Savings Accounts 101

Savings Accounts 101

What is a savings account?

An online savings account is a bank account where you can save money and earn interest. Assuming that your bank is federally-insured through the FDIC (Federal Deposit Insurance Corporation), your online savings account also will be FDIC-insured up to $250,000.

The best savings account often is online and is a high yield savings account. A high yield savings account enables you to earn interest on your savings account balance at a higher rate than a typical savings account. Therefore, the best savings account means more money in your pocket.

Compare The Best Student Loan Refinance Rates For 2020

Lender
APR
Minimum Credit
1.89% – 5.98%
650

Overview

KeyValue
Variable Rates:1.89% – 5.98%
Fixed Rates:2.94% – 5.98%
Minimum Credit Score:650
Minimum Income:None
Fees:None
Minimum Loan Amount:$5,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5-20 years
Borrower Residency:All States except DE, KY, NV
Unemployment Protection:Yes
Co-signer Option:No
2.39% – 6.69%
680

Overview

KeyValue
Variable Rates:2.39% – 6.01%
Fixed Rates:2.94% – 6.69%
Minimum Credit Score:680
Minimum Income:$35,000
Fees:None
Minimum Loan Amount:$15,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All States
Unemployment Protection:Yes
Co-signer Option:Yes

2.29% – 7.02%
660

Overview

KeyValue
Variable Rates:2.29% – 6.65%
Fixed Rates:3.50% – 7.02%
Minimum Credit Score:660
Minimum Income:None
Fees:None
Minimum Loan Amount:$5,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All States
Unemployment Protection:Yes
Co-signer Option:Yes

1.90% – 8.59%
680

Overview

KeyValue
Variable Rates:1.90% – 8.59%
Fixed Rates:3.49% – 7.75%
Minimum Credit Score:680
Minimum Income:$24,000
Fees:None
Minimum Loan Amount:$5,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states, except ME, ND, NV, RI, WV
Unemployment Protection:Yes
Co-signer Option:Yes

2.31% – 6.48%

650

Overview

KeyValue
Variable Rates:2.31% – 6.48%
Fixed Rates:3.20% – 6.48%
Minimum Credit Score:650
Minimum Income:None
Fees:None
Minimum Loan Amount:$5,000 ($10,000 in CA)

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

1.99% – 7.02%

660

Overview

KeyValue
Variable Rates:1.99% – 6.65%
Fixed Rates:3.48% – 7.02%
Minimum Credit Score:660
Minimum Income:None
Fees:None
Minimum Loan Amount:$5,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5 – 20 years
Borrower Residency:All states
Unemployment Protection:Varies
Co-signer Option:Yes

Checking Your Rate Doesn’t Affect Your Credit Score
Disclosures: Earnest | ELFI | Laurel Road | LendKey | SoFi | Splash

Why do you need a savings account?

You need an online savings account for several reasons:

  1. Save for your future. The best online savings account can help you save funds for your future. You can deposit your paycheck in your online savings account, and invest in your future.
  2. Earn high yield interest. The best savings account helps you earn interest income that can be significantly higher than the national average for a traditional savings account. Most high yield, online savings accounts offer an annual percentage yield (APY) that is higher than 1%.
  3. Ease of use. An online savings account is mobile friendly and can help you manage your account and transfer money with ease.
  4. Limit on transfers. Under federal law, you can withdraw or transfer funds no more than six times per month. This can help instill discipline, since a high yield online savings account is intended to help you save so you shouldn’t transfer funds frequently.

What is the difference between an online savings account and traditional savings account?

Traditional Savings Account: A traditional savings account is a default savings account offered by a brick-and-mortar bank. Typically, you can link your savings account to your checking account, and move money between the two accounts. Traditional savings accounts usually do not come with checks and also may require a higher minimum balance. The biggest downside of a traditional savings account is the interest rate. Compared to CDs and investing accounts, the interest rate on traditional savings accounts are very low.

Online Savings Account: An online savings account is almost exclusively online and offers a much higher interest rate. The best online savings account can offer higher annual percentage yield (APY) because the bank saves costs by not having additional or any physical branches to support online savings accounts. Most online savings accounts have excellent customer service, so you still have access by phone, email or chat to speak with customer service. An online savings account is a great option if you are comfortable with mobile and online banking. With the best online savings account, the good news is that you can earn a higher yield and typically do not need to maintain any minimum balance. Some online savings account may also pay you a higher yield if you have a higher balance. This is known as a tiered rate savings account.

How do you find the best online savings account?

You can find the best online savings account here on Make Lemonade. Make Lemonade’s list of the best online savings accounts includes banks that we believe offer the best online savings account rates, best customer service, savings account management tools and lowest fees.

You can compare these online savings accounts on Make Lemonade, and choose the best savings account for you.

Then you can open an account directly through Make Lemonade with one of our partners. You will need to provide basic information such as you name, Social Security Number, driver’s license and other contact information.

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