UFB Direct is a division of Axos Bank, a digital bank which was launched as Bank of Internet USA in 2000 and rebranded as Axos in 2018. ... However, the lack of physical locations allows UFB Direct to offer favorable interest rates on deposit accounts, as well as mortgages through its parent company.
Summary of best high-yield online savings accounts for May 2021
| Institution | APY | Fees |
|---|---|---|
| Ally Bank Online Savings Account | 0.50% | None |
| Citibank Accelerate High-Yield Savings | 0.50% | None |
| Marcus by Goldman Sachs High-Yield Online Savings Account | 0.50% | None |
| TAB Bank High Yield Savings | 0.50% | None |
High-yield savings offer zero risk
As long as you open a savings account at a legitimate bank that is FDIC-insured, "there is zero risk of capital loss," says Gordon Achtermann, a Virginia-based certified financial planner.
UFB Direct, a division of online institution Axos Bank, offers definite advantages when it comes to interest rates. Its savings account pays up to 0.20% APY, and its money market account pays up to 0.20%.
UFB Bank has a great online savings account. ... Given that this bank is FDIC insured is a great peace of mind because that means at least 250,000 dollars is insured by the FDIC.
How do I close an account?
Is your money stuck in an online savings account? No. Just like a traditional savings account, your money is accessible to you when you need it. With just a few clicks, you can move money in and out of your savings and into another account.
According to the FDIC, the average savings account interest rate in the U.S. sits at a low 0.05%. When choosing a high-yield savings account, you want to make sure you find one offering an APY greater than the average 0.05% that you would earn in a standard savings account.
How much interest can you earn on $1,000? If you're able to put away a bigger chunk of money, you'll earn more interest. Save $1,000 for a year at 0.01% APY, and you'll end up with $1,000.10. If you put the same $1,000 in a high-yield savings account, you could earn about $5 after a year.
Online transfers between your physical checking account and your online savings account take a few days. So if you need money immediately, you may be out of luck. You can't withdraw money from an ATM or at a physical branch unlike accounts held at brick and mortar banks.
In short, MMAs might be a better option, depending on the rate, if the goal is to park some cash for a short period, or if you don't want to actively manage your savings. MMAs provide access to your money when you need it, pay a higher rate than savings accounts while requiring a minimum amount of effort on your part.
Interest on high-yield savings accounts and CDs is subject to ordinary income tax. You need to report savings interest on your tax return for any account that earned more than $10. For most savers, the benefits of a high-yield account outweigh any minor bump in taxes.
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