Online Savings Accounts

Below are today’s highest yielding online savings accounts. All of the offers listed in our tables are available nationwide and are federally insured up to $250,000. Despite a low interest rate landscape in 2012, these cash investments still remain popular as a hedge against inflation.

Benefits of an Online Savings Account

2012 is not a strong year for interest rates on online savings accounts or any FDIC insured savings products in general. However, despite record low rates customers are still signing up for them simply because a little return on your cash is better than none. The main advantages online savings accounts have over traditional ones is that all personal banking procedures can be conducted online – bill payments, transfers, and even check deposits. These accounts also come with straight forward terms, conditions, and requirements such as no minimum balance requirement, zero fees, and ATM reimbursement.

Before the recession hit, these products were extremely popular amongst consumers and will likely regain prominence once the FED allows interest rates to rise again. Online banks can often top the APYs (annual percentage yields) offered by both credit unions and traditional brick and mortar banks because of their relatively low cost of operation. They have no store fronts and conduct 100% of their business online, allowing customers to operate their accounts through their computers, mobile devices and/or smart phones. With the savings in overhead costs, online banks can return the favor to their customers in the form of higher savings rates and APY’s on their savings products.

Recent News Affecting Online Savings Accounts:

Interest rates will likely remain low through 2014 – FED Chairman, Ben Bernanke, has made it clear with every official FED meeting that he has no inclinations towards raising key rates above their near zero levels until at least 2014. While he doesn’t have unanimous support on this with the entire board, he does have majority support. With inflation sitting at around 3 percent annually consumers invested in any FDIC insured savings product are still realizing negative returns on their dollar’s buying power.

Banks under FDIC insurance umbrella are strengthening – Banks insured by the FDIC showed substantial earnings in the final quarter of last year. Many troubled banks of the past are now beginning to pass stress tests in which they had once had failed which is increasing levels of consumer confidence in these institutions. Many banks have also rebranded themselves in 2012, attempting to breakaway from their once troubled identity.

Mobile check deposit becoming more common – The most desired mobile banking application, remote check deposit, is being offered in conjunction with online bank accounts eliminating even more reasons to need to actually show up to a physical bank. Empowering consumers to scan their checks via a smart phone and make these deposits remotely is solving the most desired consumer request of 2012.

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