Best Online Bank: January 2021

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.

Member FDIC
Rewards Checking - Up to 1.25% APY
Click Here to Get Deal
• Up to 1.25% APY
• No minimum balance requirements
• No fees to open or maintain account
• Overdraft Protection

Where is the Best Place to Open an Online Savings Account?

What Is Online Banking?

The major difference in online banks is that they have no physical locations, so you must do all your banking businesses 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.

Best Online Banks for 2021: Safe & Trustworthy

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Here is a list of the best online banks, including the best for savings and checking accounts.

Discover Bank: Best Online Bank with No Fees

Member FDIC
Discover Bank
Pros: High yield Cashback checking 24/7 customer service

Cons: No interest checking $2,500 minimum deposit for CDs
Our Review: (4.8) Discover offers high interest rates on its online savings and CD accounts. But there are downsides. Here's what you need to know before you open an account... Read full review

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

Top features:

• $0 to open Checking and Savings accounts
  
• No monthly fees for any accounts
  
• Earn cash back rewards for debit card purchases
  
• Free access at over 60,000 ATMs nationwide
  
• Free checks
  
• Free online bill pay and mobile check deposits
  
• 24/7 customer support

Current rates:

• Checking: Earn 1% cashback on up to $3,000 in debit card purchases each month
  
• Savings: 0.50% APY

CIT Bank: Best for Online Savings (Runner Up)

Member FDIC
CIT Bank
Pros: High yield No monthly service fees Low opening deposits

Cons: No physical locations No check writing
Our Review: (4.5) CIT Bank offers a high interest rate. But is CIT reliable and safe? Read this review to find out if what you heard is true... Read full review

CIT Bank offers checking, savings accounts, and CDs. Its Savings Builder account offers one of the highest APYs and 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 Builder account
  
• No monthly maintenance fee
  
• Get a high APY if you can save $100 per month
  
• Mobile check deposits

Current rates:

• Savings: Savings Builder up to 0.45% APY with $25,000+ balance or $100 monthly deposit.
  
• Money Market: 0.50% APY
  
• CD: Term CDs up to 0.50% APY. $1,000 minimum opening deposit.

Ally: Best Full-Service Online Bank

Ally Bank
Pros: CD options No account minimums Good customer service

Cons: Low Checking APY for lower balance customers
Our Review: (4.4) Ally Bank offers good interest rates and no account minimums. But is this popular online bank good for you? Learn the benefits (and drawbacks) here... Read full review

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
  
• 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: 0.50% APY
  
• Checking: 0.10% APY under $15,000; 0.25% APY $15,000 or more
  
• Money Market: 0.50% APY
  
• CD: 0.20% to 0.85% APY. Terms of 3 months to 5 years. 12-month CD APY of 0.60%

Synchrony: Best for Online Savings

Synchrony Bank

Pros: Savings with ATM card High APY All balance tiers receive same rate

Cons: No checking account $2,000 minimum deposit for CDs Limited customer service hours

Our Review: (4.3) Synchrony offers some of the highest savings and CD rates. But there are downsides. Read this review before you open an account... Read full review

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, and CDs, as well as 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: 0.60% 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
  
• Money Market: 0.50% APY. No monthly service fee and no minimum deposit.
  
• CD: 0.15% to 0.80% APY. Terms of 3 months to 5 years. Minimum deposit of $2,000 to open.

NBKC Bank: Best for Online Checking

NBKC Bank
Tired of losing your hard-earned money to banking fees? Consider nbkc bank. They make it easy to save, spend, and transfer money online with no-fee bank accounts. Learn everything you need to know about nbkc below... Read full review

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:

• $5 to open; no minimum balance requirements
  
• No monthly maintenance fees
  
• Free access at 32,000+ 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: 0.40% APY. $5 to open, no monthly service fees
  
• Money Market: 0.40% APY on balances up to $1 Million. $5 to open, no monthly service fees
  
• CD: 0.10% to 0.40% APY. Terms of 3 months to 5 years. Minimum deposit of $1,000 to open.

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

Rewards Checking
• Earn 1.00% cash back on purchases when you use your Radius debit card.
• Earn 0.15% APY on balances of $100,000 & up.
• Earn 0.10% APY on balances of $2,500–$99,999.99.
Click Here to Get Deal

Radius Bank - an online bank headquartered in Boston - 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 Radius Rewards Checking pays interest for balances $2,500 and more. 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:

• $100 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: For balances of $2,500 - $99,999.99, you earn 0.10% APY. For balances $100,000 and more, you earn 0.15% APY.

Capital One 360: Best Customer Experience

Capital One

Pros: Overdraft protection options No account minimums 27 cafes for in-person support

Cons: Lower savings APY compared to other online banks

Our Review: (4.3) Capital One 360 checking and savings accounts are free to open and offer higher-than-average APY rates. Does this popular web bank live up to its claims? Find out if it's right for you... Read full review

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 39,000+ Capital One or Allpoint ATMs
  
• Four options to cover overdrafts
  
• 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: 0.40% APY
  
• Money Market:

TIAA Bank: Best One Year Intro Rates

TIAA Bank

Pros: High intro APY No monthly service fees Refund ATM fees

Cons: Large minimum deposit Intro rate only for one year

Our Review: (4.3) If you have a large opening deposit, TIAA Bank provides a variety of options at high introductory rates. But there are downsides. Read on to see if it's right for you... Read full review

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. It offers a great first year intro 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
  
• 1-year intro APY on account balances up to $250k
  
• 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: 0.12% APY depending on balance. 1-year 0.40% intro APY on balances up to $250,000. Minimum deposit of $5,000. No monthly service fee.
  
• Money Market: 0.40% APY depending on balance. 1-year 0.45% intro APY on balances up to $250,000. No monthly service fee. Minimum deposit of $500.
  
• CD: Basic CD: 0.20% - 0.65% APY. Terms of 3 months to 5 years. Minimum deposit of $1,000. Yield Pledge CD: 0.25% - 0.85% Terms of 3 months to 5 years. Minimum deposit of $5,000. No monthly service fee.

Simple: Best App-Based Banking for Young Adults

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Simple helps make banking and money management more fun and effortless. It's an app-based bank with built-in budgeting tools to help students and young adults to manage their money better.

Top features:

• No opening minimum or monthly fees
  
• Save without thinking with round-up rules
  
• Competitive rates on your Protected Goals account
  
• "Safe to spend" feature tells you how much you have left after your bills and budgets
  
• Automatically transfer money to your goals
  
• Add photos and hashtags to your transactions

Charles Schwab: Top Online Bank for Travelers

Charles Schwab Bank

Pros: No account minimum No service fees Refund all ATM fees

Cons: Only checking or savings Must do banking online

Our Review: (4.3) Charles Schwab is more than a brokerage. It also offers high yield checking and savings interest rates that might far surpass your local bank. Read on to learn the pros and cons... Read full review

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: 0.03% APY, $0.01 account minimum

Axos: Best Online Bank for Small Business

Member FDIC
Axos Bank
Axos Bank offers full-service banking completely online with no fees. Find out below whether they can replace your traditional bank account... Read full review

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:

• $1,000 minimum to open a basic checking account
  
• No monthly maintenance fees
  
• Large ATM network worldwide
  
• Free online bill pay and mobile check deposits
  
• First 200 transactions at no cost ($0.30/item afterwards)
  
• 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 offers 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 Money
  SoFi (the student loan refinance lender) also offers an excellent cash management 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.

Online Banking Pros & Cons

PROS:

• Higher interest rates than traditional banks
  
• Often no (or very low) opening amount
  
• Often 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

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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.

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

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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.

Making Withdrawals

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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).
  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

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.