Digital technology has shifted the banking industry a little.
Online bank accounts offer many advantages over traditional banks.
People are becoming more aware of their finances and are becoming smarter. They see how most brick-and-mortar banks operate and what a bad service they can provide.
It is not meant to be a criticism of all traditional banks. There are many good ones. If you’re looking for new options, it can be smart to open an online account.
Here are some of the top online bank accounts to help you put your money to good use.
Table of Contents
Online Bank Accounts: Benefits
Online Bank Accounts: The Cons of Online Banking
Best Online Bank Accounts
FAQs
Online Bank Accounts: Benefits
You might wonder what the advantages are of a “internet bank”, or a bank that only accepts online transactions, over a traditional bank.
There are a number of benefits to choosing these banks.
Here are some of the most important benefits:
You can open a banking account without visiting the bank
Personal banking has lower or no fees.
Get better interest rates for your money (savings or checking)
Website encryption and tighter security
Convenience factor
Online and mobile experience that is better
Easy sync with other money apps
FDIC still insures your money (important protections for your money)
Online Bank Accounts: The Cons of Online Banking
There will always be some negative aspects to everything. When you decide to open an account online, your goal is to make sure that the pros outweigh any cons.
Here are some of the downsides to online banking:
No personal banking relationship
No direct ATMs are available (they may have partnerships, but you should check the fees and locations before).
It is difficult to deposit cash
You must be more careful with your passwords.
Best Online Bank Accounts
Before I get into the best online banks, let me share that they all offer different options and services.
Some banks will have a stronger focus on their savings account, while others will offer unique accounts. Others will combine both.
The platform you choose will depend on your financial goals and needs, as I said in the introduction.
You may even want to open accounts with multiple banks to spread your money out.
- Chime
You may have seen their TV ads in recent months. You can also ignore Chime if you’ve never heard of it.
Chime, the fastest-growing bank in the U.S. with more than 5M accounts but no physical branches.
This is how the online bank works.
Chime offers a free online banking service that is mobile-first. Chime is a fee-free bank that offers a mobile-first online banking experience.
Some of the key features are:
No hidden fees
Direct deposit can pay you up to two days sooner.
Overdraft without Fees
MoneyPass Alliance and VisaPlus Alliance offer 38,000+ ATMs that are free of charge (out-of network fees may apply).
You can save money by using automatic savings features every time you pay or spend.
Mobile alerts
Savings and checking accounts are available
Security, privacy and support at the highest level
Chime Visa(r), Debit Card is a cool feature that I really like. You save money every time you pay your bill or make a purchase.
It also automatically rounds transactions up to the nearest dollar, and transfers that round-up from your spending account into the Automatic Savings Account App.
How does Chime make money?
Through their partnership. Every time you use your Chime Debit Card, the company earns a small amount (paid by the merchant) from Visa.
It’s easy to open a Chime account. Get Started Here.
- CIT Bank
CIT Bank is one of my favorites. This online account will give you more options to put your money to work.
First, let’s take a look at this online account.
CIT’s Consumer Banking segment includes CIT Bank (its national online bank) and OneWest Bank (a Southern California branch), which are both insured by the FDIC.
CIT offers you the following:
Savings Builder Account
Money Market Account
High Yield Premier Savings account
Checking eChecking
CDs
Mortgages
CIT Bank’s Savings Builder Account is one of the main reasons I prefer them. It offers a great rate of interest. You only have to deposit $100 per month to receive the rate.
Minimums may not be your thing, but they encourage you to consistently save money every month.
Here’s a complete review of all the features and benefits that CIT Bank offers.
- Ally Bank
You may have heard of Ally if you’ve ever done a search on online banks, or perhaps even invested. Ally has built up a great brand with a wide range of financial products.
What they call “social impact” is something I really like about this company.
It includes the value of diversity in the company, giving back to communities, and much more. Personal, I like companies who give back to the community and create a great workplace culture.
Ally’s banking division offers a variety of options to you.
Online savings account with high-yield interest
Interest Checking Account
Money Market Accounts
Certificates of Deposit (CDs).
IRAs
Ally Bank offers some great features that may be suitable for your needs.
Savings account with no monthly fees or minimum balance requirement
Chat, email or phone 24/7 support for banking
FDIC insured
You can now deposit checks using your smartphone
You can use any Allpoint(r), ATM in the U.S. at no cost.
Enjoy interest on your checking account
Learn more about this award-winning company’s online savings account, CDs, and interest checking.
Are you interested in opening an Ally Bank Account? Click here to get started.
- Radius Bank
Radius Bank is next on our list of best online banking accounts. This bank was founded in the late 1980s, and has since shifted its focus to digital banking to offer a high-quality platform.
Radius also won several awards over the past few years, including Best of FinXTech Award 2018, 2018 Financial Capability Innovation Award and 2017 Product Innovation Award.
Radius Banks features are quite impressive. Here are some of the features they offer.
Check out the rewards program to earn cashback and interest on your everyday purchases.
There are many options for checking accounts based on your financial situation
Reimbursement of ATM fees is unlimited every month
Overdraft protection
Savings account with high interest rates for free
Certificates of Deposit (CDs)
Mobile payments
Mobile Wallets
Radius Debit Card
Loans & Insurance
What a list. There are a lot of details about each on their website.
Radius Bank also offers online banking for institutions and businesses (Nonprofits, Escrow Services, Government). Most online bank accounts don’t offer this (yet).
Radius Bank offers a variety of services, including the ability to open a personal account.
FAQ
Some of the frequently asked questions regarding online bank accounts are worth mentioning.
Three important questions to ask yourself before you consider online banking
Can I open a savings account online?
Online bank accounts can be opened with confidence. Look for encryption, and make sure they’re FDIC-insured. Also, use smart passwords, and be careful where and when you log in. Set up two-factor verification for extra protection. You will be protected against identity theft.
Online bank accounts are only for tech-savvy people?
Because we grew up mostly with technology, my millennial generation is naturally drawn to online banking. It doesn’t necessarily mean that older generations won’t have any trouble. These online accounts have mobile apps and websites that are easy to navigate. Anyone can learn and access the information they need easily.
Why should you open a bank account online?
Online banks are the only ones revolutionizing banking. Traditional banking will not die anytime soon. Your personal finances and your interests will determine if you open an online account. You can open an online savings account, keep your current bank or switch everything.
