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Are you curious about whether an online bank can meet all of your financial needs? If you can adjust to managing your accounts online or via a smartphone app, then online banking is a great way to maximize your returns and eliminate fees that work against your goals.
An online bank can also be combined with your brick-and-mortar option to take advantage of competitive rates and digital tools designed to improve your savings habits. However, there are drawbacks associated with online banks that you should consider.
To help you get started, here are some top online banks worth considering.
Compare the best online banks
CNET’s list of the best online banks includes some of the most popular financial institutions nationwide. However, there are also great banks that aren’t household names to consider.
| Bank | Savings Account | CDs | Checking Account | Money Market | Accepts cash deposits? | ATM fee rebates |
| Alliant Credit Union | Yes | Yes | Yes | No | Yes | Up to $20/month |
| Ally | Yes | Yes | Yes | Yes | No | Up to $10/statement cycle |
| Bask Bank | Yes | Yes | Yes | No | No | N/A |
| Discover Bank | Yes | Yes | Yes | Yes | No | N/A |
| Laurel Road | Yes | No | Yes | No | No | N/A |
| Marcus by Goldman Sachs | Yes | Yes | No | No | No | N/A |
| My Banking Direct | Yes | Yes | Yes | No | No | N/A |
| SoFi | Yes | No | Yes | No | Yes | N/A |
| Synchrony | Yes | Yes | No | Yes | No | Up to $5/statement cycle |
| TAB Bank | Yes | Yes | Yes | Yes | No | Up to $15/month |
| Zynlo Bank | Yes | No | Yes | Yes | No | N/A |
Alliant Credit Union
Products offered:
- Savings: 3.10% APY
- Checking: 0.25% APY
- 1-year certificate (CD): 4.75% APY
Monthly fees: None
Alliant Credit Union is an NCUA-insured online credit union offering members competitive deposit account rates and minimal fees. Most accounts don’t charge maintenance fees, or they can be waived if you sign up for e-statements. Membership is open to current or former employees of Alliant’s US partner businesses. You can also become an Alliant Credit Union Foundation digital inclusion advocate to become eligible for membership. It costs $5 to sign up, but Alliant will pay the one-time fee on your behalf.
Alliant’s certificates earn some of the highest APYs available, with terms ranging from three months to five years. Its savings account earns a respectable yield of 3.10% APY on balances of $100 or more, but there are plenty of higher-yielding savings accounts with APYs over 5%. We like that Alliant’s High-Rate Checking account pays a better yield than other checking accounts and doesn’t require a minimum balance or charge service fees.
Read our full Alliant Credit Union review.
Ally
Products offered:
- Savings: 4.20% APY
- Checking: 0.10% – 0.25% APY
- 1-year CD: 4.50% APY
- Money Market: 4.20% APY
Monthly fees: None
Ally Bank is an ideal alternative to traditional brick-and-mortar banks. Founded in 2009, Ally is a full-service bank offering consistently competitive rates on all deposit accounts. The highest rates are available for all balances, regardless of tier.
High APYs, minimal fees and 24/7 customer support help make Ally an attractive banking solution for the 21st-century retail banking customer.
Read our full Ally Bank review.
Bask Bank
Products offered:
- Savings: 5.10% APY
- Checking: 1.00% APY
- 1-year CD: 5.00% APY
Monthly fees: None
Bask Bank is an online-only bank that offers competitive APYs on savings accounts and CDs. You have two savings accounts to choose from: the Bask Interest Savings Account and the Bask Mileage Savings Account, which allows you to earn American Airlines miles. There are no monthly fees and no minimum balances required to open or maintain a savings account. This bank also offers competitive yields on all of its CD terms, ranging from three months to two years.
Bask doesn’t offer a money market account, but it recently launched its interest checking account which earns a 1% APY, doesn’t charge a monthly fee and provides access to 55,000 fee-free ATMs.
Discover Bank
Products offered:
- Savings: 4.25% APY
- Checking: 0% APY (1% cash back on up to $3,000 in debit card purchases per month)
- 1-year CD: 4.60% APY
- Money Market: 4.00% APY – 4.05% APY
Monthly fees: None
Discover Bank has deposit accounts, credit cards, personal loans and student loans. We like that Discover offers deposit accounts, such as CDs, savings and a money market account, at competitive rates with no fees. While its $2,500 minimum deposit requirement for its CDs is steep, there is no required minimum deposit to open and maintain a savings, money market or checking account.
The Discover Cashback Debit account is a free checking account that pays 1% cash back on debit card purchases up to $3,000 per month. Discover is a solid choice for anyone looking to manage their everyday banking and credit card accounts in one place.
Laurel Road
Products offered:
- Savings: 5.00% APY
- Checking: 0.01% APY (monthly cash reward opportunities available)
Monthly fees: None
Laurel Road, the digital arm of KeyBank, offers a high-yield savings and rewards checking account with no minimum deposit or balance requirements to earn its competitive APY. Like many online banks, Laurel Road doesn’t accept cash deposits, so you’ll need to transfer money electronically to fund your account.
If you open a loyalty checking rewards account by Oct. 15, 2024, and direct deposit at least $2,500 within the first statement period, you’ll qualify for a $300 welcome bonus. You can add $20 per month to that bonus, for a combined bonus total of $540 in the first year, if you maintain $2,500 in qualified direct deposits each month for the first year. After that, you’ll receive $10 whenever you have $2,500 or more in qualifying direct deposits in a month.
Laurel Road began as a student loan originator in 2013 and was acquired by KeyBank in 2019. In addition to its deposit accounts, Laurel Road offers credit card and loan products primarily geared toward health care and business professionals nationwide. Its digital platform merges technology with banking services to offer a high-yield rate that applies to the entire balance.
Marcus by Goldman Sachs
Products offered:
- Savings: 4.40% APY
- 1-year CD: 4.70% APY
Monthly fees: None
Launched in 2016, Marcus is the online-only banking arm of Goldman Sachs, one of the 15 largest banks in the US. The bank’s savings accounts and CDs offer competitive yields and no monthly maintenance fees. Marcus has three types of CDs with competitive APYs and terms ranging from six months to six years.
While some online banks offer no minimum deposit requirement to open an account, Marcus requires a $500 deposit to get started with a CD. However, there’s no minimum deposit requirement for its high-yield savings account. Marcus doesn’t offer a checking account or money market account.
See our full review of Marcus by Goldman Sachs for more details.
My Banking Direct
Products offered:
- Savings: 5.45% APY
- Checking: 0% APY
- 5-month CD: 5.25 APY
Monthly fees: None
My Banking Direct is the online-only arm of Flagstar Bank, N.A., which is owned by New York Community Bancorp. The bank is a lean financial service that offers only savings, checking and a five-month CD term. The APYs on its savings account and CD are among the best available today.
Beyond great rates, the bank doesn’t charge monthly or overdraft fees and provides surcharge-free ATM access through a network of 55,000 Allpoint and Presto ATMs. To open a savings account, you must deposit $500. Checking accounts can be opened with just $1. During the week, you have access to extended customer service hours, until 8 p.m. ET and 2 p.m. ET on Sundays.
SoFi
Products offered:
- Savings: Up to 4.50% APY
- Checking: 0.50% APY
Monthly fees: None
SoFi (short for Social Finance) was the brainchild of Stanford Graduate School of Business students who created an alumni-funded lending source initially focused on refinancing student loans. Since then, SoFi has expanded into a variety of loan categories and now offers online checking and savings accounts.
You automatically get a savings account when you open a SoFi checking account. The checking account doesn’t require a minimum deposit or charge monthly maintenance or overdraft fees. Its high-yield savings account has a competitive APY and doesn’t have a minimum deposit requirement or monthly fees.
You may qualify for a bonus of up to $300 when you establish a qualifying direct deposit by December 31, 2024.
Read our full SoFi banking review.
Synchrony
Products offered:
- Savings: 4.65% APY
- 1-year CD: 4.70% APY
- Money Market: 2.25% APY
Monthly fees: None
Synchrony takes advantage of its limited overhead to offer competitive rates on deposit accounts. In addition to a wide variety of financial products such as IRA CDs and IRA money market accounts, Synchrony offers niche types of CDs, including a bump-up (which automatically adjusts to a higher APY when available) and no-penalty varieties.
Read our full Synchrony Bank review.
TAB Bank
Products offered:
- Savings: 5.02% APY
- 1-year CD: 5.02% APY
- Checking: 3.50% APY
- Money Market: 0.25% APY
Monthly fees: None
TAB Bank is an online-only bank that originally catered to professionals in the transportation industry. It offers highly competitive APYs for its high-yield savings and CD accounts. There are no monthly fees and its savings, checking and money market accounts have no or low initial deposit requirements to open an account.
You can now open a TAB Spend Rewards account -- a dual rewards checking account that offers a competitive yield and 1% cash-back reward with every qualified debit card purchase. As with the bank’s standard checking account, there are no monthly fees or minimum balances required. And you can enjoy all the same features, such as mobile check deposit and fee-free ATMs nationwide through the MoneyPass ATM network.
We also like that you can receive mobile alerts and text messages for withdrawals when your account falls below a certain dollar amount. Another benefit is that TAB has extended customer service hours: Monday through Friday from 6 a.m. to 7 p.m. MT and Saturdays from 9 a.m. to 3 p.m. MT, excluding federal holidays.
Zynlo Bank
Products offered:
- Savings: 5.00% APY
- Checking: 2.00% APY
- Money Market: 5.00% APY
Monthly fees: None
Zynlo Bank is a relative newcomer to online banking, launching in 2020 as the digital-only arm of PeoplesBank. It offers competitive rates on savings, checking and money market accounts. In addition to high yields, this bank offers tools to assist you in reaching your savings goals. For example, it has savings folders that help you label your savings goals in separate accounts, and Zyng, an automated roundup savings service with a bank match for every debit card purchase.
Zynlo accounts are FDIC-insured up to $250,000, per depositor, per type of account, in case of bank failure. The bank also covers deposits beyond the allotted FDIC limit through the Depositor Insurance Fund.
Note: APYs shown are as of Sept. 3, 2024. CNET’s editorial team updates this information regularly. APYs may have changed since they were last updated and may vary by region for some products.
What to look for in an online bank
An online bank should serve your financial needs like any brick-and-mortar alternative. Here are a few factors to keep in mind when considering online banks.
- APY: The annual percentage yield offered by each account will allow you to determine how much interest your money will earn. When comparing options, consider an online bank that offers competitive rates across all of its deposit accounts.
- Products and services: Some online banks offer a full suite of banking products including checking, savings, CDs and money market accounts. In addition, an online bank may offer loan products or credit cards. Depending on your needs, look at the full range of products and services to make the best decision. Combining an online bank with a traditional brick-and-mortar bank may allow you to focus on a bank offering a subset of products and services available to a competitor.
- Account access: Ideally, an online bank will offer 24/7 access to your account through its app or website. But you should also consider how the bank handles withdrawals and deposits. It’s important to understand the restrictions -- if any -- on transfers, limitations on withdrawals and whether the bank accepts free cash deposits if you’ll need that service frequently.
- Digital tools: The best online banks offer innovative digital tools to help you accomplish financial goals. For example, Ally will help you organize your savings goals with savings buckets and analyze your spending habits to safely transfer available funds from your checking to your savings account.
- ATM network: An ATM network is important if you frequently withdraw or deposit cash. A large ATM network will help you avoid transaction fees. If the bank is not associated with a large ATM network, you should look for one that will reimburse out-of-network ATM fees.
- Fees: You should avoid any bank, online or otherwise, that charges monthly fees or has extensive requirements to avoid them. Many online banks offer no-fee deposit accounts, require a low or $0 initial deposit to open the account and don’t require a minimum balance to avoid maintenance fees. However, make sure you know whether the bank charges excessive withdrawal fees, paper statement fees or fees for other services that you may want to use regularly.
- Customer service support: Since you won’t have access to in-person customer service with an online bank, determine how you can contact a customer service representative if needed. Most online banks offer telephone support, live chats or assistance via email. Some online banks also offer access to live support via extended hours or 24/7.
What makes an online bank different?
An online bank, credit union or financial services firm requires that you fully manage your money and accounts online via a website, mobile device or app.
Online banks typically offer higher interest rates than traditional banks, said Bola Sokunbi, founder of Clever Girl Finance and CNET expert review board member. And one major advantage is that some let you earn interest on your checking account -- a feature most big banks don’t offer.
Online accounts generally have fewer fees. You can save a lot of money by taking note of any additional fees, Sokunbi said. An online checking account, for example, might charge an ATM withdrawal fee. And an online savings account might charge you an excessive withdrawal fee if you go beyond six transfers or withdrawals per statement cycle, said Shang Saavedra, founder and CEO of Save My Cents and CNET expert review board member.
Though technology makes everything we do more accessible from a smartphone, there are some drawbacks to online banks. Online-only banks lack in-person assistance, and some might not accept cash deposits, making it tricky to bank there if you’re often paid in cash. On the other hand, if you’re comfortable managing your money online, digital banks are a convenient, low-cost option.
How do I deposit and withdraw money from an online bank account?
The way in which you deposit and withdraw money, and the transfer time, will depend on the specific bank you choose.
Bank transfer
A bank transfer is one of the most common and seamless ways to transfer money online from one bank account to another. You can transfer money to or from an existing account using the account and routing numbers through your online account or mobile app. Some banks also let you transfer money through banking platforms like Plaid or Zelle. While some banks may transfer your money instantly or within two business days, some can take as long as seven -- which can make a big difference, Sokunbi said.
Mail or wire transfer
Even if the only bank you choose doesn’t have a physical branch you can visit, you may still be able to mail a paper check or wire transfer with the funds to deposit into your account. However, this route will likely take longer for your money to hit your account compared with other options.
ATM deposit and withdrawal
Many online banks offer an ATM network for fee-free deposits and withdrawals, and you may be reimbursed for out-of-network ATMs. Some online banks partner with brick-and-mortar financial institutions or offer ATM deposit access if you prefer to make transfers in person. Cash deposits are usually available instantly, but checks may take a few days. Not all online banks allow you to deposit cash at an ATM. And not all online accounts come with ATM access to withdraw your money.
Mobile check deposit
If your online bank offers mobile account access, you can deposit a paper check using the mobile app and your smartphone camera. Usually, there’s no fee, and the money is available in one to two business days, depending on the bank.
Pros and cons of online banks
Pros
Higher APYs compared to brick-and-mortar banks
Fewer account fees
Robust website and app with more online money management features
Cons
Limited banking services
No in-person physical assistance
May not accept cash deposits
Limited ATM availability without fees
Are online banks safe?
Like traditional banks, money stored at an online bank is safe as long as it is FDIC- or NCUA-insured to protect your deposits up to $250,000 per individual, per bank.
But keeping your financial and personal data secure when banking online is also important. Choose an online bank with robust safety and security features to protect your account. Some essential features to look for include two-factor or biometric authentication, end-to-end encryption and no liability for unauthorized transactions. This can help keep your account more secure and protect it from data breaches and hackers. Before opening an account at an online bank, ask customer service about any safety features and be sure to enable them for your safety.
How to open an account with an online bank
Opening an account with an online bank is usually straightforward. Once you’ve compared different bank options and are ready to open an account, follow these steps:
- Visit the bank’s official website.
- Narrow down which account(s) you want to open and review any requirements and fees.
- Complete the application with any required personal information and verification.
- Fund your account using the bank’s approved deposit methods.
From there, you can download the bank’s official mobile app and request a debit card (if available).
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Methodology
CNET reviews online banks based on the latest APY information, fees charged and services offered from issuer websites. We evaluated online banks from among more than 50 banks, credit unions and financial companies. We selected the banks with the highest APYs that were insured up to $250,000 by the FDIC or NCUA.
Banks surveyed include: Alliant Credit Union, Ally Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank of America, Bank of the West, Bank5 Connect, Barclays, BMO, Bread Savings, BrioDirect, Capital One, CFG Community Bank, Citizens Access, Colorado Federal Savings Bank, Connexus Credit Union, Consumers Credit Union, Credit One Bank, Discover Bank, First Internet Bank of Indiana, First Tech Federal Credit Union, FNBO Direct, GO2bank, Golden 1 Credit Union, HSBC Bank, Huntington Bank, Lake Michigan Credit Union, LendingClub Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Merrick Bank, Nationwide (by Axos), Navy Federal Credit Union, NBKC, OneUnited Bank, Pentagon Federal Credit Union, PNC, Popular Direct, PurePoint Financial, Quontic Bank, Rising Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Synchrony Bank, TAB Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, USAA Bank, Vio Bank and Wells Fargo.
This article includes some material that was previously published on NextAdvisor, a CNET Money sister site that was also owned by Red Ventures and that has merged with CNET Money. It has been edited and updated by CNET Money editors.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.