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10 Best Online Banks: Discover the Allure of Online Banks

Updated: Oct 13, 2023

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Best Online Banks

Introduction: Best Online Banks

In recent years, the financial world has seen a significant shift towards online banking and neobanks. As technology continues to evolve, more people are recognizing the convenience and benefits of managing their finances online. But with so many online banks vying for your attention, how do you determine which one is the best?


In this article, we'll delve into the key features that make an online bank stand out and why they might be the right choice for your financial needs.


 

Best Overall: Quontic Bank

Why we love Quontic Bank

Quontic Bank offers nearly everything you could want from an online bank. They have checking and savings options, high-yield savings accounts and CDs (with extremely competitive rates), mortgages, cash rewards, and the Quontic Pay Ring! They are highly innovative in their approach to banking and that is why we rank them the best.


If you want to learn more about Quontic Bank, check out our comprehensive review.


Best Online Bank for Small Businesses: Axos Bank


 

Best For: User-friendly, diverse products


Summary: Ally Bank stands out as a pioneer in the online banking space, offering a range of financial products tailored to meet the diverse needs of its customers. With its roots as an auto financing company, Ally has transformed into a full-fledged online bank, emphasizing transparency, competitive interest rates, and 24/7 customer support. Its platform is designed with user experience in mind, making banking tasks straightforward and hassle-free.

Pros:

  • Comprehensive range of banking products.

  • Competitive interest rates on savings and CDs.

  • No monthly maintenance fees.

  • Robust mobile app with features like mobile check deposit.

Cons:

  • No physical branches.

  • Some services, like wire transfers, may incur fees.

  • No dedicated business banking products.


 

Best For: Rewarding banking experience


Summary: Discover Bank, an extension of the renowned credit card company, offers a banking experience that rewards its customers at every turn. Known for its Cashback Debit account, Discover Bank provides opportunities for customers to earn cash back on everyday purchases. Beyond its rewarding checking account, Discover also offers high-yield savings accounts, CDs, and money market accounts, all with competitive rates and no hidden fees.

Pros:

  • Cashback rewards on debit card purchases.

  • No monthly fees or minimum balance requirements.

  • High-yield savings and CD rates.

  • Seamless integration with Discover credit cards.

Cons:

  • Limited ATM network compared to other banks.

  • No physical branches.

  • Cashback rewards limited to certain categories.


 

Best For: Streamlined, fee-free banking


Summary: Chime is an online banking platform that emphasizes a seamless banking experience devoid of hidden fees. Operating with a philosophy akin to credit unions, Chime's primary goal is to pass on savings to its customers. With features like early direct deposit and a nationwide ATM network, Chime has positioned itself as a frontrunner in the online banking world.

Pros:

  • No hidden fees or monthly charges.

  • Early direct deposit feature.

  • Access to a vast nationwide ATM network.

  • User-friendly mobile app and platform.

Cons:

  • Limited physical presence, entirely online.

  • No joint accounts option.

  • Limited to basic banking products.


 

Best For: Digital banking, top security


Summary: iGObanking, a division of Flushing Bank, offers a fully digital banking experience tailored for the modern user. Prioritizing security and convenience, iGObanking provides a range of products from high-yield savings accounts to flexible checking options. Their platform is designed to ensure top-notch security, giving users peace of mind while conducting their banking tasks online.

Pros:

  • Competitive interest rates on savings.

  • No monthly maintenance fees.

  • FDIC insured, ensuring safety for deposits.

  • User-friendly online platform and mobile app.

Cons:

  • No physical branches.

  • Limited product range compared to larger banks.

  • Some services may have transaction limits.


 

Capital One 360: Read our Full Review Here

Best For: Traditional meets online banking


Summary: Capital One 360 is the online banking arm of the well-known Capital One brand. Merging the reliability of traditional banking with the convenience of online services, Capital One 360 offers a range of products from high-yield savings to checking accounts. With the added benefit of access to physical Capital One cafes and branches, customers get the best of both worlds.

Pros:

  • Competitive interest rates on various accounts.

  • No monthly fees or minimum balance requirements.

  • Access to Capital One cafes and ATMs.

  • Seamless integration with other Capital One products.

Cons:

  • Limited high-yield account options.

  • Some services, like international wire transfers, may incur fees.

  • Customer service wait times can be long during peak hours.


 

Marcus by Goldman Sachs: Read our Full Review Here

Best For: High-yield savings


Summary: Marcus by Goldman Sachs, an online bank launched by the renowned Goldman Sachs Group, focuses on providing high-yield savings opportunities to its customers. With a commitment to transparency and no hidden fees, Marcus offers savings accounts and personal loans with competitive rates. The platform is designed for simplicity, ensuring that users can easily manage their finances without the complexities often associated with traditional banks.

Pros:

  • High-yield savings accounts with top-tier interest rates.

  • No monthly fees or minimum deposit requirements.

  • User-friendly online platform.

  • Personal loans with flexible terms.

Cons:

  • No checking account options.

  • No physical branches.

  • Limited product range compared to full-service banks.


 

Best For: Personal finance management


Summary: Banktivity is not just a bank but a comprehensive personal finance management tool. Designed for individuals who want to take control of their financial life, Banktivity offers a suite of tools for budgeting, tracking investments, and monitoring financial goals. With a focus on providing a holistic view of one's finances, Banktivity stands out as a platform that goes beyond traditional banking to offer financial insights and planning tools.

Pros:

  • Comprehensive budgeting and financial tracking tools.

  • Integration with multiple bank accounts and credit cards.

  • Investment tracking and performance analysis.

  • User-friendly interface with customizable views.

Cons:

  • Not a standalone bank.

  • Requires a learning curve for new users.

  • Subscription-based pricing for advanced features.


 

Best For: Adaptive digital banking


Summary: Quontic Bank is a trailblazer in the realm of adaptive digital banking. With a mission to challenge the status quo, Quontic offers innovative banking solutions tailored to the diverse needs of its customers. From high-yield savings accounts to unique loan solutions, Quontic combines technology and banking expertise to provide an adaptive and customer-centric banking experience.

Pros:

  • High-yield savings and checking accounts.

  • Innovative loan solutions tailored to individual needs.

  • FDIC insured with top-tier security measures.

  • Commitment to financial inclusion and diversity.

Cons:

  • Limited physical presence.

  • Some products may have minimum balance requirements.

  • Customer service availability may vary.


 

Best For: Comprehensive financial platform


Summary: SoFi, short for Social Finance, started as a student loan refinancing company but has since evolved into a comprehensive financial platform. Catering to the needs of the modern consumer, SoFi offers a range of products from personal loans to investment opportunities. With a focus on financial education and community, SoFi provides its members with resources, events, and advice to help them achieve their financial goals.

Pros:

  • Diverse range of financial products, including SoFi Money and SoFi Invest.

  • No account fees and competitive interest rates.

  • Access to financial advisors and educational resources.

  • Active community with member events and networking.

Cons:

  • Limited physical presence.

  • Loan approval may require a higher credit score.

  • Some investment options may have associated fees.


 

Best For: Innovative budgeting tools


Summary: One Finance is redefining the banking experience with its innovative approach to budgeting and saving. With features like "Pockets" for dedicated saving goals and shared Pockets for collaborative saving, One Finance offers tools that make budgeting intuitive and fun. The platform is designed with the modern user in mind, emphasizing simplicity, transparency, and user empowerment.

Pros:

  • Unique "Pockets" feature for organized saving.

  • Competitive APY on savings.

  • No monthly fees or overdraft charges.

  • User-friendly mobile app with real-time notifications.

Cons:

  • No physical branches.

  • Limited to basic banking products.

  • Deposit limits on certain account types.


 

Best For: Seamless online banking experience


Summary: Axos Bank, established in 2000, was one of the pioneers in the digital banking realm. With a mission to simplify banking through technology, Axos Bank offers a variety of account types, including checking, savings, CDs, and Money Market accounts. The bank is known for its competitive interest rates, especially on savings accounts and CDs. With no physical branches, Axos Bank emphasizes 24/7 online accessibility, ensuring customers can manage their finances anytime, anywhere. The bank's commitment to providing exceptional banking services is evident in its responsive customer support, available seven days a week.

Pros:

  • Competitive interest rates on savings accounts and CDs.

  • Broad range of account types catering to diverse financial needs.

  • No monthly fees on checking and savings accounts.

  • 24/7 access to online banking.

Cons:

  • No physical branches.

  • Limited customer service options compared to traditional banks.

  • Some accounts may have minimum balance requirements.


 

Bonus Bank (we said 10 but couldn't help ourselves and included 11)


Charles Schwab Bank: Read our Full Review Here

Best For: Banking for investors


Summary: Charles Schwab Bank offers a unique blend of banking and investment services, making it an ideal choice for investors. As a subsidiary of the Charles Schwab Corporation, the bank provides a range of products tailored to meet the needs of modern investors, from high-yield checking accounts to brokerage services. With a focus on wealth management and financial planning, Charles Schwab Bank stands out as a one-stop-shop for both banking and investment needs.

Pros:

  • Integrated banking and brokerage services.

  • No ATM fees worldwide.

  • High-Yield Investor Checking Account with competitive rates.

  • Access to expert financial advice and wealth management.

Cons:

  • Limited standalone banking products.

  • Minimum deposit required for some accounts.

  • Some investment products may have associated fees.


Key Features of Top Online Banks

User-Friendly Interface

One of the primary reasons people switch to online banking is the convenience it offers. A top online bank should provide an intuitive design that makes navigation a breeze. Whether you're checking your balance, transferring funds, or using online bill pay, the process should be seamless.

  • Mobile Banking Experience: With the rise of smartphones, a robust mobile banking app is crucial. This allows users to manage their finances on-the-go, from checking their high yield savings accounts to depositing checks with just a snap.

Competitive Interest Rates

Online banks often have an edge over traditional banks when it comes to interest rates. Without the overhead costs of maintaining physical branches, they can offer more competitive rates on products like high yield savings accounts and certificate of deposit (CD) rates.

  • Table: Comparison of Average Interest Rates (typical rates)


Low or No Fees

Nobody likes fees, especially when they eat into your hard-earned money. One of the standout features of the best online banks is their commitment to low or no fees.

  • List of Common Fees to Watch Out For:

    • Monthly maintenance fees

    • ATM fees

    • International transaction fees

    • Overdraft fees


Many online banks offer no-fee checking accounts and even reimburse you for ATM fees incurred at other banks.


Robust Security Measures

With the increasing threats of cyberattacks, ensuring your money is safe online is paramount. Top online banks invest heavily in security measures, from encryption to two-factor authentication. They also monitor for any suspicious activities, ensuring your funds and personal information are protected.


24/7 Customer Service

While online banks may lack physical branches, they make up for it with round-the-clock customer service. Whether you have a query about your FDIC insured bank account or need assistance with a transaction, help is just a click or call away.


The Benefits of Banking Online

Convenience

The digital age has ushered in a new era of convenience, and online banking is at the forefront of this revolution. With online banks, you can:

  • Access your accounts anytime, anywhere.

  • Make instant transfers between accounts.

  • Set up automatic payments for bills.

  • View your transaction history and statements in real-time.

  • Use online bill pay to manage and pay your bills from one platform.

Visualization: A side-by-side comparison infographic showing the time saved with online banking vs. traditional banking (e.g., no need to visit branches, instant transfers, etc.)


Better Rates and Lower Fees

As mentioned earlier, online banks typically have lower operational costs than their brick-and-mortar counterparts. This cost-saving advantage is often passed on to the customers in the form of:

  • Higher interest rates on savings and certificate of deposit (CD) rates.

  • Lower loan interest rates.

  • Minimal or no monthly fees.

  • Reimbursements for ATM fees.

Table: Fee Comparison Between Online and Traditional Banks (typical fees)


Advanced Technology

Online banks are often at the cutting edge of financial technology, offering tools and features that help users manage their finances more effectively:

  • AI-driven insights: Get personalized recommendations based on your spending habits.

  • Spending analysis tools: Break down your expenses into categories to see where your money goes.

  • Budgeting tools: Set monthly spending limits and track your progress.

  • Savings goals: Set up specific goals (e.g., vacation, new car) and allocate funds towards them.

Typical Monthly Budget Breakdown

Typical Monthly Budget Breakdown


Potential Drawbacks and Considerations

While online banking offers numerous advantages, it's essential to be aware of potential drawbacks and considerations:


Lack of Physical Branches

For some, the absence of physical branches can be a deterrent. This might be a concern if:

  • You often require services like notary or safe deposit boxes.

  • You prefer face-to-face interactions for complex financial matters.

  • You frequently deal with cash deposits or withdrawals.

Transitioning from Traditional Banking

Switching banks can be a daunting task, especially if you have multiple accounts or services with your current bank. Considerations when transitioning include:

  • Transferring direct deposits and automatic payments.

  • The potential wait time for new checks and debit/credit cards.

  • Ensuring no missed payments during the transition.

List of Tips for a Smooth Transition:

  • Open your new online bank account before closing the old one.

  • Update any direct deposits or automatic payments to the new account.

  • Keep a small amount in your old account for a month to cover any unexpected expenses or checks.

  • Monitor both accounts regularly to ensure all transactions are accurate.

Conclusion

Online banking has undeniably transformed the way we manage our finances, offering unparalleled convenience, competitive rates, and innovative tools. While the benefits are numerous, it's essential to approach the decision with a well-informed perspective, considering both the advantages and potential drawbacks.


By understanding the key features that make an online bank stand out and assessing your individual needs, you can confidently choose a bank that aligns with your financial goals. As the digital age continues to evolve, online banks are poised to play an even more significant role in shaping the future of banking.

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