You may be surprised at how quickly interest rates have risen in recent months. You should seriously consider alternatives if you are currently holding money at a bank which pays 0.0-something per cent. We’re going provide you with 11 of the top online banks that pay higher interest rates than “traditional” banks.
We’ll start by giving you a high-altitude overview with the table. All 11 banks are listed, along with their main features. You can quickly scan the table and then read the summaries of the banks you are interested in.
The Best Online Banks: Our Picks
Here is a list of 11 online banks that we think are the best. Each bank has its own specialties.
- Ally Bank : The Best All-Around
- Discover Bank: Best Rewards Checking
- Alliant Credit Union Best Online Credit Union
- CIT bank: Best for High-Interest Savings
- Capital One Bank : Best Online Banking with Credit Cards
- Chime : Best for depositors with bad credit
- PenFed : Best High Interest on CDs
- Bank of America : Best Full-Service Bank
- NBKC : Best Small Full-Service Internet Bank
- PNC: Best Banking Virtual Wallet
- Betterment : Best Investment Service with Banking
Check out the high-interest rate.
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Ally Bank: Best All Around
- Product Offered: Checking, Online Savings, Money Markets, and CDs
- Minimum balance required:None
- Best account:1.00% (online savings and Money Market)
- Monthly fees:None
- ATM network:43,000+
Ally Bank is our choice for the best online bank. They offer 1.00% APY for their online money market and savings accounts. In addition, they have high-yield CDs and interest-bearing checks.
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This online bank is not just about the interest-bearing deposit accounts. They offer not only interest-bearing accounts but also mortgages, personal loans, car loans and other loans. They also offer self directed trading for most investment securities as well as wealth management and a robo advisor.
Ally Bank offers two levels of interest checking. The account offers 0.10% APY for balances under $15,000 and 0.25% on balances over that amount. This account has a Round-Up feature that allows you to save as you spend.
Ally Bank offers CDs that range from three months to five years in length, with interest rates between 0.50% APY and 2.75%.
Discover Bank’s Best Rewards Checking
- Product Offered: Online Savings, Checking Account, Money Market, and CDs
- Minimum balance required:None
- Best Account:3.60% on Online Savings Account
- Monthly fees:None
- ATM network: 60,000+
Discover is best known for their high-rewards credit cards. However, they also offer online banking that pays high interest. Although their online savings account offers the highest interest rate of 3.60%, their money market is close behind with 3.50% on balances under $100,000 and 3.55% on balances above that amount. The company also offers CDs with terms of 12 months, 24 months and 60-months. Interest rates range between 4.15% and 4.30 % APY.
Discover Bank is similar to Ally Bank in that it does not charge any fees. Even their online savings account does not charge an excess withdrawal fee. With their no-fee account, you’ll receive 1% back on all debit card purchases.
Alliant Credit Union is the Best Online Credit Union
- Products Offered:Savings and interest checking accounts, children’s account, and more
- Minimum balance required:$5, however $100 will earn interest
- APY for Best Account:1.00% on high-yielding online savings
- Monthly fees:None for electronic statements
- ATM network:80,000+
Alliant Credit Union has grown to be one of the biggest credit unions across the country. Although based in Illinois it is available to all depositors. They offer a wide range of banking services as a credit union. Credit cards, mortgages and home equity lines of credits, auto loans, personal loan, commercial real estate financing, and personal loans are all available.
The High-Rate Account pays 1.00% APR with a $100 minimum balance. There is no monthly fee for electronic statements, but paper statements cost $1. The high yield checking account offers 0.25% APY, with no monthly fee, no overdraft charges, and no minimum balance.
CIT Bank is the best bank for high interest savings
- Products Available:Money Market, Savings Account, eChecking and CDs
- Minimum balance required:$100
- APY for Best Account:1.35% on Savings Connect account
- Monthly fees:None
- ATM network:7 but ATM fees up to $30/month reimbursed
Savings Connect is CIT bank’s star account. The account pays 1.35% annual percentage yield and requires $100 minimum to open. This requires that the savings account be linked to an eChecking. Speaking of eChecking account, it pays interest at 0.10% APR on balances below $25,000 or 0.25 % above. The minimum balance to open the account is $100.
The money market account offers 1.00% APY, and requires $100 minimum to open. The company also offers a Savings Builder Account, which can pay up to 0.70% Annual Percentage Yield. This savings account can be a little complicated. To earn the highest interest rate, you must have a minimum of $25,000 in your account or make monthly deposits of $100. If you do not, the rate drops to 0.34%.
CIT Bank offers a wide variety of CDs. Except for the No Penalty CD 11-month CD that currently pays 1.40% APY (currently), the CDs’ interest rates are well below 1%. CIT Bank offers business and commercial loans as well as home mortgages.
Capital One Bank offers the best online banking with credit cards.
- Product Offered: Checking, Savings, CDs and Kids Savings Accounts
- Minimum balance required:None
- APY for Best Account:1.00% on 360 Performance Savings
- Monthly fees:None
- ATM network:70,000+
Capital One, like Discover, is best known for its line of attractive credit cards. Capital One offers online banking, which includes checking and savings account that pay interest as well as CDs. 360 Performance Savings, the most impressive account currently paying 1.00% on all balances, is the best program. No monthly fees and no minimum balance are required.The 360 Checking Account pays 0.10% APR. The 360 Savings account has no minimum balance requirement and no monthly fee. Capital One offers CDs that range from 6 months to 60 month terms, with interest rates ranging between 0.75% and 2.90%.
Chime is the best option for depositors with bad credit.
- Product Offered: Checking and Savings Accounts
- Minimum balance required:None
- APY for the Best Account:0.50% on the High Yield Chime Account
- Monthly fees:None
- ATM network:60,000+
Chime is a great option if you have been denied a checking account due to bad credit, or a poor relationship with your previous bank. No credit check is required to open an account. Chime offers free overdraft protection through their SpotMe Program, which provides up to $200 of overdraft spending.
Chime offers a variety of services that can help you manage your finances better and improve your credit. The Credit Builder program provides a Visa credit card that is secure and has no annual fees.
Chime is at the lower end of interest rates, with a top rate of 0.50% on its High Yield Chime Account. Chime, however, is a banking application for those who are looking to build their credit and not pay high interest.
Best High Interest CDs: PenFed
- Product Offered:Checking and Savings Accounts, Money Market Accounts, and CDs
- Minimum balance required:$1,000
- Best account:3.45% on their 5-year CD
- Monthly fees:None
- ATM network:85,000+
PenFedis an online credit union that offers complete banking services. This includes checking, saving, and money-market accounts as well as credit cards, auto and personal loans, lines of credit and student loans.
The CDs they have are their strongest assets. Starting with the five-year certificates that pay 3.45% APY for balances below $1,000. Their Premium Online Savings pays 0.75% APY and requires a minimum $5 to open the account.
There is also a free checking with no monthly fee and no minimum balance. They offer an Access America checking account that pays up to 0.15% on balances under $20,000 and 0.35% on higher balances. To avoid the $10 monthly fee, you must deposit at least $500 each month via direct deposit or maintain a daily minimum balance of $500.
Bank of America is the best full-service bank.
- Product Offered: Checking, Savings, and CDs
- Minimum balance required: Varys by account type and programme
- APY for Best Account:N/A
- Monthly fees: Waivable charges on checking accounts and none on savings
- ATM network:16,000+
There are both good and bad news about Bank of America . Start with the bad news: Interest on checking, savings, and CDs has been cut. downright dismal . Even with the recent rise in interest rates, we’re still talking about rates below 0.10%. Bank of America will not be a place where you want to keep large amounts of cash in order to earn interest.
Bank of America excels at providing a wide range of services. Bank of America, unlike many of the banks listed here, is a brick-and mortar bank. The bank has more than 4,000 retail centers in the United States, so the chances of doing face-to-face business are high. Like an increasing number traditional banks, they offer full online banking services.
Merrill Edge, a full service bank, offers a variety of credit cards, home loans, auto loans and investment through Merrill Edge. If that wasn’t enough, they offer small business banking as well as wealth management. If you are looking for these services, Bank of America will be the best choice.
Best Small Full Service Online Bank: NBKC
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- Product Offered: Checking and Money Market Accounts, and CDs
- Minimum balance required: None, but you will need to make a deposit in your account within 60 days after opening it.
- APY for the Best Account:0.40% on Personal Money Market
- Monthly fees:None
- ATM network:37,000+
NBKC has only four brick-and mortar branches in Kansas City. They are a full-service online bank that offers a variety of banking products. This includes auto loans and bridge loans as well as credit cards and checking and money-market accounts. They also provide business services like fraud management, collections and cash management.
Both their checking and money market accounts pay interest. Personal Money Market pays 0.40% on all balances. There is no minimum balance required and no monthly fee. The Everything (checking account) pays 0.25% on all balances and has no minimum deposit requirements or monthly fees.
Interest rates range between 0.10% APY and 0.75% for CDs with terms ranging from three months to five years. Minimum investment is $1,000 or $250.
Best Virtual Banking Wallet: PNC
- Product Offered:Checking and Savings Accounts, Money Market Accounts, and CDs
- Minimum balance required:Varies according to account
- APY for Best Account:N/A
- Monthly fees:Varies according to account
- ATM network:9 500+
PNC has a brick-and mortar presence with a strong internet presence. The bank is one of the biggest regional banks in the United States, offering a full range of banking services for both individuals and business. The bank offers checking and savings account, credit cards, auto loans, home financing and retirement plans as well as services for business banking.
PNC, as an established banking company, pays low interest rates on its deposit accounts. PNC offers multiple savings accounts with rates that are well below the 0.10% APY regardless of balance. Their CDs are also very similar, with terms that range from one month up to 10 years.
If PNC has a feature that sets them apart, it is their Virtual Wallet. This feature combines savings and checking accounts with money-management tools. You will be set up with a primary checking account to represent your spending, a second checking account as a reserve and a long-term saving account for growth. Then, it will add digital tools that track your spending and automate savings.
Best Investment Service for Banking: Betterment
- Product Offerings:Checking account, Cash Reserve, and Automated Investing
- Minimum balance required:None
- APY for Best Account:1.10% with Cash Reserve account
- Monthly fees:None
- ATM network:None. However, fees charged by other financial institution are reimbursed
Bettermentis a web-based, automated investment platform. It is also known as a “robo-advisor”. They will create, manage and rebalance the investment portfolio you have for a small fee. You only need to fund your account.
The company now offers both a checking account and a cash reserve account with high interest rates. Cash reserve accounts pay 1.10% APR with no monthly fees and no minimum balance requirement. To take advantage of this cash reserve, you will need a Betterment account. Your account is insured by the FDIC up to a maximum of $1 million or $2 million if it’s a joint account.
Betterment offers a no-fee check account that comes with a Visa Debit Card. This account is free and FDIC-insured up to $250,000. Visa cards offer rewards for participating merchants. Betterment does not have an ATM network but they reimburse ATM fees and foreign transaction fees.
A checking account allows you to easily access your money.
You can use the funds in your Chime Checking Account as you wish, with no restrictions. Click here to open an account!Open an account today
Online Banking vs. Traditional Banking
The truth is that the Line between online banking and traditional bank It is becoming less and less obvious. It’s possible because almost all banks in the country offer online banking, even long-established brick and mortar ones. It is not only a feature that consumers prefer, but also allows banks to reach customers beyond their own territory.
Online banking is not just about expanding the reach of banks to their customers. Online banking reduces the cost of operating a bank because it doesn’t need physical branches or employees to staff them. Online banks can attract more customers by passing on the lower costs to them.
Online banks are able to charge lower fees and pay higher rates of interest than traditional banks. In fact, many online banks charge no fees. They start with the monthly service fee.
Online banks offer full functionality from their websites. This includes the ability for consumers to check their individual transactions, balance their account, pay merchants and vendors, transfer money online, or even send money to a third party.
Online banking has advanced to the point that you can now use mobile check deposit to deposit a check into your account. Online banking platforms allow you to apply for credit cards or loans. Combining services is so advanced that it’s virtually eliminated the need for a branch visit.
Mobility is another feature that has proven critical to online banking’s success. Customers can access their accounts on their computers at home, at work or via their mobile devices. This can reduce a transaction that used to take up to an hour down into five minutes.
