple free savings accounts that you can nickname — it makes it easy to track my progress toward different savings goals.
Of course, I could take my emergency fund out of high-yield savings altogether and go for something that might earn more money. This is the trade-off. The three most common options for places to park your emergency savings that might offer better returns than a high-yield savings account are:.
You don't take on any more risk by putting your money in a CD than you would by putting it in a savings account, but you lose liquidity. The reason that CDs often offer higher rates than savings accounts is because you're agreeing to tie up your money for a certain amount of time.
For example, if you get a three-year CD, you have to keep your money in the CD for three years in order to earn the interest it offers. This doesn't work very well for an emergency fund, which you need to be able to access immediately. You could keep a small amount of your emergency fund in a savings account and stash the rest in a short-term CD, which you then just renew continuously if you don't end up needing it. However, short-term CDs don't really offer better rates than high-yield savings accounts — in most cases, the rates are far worse than what you could get from a top high-yield savings account.
Then, you have money market accounts. This is pretty similar to a savings account, and they're also FDIC-insured, so you don't have to worry about losing your money. In the past, these accounts have been popular because they offer higher interest rates than traditional savings accounts at a brick-and-mortar bank.
However, their rates are also pretty comparable to what you get from a high-yield savings account. Here's the thing: Most of your options will offer rates that follow the same, or related, economic markers that high-yield savings accounts follow. When one rate drops, they all eventually drop. Trying to "game the system" is more often than not a waste of time. Finally, the only option of the three that doesn't protect your principal in other words, you could lose some or all of the money you put into the account is investment accounts.
That being said, it's also the only option that offers the potential for notable enough returns that you could significantly outpace inflation. But again, they're very risky.
If the stock market tanks as it has been lately , you lose your emergency fund. Some people feel comfortable investing a portion of their emergency fund. I prefer to play it safe with that money, although I did invest one-third of my emergency fund , but only because I had more than one year's worth of basic living expenses saved up. If you're working with six months of living expenses, or even less, you want to keep those funds in an account that's risk-free and easy to access.
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