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Are you looking for ways to earn free money? Here are the 5 best bank accounts to earn free money in 2020. These accounts are one type of what I call mitochondrial accounts.
They have a high annual percentage yield (APY) and pay you 5-50x more than the national average of 0.06% just for having money saved in them. You do not even have to do any work! They also help you save money by having minimal to no fees.
My emergency fund savings account with Capital One has already payed me over $50 in 6 months. That’s with an APY that started at 1.8%, and then slowly dropped to 0.8% due to the pandemic when the Federal Reserve decided to lower the interest rate to 0%.
While the world of banking has substantially changed since the beginning of this year, keeping your money in a high interest account will still earn you 10x more money than other bank accounts. And although 0.8% may not sound like a lot, the point of these accounts is to make as much free money as you possibly can from money that would otherwise be earning nothing.
Let’s take a look at the 5 best bank accounts for earning free money in 2020 so you can start earning free money too!
Related Article: Is Your Money Saved In Vacuoles or Mitochondria?
Methodology
When creating this list, I looked at the fees, convenience and interest rate of mainly major banks and popular online banks. I use two of the accounts in this list for my personal banking and highly recommend them both.
Bank account fees matter a lot. Over time, these fees can eat away at your money if you are not careful. It is also very inconvenient when you have to keep a certain amount in your account to waive the fee. Not everyone can or is willing to always leave $1,500 lying around in an account. Not only are there fees, having to keep that money in the account costs you an opportunity to use that money to make more money through investing. Here, I only included accounts that have no minimum balance or monthly maintenance fees.
Convenience is also very important. After all, why have a bank account if you cannot easily access that money? All of the accounts on this list are online accounts and most are a savings account, which means there are no debit cards. However, you can easily transfer your money to your other accounts where there are branches and ATMs near you. Another thing to keep in mind is that these accounts are meant more for you to keep your savings – money that you want to use should be kept in your checking account(s).
The 5 Best Bank Accounts For Earning Free Money
| Bank | Account | APY | Monthly Fees | Minimum To Open |
|---|---|---|---|---|
|
|
0.03% |
$0 |
$0 |
|
|
|
0.5% |
$0 |
$0 |
|
|
|
4%* 1% |
$0 |
$0 |
|
|
|
0.65% |
$0 |
$0 |
|
|
|
0.6% |
$0 |
$0 |
*4% APY available only for T-Mobile customers.
**Interest rates are accurate as of November 2020.
Charles Schwab High Yield Investor Checking
The Charles Schwab High Yield Investor Checking account is not a high-yield account per se as the APY (0.03%) is far less than the other four banks and it’s the only checking account on this list, but it is the best checking account for international use. It has no account minimum, $0 monthly free and unlimited ATM rebates and no foreign transaction fees.
Perks
- APY: 0.03%
- Monthly Fee: None
- Mobile Deposit: Yes
- Minimum Balance: None
- ATM Reimbursements: Unlimited
- Foreign Transaction Fees: None
Review
The main reason this made the list is its unlimited ATM rebates and no foreign transaction fees. You can withdraw money abroad at any ATM without any fees. If you travel a lot to destinations where credit card is not widely accepted and cash or debit is needed, this account can save you hundreds of dollars in fees. Of course, this depends how much you travel and how often you withdraw from ATMs. Nevertheless, this perk alone is enough for me to open this account.
I used to have the Bank of America Advantage Plus Checking account, which had quite a lot of fees. I was required to have a daily balance of $1,500; otherwise I had to pay the $12 monthly fee. To avoid the fee, I needed qualifying direct deposits of $250 each month or to be enrolled in their Preferred Rewards program (which I was not). You also have to pay a fee if you use a non-Bank of America ATM. There is also a foreign transaction fee of 3%.
I was tired of these fees so I started to look for alternatives. As soon as I learned about this account from Ramit Sethi’s book, ‘I Will Teach You To Be Rich’, I immediately opened an account, transferred my money, and cancelled my Bank of American account. I cancelled because I already had a checking account with Chase and didn’t want more than two checking accounts.
There is only one small catch when opening a Charles Schwab checking account: You can only open this account if you also open a brokerage account with them. The good thing is there are no fees or minimum balance required on the brokerage account – it’s completely free. You never have to do anything with it if you do not want to. Mine currently has no money in it. Charles Schwab requires this hoping you will use them as a brokerage when you are ready to have one later.
Capital One 360 Performance Savings
This is the account I personally use to keep my emergency savings fund. The Capital One 360 Performance Savings account is right up there with the other high-interest accounts with an APY of 0.5%. While that may not seem like a whole lot, it is still much better than the national average 0.06%.
Perks
- APY: 0.5%
- Monthly Fee: None
- Mobile Deposit: Yes
- Minimum Balance: None
- Can open several and nickname multiple accounts
Review
This account is paying me to keep my emergency savings in the account. It has already payed me over $50 in interest in 6 months. In one year, I would have earned over $100. Although that may not look like a lot, I know a lot of people who wouldn’t even consider paying $100 for a credit card annual fee or an annual subscription. They think it’s too much and would rather save that money. In that sense, $100 is quite a lot.
With that said, there are fees associated with this account. There is a $35 fee per overdraft transaction and a $40 fee per outgoing domestic wire transfer. These fees shouldn’t be an issue with this account because it’s a savings account and we should only be keeping our savings here. Our checking account should be the account from which we withdraw or transfer money for all other purposes. Furthermore, we should practice avoiding overdrafting of our accounts. In other words, avoid taking out money that we do not have.
On that note, Capital One also offers a 360 Checking account unlike some of the other banks on this list which offers only an online savings account. This allows you to use Capital One as more of a regular bank in the sense that you get a debit card, checks, online bill pay and so forth. The Capital One 360 Checking account also pays you a 0.1% APY interest rate. This is not a lot, but most other banks pay you absolutely nothing in a checking account. It even beats out the Charles Schwab Investor Checking account as of now.
You get more than twice the interest paid with the Capital One 360 Checking account than you do with Charles Schwab. This is all without any minimums. Comparing this to the 0.05% that you get from Chase for having a minimum of $250,000, you are getting twice the interest rate from a checking account at quite the bargain.
Another great perk that I like is I can open multiple 360 Performance Savings accounts and nickname them according to my saving goals. I have an account for my emergency savings and one for my wedding savings. This allows me to easily keep track of how much I have saved and how much more I need to hit my goals. I have my money automatically transferred into the accounts from my checking every month. This ensures I save towards my goals without having to really think about it.
T-Mobile MONEY Checking
The T-Mobile MONEY Checking account is a relatively new bank account that was introduced in November of 2018. T-Mobile partnered with BankMobile, a division of Customers Bank, to provide a high interest, fast money growing banking solution. According to T-Mobile, Americans paid over $34 billion in overdraft fees in 2017. And so they created a mobile-first banking solution with no fees, especially overdraft fees, and one of the highest interest rates in the nation.
Perks
- APY: 4% and/or 1%
- Monthly Fee: None
- Mobile Deposit: Yes
- Minimum Balance: None
- Out of Network ATM Fees: None
- Overdraft Fee: None up to $50
Review
Anyone can open a T-Mobile MONEY Checking account, but there’s a catch. In order to get the 4% APY, you must be a T-Mobile customer with a qualifying wireless service plan. In addition, you also need to register for their perks and make monthly deposits of $200 before the last business day of the month. If you are otherwise not a T-Mobile customer, you earn 1% APY.
The 4% APY also only applies to the first $3,000 and then 1% after that. Although the 4% is only applied to balances up to $3,000, you would still earn $120 per year which can be used to help offset your T-Mobile phone bill. This is more than any other high-interest accounts out there for the first $3,000. And earning 1% on the rest isn’t too shabby either, especially when most other banks are steadily lowering their interest rate.
I just opened this account a week ago and deposited $3,000 into the account. For now, I am planning on using this as my secondary savings account since 1% is still higher than the 0.8% I get from my Capital One 360 Performance Savings. Once interest rates increase over 1% again, I plan on using this account as my master account to automatically transfer money to all of my other accounts. I also plan on using this solely as an online account.
If you would like to use this as your primary checking account and more than just an online account, T-Mobile MONEY has 55,000 ATMs worldwide through the Allpoint Network. You can also use this at ATMs outside of the network and T-Mobile MONEY will not charge you a fee. However, you may have to pay fees charged by the ATM owner.
I recommend T-Mobile MONEY Checking if you are already a T-Mobile customer or going/planning to be one. As long as you do not mind opening another account, T-Mobile Money is a great way for you to keep and earn more money.
Ally Bank Online Savings
This is the only bank on the list that I do not use, whether it’s for banking or credit cards. However, Ally Bank’s Online Savings account is one I found from my research that also offers a competitive interest rate and competitive perks. They are also a full on bank, which means they have checking accounts. You can take out a loan from them as they are a lender. And, they are an investment platform with $0 stock trades.
Perks
- APY: 0.65%
- Monthly Fee: None
- Mobile Deposit: Yes
- Minimum Balance: None
Review
Like the Capital One 360 Performance Savings and American Express Personal Savings, Ally Bank’s Online Savings account has an APY of 0.65%. It has zero monthly maintenance fees and minimum balance.
There are fees associated with this account. There is a $25 fee per overdraft transaction and a $20 fee per outgoing domestic wire transfer, which are less than those from Capital One. Again, these fees shouldn’t be an issue because we should only be keeping our savings here. Instead, we should use our checking account to withdraw or transfer money for all other purposes.
Since Ally Bank is a full on bank, they also offer a checking account. They will pay you 0.1% in if you have less than $15,000 and 0.5% if you have more. Again, this may not seem much, but they are paying you interest when most other banks pay you nothing for keeping your money in a checking account. You also get free checks with this account!
Ally Bank is also a lender and an investment platform. So, you can get everything money-related done all with one bank, from banking with their checking and savings accounts to investing and taking out loans.
American Express Personal Savings
The Personal Savings account from American Express is a savings account only. They do not offer a checking account, which means you are limited in terms of the number of transactions you can make. If you are looking for just a savings account, especially if you own a few American Express credit cards, this a good account that offers a competitive interest rate.
Perks
- APY: 0.6%
- Monthly Fee: None
- Mobile Deposit: Yes
- Minimum Balance: None
Review
Like the Capital One 360 Performance Savings and Ally Bank’s Online Savings, this account has an APY of 0.6%. It has no monthly maintenance fees and minimum balance.
The best part of this account is that it doesn’t have any fees. Since there is no debit or ATM card, there are no overdraft fees. It doesn’t appear that you could perform any wire transfers so there’s no fee for that. The only fee that I could find is a $5 fee for a returned deposit.
I considered opening this account to strengthen the relationship I have with American Express. Any time you improve your relationship by choosing to go with more of their services, you may be targeted for special offers. I already had a couple of credit cards with them and was looking to get targeted with their special sign-up bonuses. for other credit cards.
I was between this account and the Capital One 360 Performance Savings when I sought to open a high-yield savings account. Ultimately, I ended up going with the latter because it offered the option to open multiple saving accounts and assign a nickname to them.
You can also pay your American Express credit card bills with money from this account. This is more convenient and your payment is often processed faster since you are using the same bank. This is a good choice for a high-yield savings account if you are only looking to open a savings account to earn money and you are an American Express customer.
Should You Open Another Bank Account?
This depends on whether or not you already have a high-interest bank account. If you do not, I recommend opening an account so that you can keep and earn more money. You must also decide if you really want to manage multiple financial accounts, particularly if you have accounts with different banks. Factoring in other accounts such as credit cards, mortgage, investments and loans, it adds up really quickly.
Deciding which high-interest bank account to open depends on your personal situation, needs and preferences. I recommend starting with the bank you already use and open an account there if they offer one. If not, you can always open one of these accounts from my list or research other options, including looking into your local credit unions.
Remember, when deciding on an account to open, you should consider the following factors.
- Convenience – local branches, ATM access, mobile app, mobile deposit and ease of transferring money.
- Fees – fees for maintenance, foreign transactions, etc.
- Account Minimum – minimum for opening the account or minimum account balance to not incur a fee.
- Customer Service – 24/7 support, email/phone/chat support, friendliness, helpfulness, etc.
Final Thoughts
Keeping your money in a high-yield savings or checking account is an easy way to earn free money. This allows you to get the best interest rate for your cash that is otherwise getting little to no interest and save on fees that you may otherwise incur with a different account.
With that said, investing in high-interest accounts is not the best return in investments. These accounts are more for maximizing the money you do have that is not in other types of investments.
So, do you have a high-interest earning bank account and if not, are you going to open one?
Please let me know by commenting below!
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