When is the last time you checked to see how much your checking or savings account was earning you, just for having money in it? If you bank with a traditional brick-and-mortar bank, it might have been a while — and that’s not surprising.
When financial institutions like Wells Fargo and Bank of America offer annual percentage yields (APYs) as low as 0.01% on their savings and checking accounts, it’s easy to become accustomed to your money being stagnant.
But savings accounts and even checking accounts can earn you money if you choose the right bank or credit union. And nowadays, those banks tend to be online.
Best Online Banks of 2019, Ranked
The biggest allure of online banking is the high annual percentage yield (APY). APY is the interest (including compound interest) that you’ll earn on your money in a year. Because online banks very rarely have physical locations and need fewer employees, they have low overhead and can pass those savings over to customers.
The average APY for the nine best online checking accounts awarded in our 2019 list is roughly 1.4%. The average APY for our nine best online savings accounts is even higher: roughly 2%.
Remember, traditional banks offer interest rates as low as 0.01% for both checking accounts and savings accounts. (The national average for savings accounts is just 0.12%, according to Bankrate.com.)
But online bank accounts have many benefits 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, foreign transaction fees and ATM fees. Some online banks even offer ATM reimbursement for out-of-network ATMs.
- 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.
These are the best online banks of 2019, starting with our top pick:
1. Ally Bank
Why we like this bank: Hands down, Ally is the best online bank of 2019, offering both online checking and savings accounts. APYs are high (the 2.20% savings APY is especially attractive), you can apply for major loans with Ally, and ATM access is never a problem.
Potential pitfalls: If you travel outside the country frequently, don’t use your Ally Bank debit card — it carries a 1% foreign transaction fee. Travel credit cards are a better option when traveling abroad.
2. Aspiration
Why we like this bank: Aspiration was our top-rated high interest checking account for this year, thanks to its unlimited ATM reimbursement, lack of fees and high APY.
Potential pitfalls: Aspiration is a checking-only account (no online savings), you won’t be able to apply for a mortgage or car loan, and you need at least $2,500 in the account to earn the 1.00% APY.
3. Synchrony
Why we like this bank: Synchrony has a healthy 2.20% APY for the savings account, which also includes a convenience card for ATM access. Its lack of fees (even for withdrawals past the maximum six per month) is also a highlight.
Potential pitfalls: Synchrony does not include a checking account and does not have a mobile app.
4. Capital One 360
Why we like this bank: Capital One 360 does not have the most attractive APYs on either its online checking or savings account, but the bank makes up for it with the industry’s highest-rated app, no monthly fees and easy account integration.
Potential pitfalls: As I mentioned, the 1.00% APY is not the strongest on this list, and it’s also not guaranteed. You’ve got to meet certain criteria to earn the maximum interest rate.
5. nkbc
Why we like this bank: nbkc (the National Bank of Kansas City) offers checking and savings accounts, as well as home and auto loans. Its APYs are respectable, but its lack of fees and wide network of ATMs are even more appealing.
Potential pitfalls: Its savings APY (1.77%) is not as competitive as some of the other online savings accounts listed here, and it costs $5 to open the account. That’s obviously not substantial, but most accounts on our list are free to open.
6. Axos Bank (formerly known as Bank of Internet)
Why we like this bank: The Axos Rewards checking account has high potential: 1.25% APY, assuming you meet strict criteria (monthly direct deposit of $1,000 or more and 15 total debit card swipes a month). It also offers unlimited ATM reimbursement, a savings account, and mortgage and auto loans.
Potential pitfalls: Foreign transaction fees total 2%, the mobile app has poor reviews, and Axos charges $10 for debit card replacement.
7. CIT Bank
Why we like this bank: CIT offers the highest interest rate for any savings account on our list (2.45%), 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 monthly minimum deposit of $100. CIT has mortgage loans available, and its mobile app has great reviews on the App Store and Google Play.
Potential pitfalls: Aside from the tough requirements to earn the high APY, the CIT Savings Builder account suffers from lack of ATM access and a minimum balance requirement ($100). There is no checking account.
8. Alliant Credit Union
Why we like this bank: ATM access is almost always guaranteed when you bank with Alliant (it has more than 80,000 ATMs in its network). Alliant also operates one of the highest-rated apps for both checking and savings accounts and has physical locations in the Chicago area.
Potential pitfalls: Credit unions can be more challenging to join, and Alliant is no different. The APY is 2.10%, which is higher than brick-and-mortar banks like PNC but lower than most other online savings accounts included here.
9. Discover Bank
Why we like this bank: Discover Bank features both savings and checking accounts. Discover’s checking account is a rewards account, meaning you earn cash back for debit card usage instead of interest on the money in the account. The savings account has a 2.10% APY.
Potential pitfalls: You cannot get an auto loan through Discover Bank. The account also charges overdraft fees.
10. Barclays
Why we like this bank: Barclays offers a competitive 2.20% APY on its online savings account. Its mobile app is highly rated.
Potential pitfalls: You cannot open a checking account with Barclays, complicating access to funds.
11. Charles Schwab
Why we like this bank: Charles Schwab is great for those who like to travel — it has no foreign transaction fees and offers unlimited ATM reimbursement worldwide.
Potential pitfalls: APYs are low: 0.40% for the savings account and 0.50% for the checking account.
12. American Express
Why we like this bank: The APY for the American Express Personal Savings is 2.10%. Lack of fees and a strong mobile app are also key reasons to consider an account with American Express.
Potential pitfalls: American Express is a savings-only account, meaning access to funds can be challenging.
13. Simple Banking
Why we like this bank: The APY for the Simple checking account is incredibly noteworthy at 2.02%.
Potential pitfalls: Simple requires the checking account to have a linked Protected Goals account, which operates similarly to a savings account. The minimum balance is $2,000 to earn the high interest rate, and you can’t take out loans with Simple.
14. Chime
Why we like this bank: Chime is great for first-time savers. Its spending account has no monthly fees and unlimited ATM reimbursements. More importantly, it can be set up to automatically transfer 10% of any direct deposit into the linked savings account and/or to automatically round up to the nearest dollar on all purchases, depositing the extra change into the savings account. Chime also lets members access their paychecks early if they are paid via direct deposit.
Potential pitfalls: The APY for the Chime account is just 0.01%. It’s not a wise place to store all your money, but a good way to make sure you’re saving when you spend.
Why We Picked These Banks
To determine the online banks and credit unions for this list, we looked exclusively at the banks that made it onto our 2019 checking and savings account lists — or both.
These banks were selected from among nearly 40 of the most popular banks and were chosen because of their combination of high APYs, low minimum account balances, low or no fees, mobile/online experience and ease of funds transfers.
All banks on this list are FDIC-insured (Federal Deposit Insurance Corporation) or NCUA-insured (National Credit Union Administration) and have no monthly fees.
While many of the banks on each list offer both checking and savings accounts, only two banks were ranked in the top nine for both checking and savings: Ally Bank and Capital One 360.
| Bank | Savings Account APY | Checking Account APY | Mortgage and Auto Loans | What Makes This Bank Great | And What Doesn’t |
|---|---|---|---|---|---|
| Alliant Credit Union | 2.00% APY | 0.65% APY | Mortgage and auto loans | Great mobile app; access to 80,000+ fee-free ATMs (and limited out-of-network ATM reimbursement); no overdraft fees | Foreign transaction fees |
| Ally Bank | 2.20% APY | 0.60% APY | Mortgage and auto loans | Great mobile app; access to Allpoint ATMs (and limited out-of-network ATM reimbursement); 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 out-of-network ATM reimbursement; no overdraft or foreign transaction fees; donates 10% of earnings to charities | Requires minimum balance of $2,500 for 1.00% APY (otherwise, it is 0.25%) |
| Axos Bank | 1.30% APY | 1.25% APY | Mortgage and auto loans | Unlimited ATM reimbursement | Poor 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 no mortgage loans | Number one mobile app (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 no auto loans | Great mobile app; unlimited ATM reimbursement worldwide; no foreign transaction fees | Overdraft fees if funds aren’t available in linked account |
| Chime | It’s complicated | 0.00% APY | None | Encourages first-time savers to be better with finances with Automatic Savings Account; access to paycheck before actual deposit; access to 38,000+ ATMs nationwide | Doesn’t offer any interest |
| CIT Bank | 2.45% APY | N/A | Mortgage loans, but no auto loans | Highest savings account interest rate; great mobile app | Requires either $25,000 in account or minimum deposit of $100/month to earn high APY (otherwise, it is 1.17%); requires minimum balance of $100; limited access to funds |
| Discover Bank | 2.10% APY | 1% cash back on up to $3,000 in monthly purchases | Mortgage loans, but no auto loans | Great mobile app; access to 60,000+ fee-free ATMs; no foreign transaction fees; cash back rewards | No traditional APY for checking account, but cash back is still enticing (rewards checking account); overdraft fees |
| nbkc | 1.77% APY | 1.01% APY | Mortgage and auto loans | Access to Moneypass fee-free ATMs; limited ATM reimbursement; no overdraft or foreign transaction fees | APY ranges from 1.31% to 1.77% |
| Simple Banking | It’s complicated | 2.02% APY | None | Access to 40,000 fee-free ATMs; no overdraft fees | Account requires a Protected Goals Account (which operates like a savings account) with $2,000+ to earn APY; foreign transaction fees |
| Synchrony | 2.20% APY | N/A | None | Convenience card for access to ATMs (nice touch for a savings-only account); no checking account, but can open money market account (1.20% APY) for check-writing capabilities; limited ATM reimbursement | No mobile app |
Drawbacks of Online Banks
Online banking isn’t without its issues, but customers have generally found the high-yield returns, stellar mobile experiences and lack of fees more than make up for online banks’ pitfalls.
Below are some of the most common drawbacks of online banks:
Limited Options for Cash Deposits
Depositing cash is the biggest challenge of online banks because they lack physical locations. Even online banks that have partnerships with brick-and-mortar banks for in-network ATMs often cannot accept cash deposits via ATM.
If you intend to deposit cash regularly (like if you’re a server or hair stylist who depends on cash tips) but still want the benefits of an online account, open an account with a brick-and-mortar bank solely to deposit cash and electronically transfer it to your online account.
Challenges With Transferring Funds
Online checking accounts generally make it easy to access your money with debit cards that work at thousands of ATMs. Some also offer checkbooks, no matter how archaic they may seem.
Online savings accounts, on the other hand, can be more challenging to access in emergencies than savings accounts at brick-and-mortar banks, but thanks to improvements in the speed of electronic transfer (ACH deposits) and new solutions from online savings accounts (like convenience cards), this issue has been largely reduced. You can read the specifics of funds transfers for popular accounts here.
No Face-to-Face Support
If you’re more old school about your money management and like the idea of walking into a branch and singing your sorrows to a bank teller who can help you figure out your financial problems, 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 in-person help for your accounts at a brick-and-mortar bank.
Timothy Moore is a market research editor and freelance writer covering topics on personal finance, careers, education, pet care and automotive. He has worked in the field since 2012 and has been featured on sites like The Penny Hoarder, Debt.com, Ladders, Glassdoor and The News Wheel.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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