If you’re looking for a place to park your tax refund, you may be able to earn a higher interest rate with an online savings account. MyBankTracker has profiled the top five online banks for savers.
About 14 million tax returns have been filed already this year and nearly half have resulted in a refund. According to the IRS, taxpayers are receiving about $3,500 back on average. Putting your refund into an online savings account is a smart way to build your emergency fund or plan ahead for future expenses. When comparing online banks, paying attention to the fees as well as the interest rate ensures that you find the best deal.
1. Ally Bank
Ally Bank offers a number of banking products, including savings accounts, money market accounts and certificates of deposit. It consistently ranks as one of the top online banks, thanks to its higher interest rates and relative lack of fees.
There’s no minimum opening deposit and you’re not required to maintain a specific balance each month. Deposits can be made through your mobile device or computer using Ally’s eCheck Deposit service or you can arrange for a wire transfer from another bank account.
The rate that’s currently being offered is substantially higher than what many brick-and-mortar banks are paying these days.
3. Synchrony Bank
Formerly GE Capital Bank, Synchrony features a slightly higher APY. Like Ally, there’s no minimum amount required to open an account, although you will need to maintain at least a $30 balance to avoid a $5 monthly service charge.
Aside from a competitive rate, Synchrony also offers its account holders the opportunity to earn some extra perks while they save. Enrollment in the OptimizerPerks Plus program is automatic and the types of rewards you’re eligible for are based on how long your account has been open and your balance.
At the Basic level, which is reserved for accounts that have been open for less than a year or have a balance of under $10,000, you’ll get statement credit of up to $5 in ATM fees each month and a free order of checks if you have a money market account versus a high yield savings account. At the top tier Diamond level, you can enjoy discounts on hotels, entertainment, and travel, as well as things like free wire transfers, special rate offers and access to VIP events.