Maximizing Your Liquid Savings

Everything you needed to know about online banking.

Episode Summary

This week, Maggie is answering a couple of listener questions about savings accounts. She talks about how to use online banks to maximize your savings and make your money work for you.

Episode Notes

The things you want to consider when choosing an online bank:

  • Interest rates: Make sure they are offering high-yield savings accounts

  • Fees: Make sure you aren’t paying any monthly maintenance fees

  • Minimum balance requirements: Make sure that the bank doesn’t require you to either deposit or maintain a certain balance

  • Mobile accessibility: Make sure the bank has a good online portal that allows you to easily access your money

  • ATM fee reimbursement: Since online banks are only online, that means that they typically don’t have any of their own ATMs for you to withdraw money from. Make sure that they offer monthly reimbursement for any ATM fees you’ve paid when withdrawing money.

There are lots of online banks out there these days. Here are just a few to start with:

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The theme music is called Escaping Light by Aaron Sprinkle. The podcast artwork design is by my dear husband, Dan Rader.


Maggie Germano: 00:00 Hi there and welcome to the money circle podcast. My name is Maggie Germano and I am your host. Every other week I’ll be answering listener questions on air in a way that is easy to understand and actionable. This week I’m answering two different questions related to online banking and high yield savings accounts. The first question was submitted by Mercy from California. Mercy writes, “I’m thinking of switching to an online bank. What should I consider?” The second question was submitted by Devon from Washington, DC. Devon writes: “I’m interested in learning more about high-interest savings accounts. What are they and what are some good ones?” So I’m a huge proponent of online banks. I actually talk and write about this a lot. The savings accounts that go with these online banks are also known as high yield savings accounts because these companies don’t have the overhead that keeping physical branches open requires they can offer lower fees and more perks for their customers.

Maggie Germano: 01:01 One of these perks is that you are actually able to access your money from anywhere since there’s no in-person branch to walk into. The online platforms for these banks are usually much more user-friendly. You can deposit checks through your phone, easily transfer money across accounts, and withdraw money from any ATM. I especially recommend online bangs when you’re thinking about putting your money into savings. So these online banks usually have checking accounts and savings accounts as options, but usually when I’m talking about them, I’m talking about them in terms of savings accounts and that’s because their interest rates are typically 20 times the national average, which makes your money work for you over time to make this easier to understand, I’ll give you an example. If you were to open a savings account at say m and d bank, your interest rate would be 0.02% right now.

Maggie Germano: 01:50 Plus you will get charged $7 and 50 cents per month if you don’t keep a minimum daily balance of $500 so that means that if you were to dip below $500 you would be getting charged a fee every month and you’d have to be thinking about keeping that balance up all the time. On the flip side, if you opened a savings account with ally bank, your interest rate would currently be 1.9% and I say currently because these industries typically change given um, the current economic landscape or what the government is up to. So recently the government did reduce interest rates. So ally bank moved their interest rate offering from 2.2% to 1.9% so it’s slightly down, but it’s still much higher than other banks. As you could see with my example. Plus, Ally Bank does not charge monthly fees or have minimum balance requirements. You could literally open an account with $1 and you wouldn’t get penalized.

Maggie Germano: 02:47 So this big huge difference, not only in the interest rates that you’re earning every single month but also in the fees that you wouldn’t have to be getting paid really does make a big and adds up over time in a good way for you. Another added bonus is that with ally bank at least, I’m not sure about the other banks, but I would guess I would probably bet on it is that you can have as many different savings accounts as you want. So this can come in handy if you’re saving up for multiple goals at once. That is something that I do and actually when I switched over to ally bank, one of the questions that I asked them is if I could have more than one or two savings accounts at a given time, I wanted to have like five different savings accounts because I was having my emergency savings. I had travel savings, I wanted to save up for things like gifts or fun activities. So I like having my money kind of separated so that I can reach different goals at once and see that progress, but I didn’t want to get charged for that. So that is a big benefit, especially if you want to be able to separate your goals that way. So as I’ve touched on a bit already, the main things you want to consider when choosing an online bank are one the interest rates. So make sure that the online bank you’re looking at offers high yield savings accounts and has a savings account, interest rate that is at least 1% but hopefully more than that. Next is the fees. So making sure you’re not paying any monthly maintenance fees or other fees around, you know, having a minimum balance or having a certain amount of deposits.

Maggie Germano: 04:20 Just looking into that and seeing what those fees might be and hopefully that there aren’t any. Next is minimum balance requirements. So make sure that the bank doesn’t require you to either deposit or maintain a certain balance when you’re opening or keeping your account. This is really important for people who are just starting out. Like, if you only have five 10, $20 to start your savings account with, you don’t want to get penalized and not be able to open that account. And you don’t want to just put off saving, right? So you want to find an account, find a company that’s going to allow you to start with what you have so that you’re actually starting at all. Next is mobile accessibility. So like I said, these online banks are not going to have in-person, um, branches, right? So you’re not going to be able to walk into a bank and ask for help or ask for money.

Maggie Germano: 05:11 So you’re going to want to make sure that their online platform has, is easy to use and has a good online portal and that you’re not going to be getting frustrated every time you need to transfer money or look at your balance or whatever it might be. And the last piece is ATM fee reimbursement. So as I’ve said multiple times, there’s no in-person branch for an online bank. That’s the idea. They’re online, they’re not in person, so they’re not going to have their own ATMs for you to use. And one of the perks, and you know the history around most banks is if you go to the ATM that is owned by Your Bank, you don’t have to pay an ATM fee for that. And those can be $3 three 50, you know, it really adds up over time. So the, the good thing about online banks is since they do not own their own ATM, they will reimburse you for those ATM fees that you rack up over the course of your month so that you don’t have to just completely avoid taking money out in cash.

Maggie Germano: 06:10 So looking into whether or not they offer monthly reimbursement for any ATM fees and making sure that you’re getting reimbursed for that on a monthly basis. So there are lots of online banks out there these days. I’ve mentioned ally bank multiple times. Don’t worry, they’re not sponsoring this episode, although I would loudly take them up on that. Uh, I use ally as an example because they are the bank that I’ve personally been using for years and so I’m very familiar with their process and their fees and their interest rates and other kinds of structures that they have in place. So that’s just one example. There’s also other banks like synchrony bank, Barclays and American Express. They all offer online options and high yield savings accounts these days. So do your own due diligence and look into the different banks that are out there. There are definitely more than the four that I have listed today.

Maggie Germano: 07:04 Many of them are very similar to each other and what they offer. So decide which one you like best once you make a choice. Opening an online bank is actually very easy so you can go to their website and start an application. Again, since they’re an online bank, there is no branch for you to walk into to open an account. So they have to make it easy for you to open the account on their website. They’ll often want to verify you are who you say you are. So you’ll probably have to send some form of your id to them, either via email or by fax, just to prove that you are who you say you are when you’re opening this account. From there it should be smooth sailing. Plus once you have your account open and set up, you can always easily open additional accounts with the same company.

Maggie Germano: 07:49 So for example, as I mentioned, I have a bunch of savings accounts with ally bank, but recently I wanted to open another savings account that would be a joint savings account with my husband. So all I had to do was log into my account and open a new savings account and that was immediately approved. They already know who I am, he already has his own accounts with ally bank so they could easily verify who we were and that we have accounts together and go from there. So there was something, I didn’t have to wait for her, it was automatically open for me. So once you get through that initial step of verifying your identification and your, uh, who you are, they’ll pretty much speed through that. So like I said, I think online banks are a great resource, especially when it comes to saving and especially when you want to build up something like your emergency fund or if you have another longterm savings goal that you’re working towards, having a bank account that’s actually going to help you grow your interest and have your money work for you when you have it in, you know, liquid form rather than putting it into the stock market.

Maggie Germano: 08:52 So I definitely recommend looking this and seeing what bank that you’re interested in. And like I said, it is easier than it seems I have to do is take that first step and you know, good luck and happy savings.

Maggie Germano: 09:05 thanks for tuning in to the money circle podcast this week. Make sure that you rate, review and subscribe so that you never miss an episode. This also really helps just as we’re getting off the ground so that more people get the money circle podcast in front of them and in their ears. If you’d like to get more connected with money circle or with me, there are lots of ways you can do that. To join the free Facebook group, visit To stay informed of any upcoming events, subscribe to my weekly newsletter at if you’d like to join the virtual money circle membership group, visit to learn more about my financial coaching services, my speaking and workshop offerings, or just to read my blog, visit you can also follow me on Instagram and Twitter @MaggieGermano.