Best Online Bank: January 2020

Online banks are convenient, pay higher interest rates, and have less fees. Read on for our list of the best online banks for your money.

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Online banks have a distinct advantage over your standard brick-and-mortar banks: lower costs.

Many banks pass the savings onto their customers by providing a higher APY and fewer fees.

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

What Is Online Banking?

Online banks have no physical locations, so you must do all your banking businesses online or via an app. Because of the less 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. Compare carefully and pick one that meets your needs.

Best 10 Online Banks of 2020

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We've compiled a list of the best online banks for every need. See if there's one that catches your eye.

Ally: Best Full Service Online Bank

Ally Bank

Pros: CD options No account minimums 24/7 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 is 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 at one place.

Top features:

• No minimum requirements to open any account
  
• No monthly service fees for any account
  
• Free withdrawals at over 55,000+ Allpoint ATMs worldwide
  
• Up to $10 ATM fee refunds per statement cycle
  
• 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
  
• 24/7 customer service with real human reps

Current rates:

• Savings: 1.60% APY
  
• Checking: 0.10% APY under $15,000; 0.50% APY $15,000 or more
  
• Money Market: 0.75% APY
  
• CD: 0.75% to 2.15% APY. Terms of 3 months to 5 years. 12-month CD APY of 2.00%

Discover: Best Online Bank with Bonus

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 often offers a cash bonus for opening a new savings account (check current promotions). Plus, the Cashback Debit account offers rewards for purchases made with your debit card.

Top features:

• No opening deposits for Checking and Online Savings
  
• No monthly service fees for any accounts
  
• Earn cash back rewards for debit card purchases
  
• Free withdrawals 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: 1.70% APY

Synchrony: Best for Online Savings

High Yield Savings - 1.70% APY

Click Here to Get Deal

$0 minimum opening deposit. No minimum balance requirement. No fees to open or maintain account.

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 is a great choice. It only offers savings and CDs and has no checking.

Top features:

• No monthly minimums or fees
  
• High savings interest rates
  
• Optional ATM card; Free withdrawals at Plus or Accel ATMs
  
• Up to $5 ATM fee refunds per statement cycle
  
• Free mobile check deposits
  
• Customer service available by phone, live chat, and email

Current rates:

• Savings: 1.70% 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: 1.20% APY. No monthly service fee and no minimum deposit.
  
• CD: 0.75% to 2.15% APY. Terms of 3 months to 5 years. Minimum deposit of $2,000 to open.

CIT Bank: Best for Online Savings (Runner Up)

CIT Bank
Pros: High APY No monthly service fees Low opening deposits

Cons: No physical locations No check writing
Our Review: (4.5) Want a high interest rate at a good FDIC insured bank? CIT is tempting, but has some downsides. Read this CIT Bank review before you open an account... Read full review

CIT Bank offers checking, savings accounts, and CDs. Its Savings Builder account offers a great rate and encourages users to save every month. The savings account doesn't come with an ATM card for easy withdrawals.

Top features:

• $100 minimum to open Savings Builder account
  
• No monthly maintenance fees
  
• Get a high APY if you can save $100 per month
  
• Mobile check deposits

Current rates:

• Savings: Savings Builder up to 1.80% APY with $25,000+ balance or $100 monthly deposit.
  
• Money Market: 1.85% APY
  
• CD: Term CDs up to 1.85% APY. $1,000 minimum opening deposit.

NBKC Bank: Best for Online Checking

NBKC (National Bank of Kansas City) allows anyone to open their online checking and savings accounts. We like NBKC's checking account because it provides a high interest rate for all balances.

Top features:

• $5 to open; no minimum balance requirements
  
• No monthly service fees
  
• Free withdrawals 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: 1.00% APY. $5 to open, no monthly service fees
  
• Money Market: 1.50% APY on balances up to $1 Million. $5 to open, no monthly service fees
  
• CD: 0.50% to 1.97% APY. Terms of 3 months to 5 years. Minimum deposit of $1,000 to open.

Capital One 360: Best Customer Experience

Capital One

Pros: Overdraft protection options No account minimums 27 Capital One 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

Online 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 the community.

Top features:

• No opening minimums or monthly service fees
  
• No foreign transaction fee
  
• Free withdrawals at 39,000+ Capital One or Allpoint ATMs
  
• Easily send and receive money with Zelle
  
• Highly rated mobile app
  
• Get help opening an account, meet with financial advisors, and attend events at Capital One 360 cafes

Current Rates:

• Checking: 0.20% APY
  
• Savings: 1.70% 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 deposit requirements than other online banks.

Top features:

• $100 minimum to open Yield Pledge Checking
  
• 1-year intro APY on 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: 0.25% - 0.55% APY depending on balance. 1-year 1.01% intro APY on balances up to $250,000. Minimum deposit of $5,000. No monthly service fee.
  
• Money Market: 1.01% - 1.60% APY depending on balance. 1-year 1.75% intro APY on balances up to $250,000. No monthly service fee. Minimum deposit of $500.
  
• CD: Basic CD: 1.15% - 1.85% APY. Terms of 3 months to 5 years. Minimum deposit of $1,000. Yield Pledge CD: 1.40% - 2.10% 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 budgeting features to help students and young adults to manage their money better.

Top features:

• No opening minimums or monthly service fees
  
• Save without thinking with round-up rules
  
• High interest rates on your Protected Goals
  
• "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: Best 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 online checking option. Many travelers especially love using Schwab's checking account for the following reasons.

Top features:

• No opening minimums or monthly service fees
  
• Unlimited ATM fee refunds worldwide
  
• No foreign transaction fee on the debit card
  
• Free standard checks
  
• Free online bill pay and mobile check deposits

Current rates:

• Checking: 0.15% APY, $0.01 account minimum

Axos: Best Online Bank for Small Business

Axos Bank
If the perfect checking account for you is one with no monthly fees while offering rewards, you may have found your match with Axos Bank... Read full review

Small businesses trying to keep their fees in check often benefit from online banks. With lower minimum deposit requirements and fewer 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 service fees
  
• Large ATM network worldwide
  
• Free online bill pay and mobile check deposits
  
• First 200 transactions are free ($0.30/item afterwards)
  
• First set of 50 checks free

Online Banking Pros & Cons

PROS:

• Higher interest rates than traditional banks
  
• Often no (or very low) opening deposit
  
• Often no monthly service fees or balance requirements
  
• Convenience - manage your account 24/7 online
  
• Easy to open an account online

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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Before choosing an online bank, make sure to compare features like:

• High interest rates
  Online banks tend to offer higher APY but rates do vary.

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

• Opening deposit requirement
  Weigh the opening minimums against interest rates and features you want.

• 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.

• Reimbursement of ATM fees
  If a bank offers access to an ATM network, inquire about the fees you may incur and whether they will be reimbursed.

• Accessible customer service
  Without the ability to walk into a local bank, you need to be able to get a hold of reps when you have problems. Some online banks only superior 24/7 customer service by phone or even live chat.

• FDIC insurance
  This goes without saying: you want your money protected should anything happen to the online bank.

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

How to Make Deposits and Withdrawals

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Online 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 make deposits and withdrawals? Keep reading for the answer.

Making Deposits

You have these options for making deposits:

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

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

• 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:

• ATMs
  Some online banks have agreements with partner ATMs throughout the country. This may allow you to withdraw your funds without any fees.

• Debit card
  Some online banks offer a linked debit card with your checking account that you can use for purchases.

• Electronic transfer
  You can transfer your funds to a local checking account and then withdrawal from there via ATM. You'll have to allow a few days for the transaction to process.

• Checks
  Online checking accounts include checks (either free or for a small fee). You can use them as you would with a checking account at a brick-and-mortar bank.

Bottom Line

Online banking can be a great way to make more 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.