If you haven’t yet tried online banking, you’re missing out on some great perks and rewards that you won’t find with traditional banks. Because online banks avoid the expense of maintaining costly brick-and-mortar branch networks, the best online bank accounts come both attractive interest rates and low or now fees. Plus you gain the ability to bank from anywhere at any time.
Savings account at online banks typically pay interest rates between five and 10 times what national banks offer. They’ll also have lower-than-usual fees, such as ATM charges and monthly maintenance fees, in many cases eliminating them altogether. You’ll also find account features designed to make your financial life easier, from tools to help you increase your savings to rewards for everyday purchases.
Our Top Picks for Best Online Banks of 2021
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Axos is our choice for top online bank thanks to its low fees, low opening balance requirements and high interest rates on savings and checking accounts.
- Earn higher interest rates on both savings and checking accounts compared to other online banks.
- Unlimited reimbursement on all domestic non-Axos ATM fees
- No monthly maintenance fees
- Biometric authentication
- Requirements to earn the maximum interest rates on checking accounts may be difficult for some to meet.
- The interest rate on savings account decreases as your balance grows.
Axos’ High Yield Savings Account pays 0.61% interest on balances up to $24,999, which is the highest rate of all the online banks we looked at. However, that rate decreases to 0.25% on balances between $25,000 to $99,999 and falls to 0.15% for balances above $100,000. The minimum opening balance is $250, which isn’t prohibitively high but not as low as some of Axos’ competitors. However, once an account is open there is no minimum balance requirement, and Axos doesn’t charge any maintenance fees.
Axos also offers high yields on its checking accounts. You can earn up to 1% interest with the Rewards Checking account, which is higher than the rate offered by most but not all online banks. There are certain conditions you have to meet in order to earn that rate, however. You can qualify for an initial 0.40% interest by making a minimum of $1,500 in direct deposits into the account. If you use your debit card at least 10 times during the statement cycle or sign up for the bank’s Personal Finance Manager program, you can add 0.30%.
The remaining 0.30% can be obtained by taking the following three steps, each of which boost your rate by 0.1%: keeping an average daily balance of $2,500 in the Axos Invest Managed Portfolio Account; keeping a $2,500 balance in the Axos Invest Self Directed Trading Account; and using your checking account to pay an Axos consumer loan. While meeting all three of these requirements might be a tall order, the 0.7% you can earn without any of them remains highly competitive among online banks.
With the Axos app you can view all your accounts, transfer funds and pay bills, and manage your investments directly from your phone. The app is easy to use and has a rating of 4.5 stars out of 5 on Google Play. Most negative reviews center around the length of time it takes for mobile check deposits to clear.
Best for Low Fees
If you’re looking for an online bank that won’t charge you a ton of fees while at the same time giving you a full array of tools to help you manage your money, Ally is a great option.
- No fees on most common banking transactions
- Pays competitive interest rates on savings and checking accounts
- Low opening balances
- Savings and money management tools
- No ATM card provided with the savings account
- Interest rates are not as high as those paid by other online banks.
With Ally, you’ll find convenient online banking with access to over 43,000 Allpoint network ATMs and very few fees. While many online banks eliminate monthly service fees and electronic payment fees, Ally goes a little further. There are no fees for incoming domestic or international wire transfers, official and cashiers checks, or overdrafts, and lower fees than other banks, including our overall winner Axos, for outgoing wire transfers and account research fees.
The Interest Checking Account pays 0.10% on balances below $15,000 and 0.25% on balances above $15,000, which is competitive compared to other online banks. Ally’s Online Savings Account earns 0.50% on all balance tiers, which is about standard for an online bank. Both accounts can be opened with $0 and there are no minimum balance requirements to earn interest. You can divide your savings account into up to 10 different “buckets” and use these to save for a special occasion, such as a vacation, wedding or home repair. However, only the checking account comes with an ATM card.
In addition to few fees and high rates, Ally offers a number of tools to help accelerate your savings automatically. These include the ability to set up recurring transfers between your accounts and to round up your checking account purchases to the nearest dollar amount and automatically transfer them to a savings account.
Varo is our pick for best rates because it offers the highest potential savings account rate of any of the online banks we considered.
- Earn up to 3% interest on a savings account.
- No monthly fees
- No minimum opening balance
- Earn up to 15% cash back on select purchases.
- 3% interest is paid only on balances below $5,000.
- Checking account doesn’t earn interest.
- Limited number of accounts to choose from
Varo stands out from other online banks thanks to the potential to earn an eye-popping 3% on the Varo Savings Account. There’s no minimum opening balance required and you can start earning interest with a balance as low as one cent. There are caveats to earning the maximum though. You’ll only earn 3% on savings account balances below $5,000, and you have to open a checking account as well. You’ll also need to meet the following two criteria: receive at least $1,000 in direct deposits each qualifying period and keep your checking account and savings account balances above $0 the entire calendar month. If these criteria aren’t met, or if your savings account balance exceeds $5,000, the interest rate drops to 0.50%, which is still a very good rate compared to other online banks.
In addition to great rates, Varo can help you avoid overdraft fees. If you need extra money, the Cash Advance feature will let you borrow up to $100 free of interest as long as it’s paid back in 30 days. You can also earn up to 15% cash back rewards on select purchases when you use your Varo Visa debit card. Every time you reach $5 in rewards, it’s automatically deposited into your savings account.
There are no monthly fees for account maintenance, ACH transfers, foreign transactions or transfers between one Varo bank account and another (even if it belongs to someone else). You’ll also have free access to over 55,000 Allpoint ATMs, but Varo does charge a $2.50 fee if you use a non-Allpoint ATM.
Quontic is our choice for most innovative thanks to its rewards checking account which allows you to earn Bitcoin as a cash-back spending reward, as well as for its attractive interest rates and low fees.
- Earn 1.5% cash-back rewards in the form of Bitcoin on eligible debit-card purchases.
- Earn a high interest rate on checking and savings accounts.
- No maintenance fees
- Opening account balances higher than other banks
- Bitcoin rewards are not available in all states.
We chose Quontic as the most innovative online bank because of its foray into cryptocurrency. With the Bitcoin Rewards Checking Account, you can earn up to 1.5% of your debit-card spending as a “cash-back” reward in Bitcoin. Unlike traditional cash back rewards that are credited each month, you can accumulate your earned Bitcoin rewards and choose to redeem them whenever it is convenient for you.
There are no monthly fees for this account and the minimum opening balance is $500, a little higher than other banks we considered but not an unreasonable amount. This account is only available in 45 states and territories. (It’s not available in Hawaii, Idaho, Indiana, Louisiana, North Carolina, Nebraska and Nevada).
If crypto isn’t your thing, Quontic’s High Interest Checking Account starts with a 0.01% interest rate, but this can easily be increased to 1.01%, if you make 10 or more qualifying debit card transactions per statement cycle. Or you can earn 1.5% cash back with the Cash Rewards Checking Account. You can open these accounts for as little as $100 and there are no maintenance fees.
You can complement your checking account by opening a High Yield Savings Account, which has no monthly fees, pays 0.55% interest and can be opened with as little as $100.
Best Customer Service
Discover Bank is our pick for best customer service based on its high ranking in the J.D. Power 2021 U.S. Direct Banking Satisfaction Study and positive mobile app users reviews. Plus, it has great credit card rewards.
- High customer satisfaction rating
- Great cash back rewards programs
- Earn interest on savings accounts.
- No minimum opening balance requirements
- Checking account doesn’t earn interest.
- The interest rate on the savings account is lower than other online banks considered.
Discover came in second in J.D. Power 2021 U.S. Direct Banking Satisfaction Study, obtaining a score of 862 points out of a 1,000 point scale. It’s the highest-ranking of all the online banks we considered for our list and 10 points above the industry average of 852 points. Discover’s mobile app also has a high rating of 4.6 stars out of five on Google Play, with most users praising its ease of use and the tools that let you manage all your accounts. If you don’t like the impersonal nature of online banking, customer service is also available by phone with an actual person for those of us who hate automated menus.
Aside from great customer service, at Discover you’ll also earn competitive interest rates and other perks. Discover’s Online Savings Account offers 0.40% interest, a little lower than other online banks but still higher than the rate offered by most national banks. This account has no account minimum to open and charges no maintenance fees. With the Cashback Debit Account, Discover’s online checking product, you can earn 1% cash back on up to $3,000 in debit card purchases each month. There are no monthly fees for this account and it doesn’t earn interest.
Discover is also known for its credit card rewards. Depending on the type of credit card you choose you can earn between 1% and 5% cash back on select purchases every month. Plus, Discover will match your cash back rewards dollar for dollar at the end of the first year, with no maximum limits.
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How we chose the best online banks of 2021-2022
To choose winners for Best Online Banks, Money started by selecting 15 of the biggest, best-known online banks, including upstart “neo” banks. Money then partnered with data provider Curinos to review account minimums and qualifications, interest rates, monthly service fees, ATM fees, overdraft fees, overdraft protection fees, insufficient funds fees, debit card replacement fees, domestic wire transfer fees, and online banking capabilities.
When selecting finalists, priority was given to checking and savings accounts with no or easily waived monthly fees, free ATMs, and higher interest rates. In naming no-fee accounts, we assumed customers would be okay with receiving e-statements to avoid a monthly fee.
When available, we weighed customer service ratings from J.D. Power’s 2020 U.S. Retail Banking Satisfaction Study, 2021 Online Banking Satisfaction Survey, and 2021 Mobile Banking Satisfaction Survey. Money’s edit team independently fact-checked information in September and October.
The interest rates quoted were checked on October 25, 2021.
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