Best Online Banks
When it comes to banking, you have choices like never before when looking for the best online banks. In fact, you can even choose between a brick-and-mortar bank or an online bank. With the rise in technology, your choices and options have greatly expanded. But that doesn’t make it any easier to choose.
So when trying to determine what is the best virtual bank, you should know what your needs are. Here are a few factors to consider when figuring out the best online banking for you.
What is the Best Online Bank – How Do You Choose?
There are several types of accounts to choose from. However, each bank has their own rules.
Some banks charge fees for some or all their accounts. All banks offer different APY rates.
Here are the basics of online banking and what to look for.
This type of account is most commonly used to deposit your paycheck, withdraw cash, and pay your bills. Here’s what to look for when searching for the best online banks.
Some banks still charge fees to keep your money at their bank. Save your money by finding a bank that doesn’t charge for the following.
- Monthly maintenance fees
- Free checking and savings accounts
- No balance or minimum balance requirements
- ATM reimbursement
While 61% of Americans aren’t paying banking fees, always ask about any possible fees associated with your banking account upfront before making a decision.
Overdraft protection is a smart feature to have with your bank account. It can help prevent you from bouncing a check, which could potentially affect your credit score.
Sometimes life gets busy and a mistake is made. That mistake shouldn’t cost you dearly.
So knowing the best online bank for lenient overdraft policies will help you save money and save your credit. Because if you choose the wrong bank, you could be charged multiple times in one day for the same mistake.
A basic savings account has limitations. However, it’s a great place to save money for emergencies or a rainy day fund.
That doesn’t mean you shouldn’t know the best online bank for a savings account. While the national average for earning interest in a savings account is currently 0.06%, online banks usually offer low fees and higher rates upward of 1%.
Don’t forget that most banks limit the number of monthly transactions made to a savings account.
Money Market Account
Like savings accounts, money market accounts often have a limited number of monthly transactions the bank will allow. Money market accounts also offer a slightly higher interest rate of 0.08% than savings accounts.
Money market accounts also have higher minimum balance requirements than savings accounts. But they come with a debit card and the ability to write checks.
Since savings accounts and money market accounts are so similar, when choosing an online bank, look for the bank with the:
- Lowest fees
- Best rates
- Most reasonable balance requirements
Certificate of Deposit
Certificate of deposits or CD’s, are perfect if you’re okay with saving and earning money. CD’s are actually timed deposits.
Which means you agree to leave your money in their bank for a specific period of time, usually between a few months and five years. By leaving your money in their bank, you’ll receive higher interest rates.
The longer you place your money in their bank, the higher the interest rates are.
Here’s what to look for when choosing the best bank for a CD.
- Terms you’re comfortable with, including the length of time.
- A higher rate than 1%
Beware that withdrawing your money before the end of the term will result in a costly penalty.
It’s important to know which online bank is the best for extra services. While the services you’ll enjoy certainly won’t be done face to face, if you’re into the convenience of not having to leave your home, online banking is a great choice.
- Most of your mobile banking can and will be done on your phone anywhere
- Online features like statements and budgeting tools help you easily keep track of your finances
- Access to ATMs nationwide and reimbursement for the fees
- Credit options: You’ll have access to loans for mortgages, home equity, and cars as well as credit cards, reward cards, and student credit cards
- Two-factor authentification for security purposes
So now that you know what to look for, here is our list of the top 10 online banks to choose from.
1. Ally Bank
What is the best online bank? According to GoBankingRates, Ally Bank definitely is.
They’ve been voted as 2017’s best online bank. They also won the same award las year.
- High savings currently at 1.00% APY
- High CD yields currently at 1.05% APY for a 12 month CD but jumps to 0.60% for balances over $15,000
- Great customer service with 42/7 customer support
- No minimum deposit requirement for checking or savings accounts
- ATM reimbursement up to $10 per statement cycle
Ally Bank is also a top 25 U.S. financial holding company.
Watch This Short Video About Ally Bank – The Best Online Bank
2. Discover Bank
What is the best online bank for earning cash back? That would be Discover Bank.
There’s a reason why Discover Bank is a great choice and part of it is its rewards program for their checking accounts.
But that’s not all. Discover Bank also has:
- No monthly fees
- 24/7 customer support
- 12-month CD’s that are among the highest yielding in online banks
- Remote check deposit
- Access to 60,000 ATMS
As for those rewards, if you qualify for the Cashback Checking account, you’ll earn cash back on up to 100 transactions each month. This includes debit purchases, paying your bills, and clearing checks.
With the potential to earn as much as $120 cash back each month, there’s a lot of incentive to look into this program.
Discover also offers credit cards that award you with cash back every time you make a purchase.
3. Bank5 Connect
What is the best online banking for competitive rates? Bank5 Connect earns that top spot for the second year in a row in the Best Online Banks top 10.
Bank5 Connect’s checking account offers 0.76% APY and has no monthly fees. Their savings account offers 0.90% APY and their 12-month CD offers 1.00% APY.
There are a few things you should know before choosing Bank5 Connect.
- A minimum deposit of $100 required to earn interest
- No 24/7 customer support via phone but does offer live chat
Besides their great competitive rates, Bank5 Connect also offers the UChoose Rewards program. With this program, you earn points by using your debit card.
Redeem those points for vacation packages, gift cards, and other items.
4. Internet USA
But only if you have their rewards checking account. If you do have their rewards account, you can enjoy perks like earning up to 1.25% APY when certain conditions are met.
Also, while Internet USA has a BauerFinancialStar Rating of 5 out of 5 because of its no-fee checking and 24/7 automated phone support, its yields are lower than other banks on this list.
Their savings account has a 0.61% APY and while that is amongst the lowest for online banks, it’s still higher than most brick-and-mortar banks.
5. Capital One 360
What is the best online bank that also offers physical branches? That’s Capital One 360.
Not only does Capital One 360 offer you the best of both worlds, they also offer:
- Free access to Allpoint and Capital One ATMs nationwide
- No monthly fees
- Mobile app available on Apple App Store and Google Play
- Great customer service
- Mobile check deposit
What’s in your wallet? With a Capital One 360 Money Market account, you’ll enjoy a high APY on balances starting at $10,000.
Current checking rates as of July 1, 2017, are:
- From $0-$49,000 you’ll receive a 0.20% APY
- Between $50,000.00 – $99,999.99 you’ll receive a 0.75% APY
- From $100,000 or more you’ll receive a 0.90% APY
USAA was started in 1922 when military personnel found it difficult to buy car insurance due to their military status. So, 25 of them got together and started their own insurance company!
Today, USAA is a Fortune 500 company and offers a lot more than just car insurance. They also provide:
- Life, renters, and property insurance
- Retirement planning services
- Financial planning services
- Mortgage loans
- Checking and savings accounts
- Access to shopping, travel, and car rental discounts
While USAA only has a few branches, you can still enjoy 10 free withdrawals from USAA preferred ATMs and up to $15 in reimbursement from non-preferred banks.
To join, you must have served or be serving in the military, or be the spouse or child of someone who served or is serving in the military.
Have A Look At This Video From USAA About Their Member Mission
7. Radius Bank
What is the best online bank for a hybrid checking and savings account in one place? Radius Bank offers these perks and many others.
- Unlimited ATM rebates
- Free ATM access worldwide
- Overdraft line-of-credit
- No monthly maintenance fees
- High APY on balances of $2,500 and up
- Pay a Friend feature lets you send money easily
Best of all, you’ll enjoy live chat, their ‘pay a friend’ feature, and a high-interest rate for their high-yield savings accounts.
With several products to choose from and an easy online application process, you can literally open a new account in minutes.
8. First Internet Bank of Indiana
What is the best online banking for long-term CDs? That’s First Internet Bank of Indiana because it offers a five-year CD that has the highest rate compared to other online-only banks.
If you’re looking for a CD with shorter terms, First Internet Bank of Indiana’s one-year CD also compares well with the rates of other banks. Better yet, when you deposit your funds, your interest rate is automatically locked in.
Joining is easy and takes only moments.
9. Nationwide Bank
The best online bank for people who aren’t worried about bouncing a check? That would be Nationwide Bank.
If you have plenty of money then Nationwide Bank is a great choice. For balances less than $100,000 they offer a competitive 1.05% APY on its 12-month CD.
But here’s where Nationwide Bank fails when compared to other online banks.
If you fail to meet certain requirements, Nationwide Bank will charge a monthly fee. So if you choose Nationwide you’ll need to:
- Maintain a minimum balance in your checking account
- Use direct deposit
- For savings accounts, maintain a minimum balance of $300 to avoid a fee
- Customer service is not 24/7
To join online have your contact information, address, and Social Security number on hand.
10. Synchrony Bank
What is the best online banking for high savings and CD rates? That’s definitely Synchrony Bank.
Here’s what you’ll love about Synchrony Bank:
- 1.05% APY savings account
- 1.25% APY 12-month CD
- ATM card for their savings account
However, like all great things, there are a few things you need to be aware of before you choose this online bank. Like if your savings account drops below $30 you’ll be charged $5 for a monthly service fee.
The CD also requires a monthly balance of $2,000 in order to receive the 1.25% APY. They also don’t offer checking accounts or have a mobile app to use.
Wondering how you’ll be able to make deposits without a mobile app? Synchrony Bank does offer remote check deposit and 24/7 phone support.
To join you’ll need your Social Security number, driver’s license or state ID card, and your date of birth. You’ll also need a bank account and routing numbers in order to transfer your funds electronically to Synchrony.
Your finances should be taken seriously. It’s worth it to take your time, get all the facts, and then choose the best online banking services for your needs. We’re dedicated to the intelligent use of credit so visit our website and learn more about how to make the most out of your money.
Get Control of Your Credit With Our Free Ebook
* indicates required