When was the last time you checked to see how much your checking or savings account was earning you, just for having money in it?
If you bank with a traditional brick-and-mortar bank, it might have been a while â€" and that's not surprising.
When financial institutions like Wells Fargo and Bank of America offer annual percentage yields (APYs) as low as 0.01% on their savings and checking accounts, it's easy to become accustomed to your money being stagnant.
But savings accounts and even checking accounts can earn you money if you choose the right bank or credit union. Increasingly, you'll find the best APYs (annual percentage yields) through online banks. Here are the best of the best for 2021, whether you want to open a checking, savings, or even money market account:
Best Online Banks of 2021
These are the best online banks of 2021 for checking, savings and money market accounts, starting with our top pick.
Editor's note: APYs are accurate as of September 23, 2021.
1. Axos Bank
5 out of 5 stars
Why we like this online bank: Axos (formerly known as Bank of Internet) tops our list of the best online banks. For starters, it gives consumers plenty of options when it comes to checking:
The Rewards Checking account has the highest APY on our list at 1.00%, but earning that requires that you:
- Receive monthly direct deposits of $1,000 or more;
- Use your Axos-provided Visa debit card for at least 10 transactions of at least $3; and
- Use it an additional five times (for at least $3 each time).
If you just achieve one of the three criteria, the APY is 0.40%; if you achieve two, it doubles; and when you achieve all three, you get the full 1.00%.
This account also offers unlimited domestic ATM fee reimbursements and promises no overdraft or non-sufficient funds fees.
The Essential Checking account is all about no fees: unlimited domestic ATM fee reimbursements, no monthly maintenance fees and no overdraft or non-sufficient fund fees. You can also get your paycheck up to two days early with direct deposit express.
The Cashback Checking account lets you earn up to 1.00% cash back on all transactions requiring a signature. As with the Essential Checking account, there are no monthly maintenance fees, and you'll get unlimited domestic ATM fee reimbursement.
In addition, Axos offers specific checking features for teengers and senior citizens.
The Axos online high-yield savings account is also impressive, with a 0.61% APY.
Potential pitfalls: Axos offers a lot of options. Just determining the right account can be stressful. And once you choose a checking account, you've got to keep track of quite a bit to either earn the full APY or to ensure you're spending enough to make the 1.00% cash back on purchases requiring a signature worth your while. The $250 minimum balance for opening the high-yield savings account is also steep.
Pros
- Unlimited ATM reimbursement
- High APY for checking and savings
Cons
- Unimpressive mobile app
- Foreign transaction fees
- Overwhelming number choices and guidelines to manage
2. Capital One 360
4.5 out of 5 stars
Why we like this online bank: Capital One 360 doesn't have the most attractive APYs for either its online checking or savings (0.10% for checking and 0.40% for savings), but the online bank makes up for it with the industry's second-highest-rated app according to J.D. Power, with users citing the app's speed, easy-to-use interface and self-service options that are simple to use.
In addition, Capital One's accounts include zero monthly fees and offer easy bank account integration. With the checking account, you have access to more than 70,000 fee-free ATMs, and unlike some online banks, Capital One does have physical branches â€" and Capital One Cafés, where you can enjoy Peet's Coffee, take advantage of a shared work space, get one-on-one money coaching, attend workshops and even host events for nonprofits. You can also get your paycheck two days early.
Potential pitfalls: The APY for the savings account is not the strongest on this list. It's also not possible to categorize your savings into sub-accounts within the app, which makes tracking toward multiple goals challenging.
Pros
- No. 2 mobile app (J.D. Power)
- Access to Capital One and Allpoint ATMs
- No foreign transaction fees
- Unique Capital One Cafe locations
Cons
- Lower APYs than other online contenders
- Overdraft fees
3. Ally Bank
4.5 out of 5 stars
Why we like this online bank: Ally offers both online checking and savings accounts.
APYs, though now lower because of the pandemic and federal adjustments, are still high, with a 0.50% APY for savings and up to 0.25% APY for checking. You can also apply for loans through Ally, and ATM access is never a problem. That's because Ally gets you access to more than 43,000 Allpoint ATMs nationwide and reimburses up to $10 in ATM fees each month.
Other hallmarks of Ally's online banking include its lack of monthly fees (a true free checking account) and minimum balance requirements, and its top-rated mobile app with mobile check deposit.
Potential pitfalls: If you travel outside the country frequently, don't use your Ally Bank debit card â€" it carries a 1% foreign transaction fee. Travel credit cards are a better option when traveling abroad.
In addition, the 0.25% APY for checking might draw you in but know that you need at least $15,000 in the account, or else you'll earn just 0.10%. However, if you have $15K to spare, you'd be better off storing that in a high-yield savings account or money market account.
Pros
- Great mobile app
- Access to Allpoint ATMS (and limited out-of-network ATM reimbursement)
- No overdraft fees
Cons
- Foreign transaction fees
4. LendingClub
4 out of 5 stars
Why we like this online bank: LendingClub Banking (formerly Radius Bank) offers a unique free checking account that offers 1.00% cash back on everyday purchases. That means for every $100 you spend, you earn $1.
Currently, LendingClub is also offering 1.50% cash back in certain categories, including food, health, entertainment and social good. LendingClub's checking accounts also offer a 0.15% APY.
LendingClub Bank's online checking comes with several perks, but ATM usage is one of the best. When you bank with LendingCLub, you can visit any ATM at any time; LendingClub will reimburse you for all ATM fees.Â
Other advantages include payment up to two days earlier than your direct deposit, an innovative mobile app with location-based restrictions and spending caps, alerts when you or someone else uses your card and the ability to turn off lost or missing debit cards.
The LendingClub savings account offers either a 0.60% APY for balances of $2,500 or more.
Potential pitfalls: LendingClub requires a $100 minimum deposit for the checking account, and the 0.60% APY for the savings doesn't kick in until you have at least $2,500 saved up.
Something that's likely to be more frustrating to those with imperfect financial pasts are the requirements put in place for the rewards checking. Not everyone qualifies for the rewards portion of the account, meaning you may miss out on the cash back.
However, if you don't qualify for the rewards account now, LendingClub makes it possible to eventually upgrade to that account through its Tailored Checking Account. That account, which doesn't offer a cash back option, carries a monthly service charge unless for the first $5,000 (all other banks on our list carry no monthly fees), and there are caps on daily deposits and debit card usage. However, if you exhibit 12 months of positive banking history, you may be able to upgrade to the Rewards Checking Account.
Pros
- Fee-free access to ATMs
- Cash back rewards on the checking account
Cons
- $100 minimum deposit
- Restrictions on benefits
5. Alliant Credit Union
4 out of 5 stars
Why we like this online bank: ATM access is almost always guaranteed when you bank with Alliant, as it has more than 80,000 ATMs in its network and offers $20 in monthly ATM reimbursement for out-of-network usage. Alliant also operates one of the highest-rated apps for both checking and savings accounts and has physical locations in the Chicago area.
Currently, Alliant's checking APY stands at 0.25%. The account has no monthly service fee or minimum balance requirements and comes with a free Visa contactless debit card. As of September 2021, Alliant has done away with overdraft and NSF fees.
The savings account is equally impressive with a 0.55% APY. Though the account requires a minimum initial deposit of $5, Alliant will pay it for you. (Hey, that's a free $5!)
Potential pitfalls: Alliant is a credit union, not a bank. Credit unions can be more challenging to join, and Alliant is no different. Alliant currently does not participate in shared branching, a system that allows you to conduct your banking business at other credit unions in the same network throughout the country. This is often a hallmark of other credit unions.
Pros
- Great mobile app
- Access to 80,000+ fee-free ATMs (and limited out-of-network ATM reimbursement)
- Decent APYs
- New policy discontinuing overdraft fees
Cons
- Foreign transaction fees
- No shared branching
6. Nbkc
4 out of 5 stars
Why we like this online bank: nbkc (the National Bank of Kansas City) keeps things simple by combining checking and savings into one single account, called the Everything Account. You'll earn an APY of 0.15% across the board with this account.
Even better: There are no fees to bank with nbkc. We're not just talking monthly maintenance fees; you also don't have to worry about minimum balance fees, foreign transaction or even overdraft fees.
This bank also offers an extensive ATM network (37,000 and counting) with $12 in monthly reimbursements when you use an out-of-network ATM. The mobile app is easy to use, includes Savings Goals for organizing your money, and offers a Pay Bills feature.
Potential pitfalls: Its savings APY (0.15%) is not the most competitive of the accounts listed here. Actual member locations are limited to Kansas City, Missouri. Finally, it costs $5 to open the account. That's obviously not substantial, but most accounts on our list are free to open.
Pros
- Unique account combines checking and savings
- Access to Moneypass fee-free ATMs
- Limited ATM reimbursement
- No foreign transaction and overdraft fees
Cons
- Brick-and-mortar branches in KC area only
- $5 minimum deposit
7. Synchrony
4 out of 5 stars
Why we like this online bank: Synchrony has a healthy 0.50% APY for the savings account, which also includes a convenience card for ATM access.
Though low by 2019's standards, the fact that Synchrony still offers an APY that's 50 times larger than Bank of America's â€" even amid a pandemic â€" is quite impressive. Its lack of fees (even for withdrawals past the maximum six per month) is another highlight.
Also noteworthy: Synchrony has joined the ranks of other top banks by creating an app, called Synchrony Bank (not to be confused with MySynchrony, which is the bank's retail portal).
Potential pitfalls: Synchrony doesn't offer a checking account, meaning you'll need to rely on an external account or direct deposit to fund your account.
If you want check-writing capabilities, you can open a money market account â€" but the APY is lower (0.35%) than that of its savings account. Synchrony also lacks home and auto loans among its products and services.
Pros
- Convenience card for access to ATMs (nice touch for a savings-only account)
Cons
- No checking account, but can open money market account (0.50% APY) for check-writing capabilities
8. Chime
4 out of 5 stars
Why we like this mobile bank: Chime is great for first-time savers and spenders. Chime has no monthly service fees, no overdraft fees (you can overdraw up to $100 on debit cards without incurring a fee), no minimum balance requirements, no foreign-transaction fees and access to more than 60,000 fee-free ATMs nationwide.
More importantly, it can be set up to automatically transfer a percentage of any direct deposit into the linked savings account and/or to automatically round up to the nearest dollar on all purchases, depositing the extra change into the savings account. You might also have access to your paycheck up to two days early with direct deposit.
If you're looking to save, you will want to open a Chime Savings Account (only possible if you have a Chime Spending Account). The savings account has an APY of .50%.
Potential pitfalls: Chime is a newer option and could face growing pains. There is no in-person service, and reviewers regularly complain of slow customer service.
Chime is not a full suite bank (no loans, for example).
More information: Chime Bank review
Pros
- Encourages first-time savers to be better with finances with Automatic Savings Account
- Access to paycheck before actual deposit
- Access to 60,000+ ATMs nationwide
Cons
- Not a full suite bank
- Slow customer service
9. CIT Bank
4 out of 5 stars
Why we like this online bank: In previous years, CIT offered the highest interest rate for any savings account on our list, but following the fallout from the COVID-19 pandemic, rates have dropped dramatically, far below some of its competitors.
Right now, APYs are set at 0.28% or 0.40%, depending on your balance and/or monthly deposits. While not as high as they used to be, we still appreciate the APYs, especially compared to the national average (0.05%).
Note: These APYs only apply to an introductory period. They then drop slightly.
The eChecking account, a new addition to the portfolio, is attractive, with a 0.10% APY on balances under $25,000 and 0.25% on balances at or above $25,000 â€" but it rarely makes sense to keep so much in checking. The account does pay out $30 a month in ATM reimbursements, and CIT's mobile app has great reviews on the App Store and Google Play. You can also get home loans through CIT.
Potential pitfalls: CIT's dip in offered APYs for its savings account is one of the biggest we've seen. Further, the CIT Savings Builder account suffers from its lack of ATM access and a minimum balance requirement ($100).
Pros
- Great mobile app
- Great ATM reimbursement plan
Cons
- Dramatically reduced APY over the last couple of years
- Requires minimum balance of $100
10. Discover Bank
3.5 out of 5 stars
Why we like this online bank: Discover Bank features both savings and checking accounts. Discover's checking account is a rewards account, meaning you earn cash back for debit card purchases instead of interest on the money in the bank account. Right now, you can earn 1% cash back on up to $3,000 in debit card purchases each month, for up to $30 a month and $360 a year. You'll also have access to more than 60,000 fee-free ATMs, and you won't have to worry about monthly maintenance fees.
Discover's savings account stands at 0.40% APY. Like CIT, this is a stark drop from previous years, but no online bank has been immune to the effects of COVID-19.
Potential pitfalls: You cannot get an auto or home loan through Discover Bank's products and services. Cash back on checking accounts is helpful, but big spenders will earn more when using a credit card without a monthly limit on cash back.
Pros
- Great mobile app
- Access to 60,000+ fee-free ATMs
- No foreign transaction fees
- Cash back rewards
Cons
- No traditional APY for checking, but cash back is still enticing (rewards checking)
11. Barclays
3 out of 5 stars
Why we like this online bank: Barclays offers a competitive 0.40% APY on its online savings account. While not super attractive, it is still far above the 0.01% you will earn at Chase. Its mobile app is highly rated.
Potential pitfalls: You cannot open a checking account with Barclays, complicating access to funds.
Pros
- Great mobile app
Cons
- Limited access to funds (no checking)
12. Charles Schwab
3 out of 5 stars
Why we like this online bank: Charles Schwab is great for those who like to travel â€" it has no foreign transaction fees and offers unlimited ATM reimbursement worldwide.
Charles Schwab is, however, more ideally suited for investing than saving and spending, thanks to its wide range of investment options. As such, the checking account â€" called High Yield Investor â€" is built with investors in mind with a direct link to a customer's brokerage account for easy funding.
Potential pitfalls: APYs are low: 0.05% for the savings account and 0.03% for the checking account.
Charles Schwab is great for investors looking for a brokerage account, but savers and spenders looking for basic, high-yield online savings and checking accounts should look elsewhere.
Pros
- Great mobile app
- Unlimited ATM reimbursement worldwide
- No foreign transaction fees
Cons
- Overdraft fees if funds aren't available in linked account
- Built more for investing, not spending and saving
Why We Picked These Banks
To determine the online banks and credit unions for this list, we reviewed nearly 40 of the most popular financial institutions. We chose the 12 banks on our list because of their combination of high APYs, low minimum balances and low or no fees. Customer service, easy (and free) access to ATMs, mobile/online experience and ease of funds transfers were also important considerations.
All financial institutions on this list are FDIC-insured (Federal Deposit Insurance Corporation) or NCUA-insured (National Credit Union Administration) and have no monthly fees (or offer a way to waive them).
| Name | Rating Out of 5 Stars | Savings Account APY | Checking Account APY | Mortgage and Auto Loans |
|---|---|---|---|---|
| Axos Bank | 5 stars | 0.61% APY | 1.00% APY | Both |
| Capital One 360 | 4.5 stars | 0.40% APY | 0.15% APY | Auto loans, but no mortgage loans |
| Ally Bank | 4.5 stars | 0.50% APY | Up to 0.25% APY | Both |
| LendingClub Bank | 4 stars | Up to 0.60% APY | 0.15% APY, plus 1.00% to 1.50% cash back | Mortgage loans and yacht loans |
| Alliant Credit Union | 4 stars | 0.55% APY | 0.25% APY | Both |
| nbkc | 4 stars | 0.15% APY | 0.15% APY | Only lending to those in Kansas City, Missouri, area |
| Synchrony | 4 stars | 0.50% APY | N/A | None |
| Chime | 4 stars | 0.50% APY | 0.00% APY | None |
| CIT Bank | 4 stars | Up to 0.40% APY | Up to 0.25% | Mortgage loans, but no auto loans |
| Discover Bank | 3.5 stars | Up to 0.50% APY | 1% cash back on up to $3,000 in monthly purchases | Mortgage loans, but no auto loans |
| Barclays | 3 stars | 0.40% APY | N/A | None |
| Charles Schwab | 3 stars | 0.05% APY | 0.03% APY | Mortgage loans, but no auto loans |
The biggest allure of online banking is the high annual percentage yield (APY). APY is the interest (including compound interest) that you'll earn on your money in a year.
Because online banks rarely have physical locations and need fewer employees, they have low overhead and can pass those savings over to customers.
The average APY for the online banks with checking accounts awarded in our 2021 list is roughly 0.27%; some accounts also offer cash back on debit card purchases. The average APY for our best online high-yield savings accounts is even higher: roughly 0.45%.
A note on lower rates: These APYs are significantly lower than we've seen in previous years. In 2019, the average checking APY on our list was 1.40%, and the average savings account was roughly 2.00%. The COVID-19 pandemic has led to lower interest rates across the industry. It is not clear how long these rates will stay so low.
Remember, traditional banks offer interest rates as low as 0.01% for both checking and savings accounts. (The national average for savings accounts is just 0.05%.)
But online bank accounts have many benefits outside of high interest rates. Here are just a few:
- Low (or no) fees, including monthly maintenance fees (sometimes called monthly service fees or simply monthly fees), overdraft fees, foreign transaction fees and ATM fees. Some online banks even offer reimbursement for out-of-network ATM fees.
- Low or no minimum balance requirements.
- Strong online and mobile banking experiences, including apps and two-factor authentication.
- FDIC and NCUA insurance up to $250,000.
- Accessible customer service online or by phone.
Check out our current list of bank promotions for a chance to gain a monetary bonus when signing up for a new bank account.
Drawbacks of Online Banks
Online banking isn't without its issues, but customers generally find the high-yield returns, stellar mobile experiences and lack of fees more than make up for online banks' pitfalls.
Below are some of the most common drawbacks of online banks:
Limited Options for Cash Deposits
Depositing cash is the biggest challenge of online banks because they lack physical locations. Even online banks that have partnerships with brick-and-mortar banks for in-network ATMs often cannot accept cash deposits via ATM.
If you intend to deposit cash regularly (like if you're a server or hair stylist who depends on cash tips) but still want the benefits of an online account, open an account with a brick-and-mortar bank solely to deposit cash and electronically transfer it to your online account.
Challenges With Transferring Funds
Online checking accounts generally make it easy to access your money with debit cards that work at thousands of ATMs. Some also offer checkbooks, no matter how archaic they may seem.
Online savings accounts, on the other hand, can be more challenging to access in emergencies than accounts at brick-and-mortar banks, but thanks to improvements in the speed of electronic transfer (ACH deposits) and new solutions from online savings accounts (like convenience cards), this issue has been largely reduced.
No Face-to-Face Support
If you're more old school about your money management and like the idea of walking into a branch and singing your sorrows to a bank teller who can help you figure out your financial problems, an online bank might not be for you.
Online banks offer incredible customer service online and over the phone, but you can only get comforting in-person help for your accounts at a brick-and-mortar traditional bank.
How to Choose an Online Bank
If an online bank makes sense for your finances, you're now faced with the task of choosing one. While reviewing our list of the best online banks is a great place to start, you will need to assess your specific needs out of a bank to determine which on our best online banks list actually works best for you.
Here are some things to consider:
- Which bank has the highest APY? If earning the most in interest is what's most important to you, your task is easy. Do note, however, the APYs can fluctuate. So if two of your top banks are neck and neck, but the bank with the slightly lower APY has better customer service and easier access to brick-and-mortar, it might actually be wiser to go with that one. In a few months, the interest rate may be higher than the current leading bank.
- Are there other rewards? APYs are only one piece of the puzzle. Certain checking accounts offer cash back rewards, and some accounts â€" savings, checking and money market accounts â€" even come with sign-up bonuses.
- How often do you use an ATM? If ATM usage is a part of your weekly routine, consider only online banks that have free access to a large network of ATMs. Otherwise, fees will add up.
- What are the fees? The beauty of most online banks is the lack of monthly fees. However, this can vary. If you travel to foreign countries regularly, for instance, and plan to use your bank's debit card, look for a bank that doesn't charge foreign transaction fees.
- Are you a mobile power user? If you live in your financial institution's app, chances are good you will want one with an intuitive user interface and lightning speed. Check out reviews of mobile apps before committing to a specific bank.
- How often will you need to talk to an employee? Online banks are known for a lot of things, but stellar customer service is not typically one of them. If you need to chat with someone regularly about your money or tend to ask a lot of questions, look for an online bank with a good reputation for customer service.
- What about money market accounts? For our list of the best online banks, we primarily considered personal checking and savings accounts. Money markets are quite similar to savings, but not every bank offers them.
Online Banking FAQs
Still have questions? You're not alone. Here are some frequently asked questions about online bankingâ€"with answers.
Which Is the Best Online Bank in the U.S.?
This year, we have ranked Axos Bank as the number one online bank in the US. However, these ratings are subject to change, and any bank that made our list of the top 12 online banks is a quality choice. Alliant Credit Union is the only option on our list that is not a bank.
Are Online Banks Safe to Use?
Yes, online banks are safe to use. Just make sure your bank is insured by the FDIC (or, if it's an online credit union, by the NCUA). As with all websites, only input financial information if you see the HTTPS and a lock symbol. Don't use the same password for any other accounts, and consider utilizing a password manager. Multi-factor authentication, as well as biometric screenings, are a great way to protect your account as well.
Which Is the Most Secure Online Bank?
Secure banking hinges upon strong apps, multi-factor authentication and biometric screening. Some of the top online banks that utilize such security practices include Citibank, Bank of America, Starling Bank, Barclays and HSBC. However, every bank included on our list above has been deemed to be tremendously safe and is backed by the FDIC or NCUA.
Timothy Moore is a managing editor for WDW Magazine and a freelance writer and editor covering topics on personal finance, travel, careers, education, pet care and automotive. He has worked in the field since 2012 with publications such as The Penny Hoarder, Debt.com, Ladders, Glassdoor, Aol and The News Wheel.Â
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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