Best Digital Banks

Digital banks are financial institutions that operate entirely online, without physical branches. As the name suggests, with digital banking, all of your financial services are handled, well, digitally. From deposits to account monitoring to customer service, you rely on tools that exist entirely online.

So, what’s the benefit to you as a banking consumer? – Digital banks are nearly always better for your wallet.

Traditional banks charge lots of fees and offer bottom-of-the-barrel interest rates on your savings. On the other hand, digital banks don’t have the same overhead.

8 Best Digital Banks for 2022

Here are the top digital banks you can open an account with today:

  1. Axos Bank
  2. Discover Bank
  3. Quontic
  4. Current
  5. Chime
  6. Varo Bank
  7. Bluevine Bank
  8. Monzo

1. Axos Bank

Axos Bank is a fully-chartered banking solution. This means that it does not need to rely on a third party to provide its accounts and FDIC coverage. Essentially, it’s a traditional bank that happens to limit its operations to the digital space.

Much like Chime, there isn’t a lot to criticize about Axos. There are no monthly fees or minimum balance requirements, though most of its accounts do require a certain initial deposit to open.

That said, Axos is not entirely fee-free and does charge for certain actions like wire transfers. This might seem like a downside, but the reality is that most banks charge for these. Those that don’t (like Chime) only avoid doing so by not letting you send wires.

Furthermore, Axos stands out among digital banks with its wide variety of banking products, including multiple checking and savings accounts, money market accounts (MMAs) and certificates of deposit (CDs). It offers five different checking account options, two for savings and certificates of deposit (CDs).

Of its checking accounts, the two strongest are Essential Checking and Rewards Checking.

  • Axos Essential Checking is a standard digital checking account with no fees, unlimited ATM fee reimbursements, and express direct deposit.
  • Axos Rewards Checking pays a up to 1.25% APY, but you need to utilize a bunch of Axos’ financial products to max it out. To get the full rate, you must enroll in direct deposit, use your debit card, invest in both managed and self-directed trading, and take out a loan. It’s a lot, but even if you don’t get the full rate, you’ll still get credit for the pieces you do use. (Learn why it tops our list of Best Rewards Checking accounts)

On the savings end, your best best is Axos High Yield Savings, which earns a up to 0.61% APY on balances up to $25,000. The account is completely fee-free, but you need at least $250 to open an account.

Products

  • Axos Essential Checking
  • Axos Rewards Checking
  • Axos High Yield Savings

Features

  • No monthly fees
  • Regular sign-up bonuses for new customers
  • up to 1.25% APY
  • Unlimited ATM fee reimbursements
  • Early direct deposit
  • Top-rated mobile banking app
Axos Bank Logo

up to $150

Axos : Rewards Checking
Available nationwide

Details

2. Discover Bank

Discover might be best-known for its credit cards, but its digital banking services are on par with almost any other online bank. Like Axos, it has its own banking license, so it operates as an independent, chartered bank.

From a deposit account standpoint, Discover is about as fee-free as it gets. Both its checking and savings accounts options are entirely fee-free, aside from a $30 charge for outgoing wire transfers.

Discover’s Cash Back Debit account earns 1% cashback on your first $3,000 in purchases each month, for a maximum of $360 per year. This makes it a great alternative to a rewards credit card.

For savings, you have two solid options with Discover Online Savings and Discover Money Market. Online Savings comes with a 0.50% APY on all balances. If you want an account that’s a bit more flexible, you can opt for the Money Market Account. The APY is slightly lower at up to 2.95%, but it comes with the benefit of an included debit card.

Discover Bank also has an outstanding reputation when it comes to overall customer experience, but its mobile banking experience is among the highest-rated of any bank. Its mobile app has an incredible 4.9-star rating (out of 5) in the App Store and a comparable 4.7-star rating (out of 5) in the Google Play Store.

Products

  • Discover Cashback Debit
  • Discover Online Savings Account
  • Discover Money Market Account

Features

  • 1% cashback rewards
  • No monthly fees
  • 60,000+ fee-free ATMs
  • 3.00% APY
  • Top-rated mobile banking app
  • Zelle

3. Quontic

Quontic might not have the name recognition of some of the other banks listed here, but it’s well worth your attention. As possibly the most innovative digital bank right now, it’s also a government-designated Community Development Financial Institution (CDFI). This means that it provides inclusive lending services to a diverse group of borrowers that other banks might push away.

As of January 1, 2022, Quontic has made a lot of changes, which earned it a place on this list. Among these changes is the elimination of 12 different bank fees, including those for overdrafts and domestic wires.

Dropping those fees is even more exciting when you consider what Quontic already had to offer. Its Bitcoin Rewards checking account is truly one of a kind and earns APY back in Bitcoin on all eligible debit card purchases. Plus, if you aren’t a crypto person, you can opt for the high-interest checking account, which comes with 1.10% APY.

Its savings account, called High Yield Savings, comes with an impressive 3.20% APY. Like its options for checking, there are no monthly fees, and you can open an account with as little as $100.

Products

  • Bitcoin Rewards Checking
  • High-interest Checking
  • High Yield Savings

Features

  • No monthly fees
  • Bitcoin or cashback rewards
  • 1.10% APY
  • 90,000+ fee-free ATMs

4. Current

Rounding out the list is Current Bank, an all-in-one digital bank account. Current is centered around the idea that premium banking should be accessible and affordable and aims to help anyone improve their financial outcomes.

Current offers one account with 2 different tiers: Standard, and Teen. Current recently removed monthly/annual fees on all their accounts. Let’s take a look at the features of each one:

Current Account (Standard)

  • Exclusive card with Tap to Pay
  • Early direct deposit
  • Spending Insights
  • 3 savings pods with 4.00% APY
  • Gas station authorization holds immediately released
  • Overdrive overdraft protection

Teen

  • White or Black Card
  • Standard direct deposits
  • 1 Giving Pod for donations
  • Gas station authorization holds immediately released
  • Overdrive overdraft protection

5. Chime

With Chime, there’s a lot to like. If you think about all of the benefits of digital banking in general, Chime checks virtually all of the boxes.

To start, Chime simply does not charge fees. This means no monthly fees, no minimum balance fees, no overdraft fees, and so on. The only fee you could see is one for an out-of-network ATM withdrawal. Fortunately, with a free ATM network of over 60,000 cash machines, this isn’t likely to be a problem.

From there, Chime continues to impress. Its checking account comes with a Visa debit card, and there’s no replacement fee if you lose it. You can also use its SpotMe feature for fee-free overdrafts, and you can expect your direct deposits to arrive up to two days early. Chime Checking also makes automatic transfers to your linked savings account a breeze.

With Chime High Yield Savings, you can round off your debit purchases and drop the remainder into your savings account. Plus, you can use Save When I Get Paid to automatically contribute a percentage of each paycheck toward the long term.

All of this is sure to add up with Chime’s top-tier 2.00% APY. The rate is 8 times the national average, and it applies to all of your savings, no matter what your balance is.

Combine all of this with a mobile app that has 4.8 stars (out of 5) in the App Store and 4.5 stars (out of 5) in the Google Play Store, and you’ve got a sure winner.

Products

  • Chime Checking Account
  • Chime Credit Builder
  • Chime High Yield Savings Account

Features

  • No monthly fees
  • 60,000+ fee-free ATMs
  • Fee-free overdrafts
  • 2.00% APY
  • Top-rated mobile banking app
  • Early direct deposit

6. Varo Bank

Varo is another online bank that’s managed to acquire its very own bank charter. It was founded in 2015 and currently serves more than 6 million customers.

At first glance, Varo appears to be a run-of-the-mill digital bank. It has extremely few fees, a highly competitive APY on its savings account, and a solid network of free ATMs. Those features in themselves would be enough, but Varo manages to take it a little further with some unique additions.

First, when you shop with your Varo card at certain retailers, like Walmart, CVS, and the Home Depot, you get cashback. Just visit the Perks tab in the Varo app, add your deal, and watch your cashback balance grow. When your balance reaches $5, Varo automatically transfers it to your bank account.

​Varo also goes against the grain with its savings account. Its standard savings rate of 2.00% is impressive, but it also gives the opportunity for balances up to $5,000 to earn up to 5.00%. Here’s how it works:

First, receive direct deposits of $1,000 or more in your checking. Then, end the month with a positive balance in your Varo Bank Account and Savings Account, and you get the maximum rate.

Varo also operates as a small-time lender with Varo Advance. There’s no interest and Varo is transparent about the fees they charge. You can borrow up to $100 at a time.

Products

  • Varo Bank Account
  • Varo Savings Account
  • Varo Advance
  • Varo Believe

Features

  • No monthly fees
  • 55,000+ fee-free ATMs
  • ​up to 5.00% APY
  • Interest-free cash advances
  • Up to 6% cashback
  • Early direct deposit

7. Bluevine Bank

Our top pick for small business digital banking is Bluevine. This option focuses entirely on its business checking account and consistently ranks as one of the top options for startups or entrepreneurs.

Bluevine is an all-in-one account built for small businesses. It’s completely fee-free and aims to make the day-to-day of running your business a little easier.

The Bluevine Business Checking account has no monthly fees or minimum requirements, and you can make unlimited transactions. You also get free ATM withdrawals at all MoneyPass locations, plus an awesome 2.00% APY on balances up to $100,000.

You can also use it to borrow money to run your business. With Bluevine loans, you can apply for a line of credit, up to $250,000.

Products

  • Bluevine Business Checking
  • Bluevine Business Loans

Features

  • No monthly fees
  • No minimum balances
  • ​Unlimited transactions
  • 37,000+ fee-free ATMs
  • 2.00% APY
  • Credit lines up to $250,000

8. Monzo

Monzo is a UK-based digital bank, where app-based financial institutions are known as challenger banks. Along with other banks like Revolut, Monzo is one of the original and most popular challenger banks in the industry.

Overall, Monzo US is an option that has a ton of potential, even if it’s a bit limited at the moment. The bank is still getting off the ground in the US but comes with enough functionality to merit a place on this list.

Some of what we love about Monzo is based on what it’s accomplished in the UK, where it boasts more than four million customers. That said, even in its infancy, the US version still has a lot to like.

Monzo is an all-in-one bank account, so it can serve as both your checking and savings in one convenient spot. There are no fees to worry about, and the platform is designed exclusively for your mobile device.

Most impressively, Monzo puts budgeting and savings on autopilot. With its intuitive tools, you can easily track and adjust your spending. Plus, with Savings Pots, you can automatically roll over spare change and create various Pots for whatever you’re saving for.

Of course, one glaring weakness of Monzo US is its lack of an APY associated with the account. This might make it a tough sell, but Monzo assures that interest will be available stateside soon.

Products

  • Monzo Bank Account

Features

  • No monthly fees
  • Seamless mobile banking
  • Intuitive budgeting tools
  • Savings Pots

Frequently Asked Questions

What is digital banking?

As the name suggests, with digital banking, all of your financial services are handled, well, digitally. From deposits to account monitoring to customer service, you rely on tools that exist entirely online.

Which is the best digital bank?

This might seem like a non-answer, but it depends. Banking comes down to you as an individual, so the best one is the one that best suits your personal needs.

How do digital banks work?

Mostly, they work in the same way as traditional banks. But, in many ways, they work better.

The biggest difference is the lack of physical branches. You might miss it if you prefer in-person support, but otherwise, the adjustment is fairly seamless.

Which is the biggest digital bank?

Ally Bank is by far the biggest digital bank. In fact, it’s one of the biggest banks in the US, period. Though it’s not included it in this list, rest assured that it’s still an excellent option for digital banking.

Which Digital Bank is Best For You?

So, now that you know a little more about the top digital banks, you should be a little closer to finding the right one for you.

Fortunately, it’s almost always incredibly easy to sign up with any digital bank. You can handle the whole process online, and it rarely takes more than a few minutes (assuming you have all your information ready).

No matter which option you go with, make sure that the bank you chose is working for you and not the other way around.