Interest rates on savings accounts vary widely depending on the bank. If you don’t need in-person access to your savings account, online banking can be a strong option for higher interest rates. Higher rates allow your existing savings to grow faster.
Why online banks often offer higher rates
Because they operate without physical branches, they tend to have lower overhead and can pass some of those savings on to customers in the form of higher rates.
Why traditional banks still have a role
This doesn’t mean traditional banks are “bad”—they often offer convenience, in-person service, or bundled accounts. But for money that’s meant to sit and earn interest, an online savings account can be a simple way to get more out of cash you already have.
How to compare current savings rates
There are tools that make comparing banks easier. Bankrate.com maintains a regularly updated list of high-yield savings accounts from both online and traditional banks. It lists up-to-date APYs along with the minimum deposit required to open the savings account.