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The 12 Best Online Banks For Checking And Savings Accounts

The 12 best online banks for checking and savings accounts

When was the last time you checked how much you made with your checking or savings account just because you had money in it? If you’re working with a traditional stationary bank this might have taken a while – and that’s not surprising.

When financial institutions like Wells Fargo and Bank of America offer annual percentage returns (APYs) as low as 0.01% on their savings and checking accounts, it’s easy to get used to your money stagnating.

But savings accounts and even checking accounts can make money if you choose the right bank or credit union. And now these banks are more likely to be online.

Which bank you use is more important than you might think. Find out where to keep your money (and more!) In The Penny Hoarder Daily.

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Best online banks of 2020, ranking

The biggest appeal of online banking is its high annual percentage rate of return (APY). APY is the interest (including compound interest) that you will earn on your money in one year. Because online banks very rarely have physical locations and require fewer employees, they have low overhead and can pass these savings on to customers.

The average APY for the nine online checking accounts featured on our 2020 list is roughly 1.4%. The average APY for our top nine online savings accounts is even higher: around 2%.

Keep in mind that traditional banks offer interest rates as low as 0.01% on both checking and savings accounts. (The national average for savings accounts is just 0.12%, according to Bankrate.com.)

However, online bank accounts offer many advantages outside of high interest rates. Here are just a few:

Low fees (or no fees), including monthly maintenance fees (sometimes called monthly service fees), overdraft fees, international transaction fees, and ATM fees. Some online banks even offer ATM reimbursement for ATMs outside the network.
Low or no minimum balance requirements.
Better online and mobile banking experience, including better apps and two-factor authentication.
FDIC and NCUA insurance up to $ 250,000.
Great customer service online or over the phone

Pro tip
Check out our current list of bank promotions to receive a cash bonus when you sign up for a new bank account.

These are the best online banks of 2020 starting with our top picks:

1. Allied Bank

Why We Like This Online Bank: Without a doubt, Ally is the best online bank of 2020, offering both online checking accounts and savings accounts. The APYs are high (the 2.20% savings are particularly attractive), you can apply for larger loans with Ally, and access to ATMs is never a problem.

Potential Pitfalls: If you travel overseas frequently, don’t use your Ally Bank debit card. It charges a 1% fee for foreign transactions. Travel credit cards are a better option when traveling abroad.

2. Synchronization

Why We Like This Online Bank: Synchrony has a healthy 2.20% APY for the savings account, which also includes a convenience card for ATM access. Another highlight is the lack of fees (even for withdrawals after a maximum of six per month).

Possible pitfalls: Synchrony has no checking account and no mobile app.

3. Capital One 360

Why we like this online bank: Capital One 360 ​​doesn’t have the most attractive APYs on either its online checking or savings accounts, but the online bank does so with the industry’s top-rated app, with no monthly fees and easy integration of bank accounts.

Potential Pitfalls: As mentioned earlier, the 1.00% APY isn’t the strongest on this list, nor is it guaranteed. You must meet certain criteria in order to receive interest at the maximum rate.

4. nkbc

Why We Like This Online Bank: nbkc (the National Bank of Kansas City) offers checking and savings accounts, as well as home and auto loans. The APYs are respectable, but the lack of fees and the wide network of ATMs make it even more attractive.

Potential Pitfalls: The APY (1.77%) savings are not as competitive as some of the other savings accounts listed here, and it costs $ 5 to open the account. This is of course not essential, but most of the accounts on our list are free to open.

5. Axos Bank (formerly known as Bank of Internet)

Why we like this online bank: The Axos Rewards checking account has high potential: 1.25% APY, provided you meet strict criteria (monthly direct deposit of USD 1,000 or more and a total of 15 debit card purchases per month). It also offers unlimited ATM fee refunds, a savings account, and mortgage and auto loans.

Potential Pitfalls: International transaction fees are 2%, the mobile app has poor reviews, and Axos is charging $ 10 for debit card exchanges.

6. CIT Bank

Why We Like This Online Bank: CIT offers the highest interest rate on any savings account on our list (1.80%), but like the checking account at Axos, you have to meet some requirements to earn it – either a minimum balance of $ 25,000 or a minimum monthly deposit of $ 100. CIT offers mortgage loans and its mobile app has great reviews on the App Store and Google Play.

Potential Pitfalls: Aside from the high requirements to earn the high APY, the CIT Savings Builder account suffers from the lack of ATM access and a minimum balance requirement ($ 100). There is no checking account.

More information: CIT Bank Review

7. Alliant Credit Union

Why we like this online bank: Access to ATMs is almost always guaranteed when you transfer with Alliant (the network has more than 80,000 ATMs). Alliant also operates one of the top rated checking and savings account apps and has physical locations in the Chicago area.

Potential Pitfalls: Credit unions joining can be more difficult, and Alliant is no different. The APY is 2.10%, which is higher than stationary banks like PNC, but lower than most of the other online savings accounts listed here.

8. Explore the bank

Why We Like This Online Bank: Discover Bank offers both savings and checking accounts. The Discover checking account is a rewards account. This means that instead of paying interest on the money in the bank account, you are making money on debit card purchases. The savings account has an APY of 2.10%.

Potential Pitfalls: You cannot get a car loan through Discover Bank. The account also charges overdraft fees.

More information: Discover Bank Review

9. Barclays

Why We Like This Online Bank: Barclays offers a competitive APY of 1.90% on their online savings account. The mobile app is highly rated.

Potential Pitfalls: You cannot open a checking account with Barclays, making it difficult to access funds.

More information: Barclays bank verification

10. Charles Schwab

Why We Like This Online Bank: Charles Schwab is ideal for those who love to travel – it has no international transaction fees and offers unlimited ATM reimbursement worldwide.

Possible pitfalls: The APYs are low: 0.40% for the savings account and 0.50% for the checking account.

11. Simple banking

Why we like this online bank: The APY for the simple checking account is incredibly remarkable at 2.02%.

Potential Pitfalls: Simple requires the checking account to have a linked Protected Destinations account that works similarly to a savings account. The minimum balance is $ 2,000 to earn the high interest rate and you will not be able to borrow with Simple.

More information: Simple bank verification

12. Chimes

Why We Like This Online Bank: Chime is great for first time savers. The expense account has no monthly fees and unlimited ATM refunds. More importantly, it can be set up to automatically transfer 10% of every direct deposit to the linked savings account and / or automatically round up to the nearest dollar on all purchases and add the extra change to the savings account. You may also have access to your direct deposit paycheck up to two days early.

Possible pitfalls: The APY for the Chime bank account is only 0.01%. It’s not a smart place to keep all of your money, but a great way to make sure you save when you are spending.

More information: Chime Bank Review

FROM THE BANKING FORUM

File for Bankruptcy8 / 23/20 @ 00:29 AM

Synchrony bank8 / 19/20 @ 4:19 PM

Chime Bank / Bancorp7 / 23/20 @ 1:32 pm

See more in banking or ask a money question

Why we chose these banks

To identify the online banks and credit unions for this list, we only looked at the banks that made our 2020 check and savings account lists – or both.

These banks have been selected from nearly 40 of the most popular banks and chosen for their combination of high APYs, low minimum balance, low or no fees, mobile / online experience and easy wire transfer.

All the banks on this list are FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration) insured and have no monthly fees.

While many of the banks on each list offer both checking and savings accounts, only two banks made the top nine for checks and savings: Ally Bank and Capital One 360.

Bank
APY savings account
APY checking account
Mortgage and auto loans

What makes this bank great?
And what not

Alliant Credit Union
2.00% APY
0.65% APY
Mortgage and auto loans
Great mobile app; Access to 80,000+ toll-free ATMs (and limited reimbursement from off-network ATMs); No overdraft fees
Foreign transaction fees

Allied Bank
2.20% APY
0.60% APY
Mortgage and auto loans
Great mobile app; Access to Allpoint ATMs (and limited reimbursement from ATMs outside the network); No overdraft fees
Foreign transaction fees

American Express
2.10%
N / A
None
Great mobile app
Limited access to funds

aspiration
N / A
1.00% APY
None
Unlimited refunds from ATMs outside the network; no overdraft fees or international transaction fees; donates 10% of income to charities
Requires a minimum balance of $ 2,500 for 1.00% APY (0.25% otherwise).

Axos Bank
1.30% APY
1.25% APY
Mortgage and auto loans
Unlimited ATM refunds
Bad mobile app; foreign transaction fees

Barclays
2.20% APY
N / A
None
Great mobile app
Limited access to funds

Capital One 360
1.00% APY
1.00% APY
Auto loans, but not mortgage loans
Mobile app number one (J.D. Power); Access to Capital One and Allpoint ATMs; No foreign transaction fees
Requires $ 100,000 or more for 1.00% APY, $ 50,000 or more for 0.75% APY (otherwise it is 0.20%); Overdraft fees

Charles Schwab
0.40% APY
0.50% APY
Mortgage loans, but not car loans
Great mobile app; unlimited reimbursement from ATMs worldwide; No foreign transaction fees
Overdraft fees if there is no available funds on the linked account

Carillon
It’s complicated
0.00% APY
None
Encourages first-time savers to better manage their finances with the automatic savings account. Access to paycheck prior to actual deposit; Access to more than 38,000 ATMs across the country
Is not interested

CIT bank
1.80% APY
N / A
Mortgage loans, but not car loans
Highest interest rate on the savings account; great mobile app
Requires either an account of $ 25,000 or a minimum deposit of $ 100 / month to get a high APY (1.17% otherwise); requires a minimum balance of $ 100; limited access to funds

Discover the bank
2.10% APY
1% cashback on monthly purchases up to $ 3,000
Mortgage loans, but not car loans
Great mobile app; Access to more than 60,000 toll-free ATMs; no foreign transaction fees; Cash back rewards
No traditional APY for checking accounts, but cashback is still tempting (reward checking account); Overdraft fees

nbkc
1.77% APY
1.01% APY
Mortgage and auto loans
Access to toll-free Moneypass ATMs; limited reimbursement from ATMs; No overdraft fees or international transaction fees
APY ranges from 1.31% to 1.77%

Simple banking
It’s complicated
2.02% APY
None
Access to 40,000 toll-free ATMs; No overdraft fees
The account requires a Protected Destinations account (which works like a savings account) greater than $ 2,000 in order to earn APY. foreign transaction fees

Synchronicity
2.20% APY
N / A
None
Convenience card for access to ATMs (nice touch for a savings account); No current account, but can open a money market account (1.20% APY) for check writing functions. limited reimbursement from ATMs
No mobile app

Disadvantages of online banks

Banking online is not without its problems, but customers in general have found that the high returns, great mobile experiences, and lack of fees more than make up for the pitfalls of online banking.

Below are some of the most common drawbacks of online banking:

Limited options for cash deposits

Depositing cash is the biggest challenge facing online banks due to the lack of physical locations. Even online banks that enter into partnerships with stationary banks for network-internal ATMs are often unable to accept cash deposits via ATMs.

If you intend to deposit cash regularly (e.g. if you are a server or a hairdresser who relies on cash tips), but still want to take advantage of an online account, open an account at a stationary bank to deposit only cash Transfer electronically to your online account.

Challenges in transferring funds

Online checking accounts generally make it easier to access your money with debit cards that work at thousands of ATMs. Some also offer checkbooks, no matter how archaic they may seem.

Access to online savings accounts in emergencies can be more difficult than to savings accounts at stationary banks. However, this is due to improvements in the speed of electronic transfers (ACH deposits) and new solutions in online savings accounts (such as with convenience cards), this problem has been largely reduced. You can read the details of transfers for popular accounts here.

No personal support

If you’re old-fashioned about your money management and like the idea of ​​going to a branch and singing your worries to a bank clerk who can help you pinpoint your financial troubles, an online bank might not be for you.

Online banks offer incredible customer service online and over the phone, but you can only get comforting personal help with your traditional bank accounts.

Timothy Moore is a research editor and freelance writer on topics such as personal finance, careers, education, animal care, and automotive. He has been in the field since 2012 and has been featured on sites such as The Penny Hoarder, Debt.com, Ladders, Glassdoor, and The News Wheel.


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