In the age of the internet, almost every bank offers online banking services. But that doesn’t mean every bank is an online bank. Rather online banks are defined by an essential tradeoff: you’ll typically be offered higher yields and be charged fewer fees than you would from brick-and-mortar financial institutions, in exchange for a purely digital experience. That means no branches to visit.
We looked at hundreds of data points on account yields, fees and more to figure out the top ten best online banks for you to consider.
Annual percentage yields (APYs) and account details are accurate as of February 8, 2024.
Best online banks
- Discover® Bank.
- Quontic Bank.
- EverBank
- Ally Bank.
- Sallie Mae Bank.
- First Internet Bank.
- CIT Bank.
- nbkc Bank.
- Synchrony Bank.
- LendingClub.
Why trust our banking experts
Our team of experts evaluates hundreds of banking products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 75 banks reviewed
- 35+ data points analyzed
- 4 levels of fact-chceking
Best online banks of February 2024
Discover® Bank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
60,000
Annual percentage yield
4.30%
Savings account APY
Products
Checking, Savings, MMAs and CDs
What should you know
As a Discover customer you’ll have access to 24/7 customer service (which typically rates highly in independent analysis), and 60,000 fee-free ATMs.With only one checking account, Discover makes it a good one. The Discover® Cashback Debit Checking account has no service fees and offers several attractive features, including: 1% cash back on up to $3,000 in debit card purchases (see website for details), fee-free overdraft protection and early payday — in which you can access your paycheck up to two days early when you set up direct deposit.The Discover® Online Savings Account has no monthly fee, no minimum opening deposit and offers 4.30% APY, which is compounded daily.Yet, if you want an account that you can access like a checking account and earn interest on it rather than cash back, look at the Discover® Money Market Account (MMA). You can earn 4.15% APY for balances under $100,000 and 4.20% APY for balances $100,000 and over. It has a deposit requirement of $2,500, but you’re not required to maintain a balance after opening.To earn an even higher yield in a protected account, consider Discover® Certificates of Deposit (CDs). Discover offers CD terms between three months and 10 years. The minimum CD deposit is $2,500 and there are early withdrawal fees, so be sure you can commit to the entire term.
Pros and Cons
Pros
- High yields.
- Low fees.
- Good customer service.
Cons
- $2,500 deposit requirement for CDs and MMA.
- Limited 1% cash back on the checking account. See website for details.
Quontic Bank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Quontic Bank’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
90,000+
Annual percentage yield
4.50%
Savings account APY
Products
Checking, savings, MMAs and CDs
What should you know
Quontic has two checking accounts and three types of savings accounts. None of them have overdraft fees, monthly service fees or incoming domestic wire transfer fees. And, as a Quontic customer, you have access to over 90,000 surcharge-free ATMs.Quontic Bank Cash Rewards Checking offers 1% cash back on eligible debit card purchases (up to a total of $50 per statement cycle). Eligible debit card purchases are defined as purchases made directly with a vendor, not through third-parties like an ATM, Venmo or Apple Pay.Quontic discontinued its other rewards checking account, the Quontic Bank Bitcoin Rewards Checking account, at the end of August, 2023.The Quontic Bank High Interest Checking account, however, is still going strong. It rewards you for keeping money in the account rather than spending it by offering up to 1.10% APY on all balance tiers after making at least 10 qualifying debit card transactions of $10 or more per statement cycle (otherwise, earn 0.01% APY on all balance tiers).If you’d like to earn a higher interest rate, without jumping through hoops, and you don’t need to access your cash often, look at Quontic’s savings accounts and CDs.Quontic Bank High Yield Savings offers 4.50% APY with daily compounding interest and only a $100 minimum opening deposit. But, the better deal is the Quontic Money Market Account (MMA), which features a competitive 5.00% APY and also only requires $100 to open.While you can access this account via debit card, checks and more (like most MMAs), Quontic limits you to only six monthly transactions (a stipulation that typically applies only to traditional savings accounts). For each “extra” transaction, you’ll pay a $10 fee. If you treat it like a savings account though, you’ll be earning a great rate and still have the option to swipe a debit card once in a while.Regarding CDs, Quontic Bank certificates of deposit have five terms: six months and then one, two, three and five years. You need a minimum deposit of $500 to open one, which is reasonable, and the highest yield available is 5.30% APY on the one-year term. Early withdrawals are subject to penalties.
Pros and Cons
Pros
- Competitive yields.
- 90,000+ in-network ATMs.
- Two rewards checking accounts to choose from.
Cons
- $10 excess transaction fee on its MMA.
- $100 minimum deposit for the Quontic Bank High Yield Savings.
EverBank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
80,000
Annual percentage yield
5.15%
Savings account APY
Products
Checking, Savings, MMAs, CDs, Investments, Rewards Credit Card
What should you know
EverBank’s (formerly TIAA) checking, savings and money market accounts all have a “yield pledge,” which promises that the account interest rates will remain in the top 5% of APYs offered by similar accounts at the ten largest banks in the U.S.The EverBank Performance℠ Savings account offers a 5.15% APY, while the EverBank Yield Pledge® Money Market offers 4.75% APY for the first year on balances up to $250,000. Then, an ongoing APY between 3.75% to 4.30% applies, depending on account balance. The intro rate is reserved for new EverBank savers only, but it guarantees that rate on balances up to $250,000, which is unusually good. If rates go up during the one-year period, this rate will rise to match. If they go down, this rate still won’t dip. Most accounts make no such promises.There is, however, a catch or two. If you don’t qualify for the intro APY on the MMA, you’ll earn between 3.75% to 4.30% APY, depending on your balance. And, even if you qualify, you may be looking for another high-yield account in 12 months when the intro rate runs out.The EverBank Yield Pledge® Checking account, however, offers more than a high yield. While the 0.45% APY is much lower (as is typical with checking accounts) and it requires $100 to open, you receive purchase benefits on the debit card that are typically found only on credit cards, such as price protection, return protection and extended warranty protection.For all three high-yield accounts, there’s no: monthly account fee, overdraft fee, non-sufficient fund fee or online bill pay fee. EverBank doesn’t charge ATM fees itself and automatically reimburses you up to $15 a month for out-of-network ATM fees. (If you have an average daily balance of at least $5,000, you receive unlimited ATM fee reimbursem*nts.) You’ll also have access to more than 80,000 ATMs nationwide.If you have some extra savings that you want to put away, EverBank certificates of deposit offer terms between three months and five years with a $1,000 minimum deposit. Its highest yield CD is the nine-month term with 5.25% APY.
Pros and Cons
Pros
- High yields on savings products.
- No monthly service fees.
- Up to $15 a month reimbursem*nt for out-of-network ATM fees.
Cons
- High intro rate is for new customers only.
- Intro rate only lasts for a year.
Ally Bank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
43,000
Annual percentage yield
4.35%
Savings account APY
Products
Checking, Savings, MMAs, CDs, Credit Cards, Mortgages, Auto Loans, Personal Loans, Investments
What should you know
Ally is one of the most established online banks in the nation with over 43,000 no-fee ATMs and 24/7 live customer support.Its account names tell the story: the Ally Bank Spending Account offers 0.10% APY on balances under $15,000 and 0.25% APY on balances of $15,000 or greater, while the Ally Bank Savings Account offers 4.35% APY on all balances. Neither account requires a minimum opening deposit or charges a monthly service fee.The checking account specifically has early direct deposit (you can receive your paycheck up to two days early), overdraft protection and up to $10 monthly ATM reimbursem*nts. The savings account, besides having a high yield, has automatic savings tools to help you ferret away money.In both, you can use a special tool called “buckets,” which aims to replace any budgeting apps you may already use. The bank can track your finances and do math for you, letting you see your spending habits. With some simple instructions, Ally will divide your money into different categories, like rent, utilities, vacation fund and holiday gifts.If you don’t need all of your cash to stay liquid, consider an Ally Money Market Account (MMA) or CD. Its MMA offers 4.40% APY, but you’re limited to six transactions a month (otherwise you may be charged $10).Ally Bank High Yield certificates of deposit can offer even higher rates, but don’t allow any transactions during their terms (unless you withdraw only the interest or pay an early withdrawal fee). You’ll find terms between three months and five years, with yields ranging from 3.00% to 4.65% APY. Also available are the Ally Bank No Penalty CD and Ally Bank Raise Your Rate CDs, but with lower yields.
Pros and Cons
Pros
- Competitive rates.
- 24/7 live customer support.
- Free personal finance tools.
Cons
- No cash deposits accepted.
- No cash-back reward offered.
Sallie Mae Bank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
Annual percentage yield
4.50%
Savings account APY
Products
Savings, MMAs and CDs
What should you know
Sallie Mae rates highly on our list because it charges little in the way of fees and offers competitive yield on a variety of savings products. However, there is no checking account available, hence no debit card — not even for its MMAs.Ultimately that’s not a dealbreaker for us because, well, you shouldn’t be in the business of accessing your savings at ATMs. Your savings account, ideally, is for emergency funds that you can transfer to a checking account in the rare instances when it’s needed. Still, if this lack of convenience is a dealbreaker for you, that’s understandable.Originally only a student loan organization, Sallie Mae now can help you to grow your money with four types of savings accounts. There’s no minimum balances, no monthly fees and high yields. The Sallie Mae SmartyPig Account offers 4.25% APY, the Sallie Mae High-Yield Savings Account offers 4.50% APY and the Sallie Mae Money Market Account (MMA) offers 4.75% APY.The SmartyPig Account is designed as a tiered system so that the more you save, the higher the yield; however, currently, you’ll earn a flat 4.25% APY on balances of $0.01 or greater. If you choose one account here, the clear winner is the MMA as it has the highest yield and allows you to access your funds with checks.However, if you’re not concerned about accessing your funds and, in fact, you don’t mind sitting back and letting your funds earn interest, the rates on Sallie Mae certificates of deposit may catch your eye.The bank offers CD terms ranging from six to 60 months with competitive rates, including a 12-month term with 5.25% APY, and allows you to take interest payments each month without penalty. You’ll have to meet a minimum balance of $2,500 though and there are industry-standard early withdrawal penalties if you cash out the principal before the maturity date.
Pros and Cons
Pros
- Competitive yields.
- Few fees.
- No minimum balance requirements for checking or savings accounts.
Cons
- Customer support only available during regular business hours.
- No debit card or ATM access.
First Internet Bank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
Annual percentage yield
0.80%
Savings account APY
Products
Checking, Savings, MMAs, CDs
What should you know
Different winners shine in different areas, and First Internet Bank’s most appealing products are its CDs. There are eight term options on First Internet Bank certificates of deposit, with maturity dates running between three months and five years. The highest rate is 5.35% APY on its 12-month term, and even its six month option offers a yield of 5.22%. Those are outstanding rates that will help savers meet financial needs.We like its two checking account options, as well. Our favorite is the First Internet Bank Interest Checking account, which requires a minimum opening deposit of $100 but will earn 0.50% APY. You’ll also receive up to $10 a month in ATM fee rebates. However, there is a monthly service fee of $10 which can be waived by maintaining an average daily balance of $500. If money is tight, you only need $25 to open the First Internet Bank Free Checking account — but it doesn’t pay interest.Twin sister to the Free Checking account, the First Internet Bank Free Savings account also only requires a $25 minimum opening deposit but it does pay some interest: 0.80% APY. That is not especially appealing for an online bank, though. For a higher yield look at the First Internet Bank Money Market Savings account, which offers 3.76% APY on daily balances of $1 million or less and 5.46% APY on daily balances over $1 million. You’ll need only $100 to open it but it charges a monthly service fee of $5 which can be waived by maintaining a $4,000 average daily balance.
Pros and Cons
Pros
- Attractive CD rates.
- ATM reimbursem*nt.
- Multiple checking and savings accounts.
Cons
- Balance minimum required to avoid monthly fees.
- $5 dormant account fee (if you make no transactions within 12 months).
CIT Bank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
Annual percentage yield
Up to 5.05%
Savings account APY
Products
Checking, Savings, MMAs, CDs, Home Loans
What should you know
CIT Bank offers a well-rounded suite of checking and savings products that charge little in the way of fees, though fall short of the top of the market when it comes to yields.CIT Bank eChecking is a free online checking account with no monthly fees, overdraft fees, online transfer fees and up to $30 a month in ATM free reimbursem*nts. It offers 0.10% APY on balances under $25,000 and 0.25% APY on balances of $25,000 or greater.To get a larger yield for a smaller balance requirement, check out its four savings accounts. You’ll need a $100 minimum opening deposit for each of them. The CIT Bank Platinum Savings account offers 5.05% APY with a balance of $5,000 or more and 0.25% APY on balances less than $5,000. And the CIT Bank Savings Connect account offers 4.65% APY on all balances.The CIT Bank High-Yield Money Market Account (MMA) and CIT Bank Savings Builder account aren’t as attractive. None of these accounts charge monthly service fees, but you’ll earn only 1.55% APY on the MMA and you’ll need to jump through a hoop to get the highest yield with the Savings Builder account: Earn 1.00% APY from the day the account is opened through the first evaluation day, then continue to earn 1.00% APY by maintaining a $25,000 minimum balance or making at least one monthly deposit of $100 or more. Otherwise, earn 0.40% APY.CIT Bank certificates of deposit come with terms ranging from six to 60 months, but only four of its yields are competitive: 5.00% APY on its six-month CD; 4.65% APY on its 13-month option; 4.60% APY on its 18-month term and 4.90% APY on the 11-month CIT Bank No-penalty CD. The rest of its interest rates are depressingly low, running between 0.30% and 0.50% APY.
Pros and Cons
Pros
- No monthly service or overdraft fees.
- Live customer service available during extended business hours.
- “A-” grade from the Better Business Bureau.
Cons
- You have to maintain high balances to get the best rates.
- Better rates are offered elsewhere.
nbkc Bank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
37,000
Annual percentage yield
1.75%
Savings account APY – nbkc Everything Account
Products
Checking, Savings, MMAs, CDs, Home Loans, Auto Loans, Personal Loans, Credit Cards
What should you know
The accounts that shine at nbkc Bank are its checking/savings hybrid account and its CDs.The nbkc Bank Everything Account has no minimum opening deposit and offers 1.75% APY, which is almost crazy high for a checking account (though less good for a savings account). You have fee-free access to about 40,000 ATMs and customizable savings goals to help you budget (if you want to).The only pure savings-type of account available is the nbkc Personal Money Market Account, which isn’t bad. It comes with a 3.00% APY and also has no minimum opening deposit. Other money market accounts on this list, however, offer better yields.For higher deposit rates, check out the nbkc Personal certificates of deposit. You can find a 5.50% APY on both its seven- and 11-month terms.
Pros and Cons
Pros
- Super high checking account APY.
- Only $5 to send a domestic wire.
- Up to $12 ATM fee reimbursem*nt each month.
Cons
- Customer service only available during regular business hours.
- The CD early withdrawal penalty can affect your principal.
Synchrony Bank
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
60,000
Annual percentage yield
4.75%
Savings account APY
Products
Savings, MMAs, CDs
What should you know
With a bunch of interesting savings options and a dearth of checking accounts, consider Synchrony for your emergency fund needs rather than day-to-day financial management.The Synchrony Bank High Yield Savings account offers 4.75% APY, and you aren’t required to make a minimum deposit, maintain a certain balance or pay any type of monthly service fee.If you’d like for your funds to be slightly more liquid (and we mean slightly), consider the Synchrony Bank Money Market Account. The account also doesn’t come with a debit card, though you can request checks. And while it doesn’t have a minimum balance or service fee, it’s APY of 2.25% doesn’t turn our heads. You’re probably better off with the savings account and doing your checking elsewhere.The yields on the Synchrony Bank certificates of deposit, however, are eye-catching. Term options range between three and 60 months, all with no minimum deposit requirement. The highest rate is 5.15% APY on its 9-month term. If you’re afraid of commitment in today’s topsy-turvy financial environment, there is an 11-month Synchrony Bank No-Penalty CD and a 24-month Synchrony Bank Bump-Up CD available as well.
Pros and Cons
Pros
- Attractive high-yield savings rate.
- Lots of CD options available.
- No minimum balance required.
Cons
- No debit card available.
- Money market account yield isn’t impressive.
LendingClub
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
On Fiona’s Website
BLUEPRINT RATING
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
ATM network
37,000
Annual percentage yield
5.00%
Savings account APY
Products
Checking, Savings, CDs
What should you know
LendingClub doesn’t provide only loans, but also a great checking and savings account.LendingClub Rewards Checking has no monthly maintenance, overdraft or non-sufficient fund fees, plus boasts an unlimited 1% cash back on qualified debit card purchases after meeting eligibility requirements.The LendingClub High-Yield Savings account offers 5.00% APY on all balances and comes with no monthly service or overdraft fees — which could matter because you can access your funds here with a free ATM card. There’s a $100 minimum opening deposit requirement (and a $25 opening deposit requirement for Rewards Checking), but, once the account is open, you’re not obligated to keep any daily balance.Both accounts have unlimited ATM fee rebates (and you don’t have to jump through hoops to qualify for this) and integrated management tools so you can track spending, make a budget and even figure out your net worth. Plus LendingClub offers access to nearly 40,000 ATMs that don’t charge fees at all.LendingClub certificates of deposit, however, require a hefty chunk of change to open. The minimum amount to open one is $2,500, but you’ll find competitive yields ranging from 4.00% to 5.00% depending on the term.
Pros and Cons
Pros
- Competitive rates.
- No overdraft fees.
- Personal financial management tools.
Cons
- High CD minimum deposit requirement.
- No MMAs.
Compare the best online banks
| Online bank | Star rating | Highest checking account reward(s) | Highest savings account yield (APY) | Highest CD yield (APY) |
|---|---|---|---|---|
| 5.00 | 1% cash back on up to $3,000 in debit card purchases (see website for details) | 4.30% | 4.90% | |
| 4.86 | 1% cash back on eligible debit card purchases (up to a total of $50 per statement cycle); 1.10% APY on all balance tiers after making at least 10 qualifying debit card transactions of $10 or more per statement cycle (otherwise, earn 0.01% APY on all balance tiers) | 4.50% | 5.30% | |
| 4.86 | 0.45%APY | 5.15% | 5.25% | |
| Ally Bank | 4.68 | 0.10% to 0.25%APY | 4.35% | 4.65% |
| 4.56 | N/A | 4.50% | 5.00% | |
| 4.37 | 0.50%APY | 0.80% | 5.35% | |
| 4.30 | Up to 0.25%APY | Up to 5.05% | 5.00% | |
| 4.26 | 1.75%APY | 3.00% | 5.50% | |
| 4.20 | N/A | 4.75% | 5.15% | |
| 4.12 | 1% cash back on qualified debit card purchases after meeting eligibility requirements | 5.00% | 5.00% |
Methodology
We evaluated accounts offered by more than 75 online banks and scored each out of 100. A score of 100 earned a five-star rating; a score of 80 earned a four-star rating and so on. The factors we considered and how we weighed them are below.
APY 25%
The most important factor, albeit not the only one, in determining where you’ll bank is how much you’ll earn on savings. Therefore we prioritized a bank’s APY on savings products. This is especially true for online banks whose sole reason for being is that they can offer better yields than their brick-and-mortar competitors.
Product offerings 20%
When you join a bank, you expect it to offer more than a single type of account. While online banks may or may not offer a smattering of consumer loans, we specifically looked for checking, savings, CDs and money market accounts as a baseline. Online banks with all four scored well in this category.
App ratings 13%
A point of online banks is that they are easily accessible electronically. While they don’t have brick-and-mortar locations, they do have phone apps. And no one likes a glitchy app, especially one that interfaces with your money.
The Apple App Store and Google Play Store ratings factored into our analysis of online banks.
Fees 12%
Paying monthly fees to have a bank account is a fashion that’s rapidly going out of style, especially with online banking. But we still looked at whether the banks had fees for its deposit accounts and weighed it accordingly.
Minimum opening deposit and balance 12%
We believe in democratizing finance. Opening (another) bank account likely takes a backseat to priorities such as paying rent, buying things for your family and much more. If you do want to get a new online bank account, it should be within your financial reach. We considered how much you need to both open an account and to keep it open. The lower these numbers, the better.
After all, you likely have better uses for your money rather than keeping it in a bank account; whether it’s supporting your family or investing it for a greater return than what a bank deposit account can offer.
Size of fee-free ATM network 10%
Given that online banks don’t have any physical branches, being able to access cash (and your account in general) via an ATM can be important. And who wants to pay a fee each time? No one, that’s who. We considered the size of fee-free, in-network ATMs when we evaluated the online banks.
Customer service 8%
We reviewed the letter grades awarded by the Better Business Bureau, the scores from Trustpilot and factored in whether online banks offered an online customer chat function.
Why some online banks didn’t make the cut
You’ll notice that some of the biggest names in banking aren’t on our list. Firstly, the largest banks in the nation by asset size all have physical locations (they’re not online-only banks). And, secondly, the largest banks tend to offer poor yields on consumer deposit accounts (which is the factor we weighed the most heavily).
The largest banks already enjoy the benefits of having a ton of deposits; they don’t feel the need to offer great rates to attract more customers (a.k.a. more deposits).
Smaller institutions typically offer the best rates in a bid to gain attention and attract customers.
What is digital banking?
Digital banking involves managing your bank accounts without stepping foot in a physical branch. The concept of digital banking can be broken down into two parts: online banking and mobile banking.
Online banking is when you use an internet browser like Google Chrome, Firefox or Safari to go to your bank’s website and log on to your account. Mobile banking is when you manage your money through a financial institution’s app on your smartphone or tablet. While the login details for your bank’s mobile app may remain the same, the interface within the app may look a bit different than the bank’s website.
Traditional banks with physical branches often offer both online and mobile banking services. Most customers expect it. But online-only banks don’t have branches and focus on the digital banking experience. This means that while you can bank from anywhere in the world, you need an internet connection or ATM as there are no physical branches.
How to open a bank account online
You don’t have to leave your home to open an online bank account. Once you’ve found a bank you want to work with, you’ll likely complete the following steps:
- Head to the bank’s website.
- Choose the type of bank account.
- Fill out an application.
- Provide identity verification documents.
- Wait for approval.
- Fund your new account.
In many cases, the application and approval process takes a matter of minutes.
You can make the process run smoothly by gathering necessary documents ahead of time. Most banks will ask for the following details:
- Your Social Security number: An Individual Taxpayer Identification Number (ITIN) may also fit the bill.
- A government-issued ID: Many people use their driver’s license. But a passport or other form of identification might be accepted.
- Any deposits: If you are required to make an opening deposit, have funding account information ready, including the routing and account numbers.
If you run into any issues, you’ll often find a customer support team ready to help.
Choosing the best digital banking experience
Digital banking experiences aren’t created equally. The features and the overall quality will vary based on the financial institution. It’s helpful to explore all of your options before signing up for an account.
Let’s explore some of the factors to consider when choosing the best digital banking experience:
- Account APYs: Online banks tend to offer higher APYs than traditional banks. But even among online banks, you can find a wide range of offered APYs. For most, a higher APY is a top priority to grow their funds. Take the time to find an online bank with a competitive APY.
- Bank fees: No one wants to pay bank fees. Before signing up for an account, check out the fee structure. Confirm you are comfortable with the fees before applying for an account.
- Product offerings: Some online banks offer a full suite of banking products, while others online offer a handful of savings products. When looking for an online bank, keep your goals in mind. For example, if you are looking for a top APY for your savings, you might choose a different bank than someone who wants to manage all of their accounts in a single location.
- ATMs: If you want to have access to physical cash with limited fees, look for an online bank that offers access to a fee-free ATM network.
- Mobile app: A glitchy mobile app can ruin your digital banking experience. Take a look at the app reviews in the Google Play Store and the App Store to see how the app stacks up. If reviewers are consistently calling out a glitch, you might want to choose another bank.
- Deposit insurance: It’s critical to confirm the financial institution you work is guaranteed by the Federal Deposit Insurance Corporation (FDIC), which protects your funds up to $250,000 per depositor, per covered institution, and per ownership type.
- Safety features: There are plenty of scammers in the world, but many online banks have extensive safety features to keep your funds safe. For example, some safety features include fraud monitoring, account alerts and multi-factor authentication.
A final and important consideration is the overall customer experience.
“Reliable customer support is an indispensable aspect to consider when selecting an online bank,” said Oliver Wagner, CPA and founder of 1040 Abroad, a tax firm for expats. “Whether it’s a question about account management, a discrepancy in transactions or assistance with navigating the online banking platform, having access to knowledgeable and helpful representatives can make all the difference.”
Online banking vs. traditional banking
Traditional banking comes with physical branch locations to provide customer support. Most brick-and-mortar banks offer a wide range of services at their branch locations. For example, you might be able to make deposits, check your account balance, apply for a loan or ask any number of questions about your banking experience.
While brick-and-mortar branch locations are still offered by many traditional banks, many traditional banks also offer online banking services. After all, many customers want the option to manage their finances from a website or mobile app.
In contrast, besides ATM access, online banks are exclusively digital. Because they tend to save on overhead expenses, and are less established and need to attract customers, they typically offer better rates on both savings and loan products.
However, they are often smaller and may have a limited number of financial products. For example, at one online bank, you might find a top-notch savings account, but no checking account. This might lead to you having accounts at multiple online banks to get the best deal for each type of deposit.
The right choice between traditional banking and online banking varies based on your situation. If you’re comfortable handling all of your money management needs online, then an online bank might be the right fit.
The allure of higher interest rates and lower fees is a strong feature of most online banks. But if you’re looking for a more comprehensive suite of banking products and you like the option of talking to someone in person, then working with a traditional bank might be a better fit.
If you can’t decide, get both. You can have as many bank accounts as you desire.
Frequently asked questions (FAQs)
In general, digital banking is a safe option. Like brick-and-mortar banks, online banks can offer FDIC-insured savings products to provide peace of mind about your funds.
On top of FDIC insurance, many online banks offer extensive security features. Some common safety features offered by online banks include account alerts, fraud monitoring, and multi-factor authentication. Working with an online bank that offers a wide range of security features can keep your funds safe.
The digital nature of online banks doesn’t mean you have to skip FDIC insurance. Online banks, like traditional banks, can be FDIC-insured. Before signing up to work with a particular online bank, you can confirm that its accounts are protected with the FDIC BankFind tool.
Many online banks offer accounts with access to ATMs, which gives customers the ability to withdraw physical cash from their digital bank account. While most online banks offer some level of access to ATMs, not all online banks offer this perk. If you want access to ATMs, confirm the online financial institution offers this option before signing up for an account.
If you’ve had trouble being approved for bank accounts, check out second-chance banking, like Chime®*, which doesn’t look at your previous banking history.
*Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.
