Sings accounts at brick-and-mortar banks usually offer low interest rates while charging maintenance, transaction, and service fees that can gnaw away at account balances over time.
In contrast, fee-free sings accounts he no monthly maintenance charges, no minimum balance fees, and no fees for making withdrawals or accessing your funds. Plus, these accounts tend to offer very competitive interest rates. While traditional banks frequently offer 0.01%-0.04% APY, some online accounts yield 4% or higher.
“We are living in a time of higher-yielding sings. This is something we hen't seen in a decade,” says Brad Heagy, certified financial planner and author of Mental Cents.
Large national banks offer near-zero APYs because they can, explains Heagy. They already he a large consumer base, so attracting new customers to their sings accounts is not as important to their bottom line.
Online banks typically offer fee-free sings accounts. This earning potential comes from online banks’ lower overhead costs since they don’t he branches to operate and maintain. They pass the sings along to customers in the form of better rates.
Benefits of fee-free sings accountsHere are some key benefits of choosing a sings account with no fees.
No fees on most transactionsThe key perk of a free sings account is oiding annoying maintenance fees, transaction fees, and account minimum fees.
For example, some brick-and-mortar banks charge a monthly fee if your account balance slips below a certain threshold. They also may charge fees if you withdraw your money more than six times monthly.
On a fee-hey account, just a few transactions could cost you $10 or more monthly. With a fee-free account, you oid all these junk fees. So, more of your money stays where it should be – earning interest in your account.
Higher interest ratesOnline banks can offer fee-free accounts while providing higher interest rates than traditional banks. The difference in interest rates on your sings can be substantial. For example, if you he $10,000 in an account earning 5% APY, you’d earn $500 in interest after one year.
That same deposit would only earn $1 in an account, earning 0.01% APY. Plus, thanks to compounding interest, a high-yield sings account can help you grow your sings faster over time.
AccessibilityWhen you bank with an online-only institution, you gain 24/7 access to your money from anywhere. Using their mobile app, you can monitor your balance, transfer funds, and deposit checks straight from your phone.
Some banks even allow you to make a fee-free withdrawal from an ATM or reimburse you for ATM fees. If you ever need assistance, these banks often provide excellent customer service over the phone or chat.
FDIC insuranceA lack of physical branches and well-known brand names make some understandably wary of trusting an online bank.
Reputable online financial institutions offer FDIC insurance, like any bank, up to $250,000 per person per account. This means your money stays protected from potential loss even if the bank fails.
Easy to open and fundOpening an account with an online bank is extremely simple – most can be opened online in a matter of minutes. Funding your new account is easy, too. For example, you can transfer money from an external bank account or set up direct deposit. Deposits typically take 1-2 business days to clear — and most accounts on this list don’t even require an initial deposit.
Common sings account fees to watch out forThough none of the banks on this list charge these fees, it’s essential to be aware of the typical charges you may be paying.
Your bank may charge a monthly maintenance fee for the upkeep of your sings account.If you withdraw more money from your sings account than is ailable, you may be charged an overdraft fee.Your bank may charge a non-sufficient funds fee if your account doesn't he enough funds to cover a transaction.If you exceed the allowable number of transactions within a given period, you may be charged an excessive transaction fee.Your bank may charge an out-of-network ATM fee when you withdraw cash from an ATM not in its network.The banks we've covered he reduced common banking fees, but some are more challenging to oid.
Wire transfer fees are the costs associated with transferring funds from one bank to another and, unfortunately, are rarely oidable.Paper statement fees are applied for providing a printed, paper-based account statement.Early account closing fees are assessed when you close your sings account within a specific time frame after opening the account.What consider When choosing a free sings accountWhen selecting a free sings account, there are several factors to consider:
Interest rate: Look for an account with a competitive interest rate to maximize your earnings. Keep in mind that some accounts offer tiered rates based on your balance.Minimum balance requirements: While many free sings accounts he no minimum balance requirements, some may require a certain amount to open the account or earn the advertised interest rate.Accessibility: Consider how easily you can access your funds when needed. Look for accounts with online and mobile banking, as well as ATM access if that's important to you.Linking to other accounts: If you already he a checking account with a particular bank, it may be convenient to open a free sings account with the same institution for easy transfers and management.Customer service: Consider the reputation and customer service of the bank or credit union offering the free sings account. Look for institutions with a track record of satisfied customers and responsive support.How to make the most of your sings accountTo get the most out of your free sings account, consider these tips:
Automate your sings: Set up automatic transfers from your checking account to your free sings account to make sing a habit and ensure consistent growth.Make regular contributions: Even small, regular deposits can add up over time. Try to contribute to your sings account each month, even if it's just a small amount.Avoid withdrawals: While your money is accessible if needed, try to limit withdrawals from your sings account to allow your funds to grow uninterrupted.Monitor your interest rate: Keep an eye on the interest rate offered by your free sings account. If rates rise significantly, consider shopping around for an account with a higher yield.How we rated the best free sings accountsTo determine the best free sings accounts, we carefully evaluated a wide range of factors, including interest rates, fees, minimum deposit and balance requirements, and product mix.
Our team analyzed numerous bank offers and selected the top contenders based on these key criteria. The options on this list represent the best value benefits ailable.
Here are some of the key factors we considered:
Interest rate: The interest rate is the primary reason someone would choose a sings, CD, or money market account over another, so this is our most heily weighted factor. Fees: Low fees can help minimize the cost of managing your money and accessing essential financial services, allowing you to keep more of your hard-earned cash.Minimum deposit & balance requirements: High minimum deposits can be a barrier, and high balance requirements to oid fees or earn the best rate limit the account's usefulness.Product mix: A diverse product mix allows customers to find the right financial solutions for their unique needs and goals. Customer service: Reliable customer service is essential for a positive banking experience. Digital experience: With more banking done online, the quality of an account's digital offerings is increasingly important.ATM & branch access: Access to ATMs and branches gives bank customers the flexibility to handle their banking needs in person when necessary while also providing easy access to cash when they need it.The bottom lineChoosing a fee-free sings account means earning higher interest without jumping through hoops or paying outrageous fees. Opting for an online bank allows you to access your account anytime without worrying about how every transaction may cost you.
Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.