Best online savings accounts
Online accounts are known for their higher interest to help you earn even more on your money.
An online savings account lets you manage your finances through Internet banking or mobile banking. The interest paid by online deposit accounts is often greater than that of other types of accounts.
Read on to find out the key benefits, and costs, of online savings accounts.
What's in this guide?
What is an online savings account?
An online savings account is an account that you can manage entirely online, removing the need to use a physical branch. Generally, you may find more competitive rates of interest with an online-only bank account when compared to a standard savings account. Additionally, you can enjoy the convenience of being able to manage your money around the clock.
Compare a range of savings accounts in Singapore
Disclaimer: Interest rates are applicable for deposits between S$1,000 and S$49,999. Interest rate and initial deposit are shown in Singapore dollars.
Please check with the provider for deposits and rates in other amounts and currencies.
How do online savings accounts work?
To sign up for an online account, you often need to link an active transaction account — like an everyday checking account at a traditional bank. That’s because most online savings accounts don’t come with a debit card. The only way to access your money is by transferring it to your transaction account, where you can then access it through your bank’s branches and ATMs.
Online accounts don’t usually charge transfer or monthly account fees, offering an inexpensive way to build your savings. With most accounts, interest on your balance is calculated daily and deposited into the account at the start of the following month, but compounding and pay periods vary by bank.
How to choose the best online savings account for you
Here are a few pointers to help you find the best online savings account for your needs:
- Nail down your priorities when it comes to features. Savings account interest rates fluctuate over time, so you don’t have to go with the bank that offers the highest rate. Instead, focus on one that has a high annual percentage yield (APY), but features other perks you’re looking for, such as ATM access, savings tools or no minimum balance requirements.
- Look for an account that comes with as few fees as possible. Little bank fees add up to cost you big money over time. Watch out for accounts that have lots of charges including monthly maintenance, excessive transaction, statement or inactivity fees.
- Make sure the bank or lender insures deposits. It’s not a good idea to bank somewhere that isn’t insured. This one should be a non-negotiable. If the institution goes under, you could lose all your savings. Instead, look for a bank that offers Deposit Insurance (DI) — which protects deposits up to S$75,000.
What’s the difference between an online savings and a regular savings account?
Online savings and regular savings accounts have a few key differences you should keep in mind:
| Features | Online savings account | Regular savings account |
|---|---|---|
| Lower monthly fees | ||
| Higher interest rates | ||
| Larger ATM network | ||
| More branch locations | ||
| Longer customer service hours | ||
| Quicker access to your money | ||
| Better mobile banking experience | ||
| Insured deposits up to S$75,000 |
What are the pros and cons of online savings accounts?
Consider the benefits and drawbacks of an online savings account before logging on.
Pros
- Generally, no minimum balance. The majority of online savings accounts remain in good standing no matter how much they hold. Some even allow you to open an account without a deposit. If you’re interested in a bank, ask about terms and conditions before making a decision.
- Competitive rates. Interest rates on online savings accounts are typically higher than those at your local bank. You may even qualify for a bonus introductory rate.
- Flexible terms. Deposit what you can and withdraw whenever you’d like. You often don’t need to meet specific terms, though bonus interest rates may require a minimum deposit monthly.
Cons
- Must link to a bank account. Although you don’t face many fees, your linked account may charge you to manage transactions.
- Transfers are slow between banks. If your linked account is with a different bank, your transactions may not be instant.
- No bank branches or debit cards. Many online savings accounts – including those from digital-only providers – aren’t supported by physical bank branches or debit cards, which could be inconvenient if you rely on them.
Bottom line
Online savings accounts are known for having some of the highest interest rates and lowest fees available on the market. But rates and fees aren’t the only factors you should look at when choosing an account. Make sure the online savings account you choose has the features and tools you need to reach all your savings goals — such as ATM access or low minimum balance requirements.
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