The banking industry is shifting a bit, thanks to the digital world.
Now people have options to place their money in online bank accounts, which offer new benefits over traditional banks.
And people are catching on and getting smarter about their money, that they see what most brick and mortar banks are doing and how bad the service can be.
This is not to knock all traditional banks, as there are some good ones out there. But if you are exploring some new options, opening an online bank account can be a smart move.
Below I’m sharing some of the best online bank accounts that will help put your money to work.
Table of Contents
The Benefits of Online Bank Accounts
So, you might be wondering what are the benefits of opening a strictly online bank account or an “internet bank” over traditional ones?
Well, there are quite a few benefits and reasons people continue to flock to these types of banks.
To keep this simple, I’m just going to list some of the important benefits here:
- You can open a bank account without going to the bank
- Lower or no fees at all with your personal banking
- Better interest rates on your money (checking or savings)
- Tighter security and website encryption
- Convenience factor
- Better online and mobile experience
- Easy syncing with other money apps
- Still insured by FDIC (Important money protections)
The Negatives of Online Bank Accounts
And with anything, there will also be some downside as well. The goal for you is to ensure the pros outweigh the cons when deciding to open an online bank account.
Below are a few of the negatives of online bank accounts:
- No personal banking relationships
- Generally no direct ATMs (they will have partnerships with ATMs, but check fees and locations first)
- Cash depositing is not as easy
- Must be more secure with passwords and mindful of where you login
Best Online Bank Accounts
Before we get started in some of the top choices, I wanted to share that each of these online banks offer different services and options.
Some will be stronger for their savings accounts, others will offer unique checking accounts, and others offer a combination of banking features.
As I mentioned in the intro, which platform you may choose to go with depends on your financial needs and goals.
In fact, you may want to open an account with more than one bank to diversify your money around.
Chime bank has been around for a bit now, but you might have started seeing their TV commercials lately too. If you have not heard about Chime at all yet, that’s okay too!
Chime is the largest and fastest-growing banking company in the U.S., with over 5M accounts and no physical branches.
Here’s how this online bank works.
Chime is a fee-free bank with a mobile-first online banking experience. Everything is mobile-first these days and Chime has made it their mission to have the best mobile experience of them all.
Some of their key features include:
- No hidden fees
- Get paid up to 2 days earlier with direct deposit
- Fee-free overdraft
- 38,000+ fee-free ATMs through MoneyPass and VisaPlus Alliance (out-of-network fees may apply)
- Automatic Savings features help you save, every time you spend or get paid
- Mobile alerts
- Checking and savings accounts available
- Top security, privacy, and support
A cool feature I like about Chime is their Chime Visa® Debit Card. Every time you use it, you save money with a purchase or when you pay a bill.
Along with that, it automatically rounds up transactions to the nearest dollar and transfers the round up from your spending account into your Automatic Savings Account app.
So how does Chime actually make money?
Through their partnership with Visa. So every time you use your Chime debit card, the company will earn a small amount from Visa (which is paid by the merchant).
Opening an account with Chime is easy and takes just a few minutes. Get Started Here.
2. CIT Bank
One of my personal favorites from this list is CIT Bank. With this online bank account, you will have some additional options for your money to go to work.
But first, a quick blurb about this online bank account.
CIT’s consumer banking segment includes its national online bank, CIT Bank, and a Southern California branch bank, OneWest Bank, which both are under the same FDIC insurance.
Here is what CIT has to offer you:
- Savings Builder Account
- Money Market Account
- High Yield Premier Savings Account
One of the reasons I like CIT Bank is for their Savings Builder Account, which offers great interest on your money. Plus, you only need to put away a minimum of $100 each month to get the interest rate.
You might not like the idea of having minimums, but I do because it encourages you to save money each month consistently.
If you are interested in all that CIT Bank has to offer, I did a full in-depth dive here.
3. Ally Bank
If you have ever searched about online banks or even investing, you probably have come across Ally. They have built a pretty great brand and assortment of financial products that might suit you well.
One thing I like about the company outside of their products, is what they call their “social impact.”
This includes giving back to the communities, value of company diversity, and more. Personally, I always like companies that give back and build a great work culture.
In their banking division, Ally offers some great options for you:
- Online savings account with hight-yield interest
- Interest checking account
- Money market accounts
- Certificate of deposits (CDs)
Here are some Ally Bank’s great feature that might be a good fit for your personal needs:
- No monthly maintenance fees or minimum balance requirements for saving account
- 24/7 banking support via chat, email, or phone
- FDIC insured
- Deposit checks right from your phone
- Use any Allpoint® ATM in the U.S. for free.
- Get interest in your checking account as well
Interested in opening an Ally Bank account? Get started here.
4. Radius Bank
Next on this list of the best online bank accounts is Radius Bank. This bank originated in the late 80s and shifted to digital banking over the years to provide a top notch platform.
Radius has also won some awards in the last few years including 2018 Financial Capability Innovation Award 2018 Best of FinXTech Award, 2017 Product Innovation Award.
I must say, Radius Banks’ features are pretty epic. So while I won’t go into detail of them all, here is what they have to offer you:
- Rewards checking where get cashback on everyday purchases and earn interest too
- Numerous checking account options pending your personal finances
- Unlimited monthly reimbursements for out-of-network ATM fees
- Overdraft protection
- Free high-interest savings account
- Certificate of Deposits (CDs)
- Mobile payments
- Mobile Wallets
- Radius Debit Card
- Loans & Insurance
Phew, what a list! And there is a lot more details on their website about each.
Additionally, Radius Bank offers online banking services for businesses and institutional (Non-profits, Escrow services, Government). Something most online bank accounts do not necessarily offer (yet).
Learn more and open your own account with Radius Bank.
While I don’t want to get into all the frequently asked questions about online bank accounts, some are worth mentioning.
Below are three important questions you might ask yourself when considering online banking.
Is it safe to open an online savings account?
Yes, online bank accounts are quite safe to open. You want to look for encryption and that they are FDIC insured. Additionally, be smart about your passwords and when and where you login, set up two-factor authentication for additional protection. This will ensure you are protected from identity theft.
Are online bank accounts only for the tech-savvy?
My millennial generation and younger are naturally gravitating towards online banking because we mostly grew up with technology. But that doesn’t mean older generations will have a hard time either. The online bank accounts above have really easy and navigable websites and mobile apps. Anyone can easily learn and access what they need with ease.
Should you open an online bank account?
While traditional banking isn’t going to die out anytime soon, online banks only are revolutionizing the industry. The question of if you should open an online bank account depends on your personal finances and interests. You can totally just open a savings account and keep your traditional bank, or move everything over.
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