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The best online banks of March 2021
|Institution||Savings APY||Standout feature||Next steps|
|0.50% APY||Savings tools||Learn More|
|0.61% APY||ATM fee refunds||Learn More|
|0.40% APY||Customer satisfaction||Learn More|
|0.50% APY||Early direct deposit||Learn More|
|0.40% APY||Variety of products||Learn More|
|0.40% to 2.80% APY||High APY||Learn More|
Many of us grew up making the journey to a brick-and-mortar bank to hand a paper check to a teller — but this isn't necessarily the norm anymore. Thanks to online banks, you can now bank without leaving your home.
Online banks offer more than just convenience. Because they don't have to pay for physical branch locations, online banks typically pay higher interest rates and charge fewer fees.
Below, you'll find our best online bank picks right now. We know "best" means something different for everyone, so we've listed each bank's strengths, as well as its limitations.
Our expert panel for this guide
We consulted banking and financial planning experts to inform these picks and provide their advice on finding the best online banks for your needs. You can read their insights at the bottom of this post.
We're focusing on what will make an online bank most useful, including customer service, fees, rates, and more.
How our list compares to other publications
Research is an important part of choosing an online bank, and Business Insider isn't the only website looking for the best online banks. To help you make a decision, we've compared our top picks with lists from other publications.
Keep in mind that each publication has different methodologies for identifying the "best" online banks. We included a checkmark under each publication name if it recommended an app in its roundup.
|Personal Finance Insider||Bankrate||Forbes||Nerdwallet||The Balance|
Learn more about the best online banks of 2021
Why it stands out: Ally doesn't have minimum opening deposits for any of its accounts, so you can get started with any amount.
The Ally High Yield Savings Account makes it especially easy for you to save. You can set up separate savings buckets for different goals, such as Emergency Savings or Travel Fund. The Surprise Savings feature assesses your checking account balance three times per week to determine how much you can afford to save, then transfers money into your savings account.
You can contact Ally customer support 24/7, either over the phone or via live online chat.
What to look out for: Checking account. The Ally Interest Checking Account is a solid account, but it doesn't come with any special features, such as cash back or a competitive interest rate. If you want a rewards checking account, you may want to go with one of the other banks on this list.
Why it stands out: Axos offers several types of, so you'll likely find one that fits what you're looking for. Axos already has a large ATM network, and it's generous about refunding fees an out-of-network ATM provider may charge you. Three of its checking accounts reimburse an unlimited amount in ATM fees each month.
What to look out for: Initial deposit. You'll need at least $250 to open an Axos High Yield Savings Account.
There are also a few requirements to earn the full 1.25% APY with an Axos Bank Rewards Checking account. You'll earn 0.4166% for $1,000 in monthly direct deposits, another 0.4166% for using your debit card 10 times per month, and another 0.4116% for using the card a total of 15 times in a month.
Why it stands out: Capital One ranks as No. 1 on the JD Power US National Banking Satisfaction Survey. This study evaluates customers' experiences with banks and measures factors such as trust, handling problems and complaints, and saving time and money.
Capital One doesn't require any minimum opening deposits. It also has branches and Capital One cafes sprinkled around the US, so it's a good option if you like online banking but want the option to speak with a banker face-to-face.
What to look out for: No out-of-network ATM fee reimbursements. You can use your debit card at over 39,000 ATMs nationwide for free, but unlike many online banks, Capital One doesn't reimburse any fees charged by out-of-network ATM providers.
Why it stands out: With Chime, you can receive your direct deposits up to two days early. This means you can access your money earlier and start earning interest sooner if you put money into your high-interest Chime Savings Account.
Chime doesn't charge foreign transaction fees, making it a worthwhile option for international travelers.
What to look out for: Savings account. You must open a checking account to qualify for a Chime Savings Account, so this banking platform won't be a good fit if you only want to open a savings account.
Why it stands out: Discover is a good option for people who want to do all their banking, investing, and borrowing with one institution. It offers a wide range of products, including credit cards. It also has a strong cash back checking account that lets you earn 1% back on up to $3,000 of purchases each month.
What to look out for: Minimum deposits. While you don't need to place an initial deposit for a checking or savings account, you'll need at least $2,500 to open a money market account or CD.
Why it stands out: Varo has a tiered interest rate system, so you'll earn a better rate when you make at least five debit card purchases and receive $1,000 in direct deposits each month. Even if you don't qualify for the highest rate, Varo's lower rate is better than what most banks pay.
What to look out for: Tiered rate system. Again, Varo's lowest rate is still very good. But if you're intent on earning the highest rate possible, be sure to monitor your debit card purchases and direct deposits.
Other online banks we considered and why they didn't make the cut
- American Express (Member FDIC): American Express pays a competitive APY on savings account balances, but the bank doesn't offer a checking account.
- Alliant Credit Union (Federally insured by the NCUA): This is a good option if you want a credit union instead of a bank, but like most credit unions, Alliant only compounds interest monthly rather than daily.
- Barclays (Member FDIC): Like American Express, Barclays offers solid rates but doesn't provide a checking account.
- Radius Bank (Member FDIC): This online bank offers a wide range of account types, but rates are low and minimum account balances are high.
- Bank5 Connect (Member FDIC): Bank5 Connect has decent checking and savings accounts, but you can't access the bank if you live in Massachusetts or Rhode Island.
- CIBC Bank (Member FDIC): This online bank offers a variety of checking and savings accounts, but most require a minimum opening deposit or charge a fee if your balance falls below a certain amount.
- Salem 5 Direct (Member FDIC): This is a solid online bank with some physical branches, but you'll pay a fee if you conduct a transaction in a branch that could have been done online.
- HSBC Direct (Member FDIC): The HSBC Direct mobile app has received negative reviews in the Apple and Google Play stores.
- Marcus by Goldman Sachs (Member FDIC): Even though Marcus by Goldman Sachs is a good online bank overall, it doesn't offer a checking account.
- Wealthfront: You might like Wealthfront if you're comfortable keeping your savings and spending money all in one account.
- E*TRADE Bank (Member FDIC): This online bank pays low rates on savings and checking accounts.
- Quontic Bank (Member FDIC): You have plenty of bank account options to choose from with Quontic Bank — but you need to make 15 debit card transactions per month to earn the competitive APY on its high-yield checking account, and its high-yield savings APY is lower than what you'll find with our top picks.
- TIAA Bank (Member FDIC): TIAA Bank offers respectable rates, but its checking and savings account rates drop a bit after the first year.
- Vio Bank (Member FDIC): This online bank pays one of the highest savings rates in the industry (which is always subject to change), but it doesn't offer a checking account.
- CIT Bank (Member FDIC): This is a solid online bank, but you'll need between $100 and $1,000 to open bank accounts, and it doesn't provide 24/7 live customer service over the phone like Ally does.
- Synchrony (Member FDIC): This online bank pays a competitive rate with no minimum balance on savings accounts, but you can't open a checking account.
- NBKC Bank (Member FDIC): NBKC is a good bank overall, but your checking and savings are rolled into one account.
- FNBO Direct (Member FDIC): This is a respectable online bank, but its overdraft fees are pretty steep.
- MemoryBank (Member FDIC): This online bank only offers checking and money market accounts, and you'll pay a $15 fee if your checking account balance falls below $1,000.
- Brio Direct (Member FDIC): You'll find competitive savings rates at Brio Direct, but you can't open a checking account with this online bank.
- USAA Bank (Member FDIC): This could be a good online bank for military members and families, and new recruits can get paid a day early; however, USAA's rates are low.
- Charles Schwab (Member FDIC): Charles Schwab provides unlimited out-of-network ATM fee reimbursements and doesn't charge foreign transaction fees, but its rates are low.
There are a lot of online banks out there. Through our research, we've found that the best online banks offer a wide range of products, high bank account rates, low fees, and effective customer service.
While interest rates are an important aspect of any online bank account, several offer the same annual percentage yields (APYs). To differentiate between them, we also considered minimum deposit and balance requirements, fees, ATM access and fee reimbursement, mobile apps, and other standout features.
We also took customer service into account, because with an online bank, you don't have the option of walking into a branch to speak with a representative.
We reviewed over two dozen institutions to identify the strongest options. We also cross-referenced our list against popular comparison sites like Bankrate and NerdWallet to make sure we didn't miss a thing.
Frequently asked questions
Why trust our recommendations?
Personal Finance Insider's mission is to help smart people make the best decisions with their money. We understand that "best" is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.
What is an online bank?
Many brick-and-mortar banks allow you to bank online — but an online bank has you bank primarily or exclusively online. Some online banks do have a couple physical locations, but they still operate digitally for the most part.
Why choose an online bank over a brick-and-mortar bank?
There are a few downsides to choosing an online bank over a brick-and-mortar bank. For example, you may miss being able to speak with a banker face-to-face. And if you need to deposit cash regularly, you're out of luck with an online bank.
However, because online banks don't have to pay for physical branch locations, they typically pay higher rates and charge fewer fees. This means you can earn more and spend less with your bank.
The experts' advice on choosing the best savings account for you
To learn more about what makes a good online bank and how to choose the best fit, four experts weighed in:
- Tania Brown, certified financial planner at SaverLife
- Roger Ma, certified financial planner with lifelaidout® and author of "Work Your Money, Not Your Life"
- Mykail James, MBA, certified financial education instructor, BoujieBudgets.com
- Laura Grace Tarpley, associate editor of banking, Personal Finance Insider
Here's what they had to say about banking online. (Some text may be lightly edited for clarity.)
How can someone determine whether a bank is the right fit for them?
Tania Brown, CFP:
"Obviously, you want to make sure it's FDIC insured. Also, your banking experience — do you like walking into a bank? Well, then you need someone local. Do you just not care if you ever see your bank? Then you're okay online. Do you write checks? Do you not write checks? So it's thinking through how your experience with it is going to be before you make that decision."
Laura Grace Tarpley, Personal Finance Insider:
"I would look for the bank that charges you the least in fees. This means either no monthly fees, or you qualify to waive the monthly fees. If you never overdraw from your account, then a bank's overdraft fees won't matter much to you. But if you occasionally overdraw, then I'd look at the fees or overdraft protection options."
What should someone look for in an online bank?
Tania Brown, CFP:
"With an online bank, absolutely online customer service, because you do not have the advantage of walking inside and talking to a human being. How often are you able to get them? What are their hours?"
Roger Ma, CFP:
"How onerous the transfer process is, transferring money in and transferring money out. Is it same day, next day? Is it pretty easy to sync a brick-and-mortar checking account to this particular high-yield savings account?"
Mykail James, CFEI:
"When it comes to online banks, you want to be a little bit more strict about what type of interest rates they're providing. That's the biggest thing, because online banks are supposed to have the higher interest rate because they don't have the overhead of the brick-and-mortar. You want to make sure that it's well above the national average. What type of securities do they provide? Do they have two-factor identification? If it's an online bank, they should definitely have — at the bare minimum — two-factor authentication in how easy it is to change your passwords and things like that, because you want to be a little more hypersensitive about the cyber security for a strictly online bank."
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.