Best banks of 2020:
With an online bank, you give up branches. But you get other perks. You can earn a higher rate on your savings account or checking account because online banks have less overhead than banks with branches. The best online banks also charge low fees, if any, and support intuitive mobile apps. If you’re comfortable ditching branches, you may want to switch your checking and savings account to a new online bank provider to get these kinds of benefits. Bankrate compared thousands of data points to determine the nation’s best online banks for checking and savings accounts. We gave the most weight to savings interest rates and low-cost or free checking accounts.
Best online bank: Radius BankThe brand isn’t a household name, but Radius Bank earned the No. 1 spot among online banks for the combination of its mobile banking app, generous ATM fee rebates, its payout on checking and savings accounts, and its accessibility — the minimums to open a checking or savings account are fairly low. You can earn higher yields at other banks, but the Boston-based bank is competitive, especially for those with higher balances. If you have $2,500 to put into savings, Radius will pay 1.25 percent APY. Sock away more ($25,000 and up), and the Radius High-Yield Savings pays 1.65 percent APY. A $100 minimum deposit is required to open an account. While most banks don’t pay perks on their checking accounts, Radius stands out for paying 1 percent cash back on certain debit purchases. Even better, if you have at least $2,500 in your checking account, the bank will pay you 1 percent APY, and more if your balance is $100,000 and up. If you often take out cash, you will benefit from the bank’s generous ATM policy: There are an unlimited amount of ATM fee rebates if you go out of the bank’s network. The well-reviewed mobile app lets customers take care of the banking basics and more, like letting customers link other financial accounts to manage their money. READ BANK REVIEW
Top online bank: Bank5 ConnectBank5 Connect launched in July 2013 as an online-only division of BankFive in Fall River, Massachusetts. Here, you can earn high yields without paying steep fees. The online bank’s savings account pays an attractive rate (currently offering savers 1.85 percent APY). You only need $10 to open an account. To earn interest, however, you will need to deposit at least $100 into the account.Bank5 Connect’s checking account stands out for its perks: It pays 0.76 percent APY for customers who keep $100 in their account. You can also earn rewards for making purchases on your debit card at certain stores and restaurants. Bank5 Connect will refund ATM fees that are racked up outside of the bank’s ATM network and don’t exceed $15 per statement. The bank doesn’t charge you maintenance fees either so long as you ditch paper statements and receive them online. The mobile app earns high marks in the app stores. While the app doesn’t offer cutting-edge features, you can use it to save time on financial chores, like depositing checks.
Top online bank: Ally BankThis bank often makes the best banks list and for good reason. It has everything you need: a high-yield savings account, an interest-bearing checking account, and a mobile app that stands out from the competition combined with stellar customer service. You can get a higher yield at other banks. However, you will earn competitive APYs any day of the week at Ally. With its savings account, you will currently earn 1.60 percent APY. You won’t pay monthly maintenance fees or minimum balance requirements either — it doesn’t charge those fees. The direct bank’s checking account interest rate structure is tiered, so yields will change depending on your minimum daily balance. At the low end, you will earn 0.10 percent APY. While not much, it’s still something. Plus, there are no fees tied to the checking account. More recently, the bank has been testing digital features that help ease you into regularly saving small amounts of money from your checking account — a useful tool with many of us struggling to save. Among the bank’s mobile app standouts include debit card controls and a voice assistant to navigate the app. READ BANK REVIEW
Top online bank: CIBC Bank USACIBC Bank USA pops in our rankings for paying a highly competitive yield on its savings account. But you’ll need to deposit at least $1,000 to open the account. The bank’s myChoice Plus checking account stands out for paying interest and only requiring $50 to open the account. While its interest rate is meager, it’s something whereas many other checking accounts don’t offer any perks. However, there’s an important caveat — you can only open a checking account at a branch. (Update 9/25/20: CIBC now offers online checking account applications in select states/counties.)The Canadian Imperial Bank of Commerce is based in Toronto, while its U.S. headquarters are in Chicago. Banking centers are in Illinois, Michigan, Missouri, and Wisconsin. The mobile bank app reviews aren’t glowing, but the bank’s app lets you take care of the basics, like paying your bills and depositing checks with your phone’s camera. READ BANK REVIEW
Top online bank: Salem Five DirectSalem Five Direct impresses with a high-yield savings account that has no monthly fees. Right now, you can earn 1.91 percent APY on its savings account. You will, however, need at least $100 to open the account. Its checking account can also help you earn a little extra money. It pays 0.25 percent APY on your balance. You can also earn cashback on your debit card purchases and won’t pay a monthly fee for the account. The bank never charges you for ATM transactions and will reimburse up to a certain amount of fees others banks charge. While there’s nothing innovative about the bank’s mobile app, it scores well in the app stores and will let you tackle the important chores, like deposit checks and pay bills. Salem Five Direct is an online division of Salem Five Bank in Salem, Massachusetts.
Top online bank: HSBC DirectThe online bank’s biggest draw is offering a top-tier interest rate. At HSBC Direct Savings, the direct bank pays savers an impressive 2.05 percent APY, making it one of the highest APYs available right now. Even better, you can earn the APY regardless of how much, or how little, you park in the account. You only need to deposit $1 to open the account and there are no monthly maintenance fees. The online bank also pays its checking account customers something, but the APY is extremely low. You won’t, however, have to pay monthly maintenance fees. Plus, you only need to deposit $1 to open the account. If you write physical checks, this account isn’t for you — it doesn’t offer personal checks. The reviews of the mobile banking app disappoint compared to other online banks ranking on the list, but the app makes available some useful digital tools to help you budget and save for goals. READ BANK REVIEW
Top online bank: Discover BankDiscover Bank made a splash in 2019 by dropping all deposit account fees. Besides that, savers can also get a competitive rate. Right now, you’ll earn 1.70 percent APY on your savings account balance. It’s available to anyone and there is no account minimum requirement. Discover also offers a checking account that lets customers earn cashback on their debit card purchases. Free ATM access is plentiful, too. You can use 60,000 ATMs for free across the country. The mobile bank app is reviewed favorably. There, you can redeem rewards, check your balance, turn your debit card on and off, set up travel notifications and much more. READ BANK REVIEW
Top online bank: E-Trade Bank E-Trade is best known for its brokerage services but it also offers banking services through E-Trade Bank. You can find higher rates elsewhere, but the banking unit offers competitive yields. Right now, the savings account pays 1.75 percent APY on any balance. You will need to deposit $100 to open an E-Trade checking account, however, and it won’t pay you any interest. E-Trade’s checking and savings accounts pair with a highly regarded mobile app. If you also use E-Trade for your investments, the app works with both. In logging into your bank account, you will also see your investing account in the same view. As a brokerage and bank customer, E-Trade stands out for internal transfers, allowing you to move your money from one account to the other and then invest some or all of your funds immediately. Funds that are transferred to or from an external account are typically available the third day after the request. READ BANK REVIEW
Top online bank: Quontic BankQuontic Bank offers a competitive yield. The online bank with headquarters in New York currently offers 1.85 percent APY for savers. You will need at least $500 to open the account, however. You will earn interest with the checking account, but it’s tiered and based on your balance and how many transactions you make on your debit card. Regardless, you will have access to thousands of free ATMs nationwide. You will need to make a deposit of at least $500 to open an account. Through its mobile banking app, you will have access to everything you would expect, like the ability to deposit a check and pay your bills. READ BANK REVIEW
Top online bank: TIAA BankTIAA Bank will appeal to consumers who want a full-service online bank that also offers competitive rates. You can find higher yields elsewhere, but the online bank is paying savers a respectable 1.10 percent APY. You’ll need $25 to open the account and will want to make sure to keep at least that much in your account on a daily basis. Otherwise, you will pay the bank a $5 monthly fee. If you live in Rhode Island, this requirement is waived. Its checking account is also accessible: You only need $25 to open the account. Expect to pay a $5 monthly fee unless you live in New York or maintain a daily balance of $25.TIAA’s app scores well. While other online banks earned higher marks for their mobile apps, it offers what you need, like checking your balance and paying your bills. READ BANK REVIEW
