final verdict
Some online banks are better for checking, some for savings, and some for loans or investments. The best online banks can do it all, and Ally Bank does it, consistently offering some of the highest rates on accounts completely free of charge.
This, along with useful extras like savings buckets and savings reminder features, make it the best bank overall. You can use Ally Bank as a one-stop online store for all your financial needs, whether you’re looking to bank, borrow, or invest, and know you’re always getting a great deal.
Compare the best online banks
| Company | Minimum deposit | APY | Types of accounts |
|---|---|---|---|
| Allied bank Best overall | None | 1.60% for savings, 0.25% for checking | Chequing, Savings, CD, Money Market, Investment, Retirement |
| Sync Bank Great for saving | None | 1.65% for savings, no control | Savings, Money Market, CDs, Retirement, Credit Cards |
| Capital one Ideal for students | None | 1.30% for savings, 0.10% for checking | Checks, savings, CDs, credit cards |
| Discover Ideal for checking | None | 0% for checks (1% cash back), 1.70% for savings | Chequing, Savings, CD, Money Market, Retirement, Credit Cards |
| Charles Schwab Ideal for travelers | None | 0.18% for savings, 0.15% for checking | Check, Savings, CD, Investment, Retirement |
| Axos Bank Ideal for couples | None | 0.61% for savings, up to 1.25% for control | Checking, Savings, CD, Money Market, Investment |
How to choose the best online bank
Choosing the best online bank is all about finding the features that suit your needs. Here are some considerations:
- Rates: If you’re considering checking, savings, CD, or money market accounts, getting the highest rate possible will help you get the most out of your money. Go for banks that offer a high APY compared to competitors.
- Monthly fee: Monthly maintenance fees are the most common and they add up quickly. Now that there are so many free bank accounts, there’s no reason to choose one that charges a monthly fee.
- ATM fees: If you get an account that comes with an ATM card, make sure it doesn’t charge ATM fees. Other institutions may still charge you ATM fees when you use out-of-network ATMs, but the best online banks are now offering ATM fee discounts as well.
- Other expenses: Overdraft fees and foreign transaction fees are two other big issues to avoid. Many of the best online banks do not charge overdraft fees. You can also find checking accounts with no foreign transaction fees, which is important if you are traveling abroad.
- Minimum balance requirements: Some bank accounts require a minimum monthly balance to keep your account open, while others require one to avoid fees. The best online banks don’t have minimum balance requirements – that way you never have to worry about keeping your balance at a certain number.
- Account types: If you want to do all your banking in one place, you need a bank that offers it all. Although it might be a little less convenient, having different accounts at different online banks can help you get the best deals. For example, you can open a checking account with the best online bank for checking and a savings account with the best online bank for savings.
Online banks vs traditional banks
Traditional banks are the big stalwarts that operate primarily from physical locations, like Bank of America, Wells Fargo, Chase, and US Bank. Online banks operate primarily, or exclusively, online. Some may have a handful of branches while others may not offer physical locations at all.
Because online banks don’t have the overhead of operating physical branches, online banks tend to charge fewer and lower fees (the best online banks charge no fees) and offer lower rates. higher on your savings. That said, you won’t always get the full range of financial services, such as mortgages, personal loans, and retirement, that you can get from traditional banks.
Frequently Asked Questions
Are online banks safe to use?
Online banks are just as safe as traditional banks. Accounts at top online banks are FDIC insured for up to $250,000, which is standard for traditional banks as well. These accounts also have the same, if not more advanced, security features for online banking as other banks.
Does the FDIC insure online banks?
The FDIC insures online banks, and most online bank accounts are FDIC insured up to $250,000. This is standard for all types of banks.
Do you pay more fees with online banks?
You generally pay less fees with online banks. It’s cheaper for online banks to operate online, so you get some of those savings in the form of monthly maintenance fees, ATM fees, and sometimes even overdraft or transaction fees. foreign.
Methodology
To select the best online banks, we surveyed over 25 online banks, looking at rates, fees, rewards, minimum balance requirements, customer service, mobile app, and account types offered. These are the most important features when it comes to online banking if you want to minimize your costs, maximize your income, and enjoy a convenient and easy banking experience.
We’ve excluded all online banks that charge monthly maintenance fees on checking and savings accounts because there are so many that don’t. We have also not included banks that require high minimum opening deposits or high minimum monthly balances. A high APY was not a strict requirement if the bank stood out in other ways, such as waiving all fees. Likewise, banks with a minimum opening deposit requirement were considered, as long as it was low and the bank offered something in return, such as a high APY.
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