Updated August 12, 2023

Best Online Bank

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Online banks are convenient, pay higher interest rates, and have less fees. Find out which accounts are best (#1 surprised us).

Many active savers are switching over to online banks.

Online banks offer a solid APY and attractive promotions throughout the year. You can watch your money grow faster than it would in a traditional bank.

But they're not all the same. You need to compare features like interest rates, monthly fees and opening requirements.

To help you maximize your earnings, we've rounded up the top online banks. Plus, find out how to make deposits and withdrawals without a physical branch.

Which is the best online bank?
Here are the best online banks to keep your money safe:

Where's the best place to open an online savings account?

ForBank
Interest RateCIT Bank
No FeesDiscover Bank
Savings With ATM CardSynchrony Bank
Customer ServiceAlly Bank

Which factor is your top priority?

What is online banking?

The major difference in online banks is that they have no physical locations, so you must do all your banking business on the web or via mobile apps.

Because of the lower overhead, they can pay higher interest rates and have less fees. They are FDIC insured like normal banks.

Some online banks provide a full range of services, while some have no checking. We'll highlight the best online bank accounts below.

What is the most reliable online bank?
Ally Bank has been around since 1919, has all the services of a traditional bank, and is known for low fees and great customer service.

Capital One 360 is another popular bank with an easy-to-use and powerful mobile app with 70,000+ ATMs you can use for free.

What are the best online banks?

© CreditDonkey

Discover Bank: Best Online Bank with No Fees

Discover (most famous for their credit cards) also offers banking services with an excellent combination of rewards, good rates, and no fees.

If you have a larger amount of money to save, you can take advantage of Discover's cash bonus offer (check current promotions).

Top features:

  • $0 to open savings accounts
  • No monthly fees for any accounts
  • 24/7 customer support

Current rates:

  • Savings: 4.35% APY

CIT Bank: Best for Online Savings (Runner Up)

CIT Bank offers checking, savings accounts, and CDs. Its Savings Connect account offers one of the highest APYs. It also offers Savings Builder account that encourages users to save every month. The savings account doesn't come with an ATM card for easy access.

Top features:

  • $100 minimum to open savings accounts
  • No monthly maintenance fee
  • High savings rates
  • Mobile check deposits

Current rates:

  • Savings: Platinum Savings: 5.05% APY with a balance of $5,000 or more
    Savings Connect: 4.65% APY
    Savings Builder up to 1.00% APY with $25,000+ balance or $100 monthly deposit
  • Money Market: 1.55% APY
  • CD: Term CDs up to 5.00% APY. $1,000 minimum opening deposit.

Ally: Best Full-Service Online Bank

Ally Bank has a long history dating back to 1919. It's a full-service online bank with checking, savings, IRAs, and even investment services. It's a great choice if you want to handle all your finances under one institution.

Top features:

  • No minimum requirements to open any account
  • No monthly fees on all deposit accounts
  • Free access at over 55,000+ Allpoint ATMs worldwide
  • Up to $10 ATM fee reimbursement per month[1]
  • Transfer money with your voice through Ally Skill™ for Amazon Alexa; send and receive money with Zelle
  • Free online bill pay and mobile check deposits
  • Customer support with real human reps

Current rates:

  • Savings: 4.25% APY
  • Checking: 0.10% APY for daily balances less than $15,000. 0.25% APY for daily balances over $15,000
  • Money Market: 4.40% APY
  • CD: 3.00% to 5.15% APY. Terms of 3 months to 5 years. 12-month CD APY of 5.10%

In a J.D. Power banking study, it was found that customers were actually more satisfied with online banks than traditional physical banks. Online banks especially rated higher in areas of products & fees, communication, and problem resolution. Ally Bank ranked second with 865 points out of 1,000, just one point behind winner Charles Schwab.

Synchrony: Best for Online Savings

If you don't need access to your money often and just need a place to park it while earning a decent interest rate, Synchrony Bank has some of the best online savings accounts. It only offers a high-yield savings account, money markets, CDs, and IRA accounts. It does not offer checking accounts.

Top features:

  • No monthly minimum or fees
  • High savings rates
  • Optional ATM card; Free access at Plus or Accel ATMs
  • Up to $5 ATM fee rebates per month
  • Free mobile check deposits
  • Customer support available by phone, live chat, and email

Current rates:

  • Savings: 4.75% APY. No monthly service fee and no minimum deposit. An ATM card is provided for easy withdrawal. Synchrony will refund ATM fees for other banks up to $5 per statement cycle[2]
  • Money Market: 2.25% APY. No monthly service fee and no minimum deposit.
  • CD: 2.25% to 5.65% APY. Terms of 3 months to 5 years. No minimum deposit to open.

NBKC Bank: Best for Online Checking

nbkc (National Bank of Kansas City) allows anyone to open their accounts. It offers checking, money market accounts, and CDs.

We like nbkc's checking account because it provides a competitive interest rate for all account balances.

Top features:

  • $0 to open; no minimum balance requirements[3]
  • No monthly maintenance fees
  • Free access at 37,000+ MoneyPass® ATMs nationwide
  • Up to $12 ATM fee refunds per statement cycle
  • Free online bill pay and check deposits
  • No overdraft fees
  • Free set of starter checks

Current rates:

  • Checking: 1.75% APY. $0 to open, no monthly service fees; $0.01 to earn interest
  • Money Market: 2.75% APY on all balances. $0 to open, no monthly service fees; $0.01 to earn interest
  • CD: 0.10% to 5.40% APY. Terms of 6 months to 5 years. Minimum opening deposit of $1,000 for terms of 3 months to 1 year; $250 for terms of 2 years to 5 years.

LendingClub Bank: Best for Online Checking (For Balances $2,500+)

LendingClub Bank - an online bank - offers one of the best rewards checking accounts on the market. You have the opportunity to earn cashback rewards as well as a competitive interest rate. However, there are some conditions.

The LendingClub Bank Rewards Checking pays interest for balances $2,500 and more.[4] You can also earn unlimited 1% cashback on your debit card if you: receive $2,500 worth of direct deposits each month, OR keep an average balance of $2,500 or more.

Other top features:

  • $25 to open; no minimum balance requirements
  • No monthly service fee
  • Free ATMs worldwide
  • $0 for first order of checks
  • Up to 2 days early access to direct deposit funds

Current rates:

  • Checking: 0.10% APY on balances $2,500 - $99,999.99; 0.15% APY for balances of $100,000 and more. 1% cash back on Qualified Purchases.

Capital One 360: Best Customer Experience

Web-based banks can feel impersonal. Capital One 360 stands out from other online banks by providing a great experience. It has a top-of-the-line app as well as Capital One 360 cafes where you can ask questions and engage with other people in the community.

Top features:

  • No opening minimum or monthly fees
  • No foreign transaction fee
  • Free access at 70,000+ Capital One or Allpoint ATMs
  • Three options to cover overdrafts[5]
  • Easily send and receive money with Zelle
  • Highly rated mobile banking app
  • Get help opening an account, meet with financial advisors, and attend events at Capital One 360 cafes

Current Rates:

  • Checking: 0.10% APY
  • Savings: 4.30% APY

TIAA Bank: Best One Year Intro Rates

TIAA Bank guarantees that the yield on your account will stay in the top 5% of similar accounts offered in the U.S. banking market.[6] It offers a great rate on its Yield Pledge Checking and Money Market Accounts. However, it has larger opening minimum requirements than other online banks.

Top features:

  • $100 minimum to open Yield Pledge Checking
  • Unlimited ATM refunds for accounts $5,000+ ($15/month in refunds for accounts below $5,000)
  • Mobile check deposits
  • Debit card with purchase protections

Current rates:

  • Checking: Yield Pledge Checking: Up to 0.25% APY. Minimum deposit of $100. No monthly service fee.
  • Money Market: Up to 4.75% APY. No monthly service fee. Minimum deposit of $500.
  • CD: Basic CD: 3.95% - 5.25% APY. Terms of 3 months to 5 years. Minimum deposit of $1,000. No monthly service fee.

Charles Schwab: Top Online Bank for Travelers

Charles Schwab may be best known for investments, but it also offers a great web checking option. Many travelers especially love using Charles Schwab Bank's checking account for the following perks.

Top features:

  • $0 to open the account; $0 monthly fees
  • Unlimited ATM fee reimbursements worldwide
  • No foreign transaction fee on the debit card
  • Free standard checks
  • Free online bill pay and mobile check deposits

Current rates:

  • Checking: 0.45% APY, $0.01 account minimum

Axos: Best Online Bank for Small Business

Small businesses trying to keep their fees in check often benefit from digital banks. With smaller opening requirements and low fees, the accounts can be more affordable. We chose Axos as the best online bank for small business for the following reasons:

Top features:

  • $0 minimum to open a basic checking account
  • No monthly maintenance fees
  • Large ATM network worldwide
  • Free online bill pay and mobile check deposits
  • Unlimited transactions at no additional cost
  • First set of 50 checks free

Other Banks to Consider

  • Consumers Credit Union
    Though Consumers Credit Union (based in Illinois) does have physical branches, anyone can apply for an account online. Credit unions often offer more personalized service and better rates than traditional banks.

    Consumers offer perhaps the highest rate we've found for its Rewards Checking account (for balances up to $10,000). You have the potential to earn a very high rate when you meet certain account activity and/or CCU Visa Credit Card purchase requirements each month.

    This account has no account fees and no minimum balance. You get free access to over 30,000 ATMs and 5,000 shared branches. You can also get unlimited reimbursement for ATM fees when you meet checking requirements.

    Anyone can become a member of Consumers Credit Union with a one-time $5 fee to the Consumers Cooperative Association. You'll also need to maintain a minimum $5 in your Membership Share/Savings Account.

  • SoFi Bank
    SoFi Bank, N.A., a nationally chartered bank, offers a combination of checking and savings account. It earns a competitive rate on all your cash. There are no account fees and no balance requirements. In addition, it reimburses fees for all ATM transactions worldwide.

    As a member of SoFi, you also get access to financial advisors - at no cost. You can call or meet with an advisor to create a budgeting plan to help you reach your goals.

  • Marcus by Goldman Sachs
    Goldman Sachs Bank offers high-yield savings account with a competitive savings rate. There are no fees and no minimum deposit. However, it's bare-bones and doesn't offer access to ATMs.

Traditional Bank vs. Online Bank

The most obvious difference between traditional and online banks is that you can't walk into an online bank. This can mean you miss out on face-to-face customer support.

Traditional banks have also been around for decades, so you can be more sure they'll be there for the rest of your lifetime.

And most brick-and-mortar banks do offer online services. You can check your balances, deposit checks, pay your bills, and more.

But online banks don't need to pay rent and have fewer employees, which can be great for you. They usually offer free checking accounts, lower fees, and a higher annual percentage yield (APY).

What services do online banks provide?
Online-only banks offer a range of features, including:
  • Access to ATM networks
  • Electronic fund transfers (EFT)
  • Direct deposits
  • And more

How to Open Online Bank Account?

Opening an online bank account can take just a few minutes, and you can do it as you relax on the couch.

These are some common steps:

  1. Select the bank that best fits your priorities.
  2. Go to the institution's website or mobile app.
  3. Input your personal information, including your Social Security number, address, email, and phone number.
  4. Select your account type, whether checking, savings, joint, or a money market account.
  5. Make an initial deposit if you wish. This could be from another bank or your debit card.
  6. Then wait for your deposit to clear to start banking. This could take a few days.

Are Online Banks Safe?

Online banks are insured by the FDIC and subjected to the same federal rules and regulations as traditional financial institutions. If the bank defaults, the government will pay back everything you had in the account, up to $250,000.

The biggest risk with internet banks is having your account hacked. But you can take precautions to significantly lower your risk.

How to protect yourself while using online banks?
You can improve your online banking safety by taking some simple steps:

  1. Don't use common passwords like your birth date or 12345. Use a strong password with upper and lower case letters, numbers, and symbols like @ or !.
  2. Use a unique password that's only for your bank.
  3. Use multi-factor authentication.
  4. Use biometrics like your voice, thumbprint, or Face ID.
  5. Always log out of your account after finishing your session.
  6. Check your statements for bank fraud each month.
  7. Avoid logging in on public WiFi.
  8. Never share personal information unless you've initiated a request.

Online Banking Pros & Cons

PROS:

  • Higher interest rates than traditional banks
  • Often no (or very low) opening amount
  • Usually no monthly fees or balance requirements
  • Convenience - manage your account 24/7 via web or app
  • Easy to open account from anywhere

CONS:

  • No physical branches
  • No personal relationships with your banker
  • Limited services available
  • More hassle to deposit cash

What to Look for in an Online Bank

© CreditDonkey

SavingsChecking
Discover Bank4.35% APYCashback Debit Account: 1% cash back on up to $3,000 in debit card purchases each month. See website for details
CIT BankPlatinum Savings: 5.05% APY with a balance of $5,000 or more
Savings Connect: 4.65% APY
Savings Builder up to 1.00% APY with $25,000+ balance or $100 monthly deposit
eChecking: 0.25% APY with $25,000+ balance and 0.10% APY on balances under $25,000
Ally Bank4.25% APY0.10% APY for daily balances less than $15,000. 0.25% APY for daily balances over $15,000
Synchrony Bank4.75% APY. No monthly service fee and no minimum deposit. An ATM card is provided for easy withdrawal. Synchrony will refund ATM fees for other banks up to $5 per statement cycle
NBKC Bank1.75% APY. $0 to open, no monthly service fees
LendingClub Bank4.50% APY0.10% APY on balances $2,500 - $99,999.99; 0.15% APY for balances of $100,000 and more. 1% cash back on Qualified Purchases.
Capital One4.30% APY0.10% APY
TIAA BankYield Pledge Checking: Up to 0.25% APY. Minimum deposit of $100. No monthly service fee.
Charles Schwab Bank0.48% APY0.45% APY, $0.01 account minimum
Axos Bank0.61% APY (balances under $25k); 0.25% APY ($25K-$100K); 0.15% APY ($100k and over)Rewards Checking: Up to 3.30% APY
Cashback Checking: Up to 1% cashback

Your bank should make your life easier. Before choosing the right online bank for your banking needs, make sure to compare features like:

  • High rates
    Typically, online bank accounts offer much higher APYs compared to the national average. Compare the rates against features you want.

  • Monthly fee
    Most online banks don't charge monthly fees. For the ones that do, see if you're comfortable with the monthly balance requirement.

  • Opening requirement
    Some accounts have an initial opening minimum. See if you can meet the deposit requirements.

  • Banking products
    Some digital banks only offer savings or checking, while others are full-service with a wide range of banking products (even offering things like personal loans and investment services). Think about what you want out of your bank.

  • Deposit and withdrawal restrictions
    Read the fine print to understand the bank's deposit and withdrawal policy. Pay special attention to any waiting period to access deposited funds or receive a withdrawal.

  • ATM access
    Will it be easy to withdraw your money? If a bank offers access to an ATM network, inquire about the fees you may incur and whether the bank offers reimbursement.

  • Customer service
    With no local branch locations, you need to be able to get a hold of reps when you have a problem. Some online banks offer superior 24/7 customer support by phone or even live chat.

  • FDIC insurance
    This goes without saying: you want your money protected should anything happen to the bank. Online banks are covered by FDIC just like a traditional brick-and-mortar bank.

  • Strong security
    Conducting your banking on the web can put your money at risk. Most banks have superior security, including data encryption.

You need a checking account for day-to-day use. A savings account is not easily accessible, especially from online banks. If you need cash fast, then you're kind of out of luck. That is why you should have a checking account for purchases you need to make frequently. Keep the bulk of your money in a savings account where you are earning interest, and then keep some money in your checking for the purchases you need to make. Michael Outar, founder, Savebly.com

What Experts Say

As part of our series on saving and investing, CreditDonkey assembled a panel of industry experts to answer readers' most pressing questions.

Here's what they said:

How to Make Deposits and Withdrawals

© CreditDonkey

Digital banks let you handle your business without leaving your home.

But without the ability to drive up to your local bank branch, where do you put in and take out money?

Making Deposits

You have these options for making deposits:

  • Direct deposit
    Get your paycheck sent directly to your bank account. Simply provide your HR department with your bank's routing number and account number. Many companies even allow you to split up paychecks between accounts.

  • Mobile check deposit
    Most digital banks offer remote mobile deposits via the bank's mobile app. Just take a picture of both sides of the check. If you have cash rather than a check, you can buy a money order (for $1 or $2), and then use the same above method.

  • Electronic transfer
    This requires an extra step, but you can first deposit cash or checks in a local bank account. You then initiate an electronic bank transfer to send the funds to your online bank. This can take up to three business days.

Want to deposit cash into your online bank? Not every online bank will let you. The best banks for cash deposits are:
  • Capital One 360: You can add cash at CVS or their vast network of ATMs.
  • LendingClub: You can add cash from ATMs serviced by NYCE or MoneyPass.
  • Axos: You can add cash from Green Dot locations, which you can find at major stores like CVS, 7-Eleven, and Dollar General.
  • nbkc: You can add cash from select MoneyPass ATMs.

Making Withdrawals

© CreditDonkey

Gaining access to your money is easier than making deposits with an online bank. Most banks offer:

  • ATM accessibility
    Some online banks have agreements with ATM networks throughout the country. This gives you convenient ATM access without any fees. In addition, some even offer refunds for ATM fees charged by other banks.

  • Debit card
    Just like a traditional bank, online banks will offer a linked debit card with your checking account that you can use for purchases.

  • Electronic transfer
    You can transfer your funds to one of your external bank accounts and then withdraw cash from there via ATM. You'll have to allow a few days for the transaction to process.

  • Checks
    Many digital checking accounts include paper checks (either free or for a small fee).

    Withdrawal limits for savings accounts: There's a limit to the number of times you can make withdrawals. According to Regulation D, you can only make up to six outgoing transfers from your savings account or money market per month. If you exceed the limit, you may pay penalty fees.

    Bottom Line

    Online banking can be a great way to earn interest on your money while paying fewer fees. Do your due diligence and find the bank that suits your needs while giving you the best return on your investment.

    References

    1. ^ Ally. ATMs & withdrawals FAQs: What are your ATM fees?, Retrieved 8/5/2022
    2. ^ Synchrony Bank. FAQ: Which ATMs can I use and are there any fees?, Retrieved 8/5/2022
    3. ^ nbkc bank. Is there a minimum opening deposit required to open an account?, Retrieved 8/5/2022
    4. ^ LendingClub Bank. Rewards Checking FAQ: How do I earn interest on my Rewards Checking account?, Retrieved 8/5/2022
    5. ^ Capital One. Overdraft Option, Retrieved 8/05/2022
    6. ^ TIAA Bank. Yield Pledge Promise, Retrieved 8/05/2022

Write to Kim P at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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Member FDIC

Discover Online Savings - $200 Cash Bonus

To get your $150 or $200 Bonus: What to do: Apply for your first Discover Online Savings Account, online, in the Discover App or by phone. Enter Offer Code CY923 when applying. Deposit into your account a total of at least $15,000 to earn a $150 Bonus or deposit a total of at least $25,000 to earn a $200 Bonus. Deposit must be posted to account within 30 days of account open date. Maximum bonus eligibility is $200.

What to know: Offer not valid for existing or prior Discover savings customers or existing or prior customers with savings accounts that are co-branded, or affinity accounts provided by Discover. Eligibility is based on primary account owner. Account must be open when bonus is credited. Bonus will be credited to the account within 60 days of the account qualifying for the bonus. Bonus is interest and subject to reporting on Form 1099-INT. Offer ends 12/14/2023, 11:59 PM ET. Offer may be modified or withdrawn without notice. See advertiser website for full details.

Expires 12/14/2023
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