Best Online Banks

Ally Bank is the online bank that does everything well

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Online banks are financial institutions that operate primarily (or solely) online, and this typically allows them to provide more affordable accounts that are easy to access online or through mobile apps. Customers can save money on fees and earn more on savings when choosing the best online banks.

The best online banks charge minimal fees, and some don't charge any at all—even if you keep your balance at zero. You should also get generous rates on savings accounts, a variety of different products, and secure online banking and mobile apps that are easy to use and include helpful extras like budgeting and savings tools.

Best Online Banks of 2021

Best Overall : Ally Bank


Ally Bank

 Ally Bank

  • Minimum deposit: None
  • Fees: None
  • APY: 0.50% for savings, 0.25% for checking
Why We Chose It

Ally Bank wins the overall category for best online banks because of its generous rates, low fees, and user-friendly budgeting features. This bank also offers a wide array of products, from checking and savings to investing and loans.

Pros & Cons
Pros
  • High APY on checking and savings

  • No monthly maintenance fees

  • No minimum balance requirements

  • Banking, investing, and lending products

Cons
  • No ATM card with savings account

  • No cash deposits

  • No physical branches

Overview

Ally Bank offers a little bit of everything and still manages to do it well, which is why it takes the cake for the best online bank. Both the checking and savings accounts offer an APY that's well above market average, and the rates on CDs and money market accounts are also generous. Plus, you won't have to pay any monthly maintenance fees on any accounts, and you don't have to maintain a minimum balance to earn interest.

In addition to checking and savings products, Ally Bank also offers a whole suite of investment and lending products, which is rare for online banks. These include managed investment portfolios, individual retirement accounts (IRAs), trading, mortgage loans, mortgage refinancing, auto loans, and personal loans. Both the website and mobile app are easy to navigate and offer plenty of helpful additional features, such as the ability to create "savings buckets" to better organize your funds.

Ally has no physical branches, so online banking is your only option. You also can't deposit cash to any of Ally's accounts, and the savings account doesn't offer an ATM card. This means it takes a couple of days to get your money unless you have a connected Ally checking account as well.

Read the full Ally Bank review.

Best for Savings : Synchrony Bank


Synchrony Bank

Synchrony Bank

  • Minimum deposit: None
  • Fees: None
  • APY: 0.50% for savings
Why We Chose It

With high yields and no fees for savings accounts, it's hard to beat Synchrony Bank.

Pros & Cons
Pros
  • High APY

  • No monthly maintenance fees

  • No minimum balance requirements

  • ATM card and up to $5 ATM reimbursements per statement

Cons
  • No checking account

  • Outgoing wire transfer fee

  • No physical branches

Overview

Synchrony Bank's High Yield Savings account consistently offers one of the highest APYs out there without charging monthly fees or requiring any minimum balance, earning it the prize for best savings account. The mobile app is easy to use and allows for mobile check deposits.

You'll also get an ATM card with your Synchrony savings account for easy access to your funds. On top of free in-network ATMs, Synchrony will reimburse you for up to $5 per statement in out-of-network ATM fees. Because it has an ATM network, you can do ATM deposits in addition to direct deposits, electronic transfers, and mobile deposits to fund your account.

Synchrony does charge a $25 outgoing wire transfer fee, which isn't out of the ordinary, but some of the other best online banks don't charge that. It doesn't offer a checking account either, but since you can get an ATM card with your savings account, that isn't really necessary.

Read the full Synchrony Bank review.

Best for Students : Capital One


Capital One
  • Minimum deposit: None
  • Fees: None
  • APY: 0.40% for savings, 0.10% for checking
Why We Chose It

Capital One offers a full range of products that include some great options for young adults who want minimal fees, no balance requirements, and the ability to easily receive money from parents, making them the best pick for students.

Pros & Cons
Pros
  • Fee-free checking and savings

  • No minimum balance for checking or savings

  • Option for parent-teen joint account

  • Up to $15 per statement in ATM fee reimbursements

Cons
  • Not the highest APY

  • No checks with teen checking

  • Branch locations not present in every state

Overview

Capital One offers an interesting hybrid model of being an online bank with some physical branch locations called "Capital One Cafés." Students looking to learn more about personal finance can grab a coffee in one of these cafés and get free one-on-one money coaching. The best online banks don't typically offer any physical branches at all.

This bank also has several banking products geared toward young adults, which is why we chose it for students. The MONEY Teen Checking account is completely free with no balance requirements, and teens can open a joint account with their parents, who can then easily deposit money in their accounts through the Capital One app. The account does have some transaction limits and parental controls, but those can be lifted once you turn 18.

Capital One also offers a 360 Performance Savings account that's completely free and earns a competitive rate. The mobile app is easy to use and lets you deposit checks, process transfers, and track your saving progress on-the-go. Finally, the Journey Student Rewards credit card is a great way for students to build credit. It has lenient credit requirements, no annual fee, and earns cash back rewards.

Read the full Capital One Bank review.

Best for Checking : Discover


Discover

Discover

  • Minimum deposit: None
  • Fees: None
  • APY: None
Why We Chose It

Discover's checking account comes with absolutely no fees and a debit card that earns rewards, which is rare. This, plus a network of over 60,000 ATMs in the U.S., make it the best choice for checking.

Pros & Cons
Pros
  • No monthly maintenance fees

  • No minimum balance requirements

  • No overdraft fees

  • Free cash rewards debit card

Cons
  • Doesn't earn interest

  • No cash deposits

  • No physical branches

Overview

Discover is one of few truly fee-free banks, making it the best option for your checking account. In addition to not charging monthly maintenance fees or requiring any minimum balance, this account doesn't charge overdraft fees, card replacement and expedited delivery fees, outgoing wire transfer fees, or check order fees either.

While you won't earn interest with this checking account, it does come with a free cash back rewards debit card, and you'll probably earn more that way anyway. Cardholders get 1% cash back on up to $3,000 in purchases every month. Max that out, and you'll be getting $360 per year, which is about as good as it gets for a debit card.

The Discover mobile app makes it easy to deposit checks through your phone and transfer money through Zelle. You won't be able to make cash deposits, even through the network of 60,000 U.S. ATMs.

Read the full Discover Bank review.

Best for Travelers : Charles Schwab


Charles Schwab Square Logo

Charles Schwab Square Logo

  • Minimum deposit: None
  • Fees: None
  • APY: 0.05% for savings, 0.03% for checking
Why We Chose It

Charles Schwab might be the only bank to offer a checking account that charges no transaction fees, no monthly maintenance fees, and gets you unlimited ATM fee rebates worldwide. This makes it perfect for travelers, particularly those who travel overseas.

Pros & Cons
Pros
  • No monthly maintenance fees

  • No minimum balance requirements

  • Unlimited ATM fee rebates worldwide

  • No foreign transaction fees

Cons
  • Low APY

  • No cash deposits

Overview

Charles Schwab is primarily known for its investment services, but it's also one of the best online banks, especially for jet-setters who want to avoid fees while overseas. A Schwab Bank High Yield Investor Checking account is completely free, and you won't get charged foreign transaction fees while abroad. Plus, you'll get unlimited ATM fee rebates worldwide and a modest APY.

While the checking account is where this bank shines for travelers, it does offer a Schwab Bank High Yield Investor Savings account as well. The rate isn't anything special, so you might want to keep larger savings balances elsewhere. That said, it's a free savings account with no minimum balance requirements, so it doesn't hurt to open one alongside your checking account.

In addition to checking and savings, Schwab also offers a long list of brokerage, trading, investment, and retirement products. If you live abroad, Schwab even has professional services to help you figure out how to invest from wherever you're located. Plus, its website has a 24/7 live chat, so you don't have to worry about making international calls if you have an issue.

Read the full Charles Schwab review.

Best for Couples : Axos Bank


Axos Bank

Axos Bank

  • Minimum deposit: None
  • Fees: None
  • APY: 0.61% for savings, up to 1.25% for checking
Why We Chose It

Axos offers some of the best rates on the market for both checking and savings, especially if you have a higher balance and more frequent transactions. This makes it great for couples who are combining funds into one joint account and want to make the most of their money.

Pros & Cons
Pros
  • Very high APY

  • No minimum balance requirements

  • No monthly maintenance fees

  • Unlimited domestic ATM fee reimbursements

  • Multiple checking and savings options

Cons
  • $50 minimum deposit to open Rewards Checking

  • $250 to open High-Yield Savings

  • Minimum transaction requirements to earn APY on checking

  • Low CD rates

  • No physical branches

Overview

If you and your partner are looking to combine finances into a joint account, look no further than Axos Bank. The Rewards Checking account offers one of the highest APYs of any checking account out there to folks who can meet its balance and transaction requirements, and if you've got two people on the account, you're more likely to hit those marks. 

To get the full 1.25% APY, you'll need to receive at least $1,000 in direct deposits and complete at least 15 debit card transactions per month. This account doesn't charge any fees, and you'll get unlimited domestic ATM fee reimbursements. Plus, the app lets you and your partner sync all your different financial accounts to one place and even analyze your spending behavior as a couple, making it one of the best online banks for joint accounts.

The High-Yield Savings account also offers one of the most generous rates you can get right now without any monthly fees or minimum balance requirements. You will need to make a minimum deposit of $250 to open this account and $50 to open the checking account mentioned above.

Read the full Axos Bank review.

Final Verdict

Some online banks are better for checking, others for savings, and others for loans or investing. The best online banks can do it all, and Ally Bank does, consistently offering some of the highest rates on completely fee-free accounts.

This, plus useful extras like the savings buckets and savings booster features, make it the best overall bank. You can use Ally Bank as a one-stop online shop for all your financial needs, whether you're looking to bank, borrow, or invest, and know you're always getting a good deal.

Compare the Best Online Banks

Company Minimum Deposit APY  Types of Accounts 
Ally Bank
Best Overall
None 0.50% for savings, 0.25% for checking Checking, Savings, CDs, Money Market, Investing, Retirement
Synchrony Bank
Best for Savings 
None  0.50% for savings, no checking  Savings, Money Market, CDs, Retirement, Credit Cards 
Capital One
Best for College Students 
None  0.40% for savings, 0.10% for checking  Checking, Savings, CDs, Credit Cards 
Discover
Best for Checking 
None  None  Checking, Savings, CDs, Money Market, Retirement, Credit Cards 
Charles Schwab
Best for Travelers 
None  0.05% for savings, 0.03% for checking  Checking, Savings, CDs, Investing, Retirement 
Axos Bank
Best for Couples 
None  0.61% for savings, up to 1.25% for checking  Checking, Savings, CDs, Money Market, Investing 

How to Choose the Best Online Bank

Choosing the best online bank is all about finding the right features for your needs. Here are some considerations:

  • Rates: If you're looking at checking, savings, CD, or money market accounts, getting the highest rate possible will help you make the most out of your money. Opt for banks that offer a high APY compared to competitors.
  • Monthly fees: Monthly maintenance fees are the most common, and they add up quickly. Now that there are so many free bank accounts, there's no reason to go with one that charges a monthly fee.
  • ATM fees: If you're getting an account that comes with an ATM card, make sure it doesn't charge ATM fees. You might still be charged ATM fees by other institutions when using out-of-network ATMs, but the best online banks now offer ATM fee rebates as well.
  • Other fees: Overdraft fees and foreign transaction fees are two other big ones to avoid. Several of the best online banks don't charge overdraft fees. You can also find checking accounts with no foreign transaction fees, which is important if you travel internationally.
  • Minimum balance requirements: Some bank accounts require a minimum monthly balance to keep your account open, while others require one to avoid fees. The best online banks have no minimum balance requirements—that way, you never have to worry about keeping your balance at a certain number.
  • Types of accounts: If you want to do all your banking in one spot, you need a bank that offers it all. While it can be a little less convenient, holding different accounts at different online banks can help you get the best deals. For example, you could open a checking account with the best online bank for checking and a savings account with the best online bank for savings.

Online Banks vs. Traditional Banks

Traditional banks are the big mainstays that operate primarily out of brick-and-mortar locations, like Bank of America, Wells Fargo, Chase, and U.S. Bank. Online banks operate primarily, or exclusively, online. Some may have a handful of branch locations while others may not offer physical locations at all.

Because online banks don't have the overhead costs of operating physical branches, online banks tend to charge fewer and lower fees (the best online banks charge no fees) and offer higher rates on your savings. That said, you won't always get the whole suite of financial services—such as mortgages, personal loans, and retirement—that you can at traditional banks.

Frequently Asked Questions

Are Online Banks Safe to Use?

Online banks are just as safe as traditional banks. Accounts at the best online banks are FDIC-insured on up to $250,000, which is standard for traditional banks as well. These accounts also have the same, if not more advanced, security features for online banking as other banks.

Does the FDIC Insure Online Banks?

The FDIC does insure online banks, and most accounts at online banks are FDIC-insured on up to $250,000. This is standard for all types of banks.

Do You Pay More Fees with Online Banks?

You typically pay fewer and lower fees with online banks. It's cheaper for online banks to operate online, so you get some of that savings in the form of no monthly maintenance fees, no ATM fees, and sometimes even no overdraft or foreign transaction fees.

Methodology

To select the best online banks, we surveyed over 25 online banks, looking at rates, fees, rewards, minimum balance requirements, customer service, mobile app, and types of accounts offered. These are the most important features when it comes to online banking if you want to minimize your cost, maximize your earnings, and enjoy a convenient and easy banking experience.

We ruled out any online banks that charge monthly maintenance fees on checking and savings accounts because there are so many that don't. We also didn't include any banks that require high minimum opening deposits or high minimum monthly balances. A high APY wasn't a strict requirement if the bank stood out in other ways, such as cutting out all fees. Likewise, banks with a minimum opening deposit requirement were considered, as long as it was low and the bank offered something in return, such as a high APY.