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The Best Online Banks of 2020

Bank Accounts

The Best Online Banks of 2020

When is 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 — 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. And nowadays, those banks tend to be online.

Best Online Banks of 2020, Ranked

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 very 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 nine best online checking accounts awarded in our 2020 list is roughly 1.4%. The average APY for our nine best online savings accounts is even higher: roughly 2%.

Remember, traditional banks offer interest rates as low as 0.01% for both checking accounts and savings accounts. (The national average for savings accounts is just 0.12%, according to

But online bank accounts have many benefits outside of high interest rates. Here are just a few:

  • Low fees (or no fees), including monthly maintenance fees (sometimes called monthly service fees), overdraft fees, foreign transaction fees and ATM fees. Some online banks even offer ATM reimbursement for out-of-network ATMs.
  • Low or no minimum balance requirements.
  • Better online and mobile banking experience, including better apps and two-factor authentication.
  • FDIC and NCUA insurance up to $250,000.

These are the best online banks of 2020, starting with our top pick:

1. Ally Bank

Why we like this bank: Hands down, Ally is the best online bank of 2020, offering both online checking and savings accounts. APYs are high (the 2.20% savings APY is especially attractive), you can apply for major loans with Ally, and ATM access is never a problem.

Potential pitfalls: If you travel outside the country frequently, don’t use your Ally Bank debit card — it carries a 1% foreign transaction fee. Travel credit cards are a better option when traveling abroad.

2. Synchrony

Why we like this bank: Synchrony has a healthy 2.20% APY for the savings account, which also includes a convenience card for ATM access. Its lack of fees (even for withdrawals past the maximum six per month) is also a highlight.

Potential pitfalls: Synchrony does not include a checking account and does not have a mobile app.

3. Capital One 360

Why we like this bank: Capital One 360 does not have the most attractive APYs on either its online checking or savings account, but the online bank makes up for it with the industry’s highest-rated app, no monthly fees and easy bank account integration.

Potential pitfalls: As I mentioned, the 1.00% APY is not the strongest on this list, and it’s also not guaranteed. You’ve got to meet certain criteria to earn interest at the maximum rate.

4. nkbc

Why we like this bank: nbkc (the National Bank of Kansas City) offers checking and savings accounts, as well as home and auto loans. Its APYs are respectable, but its lack of fees and wide network of ATMs are even more appealing.

Potential pitfalls: Its savings APY (1.77%) is not as competitive as some of the other online savings accounts listed here, and it costs $5 to open the account. That’s obviously not substantial, but most accounts on our list are free to open.

5. Axos Bank (formerly known as Bank of Internet)

Why we like this bank: The Axos Rewards checking account has high potential: 1.25% APY, assuming you meet strict criteria (monthly direct deposit of $1,000 or more and 15 total debit card swipes a month). It also offers unlimited ATM fee reimbursement, a savings account, and mortgage and auto loans.

Potential pitfalls: Foreign transaction fees total 2%, the mobile app has poor reviews, and Axos charges $10 for debit card replacement.

6. CIT Bank

Why we like this bank: CIT offers the highest interest rate for any savings account on our list (1.80%), but like the checking account at Axos, you have to meet some requirements to earn it — either a minimum balance of $25,000 or a monthly minimum deposit of $100. CIT has mortgage loans available, and its mobile app has great reviews on the App Store and Google Play.

Potential pitfalls: Aside from the tough requirements to earn the high APY, the CIT Savings Builder account suffers from lack of ATM access and a minimum balance requirement ($100). There is no checking account.

7. Alliant Credit Union

Why we like this bank: ATM access is almost always guaranteed when you bank with Alliant (it has more than 80,000 ATMs in its network). Alliant also operates one of the highest-rated apps for both checking and savings accounts and has physical locations in the Chicago area.

Potential pitfalls: Credit unions can be more challenging to join, and Alliant is no different. The APY is 2.10%, which is higher than brick-and-mortar banks like PNC but lower than most other online savings accounts included here.

8. Discover Bank

Why we like this 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. The savings account has a 2.10% APY.

Potential pitfalls: You cannot get an auto loan through Discover Bank. The account also charges overdraft fees.

9. Barclays

Why we like this bank: Barclays offers a competitive 1.90% APY on its online savings account. Its mobile app is highly rated.

Potential pitfalls: You cannot open a checking account with Barclays, complicating access to funds.

10. Charles Schwab

Why we like this bank: Charles Schwab is great for those who like to travel — it has no foreign transaction fees and offers unlimited ATM fee reimbursement worldwide.

Potential pitfalls: APYs are low: 0.40% for the savings account and 0.50% for the checking account.

11. Simple Banking

Why we like this bank: The APY for the Simple checking account is incredibly noteworthy at 2.02%.

Potential pitfalls: Simple requires the checking account to have a linked Protected Goals account, which operates similarly to a savings account. The minimum balance is $2,000 to earn the high interest rate, and you can’t take out loans with Simple.

12. Chime

Why we like this bank: Chime is great for first-time savers. Its spending account has no monthly fees and unlimited ATM reimbursements. More importantly, it can be set up to automatically transfer 10% 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.

Potential pitfalls: The APY for the Chime bank account is just 0.01%. It’s not a wise place to store all your money, but a good way to make sure you’re saving when you spend.

Why We Picked These Banks

To determine the online banks and credit unions for this list, we looked exclusively at the banks that made it onto our 2020 checking and savings account lists — or both.

These banks were selected from among nearly 40 of the most popular banks and were chosen because of their combination of high APYs, low minimum account balances, low or no fees, mobile/online experience and ease of funds transfers.

All banks on this list are FDIC-insured (Federal Deposit Insurance Corporation) or NCUA-insured (National Credit Union Administration) and have no monthly fees.

While many of the banks on each list offer both checking and savings accounts, only two banks were ranked in the top nine for both checking and savings: Ally Bank and Capital One 360.

Bank Savings Account APY Checking Account APY Mortgage and Auto Loans What Makes This Bank Great And What Doesn’t
Alliant Credit Union 2.00% APY 0.65% APY Mortgage and auto loans Great mobile app; access to 80,000+ fee-free ATMs (and limited out-of-network ATM reimbursement); no overdraft fees Foreign transaction fees
Ally Bank 2.20% APY 0.60% APY Mortgage and auto loans Great mobile app; access to Allpoint ATMs (and limited out-of-network ATM reimbursement); no overdraft fees Foreign transaction fees
American Express 2.10% N/A None Great mobile app Limited access to funds
Aspiration N/A 1.00% APY None Unlimited out-of-network ATM reimbursement; no overdraft or foreign transaction fees; donates 10% of earnings to charities Requires minimum balance of $2,500 for 1.00% APY (otherwise, it is 0.25%)
Axos Bank 1.30% APY 1.25% APY Mortgage and auto loans Unlimited ATM reimbursement Poor mobile app; foreign transaction fees
Barclays 2.20% APY N/A None Great mobile app Limited access to funds
Capital One 360 1.00% APY 1.00% APY Auto loans, but no mortgage loans Number one mobile app (J.D. Power); access to Capital One and Allpoint ATMs; no foreign transaction fees Requires $100,000 or more for 1.00% APY, $50,000 or more for 0.75% APY (otherwise, it is 0.20%); overdraft fees
Charles Schwab 0.40% APY 0.50% APY Mortgage loans, but no auto loans Great mobile app; unlimited ATM reimbursement worldwide; no foreign transaction fees Overdraft fees if funds aren’t available in linked account
Chime It’s complicated 0.00% APY None Encourages first-time savers to be better with finances with Automatic Savings Account; access to paycheck before actual deposit; access to 38,000+ ATMs nationwide Doesn’t offer any interest
CIT Bank 1.80% APY N/A Mortgage loans, but no auto loans Highest savings account interest rate; great mobile app Requires either $25,000 in account or minimum deposit of $100/month to earn high APY (otherwise, it is 1.17%); requires minimum balance of $100; limited access to funds
Discover Bank 2.10% APY 1% cash back on up to $3,000 in monthly purchases Mortgage loans, but no auto loans Great mobile app; access to 60,000+ fee-free ATMs; no foreign transaction fees; cash back rewards No traditional APY for checking account, but cash back is still enticing (rewards checking account); overdraft fees
nbkc 1.77% APY 1.01% APY Mortgage and auto loans Access to Moneypass fee-free ATMs; limited ATM reimbursement; no overdraft or foreign transaction fees APY ranges from 1.31% to 1.77%
Simple Banking It’s complicated 2.02% APY None Access to 40,000 fee-free ATMs; no overdraft fees Account requires a Protected Goals Account (which operates like a savings account) with $2,000+ to earn APY; foreign transaction fees
Synchrony 2.20% APY N/A None Convenience card for access to ATMs (nice touch for a savings-only account); no checking account, but can open money market account (1.20% APY) for check-writing capabilities; limited ATM reimbursement No mobile app

Drawbacks of Online Banks

Online banking isn’t without its issues, but customers have generally found 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 savings 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. You can read the specifics of funds transfers for popular accounts here.

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.

Timothy Moore is a market research editor and freelance writer covering topics on personal finance, careers, education, pet care and automotive. He has worked in the field since 2012 and has been featured on sites like Codetic,, Ladders, Glassdoor and The News Wheel.



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