One thing has become increasingly clear in the personal finance industry: Online banks are on the rise.
In recent years, online banks are gaining a ton of traction by offering higher interest rates and low fee schedules compared to big national banks.
And the more that account holders become comfortable saying goodbye to traditional brick-and-mortar banks, the more attractive online banks become.
In this post, we examine the best online banks, along with the advantages and disadvantages of choosing one compared to a traditional brick-and-mortar bank.
13 Best Online Banks of 2023
Here are the top online banks in the U.S. you can open an account with today:
- Discover Bank: Best Overall
- Aspiration: Best For Eco-Conscious
- Axos Bank: Best Checking APY
- Capital One: Best Customer Satisfaction
- Varo Bank: Best Savings APY
- Quontic: Best Cash Back Rewards
- Chime: Best Automated Saving
- Ally Bank: Best For CDs
- Wealthfront: Best For Investors
- nbkc: Best All-In-One Account
- CIT Bank: Best Money Market Account
- Charles Schwab: Best For Travelers and HNWI
- HSBC Bank: Best International Hybrid
Best Overall
1. Discover Bank
Products
Checking, Savings, MMA, CDs
Fees
No monthly, overdraft or ATM
Interest Rates
1% Cash Back Checking; 3.60% on Online Savings
ATMs
60,000
Discover Bank is the online-only banking division of Discover Financial.
Along with Visa, American Express, and Mastercard, Discover is one of the world’s largest credit card brands, with over 57 million cardholders in the U.S.
While not as well known for their online banking products, Discover is one of the best overall.
Why we like it
Discover is a formidable online banking option.
Discover’s Rewards Checking account offers 1% cashback on all debit card purchases, on the first $3,000 in purchases each month. Discover savings accounts, money market, and CD options all come with respectable interest rates.
But with all of that said, the thing that sets Discover apart is its commitment to a truly fee-free banking platform.
All of the fees that you’ll see with traditional banks, such as monthly service fees on checking accounts and savings accounts, are nowhere to be found with Discover. The bank also doesn’t charge for official bank checks, check orders, replacing debit cards, and many other things.
Things to watch out for
- Savers won’t get as much out of a Discover checking account as those who actively use their debit card, since the account opts for cash back instead of an APY
- Discover doesn’t offer home or auto loans, so your banking relationship can’t help you when it comes time for big purchases
- No reimbursements for using out-of-network ATMs
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: 862 (2nd place!)
- BBB Grade: A+
- Apple iOS: 4.9 based on 3.2M ratings
- Google Play: 4.6 based on 200k ratings
Learn More:
Best For Eco-Conscious
2. Aspiration
Products
Spend & Save Account
Fees
$0-$8 monthly, depending on which plan you choose; no overdraft or ATM
Interest Rates
up to 3.00% APY on your savings
ATMs
55,000
Aspiration is a bank on a mission to help the world. Operating since 2015, Aspiration is an online-only, community-driven financial firm that runs on the mantra that you can do well while also doing good.
Aspiration is firmly committed to social causes such as income inequality, environmentalism, and education. Each year, the bank donates 10% of its profits to charities.
Aspiration also has some pretty awesome online and mobile banking features.
Why we like it
If the environment is important to you, you’ll be hard-pressed to find a more benevolent bank.
It’s one of the few B-Corp certified banks, gives 10% of its profits to charity, allows you to plant a tree with every debit card purchase, and they guarantee that your deposits will not be used to fund the oil industry.
What’s more, you also get a personal impact score that can help you understand the social and environmental impact of the businesses you’re shopping to help you choose brands that uphold your values.
Aspiration also has a new and interesting feel compared to traditional banks.
For example, the Spend & Save deposit account has a unique fee structure. Instead of automatically requiring a fee, Aspiration allows you to choose the fee that you think is fair. Yes, you can choose to pay $0 — and don’t feel guilty if you do!
If you upgrade to an Aspiration Plus account there is a $7.99 monthly fee (reduced to $5.99 if you pay annually). However, this account also comes with the bank’s top-earning APY.
Things to watch out for
- Account options are limited to their two Spend & Save plans and a recently launched credit card
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: N/A
- BBB Grade: N/A
- Apple iOS: 4.7 based on 21k ratings
- Google Play: 4.0 based on 10k ratings
Learn More:
Best Checking APY
3. Axos Bank
Products
Checking, Savings, MMA, CDs, Mortgages
Fees
No monthly, overdraft or ATM
Interest Rates
up to 3.30% APY on Rewards Checking; up to 0.61% APY on High-Yield Savings
ATMs
91,000
Axos Bank, formerly known as Bank of Internet USA, is an online-only bank based out of San Diego, California.
Axos was originally founded in 1999 and offers online bank accounts, personal loans, and an investment platform.
Why we like it
Axos has some of the best interest rates in the industry, especially when it comes to checking.
Axos Rewards Checking earns an APY of up to 3.30% if you meet four requirements.
First, to be eligible for interest at all, you’ll need to receive direct deposits totaling $1,500.
Then, you can receive APY boosts by completing additional requirements, such as making at least ten debit card purchases of $3 or more each month, maintaining a $2,500 minimum balance in their managed and self-directed trading accounts and paying on a consumer loan.
If you do those things, you’ll be rewarded with one of the best checking account APYs that you can find.
The interest rates for savings accounts are similarly some of the best around.
Things to watch out for
- You’ll need to jump through hoops to earn the highest checking rates
- Axos charges foreign transaction fees, unlike competitors on this list
- Low rates on CDs
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: 751
- BBB Grade: A+
- Apple iOS: 4.7 based on 5k ratings
- Google Play: 4.5 based on 2k ratings
Learn More:
Best Customer Satisfaction
4. Capital One 360
Products
Checking, Savings, MMA, CDs
Fees
No monthly; $35 overdraft; no ATM reimbursement
Interest Rates
3.40% HYSA; 0.10% Checking
ATMs
70,000
Capital One Bank is the fifth-largest consumer bank and the eighth-largest financial institution in the U.S.
As an online bank competitor, Capital One is a nice balance – a well-established online presence coupled with over 750 physical locations.
You can expect to find competitive interest rates and a nice variety of products and services.
Why we like it
In this year’s J.D. Power U.S. Direct Banking Satisfaction Study, Capital One was ranked as one of the best, with a score of 850. And in the National Banking Satisfaction Study, it came in first!
Contributing factors were low fees that are structured clearly, high APYs, and a user-friendly online banking experience.
Overall, Capital One offers a solid banking platform with numerous account options, respectable rates, and a wide variety of credit cards and investment products.
Things to watch out for
- No out-of-network ATM fee reimbursements
- The $35 overdraft fee can add up quickly
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: 850
- BBB Grade: A
- Apple iOS: 4.8 based on 4.3M ratings
- Google Play: 4.7 based on 1.2M ratings
Learn More:
Best Savings APY
6. Varo Bank
Products
Checking, Savings, Credit Builder
Fees
No monthly, overdraft; some ATM
Interest Rates
up to 5.00% APY on your savings
ATMs
55,000
Varo Bank is an online-only bank based out of San Francisco.
Founded in 2015, the initial goal of Varo was to serve as an alternative banking option for millennials, who were becoming increasingly disillusioned with traditional banking. In that light, Varo offers 100% of its banking services through an easy-to-use mobile app.
Why we like it
It’s hard for savers not to like Varo Bank’s interest rates.
The standard APY on Varo’s HYSA is 3.00%, making it one of the highest in this post. On top of that, Varo also offers a massive bonus APY of up to 5.00% for balances up to $5,000, if you meet the following qualifying activities:
- Receive direct deposits of $1,000 or more each month
- End the month with a positive balance in your Varo Bank Account and Savings Account
If you do those things, the higher APY is yours.
Additionally, Varo offers automated savings features similar to Chime: Save Your Pay and Save Your Change.
Things to watch out for
- The higher APY is limited to just $5k worth of savings
- Varo will charge $2.50 every time you use an out-of-network ATM
- Like Chime, Varo has partnered with Green Dot for cash deposits, which may charge fees
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: N/A
- BBB Grade: A+
- Apple iOS: 4.9 based on 110k ratings
- Google Play: 4.8 based on 145k ratings
Learn More:
Best Cash Back Rewards
6. Quontic Bank
Products
Checking, Savings, MMA, CDs, Mortgages
Fees
No monthly or ATM; $35 overdraft
Interest Rates
1.10% High Interest Checking, 4.05% HYSA
ATMs
90,000
Quontic Bank started as a community bank in 2009, and still operates a few branches in New York City.
Nationwide, however, its footprint is entirely online and it’s grown to managing $1B in assets.
Why we like it
Their most interesting products are their Cash Back Rewards checking accounts, for which there is both a Cash and Bitcoin variety.
The premise of both are the same: receive 1.5% cash back on your debit card purchases. They differ only in which currency you’ll earn rewards: USD or Bitcoin.
For savers instead of spenders, Quontic also offers a High Interest Checking account, which pays 1.10% APY on your deposit balance – even more than their HYSA! The caveat here is that you’ll need to swipe your debit card at least 10 times each month to earn, and the rate decreases for balances over $150,000.
Things to watch out for
- Because Quontic didn’t start out as an online bank but have instead pivoted here, their tech lacks the shine and innovative features compared to some competitors
- Their app isn’t well-loved on Android
- The Bitcoin Rewards Checking account is not available in every state, and has a relatively steep opening deposit requirement of $500
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: N/A
- BBB Grade: A+
- Apple iOS: 4.5 based on 185 ratings
- Google Play: 3.2 based on 40 ratings
Learn More:
Best Automated Saving
7. Chime
Products
Checking, Savings, Credit Builder
Fees
No overdraft or monthly; some ATM
Interest Rates
2.00% for every dollar in Savings
ATMs
60,000
Chime is an American-based fintech — meaning that it’s online-only and very similar to a bank. The company was founded in 2013 with a focus on providing a fee-free alternative to traditional banking.
Headquartered in San Francisco, Chime has seen swift growth, boasting over 10 million account holders and $1.5 billion in private funding.
Why we like it
An intuitive digital experience, straightforward products and features, and zero fees makes Chime a great choice.
We particularly love their automated savings features, which include Round Ups and Save When I Get Paid. With these, every debit purchase is rounded up and the difference is automatically put into your savings account, and you “pay yourself first” with a percentage of every paycheck also being transferred.
You’ll also get paid up to 2 days early, won’t incur any foreign transaction fees when you travel, and while you won’t have physical checks, you will have access to “Chime Checkbook” for free, which allows you to pay bills by sending checks anywhere within the United States.
Things to watch out for
- $2.50 out-of-network ATM fee
- For cash deposits, Chime has partnered with Green Dot, which may charge fees
- You’re required to have a Spend Account to qualify for the Savings Account, so Chime isn’t for you if you only want an online savings account
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: N/A
- BBB Grade: B
- Apple iOS: 4.8 based on 300k ratings
- Google Play: 4.5 based on 260k ratings
Learn More:
Best for CDs
8. Ally Bank
Products
Checking, Savings, MMA, CDs, Mortgages
Fees
No monthly, overdraft or ATM
Interest Rates
up to 0.25% APY on Interest Checking; 3.60% APY on Online Savings; Up to 0.80 APY on CDs
ATMs
43,000
Ally Bank is quite possibly the most well-known online-only bank in the U.S.
The bank started out as a division of General Motors, helping car dealers finance and maintain inventory.
Today, still headquartered in Detroit, Ally is now the 21st largest bank in the country in terms of total assets.
Why we like it
By all standards, Ally is an industry leader in the online banking world.
They consistently earn high customer satisfaction scores, with one contributing factor being their 24/7 phone support.
Plus, the bank’s competitive rates and nearly non-existent fee schedule are about as good as it gets.
All of Ally’s account options are top contenders, but the rate on CDs really stands out. What’s more, Ally offers a guarantee that if CD rates go up within 10 days after funding your account, the bank will honor the higher rate and adjust yours going forward.
We also like that, unlike many other online banks in this list, their product breadth makes it easy to bank all in one place. They have all of the traditional banking products, along with home, auto and personal loans, retirement accounts, and even brokerage services.
Things to watch out for
- Their rates, while competitive, aren’t the absolute highest
- 1% foreign transaction fee, so keep your Ally debit card at home when you travel!
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: 850
- BBB Grade: C
- Apple iOS: 4.7 based on 34k ratings
- Google Play: 4.1 based on 20k ratings
Learn More:
Best For Investors
9. Wealthfront
Products
Cash Account
Fees
No monthly, overdraft; some ATM
Interest Rates
0.10% Cash Account
ATMs
19,000
Wealthfront is a fast-growing fintech company that offers investment accounts, Robo-advisor services, personal loans, and cash accounts with checking and savings features.
Headquartered in Silicon Valley, Wealthfront is a unique member of this list because the company uses proprietary automation technology.
Why we like it
Wealthfront is an innovative fintech company that offers advanced investing and budgeting tools. If you don’t need physical branch access and want to keep both your investment accounts and everyday bank account in one place, Wealthfront is an appealing option.
You’ll earn an admittedly measly APY from your checking account deposits, but you can easily move money around into higher-earning investment accounts. Or, if you prefer to let Wealthfront’s Robo-advisor maximize your returns, it’s as simple as clicking a button.
You can even let your Robo-advisor pay bills, set aside cash for an emergency fund, and make additional investments.
With cutting-edge tech that is relentlessly focused on making account holders as much money as possible, there’s a ton of overall growth potential for your funds, compared to traditional banking options.
Other nice perks is the $1 million in FDIC insurance and that you’ll get paid up to 2 days early with direct deposit.
Things to watch out for
- Wealthfront will charge $2.50 every time you use an out-of-network ATM, and also doesn’t reimburse any fees charged by the other company
- A steep 2.75% foreign transaction fee
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: N/A
- BBB Grade: F
- Apple iOS: 4.8 based on 14k ratings
- Google Play: 4.6 based on 5k ratings
Learn More:
Best All-In-One Account
10. nbkc
Products
Checking, Savings, MMA, CDs, Mortgages
Fees
No monthly, overdraft or ATM
Interest Rates
1.50% APY Everything Account
ATMs
37,000
NBKC Bank is a growing online bank that offers bank accounts, loans, and credit cards for consumers and small businesses.
Formerly known as the National Bank of Kansas City, NBKC still operates a handful of brick-and-mortar branches.
Why we like it
nbkc takes a unique approach to personal banking by combining checking and savings into one account, which is called the nbkc Everything Account. Basically, you get all the practicality and flexibility of a checking account, coupled with the interest-earning potential of an HYSA.
The nbkc Everything Account has no minimum account balance, no overdraft fees, no maintenance fees, and no foreign transaction fees. This makes it a really flexible option.
You’ll also get access to features like automatic bill pay and savings goals to stay on track, and NBKC’s Financial Snapshot provides a comprehensive overview of your financial picture with linked accounts, credit cards, loans, and investments.
The interest rate, however, has definitely been more competitive in the past.
Things to watch out for
- Other banks and credit unions offer higher rates
- Having your savings intermixed with your regular checking account can make it easy for some people to overspend; take advantage of their savings goals to keep yourself accountable!
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: N/A
- BBB Grade: A+
- Apple iOS: 4.4 based on 250 ratings
- Google Play: 3.9 based on 300 ratings
Learn More:
Best Money Market Account
11. CIT Bank
Products
Checking, Savings, MMA, CDs, Mortgages
Fees
No monthly; $30 overdraft; some ATM
Interest Rates
up to 0.25% APY on eChecking; up to 1.00% APY on Savings Builder
ATMs
None; Reimburses up to $30 each month
CIT Bank is a top 50 online bank in the U.S. that was founded in 2000 as the online-only banking platform of the CIT Group.
The firm also owns and operates OneWest bank locations in California, but its primary function is the online platform.
Why we like it
CIT Bank is a top-rated online bank across the board.
The product selection is lean, so you don’t have to spend time weighing your options.
Each account comes with a respectable APY, but the CIT Money Market account boasts the bank’s highest APY – with no limit on how much you can deposit.
Things to watch out for
- Rates have dramatically decreased since the COVID pandemic
- Limited customer support hours compared to competitors that offer 24/7 live help
- No paper checks for the eChecking account
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: 801
- BBB Grade: B
- Apple iOS: 4.6 based on 6k ratings
- Google Play: 4.2 based on 2k ratings
Learn More:
Best For Travelers and High-Net-Worth Individuals
12. Charles Schwab
Products
Checking, Savings, Mortgages
Fees
No monthly, overdraft or ATM
Interest Rates
0.03% Checking; 0.05% Savings
ATMs
None, but offers unlimited ATM fee rebates worldwide
Charles Schwab Bank is the online banking subsidiary of the Charles Schwab Corporation (which is more commonly referred to as just Schwab).
The banking platform offers checking and savings accounts and is built to operate seamlessly with your investing experience.
Why we like it
Charles Schwab has won the J.D. Power Direct Banking Satisfaction Study for three years in a row.
While their rates knock them low on this list, if you’re a frequent traveler and an investor with a Schwab One brokerage account, their banking products are definitely worth checking out.
There are no service fees or account minimums, no foreign transaction fees, and the bank offers unlimited ATM fee reimbursements worldwide.
Those with large investment portfolios will also find Schwab’s Pledged Asset Line® a convenient way to borrow, without disrupting your investing strategy. You can use this non-purpose line of credit for anything from a new home purchase, tuition, new business startup, and more – for as low as sub-2%.
Things to watch out for
- Painfully low rates
- Their mobile app gets less-than-stellar reviews from Android users
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: 865 (first place!)
- BBB Grade: A+
- Apple iOS: 4.8 based on 500k ratings
- Google Play: 3.5 based on 21k ratings
Learn More:
Best International Hybrid
13. HSBC Direct
Products
Checking, Savings, CDs
Fees
No monthly or ATM; $35 overdraft
Interest Rates
0.15% Direct Savings; Up to 0.30% CDs
ATMs
Not Stated
HSBC is a British Bank with roots dating back to the 1800s. Today, HSBC serves more than 40 million customers globally, and its US presence is mainly consolidated in the New York area.
HSBC Direct is the bank’s U.S.-based, online-only platform, and has three different types of accounts. You won’t have access to physical HSBC locations or services, but you will be able to use HSBC ATMs and no cost.
Why we like it
HSBC’s physical locations in the US are somewhat limited, and if you don’t live in New York City or one of their other main hubs, you might be out of luck. That’s where HSBC Direct comes in.
The online-only option gives you the assurances of working with a huge global bank, while also allowing you to get everything you need in a banking partnership. If you frequently travel internationally, HSBC might be your best bet.
Things to watch out for
- Because HSBC Direct isn’t the company’s primary focus, you’ll find better rates from other banks who are hungrier for your business
- Limited number of products
Ratings and reviews
- J.D. Power Direct Banking Satisfaction Score: N/A
- BBB Grade: C-
- Apple iOS: 4.6 based on 31k ratings
- Google Play: 4.1 based on 6k ratings
Learn More:
Why Pick an Online Bank Instead of a Traditional Bank?
- Product Offering: Online banks offer many of the same banking products that you can find at traditional banks: checking, high-yield savings accounts, CDs, money market accounts, loans, and credit cards.
- Lower Fees & Higher Rates: However, because online banks don’t have the overhead costs of brick-and-mortar branches, they offer many of the same perks that draw members to a credit union: lower fees and higher rates.
- Sleek Mobile Apps: Additionally, their tech-first focus has driven a lot of innovative features and intuitive, sleek apps that aren’t necessarily seen at the big branch banks.
That said, the pandemic in 2020 certainly tested the value proposition of online banks. In the Direct Banking Satisfaction Study, J.D. Power uncovered that overall satisfaction with online banks has declined since last year. Why?
For one, rates have decreased drastically so that there is less separation between online banks and the big national chains. We see this reflected in the list above, where online banks that used to womp the national averages no longer offer rates that are really all that competitive.
Two, the pandemic brought about all sorts of unique financial situations, problems, and questions, so online resources weren’t nearly adequate enough.
This tested the customer service aspect of online banks, and many customers ended up frustrated. Specifically, J.D. Power’s study cited a lack of clarity of information and difficulty finding answers on the bank’s website to all of their questions.
Lastly, it’s worth noting that direct banks still hold less than 10% of all deposits. That means that big banks have significantly more resources available to continue to evolve and innovate, so you’ll definitely want to continue to monitor what the big brands offer.
Pros and Cons of Online Banks
All that said, many online banks still offer really unique features and benefits, and finding one that aligns with your financial needs and values can definitely be a great way to go.
Pros of Online Banks
- High rates. Generally, online banks offer the best rates on your savings, though these days the gap isn’t nearly as big as it used to be.
- Lower fees. National chains are known to nickel and dime you with fees: overdraft, card replacement, monthly maintenance fees, and more. As a general rule, online banks in the U.S. will have fewer fees by comparison.
- Easy-to-use digital banking. Online banks depend on your digital banking experience being straightforward and intuitive, so their websites and apps are typically easier to navigate.
Cons of Online Banks
- Depositing cash can be difficult. If you frequently handle cash, you’re likely better off with a bank that has a branch nearby. For one-off deposits, however, many online banks have partnered with retailers.
- No option to seek help at a local branch. While most of the time online banking is the more convenient option, there are situations – particularly problems that aren’t routine – when having the option for in-person help could be more straightforward than navigating yourself or by phone.
- Limited account types. Some online banks like Ally offer a wide array of products, but others are limited to just checking and savings accounts. Even if this isn’t an issue for you right now, it’s something to consider: when it comes time for big purchases like a car or home, it can be nice to have an established banking relationship. This can make it easier to qualify for a loan, or to get a bank’s best rates.
- Fewer signup bonuses. National banks like Chase and Citi offer consistent bank bonuses to new customers. Online banks are, by comparison, more hit or miss.
Online Banks We’ve Considered
Interested in learning about other online banks? Click on any of the banks below to read our full review.
| Bank | Bank | Rating | About | Founded |
|---|---|---|---|---|
|
Ally Invest | 9.0 | Ally Invest is a low-cost, high-performing online brokerage platform for investors of all experience levels. | 2009 |
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UFB Direct | 8.0 | A growing division of Axos Bank, UFB Direct’s competitive interest rates set it apart from the competition. | 2000 |
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Synchrony Bank | 7.0 | If high-yield is what you're after, then you've found a solid option in a Synchrony Bank savings account. As a savings specialist, Synchrony comes to the table with no monthly fees, relatively high APYs, and a user-friendly platform. | 2003 |
 |
Comenity Direct | 9.0 | If you're looking for a straightforward banking experience with more than competitive rates, Comenity Direct will serve you well. | 2018 |
 |
Bluebird By American Express | 9.0 | With Bluebird by American Express, there’s plenty to like. You’ll rarely need to worry about fees, and the card mirrors most of the features of major checking accounts. Plus, you’ll get access to tempting Amex offers without having to pay credit card fees. | |
 |
First Internet Bank | 8.5 | First Internet Bank is easy to use and offers plenty of different account options. Its high-end interest rates are among the best in the business, and it brings everything together with a highly rated mobile app and great customer service. | 1996 |
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Vio Bank | 9.0 | If you're looking to stash away some money, diversify your portfolio, or de-risk, you should give Vio Bank due consideration – and perhaps you'll find out they're just the thing you were looking for to reach your personal finance goals and dreams. | 1911 |
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TIAA Bank | 9.0 | Overall, there is a lot to like about TIAA Bank. You'll find plenty of account options and most of them come with higher interest rates than the national average. You're also covered with an expansive ATM network and TIAA's mobile app and customer service team seem to be keeping clients happy. | 1918 |
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USAA Bank | 9.0 | If you're enlisted or served in the past, USAA Bank could be a great option for you. While it does trend behind in on its savings account interest rates, overall, there is a lot to like. | 1922 |
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Charles Schwab Bank | 9.0 | Overall, Charles Schwab Bank is recommended for those who are already comfortable with Schwab’s investment platform and want all of their deposit and investment accounts in one place. | 1971 |
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Radius Bank | 8.0 | From a tech-forward online banking experience to the account options and customer service of a traditional bank, there's plenty to feel good about with Radius Bank. | 1987 |
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Marcus by Goldman Sachs | 9.0 | Overall, Marcus by Goldman Sachs offers one of the best online banking platforms available with a clean, user-friendly interface and high-earning account options. | 1973 |
|
Axos Bank | 8.5 | Competitive APYs on high yield savings accounts, minimal fees, and access to a wide range of financial products, are some compelling reasons to sign up with Axos Bank. | 2000 |
|
Discover Bank | 9.5 | Discover Bank allows you to have all your banking products in one place all with no fees. The bank also offers such competitive rates on savings accounts that it is 5x the National Savings Average. | 1911 |
|
CIT Bank | 8.5 | If you're comfortable with an online-only bank, CIT is a solid choice. Their parent company has been around since 1908, and the bank offers everything you'd expect from online-focused banks: rates the national banks can't compete with, an intuitive digital experience, and a fair fee structure. |
2000 |
|
Ally Bank | 9.5 | Ally is one of our favorite banks. They offer consistently high rates, low fees, and solid products covering your banking and investing needs. They're online-only, which is a driver for their favorable rates and fees, but that can be a deterrent for customers who prefer to have the option of in-person support. | 2009 |
Frequently Asked Questions
What is an online bank?
Online banks are financial institutions that operate entirely (or nearly entirely) on the Internet.
Rather than a traditional banking experience in a local branch, customers interact with internet banks from a computer or mobile device.
This means the ability for mobile check deposit, person-to-person transfers through Zelle®, custom balance alerts, the ability to freeze your debit card, request checks to be sent to pay bills, set up automatic transfers to your savings account, and more.
These days, all of the big brand banks have some tech component that allows you to bank online, but the smaller overhead costs of online banks typically allow them to offer higher rates on your savings and lower fees.
What’s more, the most innovative online banks also take the opportunity to differentiate themselves from traditional banks by offering unique features or benefits.
Are online banks legit?
To put it simply — Yes. Online banks are just as legitimate and safe as traditional brick-and-mortar banks. While it may be an adjustment for some to give up the experience of doing their banking at a branch in person, online banking is perfectly safe.
All of the banks in this post are FDIC-insured just like the big national banks. And, since these banks operate exclusively online, online bank security tends to be top-notch.
In fact, in some ways, online accounts can be safer than conventional accounts. eStatements and the elimination of paper checks prevent some of the traditional opportunities for fraud.
What is the best online bank?
It all depends on what the best bank experience looks like for you. First, focus on the features that are most important to you. From there, you should be able to pick the best online bank for you based on the above list.
Taking a step back, one of the biggest draws of online-only banks like Ally or CIT is that they don’t carry the overhead costs associated with physical locations and the employees that run them.
As a result, there’s more flexibility when it comes to offering competitive interest rates, charging minimal fees, and a better banking app.
That said, if you aren’t ready to take the full plunge into online banking, a traditional bank with an online presence (e.g., Chase), or hybrid banks (e.g., HSBC) could be a better fit.
What is the downside of online banks?
The biggest drawback of banking online is the lack of in-person support available if that’s something that matters to you.
There’s no escaping the fact that you won’t have the option to talk with a representative face-to-face like you would with a local bank or credit union. You also might run into issues locating no-fee ATMs or depositing cash.
That being said, for many people, all that’s needed are some simple financial adjustments. Once you become comfortable with convenient features like online bill pay, mobile check deposit, and Zelle, you won’t miss paper checks. You probably won’t miss commuting across town to visit your local branch, either.
Are online banks FDIC insured?
Yes, many online banks are FDIC-insured.
In fact, some fintech companies like Wealthfront on this list are partnered with multiple banks on the backend, and are therefore able to split your deposits across multiple banks (behind the scenes) to give you significantly more than the typical $250,000 coverage.
Which Online Bank is Best for Your Needs?
As technology continues to evolve each day, so too will the way you interact with your bank. Traditional banks like Bank of America and Wells Fargo are unlikely to ever go away.
However, the convenient perks of online banking products are becoming increasingly impossible to ignore.
Depositing, transferring, spending, investing, and saving money has never been easier to do on your smartphone.
No matter which bank you decide to go with, if you pick the option that makes the most sense for your financial situation, you’ll be well served by any of the online banks that you learned about above.
