What is the best online savings account?
That depends on what part of a savings account you value the most. If the best savings account is the one with the highest interest rate, then the Grand Yield Direct account from New York’s Apple Bank for Savings may be at the top of the list (check the sidebar for the current rates). Yes, there are a few money market accounts that offer higher rates, but the Grand Yield Direct can be opened with just 1 dollar, something the banks with higher paying accounts won’t do. Any bank offering more than 5.30% APY usually requires an initial deposit of $5000 or more. If you’ve got a few hundred dollars to sock away, and want to earn a decent rate, all four banks mentioned in this article have accounts that can be opened for $1, but ING Direct and VirtualBank offer bonuses for minimum opening balances of $250 and $100, respectively (check the sidebar for more information about referral bonuses from these two banks).
What is the best online savings account?
If the best internet savings account is the one with the best promos and incentive programs, then it’s a battle between ING Direct and VirtualBank. I’ve written an ING Direct vs. VirtualBank article comparing the two referral programs and what you can expect to earn from each. Both have advantages and disadvantages, but thankfully, you can easily open an account at each and maximize your earnings. Apple Bank for Savings periodically runs new account promotions, but does not have a referral program. I’ve not yet seen either a new account promotion or a referral program from HSBC.
If security matters the most to you, HSBC’s Online Savings account is extremely security-conscious, although all of the banks mentioned on this site do a very good job of protecting your account and personal information. HSBC will only open an account after mailing you a PIN that you must enter during the registration process to verify your identity. Most of the other online banks allow you to open an account entirely electronically, usually by the following business day. The standard security procedure these days is to require a username, password, pre-determined image and user-supplied phrase, and sometimes a PIN. VirtualBank and ING Direct both have security features that compare favorably to Apple Bank for Savings, which asks only for a username and password.
If the user experience, site design, and ease of use are most important, you’ll probably like the new VirtualBank site the best. You can easily check balances and make transfers, and the buttons to do these things are where you’d expect them to be. The ING Direct site is also very easy to use. The Apple Bank for Savings’ web site can only be described as primitive; it’s a nasty, ugly Frankenstein’s monster of a site. The HSBC site has recently been remodeled, and is much less confusing and awkward than it used to be, but part of that is due to the greater variety of services that HSBC provides.
