The best online banks | Money

Highlights of the best online banks

• Online banks often have lower operating costs and this typically translates into lower fees and higher interest rates than traditional banks.

• Online banks can be more convenient for on-the-go transactions and mobile check deposits.

• Opening accounts at these financial institutions is generally a quick and easy process.

• Make sure your online bank has strong security features, such as firewalls, site encryption, and fraud monitoring. This is usually written in small print.

• Most online banking services are FDIC insured.

Online banking has become one of the most popular ways for consumers to manage their financial transactions. The ability to access banking services 24/7 (often via mobile app) means you can transfer funds, pay bills and monitor your accounts whenever it’s convenient. However, the benefits of an online bank account go beyond 24-hour availability. Without the need to maintain physical physical branches, digital banks have lower overhead costs and can pass those savings on to their customers through zero or low fees and competitive interest rates.

The best online banks chosen for 2024

The banks listed below are in alphabetical order.

The best reviews on online banks

Ally Bank ranks in the top three in J.D. Power’s 2023 U.S. Direct Banking Satisfaction Study for its checking and savings accounts, making it our top pick for customer service. But Ally won’t just treat you well; it also pays an excellent 4.35% APY on its savings account.

You can also use Ally’s “boosters” to boost your savings: set up recurring transfers from your checking account, round up your purchases for automatic deposits, and be pleasantly surprised when Ally finds extra money in your checking account that can be safely transferred to savings.

Our pick for the online account with the best relationship rewards is Axos Bank’s Rewards Checking. You start by earning a great interest rate of 0.40%, but you can get up to 3.3% APY when you sign up for direct deposit, use the free Personal Finance Manager service, and have personal loans or investment accounts. The more relationships you have with the bank, the higher the rate will be.

Plus, you’ll receive unlimited refunds for domestic ATM fees and can earn a $300 welcome bonus if you reach your account balance and meet the following requirements:

• Funded within 30 days of opening

• Average daily balance of $7k

• Have eligible direct deposits totaling at least $5,000 each month for the first 7 months

The Bank5 Connect High Interest Checking Account is our pick for the best high-yield checking account. You’ll earn 2.7% APY on balances over $100 without the need to open multiple accounts or establish banking relationships. You also have the opportunity to earn cash back when you sign up for the Purchase Rewards program. Other account benefits include up to $15 in ATM fees from other banks refunded per statement cycle (and no Bank5 Connect out-of-network ATM fees).

Barclays wins this year’s best low-fee bank. The Online Savings Account does not have annual or monthly maintenance fees and the commissions it provides are very low. Returned deposit and insufficient funds fees are just $5 per item, much better than other banks we considered. In addition to very few fees, you will earn 4.35% APY on your savings account.

If all you want is a savings account that earns a great interest rate, then Bread Financial’s High Yield Savings Account is for you. This high-yield savings account pays an interest rate of 5.15%, the highest among the online banks we reviewed. The minimum opening balance is $100 and there is no monthly service fee. You’ll also get a great high APY of 5.35% on Bread’s 1-year CD.

We chose Discover as the best online bank overall because of the high interest rate paid on its savings accounts and certificates of deposit (all earn at least a competitive 3.75% APY, have low opening balances, and an overall lack of fees. Plus, you get free overdraft protection and can earn up to 1% cash back per month on debit card purchases when you open a Discover Cash Back debit account. There is no minimum balance required to open a account and you will have access to over 60,000 fee-free ATMs also reward credit cards and a variety of lending options.

While we picked individual bank checking and savings accounts as the best for earning a high interest rate, EverBank stands out because it pays higher-than-usual APYs on all of its deposit accounts. In fact, the bank is committed to keeping interest rates within the top 5% of competitive accounts.

You can earn a decent 0.45% when you open a Yield Pledge Checking account and an introductory rate of 5.15% on the Everbank Performance Savings Account (this is subject to change without notice). There aren’t many fees either, not even for overdrafts or insufficient funds.

SoFi’s checking account, which comes with a high-yield savings account, is our pick for the best checking/savings combo because of the high interest rate and other benefits offered in its account options.

Earn 0.50% APY on the checking portion of the account (well above the industry average) and 4.60% on the savings portion. You can also earn up to $250 in bonus cash back when you sign up for direct deposits and meet account balance requirements, and receive 15% cash back on SoFi debit card purchases.

Quontic is once again our choice as the most innovative bank thanks to its cutting-edge products and services. Open a checking account and not only will you earn a great 1.1% APY (when you meet the transaction requirements), but you will also have access to the bank’s Pay Ring, which allows you to easily make purchases by simply tapping your ring on the terminal of payment. Quontic’s high-yield savings account is also pretty good, paying 4.5% APY.

If you’re looking for an account that will pay high dividends on your deposits, Vio’s Cornerstone Money Market Savings Account pays 5.30% – the highest of all the money market accounts we looked at and making it our pick improve. The account has a low opening balance of $100 and there are no monthly service fees. Additionally, Vio will not charge you if you have a negative balance in your account.

How we chose the best online banks of 2024

To determine our list of the best online banks for 2024, Money staff evaluated 273 of the largest retail banks, credit unions, regional and state banks, ranked by assets, and 20 of the most popular online banks. We then compared the opening and minimum balance requirements, minimum opening deposits, annual percentage returns, fees and features, such as customer support, access to ATMs for easy withdrawals, the ability to deposit cash and mobile banking, to determine our top picks. You can read our full methodology here.

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