Best Online Banks

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. You will learn about both online-only options and traditional banks with a noteworthy online presence.

In This Article

11 Best Online Banks

Here are the top online banks of 2021:

  1. BBVA Bank: Best Hybrid Bank
  2. Chase Bank: Best Big Bank
  3. Axos Bank: Best Checking APY
  4. CIT Bank: Best Money Market Account
  5. Ally Bank: Best For CDs
  6. Discover Bank: Best For Fees
  7. Barclays: Best Online Savings Account
  8. HSBC Bank: Best International Hybrid Bank
  9. Aspiration: Best For Social Causes
  10. Varo Bank: Best Savings APY
  11. Wealthfront: Best Robo Advisor Account

1. BBVA Bank: Best Hybrid Bank

BBVA USA is headquartered in Birmingham, Ala., and is the 39th largest bank in the US in terms of assets. The bank operates both online and physical locations and is a subsidiary of Banco Bilbao Vizcaya Argentaria, which is a Spanish multinational financial institution.

BBVA has physical branches in seven states: Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. You’ll have more options if you live in one of those states, but for the purposes of this post, let’s review the bank’s top online features.

Online Products and Features

  • Banking Products: Two online checking accounts, two online savings accounts, CDs, credit cards, home loans, and personal loans
  • Interest Rates: 0.01% on Premium Checking; 0.01% on Online Savings; up to 0.20% on Money Market; 0.10% on CDs
  • Fees: $19 fee on Premium Checking, no monthly fees otherwise.
  • ATMs: 64,000 fee-free locations. BBVA, Allpoint, and 7-Eleven ATMs are all within the BBVA network
  • BBVA Mobile App: 4.8 stars (out of 5) in the App Store, 4.1 stars (out of 5) in the Google Play Store

Why We Like It

BBVA is an all-in-one online banking option, with multiple types of accounts and a variety of features. You’ll get the best of both worlds with the banking services of a big international bank, and the modern online functionality of an online bank.

That said, BBVA’s interest rates are quite low for a bank operating in the online space. Don’t expect to find high-yield savings accounts here (HYSAs). Currently, the highest Annual Percentage Yield (APY) is 0.20% in the BBVA Money Market.

2. Chase Bank: Best Big Bank

Chase Bank is the consumer banking subsidiary of JP Morgan Chase, which is the largest national bank in America in terms of assets.

As a member of the big four American banks, Chase is the most traditional option that you’ll see on this list. It makes the cut because the bank has managed to build a modern, user-friendly online presence.

Online Products and Features

  • Banking Products: No online-only deposit accounts. Eight checking accounts, two savings accounts, CDs, credit cards, home and car loans, investment accounts
  • Interest Rates: 0.01% on savings accounts, up to 0.05% on CDs
  • Fee Schedule: Monthly fees on most accounts (which can be waived); overdraft fees; non-Chase ATM fees
  • ATMs: 16,000 free to use Chase Bank ATMs nationwide
  • Chase Mobile App: 4.8 stars (out of 5) in the App Store, 4.4 stars (out of 5) in the Google Play Store.

Why We Like It

In a world that’s becoming more and more online vs. traditional, Chase finds itself in somewhat of a middle ground. The mobile app functionality is excellent, and you can seamlessly move money between accounts and navigate your whole financial picture online.

Chase is a great option for anyone interested in online banking but isn’t ready to completely cut the cord from physical bank branches.

The one downside to Chase Bank’s massive size is that the bank charges more fees than you would see with a true online bank. Furthermore, the interest rates are far from high-yielding.

3. Axos Bank: Best Checking APY

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.

Online Products and Features

  • Banking Products: CashBack Checking Account, Rewards Checking Account, High-Yield Savings Account, High Yield Money Market, CDs, home, personal, and auto loans.
  • Interest Rates: Up to 1.00% APY on Rewards Checking; 0.61% APY on High-Yield Savings; 0.60% APY on Money Market; up to 0.20% APY on CDs.
  • Fees: No monthly maintenance fees; $25 (or 5% of the amount overdraft) overdraft fee
  • ATMs: No Axos ATMs, but unlimited reimbursements for domestic ATM fees
  • Axos Mobile App: 4.7 stars (out of 5) in the App Store, 3.4 stars (out of 5) in the Google Play Store

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 1.00% if you meet four additional requirements.

Tasks to receive APY boosts include 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.

4. CIT Bank: Best Money Market Account

CIT Bank is a top 50 U.S. bank that was founded in 2000. CIT Bank is 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.

Online Products and Features

  • Banking Products: Interest-bearing checking account, high-yield savings account, Money Market account, CDs, home loans
  • Interest Rates: 0.10% APY on eChecking; up to 0.45% APY on Savings Builder; 0.50% APY on Money Market, up to .50% APY on CDs
  • Fees: No monthly account fees; $25 overdraft fee (overdraft protection with linked savings)
  • ATMs: No CIT ATMs — reimbursements up to $30 per month on ATM fees
  • CIT Bank Mobile App: 4.6 stars (out of 5) in the App Store, 4.1 stars (out of 5) in Google Play Store

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 competitive APY, but the CIT Money Market account stands out the most with an APY of 0.50%, no matter how much you deposit.

5. Ally Bank: Best for CDs

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.

Online Products and Features

  • Banking Products: Interest Checking, High-Yield Online Savings (HYSA), Money Market account, CDs, retirement accounts, home loans, auto loans, personal loans, brokerage services
  • Interest Rates: Up to 0.25% APY on Interest Checking; 0.60% APY on Online Savings; 0.50% APY on Money Market; up to 0.60% APY on CDs
  • Fees: No monthly account fees; $25 overdraft fee; $10 excessive transaction fee
  • ATMs: 43,000 fee-free Allpoint ATMs. ATM fee reimbursement up to $10 per month outside of the ATM network
  • Ally Mobile App: 4.7 stars (out of 5) in the App Store, 4.3 stars (out of 5) in the Google Play Store

Why We Like It

By all standards, Ally is an industry leader in the online banking world. 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 0.60% APY on CDs, for any term length, and any deposit amount, 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.

6. Discover Bank: Best for Fees

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.

Products and Features

  • Banking Products: Rewards Checking, Online Savings Account, Money Market Account, CDs, credit cards, Individual Retirement Accounts (IRA), personal loans, home loans, and student loans
  • Interest Rates: 0.50% APY on Online Savings; up to 0.40% APY on Money Market accounts; up to 0.60% on CDs
  • Fees: No monthly account fees; No overdraft fees; No annual credit card fees
  • ATMs: 60,000 no-fee ATMs
  • Discover Mobile App: 4.8 stars (out of 5) in the App Store, 4.5 stars (out of 5) in the Google Play Store

Why We Like It

While Discover is best known for credit cards, it’s also a formidable online banking option.

Discover’s Rewards Checking account offers 1% cashback on all debit card purchases. 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.

7. Barclays: Best Online Savings Account

Barclays is a British multinational bank that has been around for over 300 years. Headquartered in London, Barclays houses four core businesses: personal banking, corporate banking, wealth management, and investment management.

On this side of the pond, Barclays US operates as an online-only bank with just two accounts available.

Online Products and Features

  • Banking Products: Online Savings Account, Online CDs
  • Interest Rates: 0.45% APY on Online Savings; up to 0.30% APY on CDs
  • Fees: No monthly account fees; no minimum balance requirements
  • ATMs: No ATMs available for online accounts
  • Barclays Mobile App: 4.8 stars (out of 5) in the App Store, 4.2 stars (out of 5) in the Google Play Store

Why We Like It

Barclays US keeps things simple. There’s no checking option here, just savings and CDs. The rates for both account types are enticing, and you’ll easily be able to transfer funds over from your checking account at another bank.

8. HSBC Bank: Best International Hybrid Bank

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.

Products and Features

  • Banking Products: Online Checking, Online Savings, Online CDs
  • Interest Rates: 0.15% APY on Direct Savings; up to 0.40% APY on Direct CDs
  • Fees: No monthly maintenance fees; $35 overdraft fee (overdraft protection available with an HSBC line of credit)
  • ATMs: Free ATMs in the HSBC network. No HSBC fee for non-HSBC ATM withdrawals
  • HSBC Mobile App: 4.5 stars (out of 5) in the App Store, 3 stars (out of 5) in the Google Play Store

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.

9. Aspiration: Best for Social Causes

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.

Products and Features

  • Banking Products: Cash Back Checking, High-Yield Savings
  • Interest Rates: Up to 1.00% APY on savings
  • Fees: No monthly fee on Spend & Save; $15 monthly fee Aspiration Plus; No overdraft fees
  • ATMs: 55,000 fee-free Allpoint ATMs, plus one out-of-network fee reimbursement each month
  • Aspiration Mobile App: 4.8 stars (out of 5) in the App Store, 4.3 stars (out of 5) in the Google Play Store

Why We Like It

If giving back is important to you, you’ll be hard-pressed to find a more benevolent bank. 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 $15 monthly fee. However, this account also comes with the bank’s top-earning APY of 1.00%.

10. Varo Bank: Best Savings APY

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.

Products and Features

  • Banking Products: Online Checking, Online High-Yield Savings Account
  • Interest Rates: Up to 2.80% APY on Online Savings
  • Fees: No monthly fees; no minimum deposit or balance requirements; no foreign transaction fees
  • ATMs: 55,000 fee-free Allpoint ATMs; $2.50 fee for out of network ATM use
  • Varo Mobile App: 4.8 stars (out of 5) in the App Store, 4.5 stars (out of 5) in the Google Play Store

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 0.81%, making it the highest in this post. On top of that, Varo also offers a massive bonus APY of 2.80%, if you meet the following qualifying activities:

  • Make at least five debit card purchases each month
  • Receive direct deposits of $1,000 or more each month

If you do those things, 2.81% APY is yours, which is the highest currently available HYSA APY. It should be obvious that Varo Bank is one of the top online HYSAs.

11. Wealthfront: Best Robo Advisor Account

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.

The Wealthfront Cash account functions much like a standard online savings account but pays a respectable 0.35% APY on deposits. If you want, you can let Wealthfront’s Robo-advisor automatically move money across your accounts to maximize returns. You can even let your Robo-advisor pay bills, set aside cash for an emergency fund, and make additional investments.

Products and Features

  • Banking Products: Interest-bearing Wealthfront Cash Account, Robo-advisor accounts, personal loans
  • Interest Rates: 0.35% APY on Wealthfront Cash Account
  • Fees: No monthly service fees; No overdraft fees; No minimum balance requirements
  • ATMs: 19,000 fee-free ATMs
  • Wealthfront Mobile App: 4.9 stars (out of 5) in the App Store, 4.6 stars (out of 5) in the Google Play Store

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.

Not only can you earn 0.35% APY from your checking account deposits, but you can also 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.

To be fair, the interest rate in Wealthfront’s Cash Account isn’t as high as you’ll see with the top HYSAs. But 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.

Honorable Mentions

Frequently Asked Questions

Are online banks legit?

To put it simply — Yes. Online banks are just as legitimate as traditional brick-and-mortar banks. While it may be an adjustment for some to give up the experience of doing their banking 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.

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 or BBVA) 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.

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.