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Best Online Banks For March 2024

Online banks offers a convenient way to manage your finances from anywhere, anytime with convenience, accessibility, and enhanced security. We have conducted extensive research on interest rates, account features, fees, and minimum balance requirements, among other factors, to provide you with the best online banks for every type of banking customer.

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Overview

Quontic Bank is an online-only, FDIC-insured bank based in New York City, NY. The bank offers multiple deposit account options with reasonable opening deposit limits and competitive annual percentage yields (APYs). Quontic Bank’s primary goal is to innovate on traditional banking without losing the personal connection with its customers.

Along with bank accounts, Quontic offers member-exclusive financial products and opportunities, including loans. Borrowers can use these loans for things like down payment assistance on their home.

Pros

pros iconQuick and easy online process

pros iconFree access to more than 90K ATMs

pros iconNo monthly fees

pros iconNo overdraft fees

Cons

cons iconOne branch with in-person banking

  • check mark No monthly/overdraft fees
  • check mark Low minimum deposits
  • check mark High Interest Checking with 1.10% APY
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Overview

Axos Bank lays claim to being one of the oldest digital banks in the world. The company was founded as Bank of Internet USA in 1999 and rebranded to Axos Bank in 2018. Nowadays, Axos Bank is based in San Diego, California, where it has grown to a workforce of over 1,000 and is the consumer-facing arm of Axos Financial.

Axos has built a solid reputation over two decades of trading as an online bank. The company is well known for its excellent APYs, ATM reimbursements, and one of the market’s most rewarding ranges of checking accounts. To this day, the company remains online-only, with the lack of branches resulting in better value financial products for its customers.

Axos Bank is a public company: stock ticker NYSE: AX

Pros

pros iconEarn up to 3.30% APY

pros iconNo monthly fees or overdraft on most accounts

pros iconVariety of accounts with unique perks

Cons

cons iconLow CD (certificate of deposit) rates

  • check mark Earn up to 3.30% APY
  • check mark Use Promo Code "Lucky" for a $100 bonus!
  • check mark FDIC Member
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Overview

Founded in 1999, Patriot Bank, N.A. is a community-focused, full-service bank that operates in Fairfield and New Haven, Connecticut, as well as Scarsdale, NY. The bank offers personal, business, and commercial banking for its customers. It also has lines of credit, business and commercial loans, and more.
What stands out about Patriot Bank is its commitment to helping its customers build solid money management habits and achieve short- and long-term financial goals. The bank is actively involved in the community and supports many local organizations, including Housatonic Community College and a Child Guidance Center in Mid-Fairfield County. It also sponsors various community activities, such as the Stamford Boys & Girls Club 5K Race, to support financial literacy and community development.

Patriot Bank is a public company: stock ticker NASDAQ: PNBK

Pros

pros iconDependable institution

pros iconNo ATM fees

pros iconAccount fees are easily avoided

Cons

cons iconNo live chat

  • check mark Enjoy a 0.70% APY high-yield
  • check mark No fees
  • check mark FDIC Insured
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Overview

Founded in 1960, Ponce Bank is a well-established New York-based financial institution with a solid reputation in the industry. The bank has physical branches as well as a user-friendly digital platform for those who prefer online or mobile banking. Among other things, Ponce Bank offers checking and savings accounts, money market accounts (MMDAs), Certificates of Deposit (CDs), and IRAs. Many of these accounts come with minimal fees, making them accessible to the average person. Certain accounts, such as the MMDAs also come with decent interest rates.

Ponce Bank is a public company: stock ticker NASDAQ: PDLB

Pros

pros iconLow fee structure across all accounts

pros iconGreat mobile app

pros iconWide range of account types

Cons

cons iconOffers close to average rates

  • check mark Ability to earn interest on certain accounts
  • check mark Wide range of different options
  • check mark M. Charges can be easily avoidable
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Overview

Bluevine is a financial technology company, not a bank. Banking services through Bluevine are provided by Coastal Community Bank. The company was founded in 2013 and has its headquarters in Redwood City, CA. Its primary focus is providing banking services to small businesses. Bluevine’s main selling point is traditional banks have underserved small businesses, and Bluevine is here to provide them with the banking services and support that big companies receive from traditional banks and take for granted. Their differentiator is their high-yield checking account with no monthly fees.

Pros

pros icon2% interest credited on account balances up to $250,000

pros iconNo minimum deposit or maintenance fees

pros iconNo insufficient fund fees or ATM fees

Cons

cons iconCustomer support only available during set business hours

cons iconA deposit fee of $4.95 per deposit at Green Dot locations

cons iconNo physical banking locations

  • check mark Built for business accounts.
  • check mark No hidden fees.
  • check mark Offers high yield checking account.
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Overview

Chime is a financial technology company, not a bank. Banking services through Chime are provided by The Bancorp Bank or Stride Bank N.A. The company was founded in 2012 and has its headquarters in San Francisco, CA. Its focus is on providing personal banking services. Chime does not market to or service the business market.

Chime’s main selling point is that basic banking services for individuals should be helpful, easy, and free. They partner with regional banks to design “member-first financial products” to compete with traditional banks.

Pros

pros iconNo monthly fees or minimum balance requirement

pros iconPeople can repair their credit history

pros iconAccess to 60,000+ fee-free ATMs

pros iconUser-friendly mobile app

pros iconNo overdraft fee

Cons

cons iconNo physical branches

cons iconDaily and weekly maximum limits

  • check mark Doesn’t charge any monthly fees
  • check mark No minimum deposit requirement
  • check mark Allows people to build their credit
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Overview

Citibank is one of the largest financial institutions in the US, with over 700 branches and an ATM network of over 65,000. With an extensive history dating back over 200 years, Citibank has grown to welcome over 150 million customers worldwide since its establishment in 1812.

The financial company offers full banking services to go with its physical presence, making Citibank one of the best choices for people who want an alternative to online banks. Citibank is also the largest credit card issuer in America, with an incredible range of credit card products available to meet all needs.

Citibank is a public company: stock ticker NYSE: C

Pros

pros iconVery well respected bank

pros iconNo minimum required deposits

pros iconWide range of account options

Cons

cons iconCertain requirements to avoid monthly fees

cons icon$2.50 Charge for out-of-network ATMs

cons iconRates aren't as competitive as others

  • check mark 0.50% Annual Percentage Yield
  • check mark Offer available in select markets only
  • check mark FDIC Member
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Overview

HSBC is one of the biggest financial institutions in the world. The bank operates in over 60 countries and serves approximately 40 million people. Up until February 2022, HSBC offered a range of checking and savings accounts alongside CDs and credit cards.

However, in February 2022, the company’s services changed significantly, with more focus being placed on the HSBC Premier Account and high-net-worth individuals. Customers on the East Coast had their business transferred to Citizens Bank, and Cathay Bank took over for customers on the West Coast. All remaining services offered by HSBC are Premier Checking, Savings, and CD accounts, but you need to be sufficiently wealthy to qualify for these.

HSBC’s US headquarters are in New York City, NY, and the financial institution maintains a physical presence in the US with 25 International Wealth Centers across the country.

HSBC is a public company: stock ticker LON: HSBA

Pros

pros iconNo banking fees if you maintain Premier statusements

pros iconHigher APY is available based on account balance or type

pros iconGlobal bank presence allows for seamless movement of money and international credit history

pros iconPremier clients receive benefits anywhere in the world

Cons

cons iconLimited access as personal accounts are available to HSBC Premier clients only

cons icon$50 monthly fee on accounts without an HSBC Premier relationship

cons iconEligibility requirements are complex and can change over time

  • check mark Premier banking solution for your global lifestyle
  • check mark Exclusive banking relationship offering global benefits
  • check mark Elite financial services meet global connectivity
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Overview

Founded in 1999 in Missouri, NBKC Bank has since expanded into a mid-sized national bank. It has a network of over 37,000 ATMs and offers customers various financial services throughout the country. This includes checking and savings accounts, money market accounts, Certificates of Deposit (CDs), home loans, and credit cards.

This highly-rated bank is known for its competitive interest rates and an innovative, mobile-friendly approach to banking. It also has an array of free resources for members and non-members alike to help improve financial literacy.

Pros

pros iconNo account fees

pros icon34K+ No-fee ATMs

pros iconGood APY rates

Cons

cons iconHas only four branches

cons iconLimited account options

  • check mark Fully online bank
  • check mark Free ATMs with MoneyPass®
  • check mark FDIC Member
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Overview

SoFi, or Social Finance, Inc., was founded in 2011 by Stanford business school students. It started as a way to connect recent graduates with alumni in their community.

In 2012, it became the first private company to refinance both private and federal student loans. A couple of years after that, it started offering mortgage loans, personal loans, and more. By 2019, the company had released SoFi Invest (stock trading) and SoFi Money (cash management account).

Along with loans, SoFi also offers credit cards, budgeting tools, and unique benefits to members. Its goal is to become a one-stop shop for all its consumers’ financial needs.

Sofi is a public company: stock ticker NASDAQ: SOFI

Pros

pros iconYou can earn up to 0.50% APY on your checking account balance

pros iconYou can earn up to 4.60% APY on your savings account balance

pros iconNo monthly maintenance fees

Cons

cons iconSoFi does not have any physical branches

cons iconSoFi Savings is not available in all states

  • check mark Earn interest even on your checking account
  • check mark No overdraft or monthly maintenance fees
  • check mark FDIC insured up to $2M
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Overview

Varo is an online bank that has been operating since 2015. It offers a variety of banking services to people who are looking at alternative options to traditional banking. Varo was the first-ever fintech firm to get a full-service bank charter in 2020 from the federal government. It offers a couple of low-cost different account options, with a lot of extras available.

Varo is a public company: stock ticker BKK: VARO

 

Pros

pros iconGood savings account APY

pros iconNo monthly fees

pros iconTrusted online bank

pros iconNo minimum deposit or account balance requirements

Cons

cons iconNot too many different account options

cons iconNo physical branches

  • check mark Automatic savings tools.
  • check mark No monthly fees or min balance.
  • check mark Services are 100% digital.
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Overview

Ally Bank is headquartered in Sandy, Utah and was founded in 2009. As a full-service online bank, it offers its customers competitive interest rates, no minimum balance requirements, low fees, and round the clock customer service. Ally Bank is the digital banking division of Ally Financial Inc., and has roots that date back for nearly a century. Ally is best suited to customers who are familiar with online banking using a PC, tablet, or mobile device. The bank offers checking, savings, money market and certificate of deposit accounts. In addition, it also offers personal and auto loans, mortgages, investment accounts, and retirement services.

Ally is a public company: stock ticker NYSE: ALLY

Pros

pros iconNo maintenance fees on some accounts

pros iconEarn more with excellent APYs

pros iconSome ATM fee reimbursement

Cons

cons iconNo physical branches

cons iconNot available in all states

  • check mark No minimum balances
  • check mark ATM Fees reimbursement
  • check mark FDIC Member
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Overview

Initially launching as a credit card company, Discover was created by Sears in 1985. Since then, the company has branched out into a fully-fledged financial institution and is one of the biggest financial brands in America. Discover provides online banking services, personal loans, student loans, and mortgages, all alongside its famous Diners Club credit card offering.

Currently based in Riverwoods, Illinois, Discover has more than 50 million customers in the US and over 17,000 employees. The financial powerhouse offers all the benefits of a full-service bank with an excellent online presence and top-quality customer service.

Discover is a public company: stock ticker NYSE: DFS

Pros

pros iconGreat selection of account types

pros iconLow-cost account options

pros iconSavings account APY rates are top-tier

Cons

cons iconNo physical branches

cons iconMinimum of $2,500 for CDs

  • check mark No minimum required account balance
  • check mark No fees call out
  • check mark FDIC Member
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Overview

Bank of America as it’s known today was founded in San Francisco, CA in 1998, but is currently headquartered in Charlotte, NC. It’s a multinational financial institution and the second largest bank in the USA. With nearly 70 million customers, the bank is a leader in financial services, including consumer loans, bank accounts and Certificates of Deposit (CDs).

Among other things, Bank of America is widely recognized for its advanced digital technology and convenient payment service through Zelle. The bank also has an exceptional mobile banking app and an AI virtual assistant called Erica, which helps with money management, expense tracking, and budgeting.

Bank Of America is a public company: stock ticker NYSE: BAC

Pros

pros iconAmple physical branches and ATMs

pros iconLow minimum deposit requirements

pros iconWaivable monthly fees

Cons

cons iconAPY rates not very competitive

cons iconOnly one type of savings account

cons iconAn overdraft fee of $35 chargeable daily

  • check mark Large selection of accounts
  • check mark Monthly fees easily waived
  • check mark FDIC Member
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Overview

Nationwide Bank is a financial institution that provides a wide range of banking and financial services to individuals and businesses. The bank offers checking and savings accounts, mortgages, personal loans, credit cards, and investment options. It also provides online and mobile banking, as well as 24/7 customer service. With a history dating back to the last century, Nationwide Bank has a reputation for stability and trustworthiness, making it a popular choice for customers who are looking for a reliable and secure banking partner.

Banking services by Nationwide Bank are provided by AXOS Bank.

Nation Bank is a public company: stock ticker LON: NBS

Pros

pros iconGreat selection of account types

pros iconLow-cost account options

pros iconAPY Rates are top-tier

Cons

cons iconCD APY Rates lower than standard

  • check mark 80K ATMs across the United States
  • check mark No m. fees for some account types
  • check mark FDIC Insured Financial Institution
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Overview

UFB Direct Bank is an online based bank that has been around since the turn of the century. It has more than two decades of experience in the space, having originally started out life as the Bank of Internet USA. UFB Direct Bank mainly focuses on offering savings accounts and mortgage loans.

It has a reputation for having good APYs and low barriers to entry when people are looking to sign up for an account. People like the long track record that UFB Direct Bank has in the online banking space, which is reflected by its popularity.

Pros

pros iconOffer premium money market account

pros iconCan reach to 0.20% APY

pros iconOffer complete online banking

Cons

cons iconOnly offer savings account

cons iconHigh APY when maintaining a high balance

  • check mark No minimum to open an account
  • check mark Can deposit from your mobile
  • check mark FDIC Insured
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Overview

CIT Bank was formed as an internet-based bank in 2009 and has enjoyed a good reputation since. In fact, the reputation was so good that the bank merged with First Citizen Bank in January 2022, becoming a division of the larger banking parent company. While CIT doesn’t have any physical branches, it is well-known for the high APYs offered on its accounts. In this review we are focused on consumer banking at CIT Bank however it is important to note that the bank also has business and commercial banking solutions. All the account details and annual percentage yields (APYs) below are accurate as of Nov. 17, 2022.

Pros

pros iconNo monthly fees

pros iconExcellent APYsExcellent APYs

pros iconLow money-market account min deposit

Cons

cons iconOffers less ATMs than competitors

cons iconCD APYs are fairly low

  • check mark No monthly maintenance fees
  • check mark Low min opening deposit
  • check mark Get reimbursement on ATM fees
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Overview

TD Bank can date its origins back to the 19th century, so it is safe to say that it has a huge amount of experience in dealing with the banking needs of Americans. There are more than 1,000 TD Bank branches found across the nation, mostly on the east coast.

Its intention is to be the most convenient bank account, whether you are engaging in online banking or in-person banking. TD Bank offers a wide range of different savings and checking accounts, as well as certificates of deposits.

Pros

pros iconWide variety of account options

pros iconLow minimum opening deposits

pros iconOptions for in-person banking

Cons

cons icon$3 Fee for transactions at non-TD bank ATMs

cons iconSavings account rates lower than average

cons iconOverdraft fee chargeable 5x times per-day

  • check mark Low minimum required opening deposits
  • check mark Wide range of different account options
  • check mark FDIC Insured
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Overview

Alliant Bank has operated under its existing brand since December 2003. However, the company’s history can be dated back to 1888. With five physical branches in Northern and Central Missouri, Alliant Bank offers both online personal and business banking. The financial company is also a full-service bank registered with the FDIC. Alliant Bank’s ethos is firmly built around community partnership and working together with its customers on a personal basis.

Alliant Bank is a public company: stock ticker NASDAQ: LNT

Pros

pros iconOffers exceptional APY savings rate

pros iconA reputable brand with $13 billion in assets

pros iconRelatively lower fees

Cons

cons iconRequires a minimum of $1,000 to start

cons iconRelatively high overdraft fees

cons iconOffers limited flexibility in terms of certificates

  • check mark Very attractive APY
  • check mark 80,000+ ATMs
  • check mark In business for over 130 years
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Overview

Liberty Savings Bank was founded in 1889 in Highland County, Ohio, and was initially named the Lynchburg Building and Loan Association. In the late 1960s, Lynchburg Building and Loan Association merged with Superior Loan and Building to form Highland Savings Association.

The company continued to grow and strengthen, and when a third office was opened in nearby Wilmington, in Clinton County, Ohio, the name was changed to Liberty Savings Association. The Powell family acquired the company in September 1984, renaming it Liberty Savings Bank, a Federal Savings Bank.

Liberty Savings Bank now has branch offices in Sarasota, Bradenton, and Venice, Florida. Additionally, the bank also offers online banking for U.S. residents. It is family-owned.

Pros

pros iconGreat APY of 1.06%

pros iconLow required opening balance

pros iconReputable community bank

Cons

cons iconSome clients find their customer service faulty

  • check mark Great APY of 1.06%
  • check mark $1 required opening balance
  • check mark FDIC-insured bank
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Overview

Based in Salt Lake City, Utah, Continental Bank first opened its doors in 2003 as a State-Chartered, FDIC-insured bank. The bank’s focus is on creating a culture where shareholders, employees, and customers can grow and thrive – financially and professionally. Continental Bank primarily offers traditional banking services and real estate financing

Pros

pros iconCompetitive APY

pros iconNo fees

pros iconLow opening balance

Cons

cons iconLimited options currently

cons iconNo joint account

  • check mark Zero fees
  • check mark Competitive APY
  • check mark $1 minimum opening deposit
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Overview

The State Exchange Bank has been in business since as far back as the 19th century. While it has only gone online in recent years, it brings all of those years of experience to bear with its current offering.

You will find a great range of account options, including different checking, savings, and certificates of deposit options. The California-based bank has physical branches, as well as its online offering. With so many different account options, there should be something for everyone with this offering.

Pros

pros iconTruState Exchange Bank CDs require a low minimum opening balance of $250sted bank

pros iconInterest is compounded daily, while many competitors provide interest that’s compounded monthly

pros iconShort-term CDs available

Cons

cons iconCD rates aren’t competitive with some of the highest-paying CDs at competing banks

cons iconMust open a CD through the SaveBetter platform, which means that you’ll have to work with the SaveBetter customer support team, available during business hours Monday through Friday.

  • check mark Requires only $1 opening deposit
  • check mark Low early withdrawal penalty
  • check mark FDIC insured. No fees
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Overview

Current is mobile banking app that was launched in 2015 with an initial focus on fee-free accounts for teens. Since that time, it has become one of the more competitive online banking options with excellent cash-back rewards, no fees, no balance requirements, and access to cryptocurrency. While we are reviewing Current as an online bank, it’s important to note that it is not a bank but a financial services company. Because it offers its banking services through Choice Financial Group, its deposits are eligible for FDIC insurance.

Pros

pros iconThe 4% APY available on Savings Pods is very good

pros iconDoes not require any credit check for a checking account

pros iconCharges minimal fees across the various account types

pros iconThe Current mobile app offers money management tools

Cons

cons iconOnly offers a mobile app and no desktop platform

cons iconCurrent caps the 4% APY to $6,000 in savings

  • check mark No credit checks or credit history required
  • check mark Get paid up to 2 days faster with direct deposit
  • check mark Earn up to a 4.00% Bonus on Savings Pods
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Overview

Pentagon Federal Credit Union (PenFed) was established in 1935 and has grown to become the third largest credit union in the US. The company boasts over 2.8 million members and caters to individuals in all 50 states, with more than $36 billion of assets under management. PenFed offers a wide range of financial products, including mortgages, personal loans, HELOC, student loans, and student loan refinancing.

Headquartered in Virginia, the company holds valid regulation with the National Credit Union Administration. PenFed is also known for its competitive interest rates and attractive features, such as spousal loan refinancing.

Pros

pros iconGreat APYs

pros iconLow-cost structure

pros iconAccess to 85,000+ no-fee ATMs

Cons

cons iconHigh minimum for CDs

  • check mark Earn 0.60% APY on your Savings
  • check mark $5 Minimum to open
  • check mark Federally insured by the NCUA
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Overview

PNC bank, or Provident National Corporation, was established in 1852 in Pittsburgh, Pennsylvania. Over the years, PNC has built a solid reputation for itself as a reputable lender with top-notch customer support and competitive financial services and products. It offers personal banking services, credit cards, mortgage loans, and auto loans.

Today, PNC strives to embrace a diverse work culture while strengthening their connection with their customers. This, combined with its myriad of financial services, sets PNC apart from their competitors.

PNC continues to innovate and modernize its services to make them competitive – and relevant – in the industry. They have a number of convenient technologies for customers, such as an intuitive mobile app, easy-to-access services, and more. Whether you’re a new or returning customer, PNC is there to guide you along the way.

PNC  bank is a public company: stock ticker NASDAQ: FRG

Pros

pros iconExtra Time helps avoid overdraft fees

pros iconStrong mobile and online tools to help manage money

pros icon18,000 fee-free ATMs and branches in 20 states

Cons

cons iconCD rates are low compared to competitors

cons iconSavings account rates are low

cons iconBusiness accounts may be complicated

  • check mark Exceptional digital banking tools
  • check mark Extensive banking solutions
  • check mark A leader in customer service

Summary of Best Online Banks 2024

$100

Min Deposit

90000 ATMs

ATM Network

Yes

Other Fees

Online Banking Savings

$100

Min Deposit

4.50-5.30%

Min APY Savings

Online Banking Checking

Max 1.1%

Min APY Checking

Pros & Cons

drop-down-btn
  • con-icon Quick and easy online process
  • con-icon Free access to more than 90K ATMs
  • con-icon No monthly fees
  • con-icon No overdraft fees
  • con-icon One branch with in-person banking

Account types

drop-down-btn
  • Checking
  • Savings
Axos_Bank_L
Axos Bank

Save Smarter, Compound Faster

$50

Min Deposit

90,000+ fee-free ATMs

ATM Network

None

Other Fees

Online Banking Savings

Min 0.61%

Min APY Savings

Online Banking Checking

0.1-3.30%

Min APY Checking

Pros & Cons

drop-down-btn
  • con-icon Earn up to 3.30% APY
  • con-icon No monthly fees or overdraft on most accounts
  • con-icon Variety of accounts with unique perks
  • con-icon Low CD (certificate of deposit) rates

Account types

drop-down-btn
  • Checking
  • Savings
  • Money Market Deposit Account (MMDA)

$100

Min Balance

$100

Min Deposit

16,000

ATM Network

$7

Maintenance Fees

Yes

Other Fees

Online Banking Savings

$100

Min Deposit

$100

Min Balance

0.01-1.00%

Min APY Savings

Online Banking Checking

$200

Min Deposit

$200

Min Balance

0.01-0.05%

Min APY Checking

Business Online Banking

0.01-1.00%

Min APY Business

Pros & Cons

drop-down-btn
  • con-icon Dependable institution
  • con-icon No ATM fees
  • con-icon Account fees are easily avoided
  • con-icon No live chat

Account types

drop-down-btn
  • Checking
  • Savings
  • Certificates of Deposit (CD)
  • Money Market Deposit Account (MMDA)

What is Online Banking and How Does it work?

Online banking allows you to manage your bank account using a mobile app or computer. It allows you to check your balance, transfer money, and pay bills without going to a physical bank branch. To set up online banking, you must create a username and password. You can then log in to your account from anywhere with an internet connection.

When you log in to your online banking account, you can see your account balance, recent transactions, and other account information. You can also use online banking to transfer money between your accounts, pay bills, set up alerts, and more. Online banking is a convenient and secure way to manage your finances. It is also a cost-effective way to do so, as many banks offer free online banking services.

Every online bank is different in terms of its features, benefits, and limitations. That’s why comparing several options is important before choosing the right one for your banking needs.

Types of Online Bank Accounts

When it comes to online banking, here are the most common types of accounts:

  • Checking accounts: A checking account is one of the most common bank accounts. You can use it for direct deposits, withdrawals, online transfers, bill pay, and everyday expenses. These accounts often come with a debit card with a chip and pin or contactless technology for in-person transactions. Checking accounts usually have lower interest rates than savings accounts.
  • Savings accounts: Many online banking options offer savings accounts, which you can link to your checking account. You can send extra money to this account to save up money over time. Some savings accounts — high-yield savings accounts — come with higher interest rates than others. Certain banks will limit the number of transfers you can make each month between your checking and savings accounts.
  • Credit card accounts: Some online banks come with a credit card option, which has a separate account. You’ll usually receive a physical credit card that you can use like any credit card. Oftentimes, you can monitor your account online, check your credit score, and make electronic payments using this account. Some credit cards even come with rewards or other perks, like cashback.
  • Money market accounts: Some of the best online banking options also have money market accounts. These are interest-bearing accounts that are designed for investing purposes. They might have higher requirements or fees than other accounts.
  • Certificate of deposit accounts: A CD is a type of savings account that earns interest at a fixed rate for a fixed period. This account typically has higher interest rates than regular savings accounts. When you open a CD, you agree to deposit a certain amount of money and leave it in the account for a specified time. When the CD matures, you can withdraw the money or roll it over into a new one.

What Are the Benefits of Online Banks?

  1. Better Interest Rates: Online banks often offer significantly higher APYs on accounts and CDs than traditional banks. This difference can be as much as 1% to 2% more, substantially increasing your deposits' earnings.
  2. Lower Fees: Direct banks typically have lower fees due to their lack of physical infrastructure. This means you're less likely to encounter fees associated with low balances, direct deposits, or using a check or debit card. Many online banks offer accounts with no minimum balance requirements or service fees.
  3. Convenient Online Experiences: Online banks usually provide a more user-friendly online banking experience. This includes efficient and simple online transactions and high-quality banking apps and websites.
  4. Accessibility: Online banking is accessible 24/7, allowing you to manage your finances at any time and from anywhere, as long as you have internet access.
  5. No or Low Minimum Deposit Requirements: Most online banks demand low or no minimum deposits to open accounts, making them accessible to a wider range of customers.
  6. Wide ATM Network: Online banks often provide access to a large network of ATMs nationwide, and many offer free access to these ATMs or reimburse ATM fees.
  7. Environmental Benefits: With a focus on digital transactions and electronic statements, online banking is a more eco-friendly option.
  8. Security: Both traditional and online banks are subject to the same laws and regulations, and online-only accounts are FDIC-insured just like traditional bank accounts. Online banks employ robust security measures such as encryption to protect your funds and identity.

Pros and Cons Summary

Whether opening your first bank account or switching from a traditional to an online account, here are the main pros and cons to consider.

Pros Cons
Streamlined and accessible from anywhere with an internet connection through a website or mobile app Usually have less hands-on support than traditional options
Tend to offer higher interest rates May be susceptible to glitches — such as in the mobile app
Typically have lower or fewer fees than traditional options Depositing cash may not be possible
Online institutions often have multiple types of accounts, including checking, savings, and money market accounts No way to visit the bank in person

Who Are Online Banks Best For?

Online banks are great for people who like doing things online and want to save on fees and earn more interest. They're especially good for:

  1. People Who Comfortable Using Online Platforms: Online banks are handy if you're comfortable using apps and websites for your banking.
  2. Those Who Hate Fees: Online banks usually have lower fees than traditional banks, so they're good if you don't want to pay extra charges.
  3. Savers Looking for Better Rates: Online banks often offer higher rates if you want to earn more interest on your savings.
  4. Travelers: If you travel a lot, online banks are convenient because you can bank from anywhere.
  5. People with Simple Banking Needs: If your banking is mostly about depositing checks, paying bills, and transferring money, online banks are a good choice.
  6. Anyone Who Wants 24/7 Banking: Online banks let you do your banking any time, not just during regular business hours.
  7. Eco-Friendly Folks: If you prefer paperless, online banks are great because everything is done digitally.
  8. Young Adults and Students: These banks are often more suited to the lifestyles of younger people who are always online.
  9. People Living in Remote Places: Online banking is a practical option if you don't live near a bank branch.
  10. Freelancers and Small Business Owners: If you're running your business, online banks can offer the flexibility and low fees you need.

How to Choose the Right Online Bank

If you’re shopping around for the best online banking options, here are the biggest things to consider:

  • Rates: Look for high annual percentage yields (APY) to maximize your earnings on checking, savings, CDs, or money market accounts.
  • Monthly Fees: Avoid banks that charge unnecessary monthly maintenance fees, as many now offer free accounts.
  • ATM Fees: Check for ATM fee-free options or banks that offer ATM fee rebates.
  • Other Fees: Be wary of overdraft and foreign transaction fees, and carefully review the terms and conditions.
  • Minimum Balance: Choose online banks with no minimum balance requirements for hassle-free banking.
  • Account Types: Consider diversifying accounts across different online banks to secure the best deals for your specific needs.
  • Interest Rate: The interest rate, or yield, is especially important with savings accounts or money market accounts since these accounts tend to accrue interest. The higher the rate, the more you can earn over time.
  • Account types: Choosing a bank with a variety of account options — whether they’re personal or business — can be convenient. However, you might want to open accounts with more than one bank to get the best features, highest rates, and lowest fees.
  • Customer support: It’s important to find one with several support options. This can include mobile support, online chat, or 24/7 phone support. The best banks will also have good customer reviews online, particularly about their overall banking experience.

How to Open an Online Bank Account

The process of opening an online bank account is straightforward. Even getting started with a new account can be done via your computer or smartphone. Here’s how to do it, and what you’ll usually need:

  1. Determine the type of account you need: Start by figuring out which type — or types — of accounts you need. Do you need a personal or business account? Are you looking for a high-yield savings account where your money can grow? Do you want to open a money market account? Once you know this, you can narrow down your banking options.
  2. Compare different banking options: Shop around and compare several digital institutions to see which one best suits your needs. Check their interest rates, notable fees, online ratings, customer service options, features, and restrictions.
  3. Gather your documents: You’ll typically need a few things to open an account online. This may include your government-issued photo ID, Social Security number, and an initial deposit.
  4. Complete an application: When you’re ready, fill out the application. This is typically done online and may require you to provide some personal identifying and contact information. You will also typically need to create an online profile to go with the account. Be prepared to verify any information upon request.
  5. Make a deposit and wait for approval: If a deposit is required, it might take a few business days to go through. Once it does, your account should be good to go, so you can start using it immediately. If you ordered a debit card or checks, they might take up to a couple of weeks to arrive.

Online Banks vs. Traditional Banks

Online Banks and Traditional Banks each have their unique advantages and disadvantages, catering to different customer needs and preferences. Here's a comparison of the two:

Advantages:

Online Banks Traditional Banks
Higher Interest Rates: Higher interest rates on savings accounts and CDs are typically offered. Physical Branches: Offer in-person customer service, which can be crucial for complex transactions or issues.
Lower Fees: Fewer overhead costs often translate to lower fees for account holders. Cash Transactions: Easier to deposit and withdraw cash.
Convenience: Accessible 24/7 from anywhere with the internet, ideal for digital banking. Full Range of Services: Often provide a wider range of financial services, including notarization, cashier's checks, and safe deposit boxes.
No Minimum Balance Requirements: Often, there are no or low minimum balance requirements. Personal Relationship: Opportunity to build a relationship with bank staff, which can be beneficial for loan applications or personalized financial advice.
Innovative Technology: Usually offers more advanced online banking features and user-friendly apps.  

Disadvantages:

Online Banks Traditional Banks
No Physical Branches: Lack of in-person service can be a drawback for those who prefer face-to-face interactions. Lower Interest Rates: Savings and CD rates are typically lower than those offered by online banks.
Cash Deposits Can Be Challenging: Depositing cash is often more complicated compared to traditional banks. Higher Fees: More likely to have higher fees due to higher overhead costs of physical branches.
Limited Personal Relationship: Less opportunity to build personal relationships for tailored banking advice. Limited Accessibility: Banking hours are restricted to the branch’s operating hours.

Top Online Banking Options

Here are some of the best online banking providers to choose from:

Quontic Online Bank Logo
Quontic Banking
  • No monthly/overdraft fees
  • Low minimum deposits
View rates
Axos_Bank_L
Axos Bank
  • Earn up to 3.30% APY
  • Use Promo Code "Lucky" for a $100 bonus!
View rates
Patriot Bank Logo
Patriot Bank
  • Enjoy a 0.70% APY high-yield
  • No fees
View rates
Ponce Bank Logo
Ponce Bank
  • Ability to earn interest on certain accounts
  • Wide range of different options
View rates
Bluevine logo
BlueVine Banking
  • Built for business accounts.
  • No hidden fees.
View rates

*Rates and requirements subject to change