Online banking has come a long way in recent years, with people valuing the convenience offered by the best online banks perhaps more now than ever before. Whether it's the ability to open a checking account from your sofa or the option to make that urgent payment via your mobile banking app before you forget, online banks have changed the way we're able to manage to our day-to-day finances forever.
If you're looking for the top savings rates, you can do so from the comfort of your home too. Indeed, with far fewer overheads to worry about than the bricks-and-mortar bank on the main street, online banks are usually the ones where the best rates can be found. That is not to dismiss the more traditional bank out of hand; in fact, most have joined the online revolution and are offering their own banking and savings solutions to the masses, without ever having to welcome their new customers in-store.
Common among most consumers will be a desire to find the best rates, pay the lowest fees and have easy access to their money via an ATM. As a result, these are all factors that we have taken into account when evaluating the worthiness of an online bank to be called the best. However, obviously people will be looking for different things from their bank too, and that's why we've made a number of different choices in our rundown of the best online banks. There's a selection that we believe offers the best checking account, another that excels when it comes to CD rates, and an online bank that we rate as offering the best savings account. If you want the easiest route into online banking, we have singled out the bank that asks the minimum of its customers too.
Many of our selections understandably offer a wide range of other personal finance services too, but if you're looking for the best personal loans online or want to refinance your mortgage, we have specialist guides that are probably better suited to pointing you in the right direction.
- Note all rates were correct as at September 2020, but may have changed since.
1. Ally Bank: Best online bank overall
The best online bank in our opinion, right now, is Ally Bank. It has some of the highest interest rates around across its different accounts, low deposit requirements, a great app, and provides access to many other financial services too.
Ally Bank might be just online, but the benefits are clear. While some banks are currently offering little or no interest, Ally steps up to the mark with a return of 0.80% on its savings account. No minimum balance or deposit is required, but you'll need to keep your transactions beneath six per month or else face a $10 fee for each additional transaction. Ally's CD rates are attractive too. Terms range from three months to five years, but it is the 12-month rate of 0.75% that really catches the eye. Remember, that there is a penalty for early withdrawals, of course.
As a member of the Allpoint network, Ally allows you to withdraw cash on over 43,000 machines absolutely free. Finding your nearest one should be easy thanks to a handy locator tool on its website. And even if you do find yourself having to withdraw from an ATM outside of the network, Ally will repay the first $10 in fees.
- Read our Ally Bank review
2. iGO Banking: Best for minimal requirements
iGObanking is a great reminder as to why online banks are currently proving so popular. If you need a bank that has minimal requirements and no monthly fees, but still offers some decent rates of interest, then this is exactly what iGObanking does best.
All except the money market account can be opened with as little as $1, but if you do happen to have the $25,000 that the money market account requires, you'll be treated to an excellent rate of 0.75%. The checking account pays a flat rate of 0.25% regardless of the balance, while the 12 month CD account paying 0.85% is slightly better than can be found at most other online banks.
Transfers, excluding wire transfers, are free, while there's access to over 55,000 ATMs as part of the Allpoint network, and apps for mobile banking. What really stands iGObanking apart, however, is the lack of hoops that you need to jump through to open an account, and the effort that the bank has obviously made to make everything clear for its customers.
- Read our iGObanking review
3. Axos Bank: Best checking account
Axos Bank has one of the highest interest rates for checking accounts currently available. You will need $50 to open the account but after that Axos Bank hands out 0.42% when each of its three conditions are met each month: $1,000 in direct deposits are paid in, you use your debit card for more than 10 transactions at $3 or more, and you make an additional five transactions at $3 or more. If you meet all conditions the rate equals 1.25%, more than double the average rate of most checking accounts.
With no monthly fee and no minimum amount to be eligible each month, this account is perfect for customers looking for a reward each month on their debit card spending. The CD rates are below average, but if you’re just interested in a checking account, Axos is a hard one to beat. Although the bank doesn’t have a partnership with an ATM network, it does allow unlimited reimbursement on any surcharges which gives you access to a much wider network.
- Read our Axos Bank review
4. First Internet Bank: Best for CD rates
First Internet Bank of Indiana offers a wide range of banking and savings accounts, and some of the best CD rates that you are likely to find anywhere too. The minimum opening deposit of $1,000 is par for the course, but there is nothing average about the returns on offer if you're happy to lock your funds away for a set length of time.
The other accounts it provides too are worth a look, particularly the money market and interest paying checking account. The free checking account is a great option if you want an accessible, fee-free way of banking as well. Some accounts charge fees for their use, but by maintaining a specified minimum balance, First Internet Bank is happy to waive them, leaving customers with even more money in their pocket to take advantage of the attractive CD returns.
5. Synchrony Bank: Best savings account
The savings account at online-only Synchrony Bank is certainly something to consider, as are the CDs that are on offer too. First up, the high yield savings account pays 0.75%, well above the average at present, and is awarded no matter how much (or little) you have in the account. There's no monthly fees and no minimum balance is required to open an account or qualify for the interest rate.
For savers happy to commit their funds for a set period of time, there's a wide range of CD terms on offer too, each paying returns that are highly competitive among their peers - the 60-month account is the longest available at present and pays 1.00%.
As well as offering top returns, Synchrony has a perks program in place that rewards customers depending on how long they've been with the bank and the amount they have saved. Travel and leisure discounts are on offer, but there are banking related advantages too, including unlimited ATM fee refunds and free wire transfers.
- Read our Synchrony review
6. Discover Bank: Best rewards account
If you're looking for a checking account, and also have a high monthly spend, Discover just might have the innovative and high-paying account that you need. Rather than paying interest, this checking account pays 1% cashback on purchases made with the associated debit card - up to $30 in cashback is available each month, a return far higher than any you'd achieve from a traditional savings account right now. What’s more, you don’t need a minimum deposit, balance or to pay a fee to be eligible.
The rates for its CDs are also good value in the current market, while the option to guarantee your return for the next 10 years is no longer an option widely available elsewhere. If you don't live local to a one of the 60,000 ATMs on Discover's network, it's worth noting that you won’t be reimbursed for fees you might be charged if you have to use an ATM from someone else. But if this isn't a problem, there's little to dissuade anyone taking a look at what this online bank might be able to do for you - the most familiar names don't always offer the best returns, but Discover is definitely an exception.
- Read our Discover review