What Is the Typical Minimum Balance Needed for an Online Savings Account?

Many people assume you need hundreds of dollars to open a high-yield online savings account. Totally fair. Traditional banks have trained us to expect fine print, minimums, and hoops to jump through.

But in reality, most online savings accounts don’t require a minimum balance at all. Not to open the account, not to keep it open, and not to earn the advertised APY.

That said, a few different kinds of “minimums” are floating around, and they’re easy to mix up. So let’s break down what’s a typical minimum balance for an online savings account.

Table of Contents

1. What does “minimum balance” actually mean?
   1. 1. To open the account
   2. 2. To avoid monthly fees
   3. 3. To earn advertised APY
2. Typical requirements for online savings accounts
3. Popular accounts and minimum balances
4. Why online banks have low balance requirements
5. Common misconceptions
6. How to choose the right online savings account

What does “minimum balance” actually mean?

When banks talk about “minimums,” they might be referring to one of three requirements. Here’s how to tell them apart.

1. Minimum balance to open the account

The minimum balance to open the account (or minimum opening deposit) is simply the amount you’re required to put in upfront to get the account started. Opening minimums are a one-time requirement. For online banks, this number is usually $0 to $100, and many require absolutely nothing to get started.

2. Minimum balance to avoid monthly fees

Another type of minimum you may come across for an online savings account is the minimum required to avoid monthly fees. For example, a traditional bank account might have a $15 monthly fee that’s waived when you keep at least $300 in the account at all times. If you dip below $300, you pay the $15 fee. But as long as your balance is at least $300, there’s no charge.

3. Minimum balance required to earn the advertised APY

When a bank says a rate is “up to X% APY,” that’s your cue to read the fine print. Usually, the highest rate only applies if you keep a certain amount of money in the account.

For example, U.S. Bank’s Elite Money Market Account advertises a rate up to 3.75%. But you’ll only get that top rate if you keep at least $25,000 in the account.

Typical minimum balance requirements for online savings accounts

Many of the best savings accounts have no minimum balance requirement at all. You can open the account with $0, keep $5 in it, or build it up to thousands, and you’ll never pay a fee.

That said, there are a few nuances worth knowing:

• Some online savings accounts require a small deposit to open.
• A handful of online savings accounts use balance tiers where you earn a higher APY only if your balance stays above a certain threshold.
• It’s uncommon to have monthly maintenance fees tied to minimum balances with online savings accounts.

Compare popular savings accounts and their minimum balances

Below is a table of several popular savings accounts, along with their minimum balance requirements. As you browse the list, you may notice a common theme: online banks rarely require minimum balances, while traditional banks often do (either to open the account, earn interest, or avoid a monthly fee).

Why online banks have low or no minimum balance requirements

Online banks keep their costs low, and that’s the real reason they can offer high APYs with almost zero requirements. Because they don’t have branches, there’s no need for a bunch of building leases, tellers, or overhead. As a result, those savings get passed on to you via no minimums, no monthly fees, and interest rates that usually beat traditional banks by a mile.

Online banks also want to make it easier for more low- and moderate-income people to access financial institutions. So a $0 minimum balance for an online savings account makes it easy to sign up, even if you’re just starting out or moving money over slowly.

Common misconceptions about minimum balances

Because the banking world can be unnecessarily convoluted with terms, we also want to clear up a few myths that might be swirling around about minimum balances.

Reality: Most online banks let you open an account with $0 and keep earning interest with no minimum balance at all.

These are two very different things. For example, an account might require $100 to open but $0 to earn interest. So you could put $100 in there, spend $50 of it, and still earn the advertised APY on the rest of it.

Online banks with FDIC insurance offer the same protection as big banks (up to $250,000 per depositor, per institution).

This isn’t true. The bank will never take interest away from you with a savings account. But you may earn less interest if the bank uses a tiered APY system and your balance drops below the threshold needed to earn the highest rate.

How to choose the right online savings account

Once you understand how minimum balances for online savings accounts work, you can use that knowledge to compare your options. Here’s what to pay attention to:

• Look at the APY and whether it’s tiered or flat. A high advertised APY only helps if you actually qualify for it. Some banks pay the top rate regardless of balance; others require $5,000, $25,000, or more.
• Estimate your earned interest. Run the numbers using our savings account calculator to estimate how much interest you could earn as your balance grows.
• Check for fees. Monthly maintenance fees are rare with online savings accounts, but overdraft fees, wire transfer fees, or excess transaction fees may apply.
• Evaluate the overall experience. Look up the mobile app in the iOS App Store or Google PlayStore. How does it look? How is it rated? Online banking lives and dies by a good user interface, so make sure it meets your standards.
• Think about whether you want checking and savings in one place. If you already have a checking account somewhere, you may want to check if that institution offers a good online savings account with no minimum balance. Otherwise, our top savings account list is a good place to search.

When clients juggle multiple savings goals, balance tiers and APY requirements only matter if they realistically qualify for them.

I always advise reading the fine print, since some banks advertise high rates that require large balances to maintain.

I recommend keeping day-to-day “working capital” in the most convenient low-cost bank, while holding 12 to 18 months of emergency savings in an FDIC-insured high-yield savings account.

Beyond that, short-term funds can go into CDs, money markets, or Treasury bills, with longer-term goals shifting toward diversified investments.