Not Banking Online? Here's Why You Should Be Right Now

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

KEY POINTS

  • Banking online can mean spending less time making transactions and managing your money.
  • Higher interest rates can also be a huge financial benefit to banking online.

It's not just about the convenience factor.

We live in a world that's growing increasingly digital. These days, a lot of people do their work online, hold meetings online, and do the bulk of their shopping online. And a lot of people have shifted from physical banks to keeping their money in an online bank.

Banking online can be a huge time-saver. Think about it -- instead of having to get in your car and drive over to a bank, you can simply point and click your way through a given task. Plus, online banking can be super convenient. Out of stamps? You can pay your bills electronically online rather than having to mail a check.

But while banking online can be ultra convenient, that's not even the main reason to consider a switch to an online bank. Rather, the main reason has to do with earning interest -- more of it.

Don't sell yourself short

The money you have in your savings account may not grow at the same pace as the money you have in your brokerage account. But it still pays to score as high an interest rate as possible on that cash. And chances are, moving over to an online bank will be your ticket to doing just that. 

Our Picks for the Best High-Yield Savings Accounts of 2024

APY
up to 4.60%
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn
$0
APY
4.50%
Min. to earn
$0.01
APY
4.25%
Rate info Circle with letter I in it. 4.25% annual percentage yield as of May 30, 2024
Min. to earn
$1

Online banks don't tend to have the same operating expenses as physical banks. After all, they don't have to pay for rent and other overhead that comes with maintaining a physical branch. Because of this, you'll commonly be able to snag a higher interest rate on your money with an online bank, whether you have your cash in a savings account or a certificate of deposit.

If you're wondering how much of a difference moving over to an online bank will make, consider this. Many online banks today offer an annual interest rate of 4% or more for savings accounts. Let's say you have $10,000 in your savings, and you're currently earning 3% interest. That means you're earning $300 a year. But with a 4% interest rate, you're looking at $400 a year. That's a pretty notable difference.

It may be time to make a switch

If you've been using the same bank for many years, then moving over to an online bank may be an adjustment. But if that adjustment makes you richer by allowing you to earn more interest on your money, then it's worth going through the motions. 

A 2022 survey by Forbes Advisor found that 78% of Americans prefer to do their banking online than in person. Now, it's possible to keep your money at a physical bank and still conduct transactions online. But if you're going to be banking digitally anyway, then you might as well snag a higher interest rate on your money in the process.

Moving to an online bank could put extra money in your pocket at a time when living costs are stubbornly high. And if you really want to score the best interest rate on your savings, shop around with different online banks and see what sort of return on your money they're offering.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

Two of our top online savings account picks:

Rates as of May 30, 2024 Ratings Methodology
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SoFi Checking and Savings Barclays Online Savings
Member FDIC. Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor

APY: up to 4.60%

APY: 4.35%

Min. to earn APY: $0

Min. to earn APY: $0

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