Online banks typically provide the same services as traditional brick-and-mortar banks but with greater convenience. You can pay your bills, deposit checks and transfer money directly from your online account. Because online banks have fewer overhead costs than those with physical branches, they usually offer more competitive savings rates on high-yield savings accounts and certificates of deposit.
Banking entirely online is far more common than it used to be. If cash is your primary form of income, the major downside is that many online banks don’t accept cash deposits. However, you can always open multiple accounts at separate institutions to reach your financial goals.
Compare the best online banks
CNET’s list of the best online banks includes some of the most popular financial institutions nationwide. However, there are also great banks that aren’t household names to consider.
| Bank | Savings Account | CDs | Checking Account | Money Market | Accepts cash deposits? | ATM fee rebates |
| Alliant Credit Union | Yes | Yes | Yes | No | Yes | Up to $20/month |
| Ally | Yes | Yes | Yes | Yes | No | Up to $10/statement cycle |
| Bask Bank | Yes | Yes | No | No | No | N/A |
| Discover Bank | Yes | Yes | Yes | Yes | No | N/A |
| Laurel Road | Yes | No | Yes | No | No | N/A |
| Marcus by Goldman Sachs | Yes | Yes | No | No | No | N/A |
| My Banking Direct | Yes | Yes | Yes | No | No | N/A |
| SoFi | Yes | No | Yes | No | Yes | N/A |
| Synchrony | Yes | Yes | No | Yes | No | Up to $5/statement cycle |
| TAB Bank | Yes | Yes | Yes | Yes | No | Up to $15/month |
| Zynlo Bank | Yes | No | Yes | Yes | No | N/A |
Products offered:
- Savings: 3.10% APY
- Checking: 0.25% APY
- 1-year certificate (CD): 5.40% APY
Monthly fees: None
Alliant Credit Union is an NCUA-insured online credit union offering members competitive deposit account rates and minimal fees. Most accounts don’t charge maintenance fees, or they can be waived if you sign up for e-statements. Membership is open to current or former employees of Alliant’s US partner businesses. You can also become an Alliant Credit Union Foundation digital inclusion advocate to become eligible for membership. It costs $5 to sign up, but Alliant will pay the one-time fee on your behalf.
Alliant’s certificates earn some of the highest APYs available, with terms ranging from three months to five years. Its savings account earns a competitive yield, but higher-yielding accounts are available with rates up to 5.35% APY. We also like that its High-Rate Checking account pays a better yield than other checking accounts and doesn’t require a minimum balance or charge service fees.
Read our full Alliant Credit Union review.
Pros
- Competitive APYs on savings and checking accounts
- No monthly maintenance or overdraft fees
- Low minimum deposit requirements to open accounts
- Up to $20 in ATM rebates per month
- Fee-free network of 80,000 ATMs
- New savings account bonus
Cons
- No support for peer-to-peer payment tools
Products offered:
- Savings: 4.35% APY
- Spending: 0.10% – 0.25% APY
- 1-year CD: 4.50% APY
- Money Market: 4.40% APY
Monthly fees: None
Ally Bank is an ideal alternative to traditional brick-and-mortar banks. Founded in 2009, Ally is a full-service bank offering consistently competitive rates on all deposit accounts. The highest rates are available for all balances, regardless of tier.
High APYs, minimal fees and 24/7 customer support help make Ally an attractive banking solution for the 21st century retail banking customer.
Read our full Ally Bank review.
Pros
- Competitive APYs on deposit accounts
- No monthly maintenance or overdraft fee
- Fee-free network of 43,000 AllPoint ATMs
- No minimum deposit requirements
- 24/7 customer support
Cons
- No cash deposits accepted
Products offered:
- Savings: 5.10% APY
- 1-year CD: 5.40% APY
Monthly fees: None
Bask Bank is an online-only bank that offers competitive APYs on savings accounts and CDs. Bask doesn’t offer checking or money market accounts, but you’ll have two savings accounts to choose from: the Bask Interest Savings Account and the Bask Mileage Savings Account, which allows you to earn American Airlines miles. There are no monthly fees and no minimum balances required to open or maintain a savings account. Bask also offers competitive yields on all of its CD terms, ranging from six months to two years.
Pros
- High APY on savings and CDs
- Low minimum deposit requirements for savings account
- Low fees
- Variety of CD terms available
Cons
- No checking account
- High minimum deposit requirement for CDs
- Limited number of products available
Products offered:
- Savings: 4.30% APY
- Checking: 0% APY
- 1-year CD: 4.80% APY
- Money Market: 4.15% APY – 4.20% APY
Monthly fees: None
Discover Bank has deposit accounts, credit cards, personal loans and student loans. We like that Discover offers deposit accounts, such as CDs, savings and a money market account, at competitive rates with no fees. While its $2,500 minimum deposit requirement for its CDs and MMA is steep, there is no required minimum deposit to open and maintain a savings or a checking account. The Discover Cashback Debit account is a free checking account that pays 1% cash back on debit card purchases up to $3,000 per month. Discover is a solid choice for anyone looking to manage their everyday banking and credit card accounts in one place.
Pros
- Competitive APYs on savings accounts
- No monthly maintenance or overdraft fees
- No minimum deposit requirements to open accounts
- Fee-free network of 60,000 ATMs
- Direct deposits accessible two days early
- Cash-back rewards on checking
Cons
- High minimum deposit to open a CD
- No cash deposits accepted
Products offered:
- Savings: 5.00% APY
- Checking: 0.01% APY
Monthly fees: None
Laurel Road, the digital arm of KeyBank, offers a high-yield savings and rewards checking account with no minimum deposit or balance requirements to earn its competitive APY. Like many online banks, Laurel Road doesn’t accept cash deposits, so you’ll need to transfer money electronically to fund your account.
If you open a rewards checking account by April 4, 2024, and direct deposit at least $2,500 within the first 60 days, you’ll qualify for a $100 welcome bonus. You can add $20 per month to that bonus, for a combined bonus total of $340 in the first year, if you maintain $2,500 in qualified direct deposits each month for the first 12 months. After that, you’ll receive $10 whenever you have $2,500 or more in qualifying direct deposits in a month.
Laurel Road began as a student loan originator in 2013. In 2019, it was acquired by KeyBank and, in addition to the deposit accounts, it offers credit card and loan products primarily geared toward health care and business professionals nationwide. Its digital platform merges technology with banking services to offer a high-yield rate that applies to the entire balance.
Pros
- Competitive APYs on savings accounts
- Generous welcome bonus and checking account rewards
- No monthly maintenance or overdraft fees
- Low minimum deposit requirements to open a checking and savings account
- Support for peer-to-peer payment tools
- Mobile check deposit
- Fee-free network of 40,000 ATMs
Cons
- Limited deposit accounts offered
- No cash deposits accepted
Products offered:
- Savings: 4.50% APY
- 1-year CD: 5.05% APY
Monthly fees: None
Launched in 2016, Marcus is the online-only banking arm of Goldman Sachs, one of the 10 largest banks in the US. The bank’s savings accounts and CDs offer competitive yields and no monthly maintenance fees. Marcus has three types of CDs with competitive APYs and terms ranging from six months to six years. While some online banks offer no minimum deposit requirement to open an account, Marcus requires a $500 deposit to get started with a CD. However, there’s no minimum deposit requirement for its high-yield savings account. Marcus doesn’t offer a checking account or money market account.
See our full review of Marcus by Goldman Sachs for more details.
Pros
- Competitive APYs on deposit accounts
- No monthly maintenance fees
- Low minimum deposit requirements
- Automated 24/7 customer support
Cons
- No cash or mobile check deposits accepted
- No checking accounts
- No ATM network
- Limited types of accounts
Products offered:
- Savings: 5.35% APY
- Checking: 0% APY
- 5-month CD: 5.50% APY
Monthly fees: None
My Banking Direct is the online-only arm of Flagstar Bank, N.A., which is owned by New York Community Bancorp. The bank is a lean financial service that only provides savings, checking and five-month CD accounts. However, the APYs offered on the savings account and CD are among the best available today.
Beyond great rates, the bank doesn’t charge monthly or overdraft fees and provides surcharge-free ATM access through a network of 55,000 Allpoint and Presto! ATMs. To open a savings account, you must deposit $500, and a CD requires a $2,500 initial deposit. Checking accounts can be opened with just $1. However, you’ll need to deposit at least $2,500 to open a CD. During the week, you have access to extended customer service hours, until 8 p.m. ET and 2 p.m. ET on Sundays.
Pros
- Competitive APYs on savings accounts and its lone CD offering
- No monthly maintenance or overdraft fees
- Low minimum deposit requirements to open a checking and savings account
- Fee-free network of 55,000 ATMs
- Support for peer-to-peer payment tools
- Mobile check deposit
Cons
- Limited terms for CDs
- High minimum deposit required for CDs
- No interest offered on checking accounts
- No cash deposits accepted
Products offered:
- Savings: Up to 4.60% APY
- Checking: 0.50% APY
Monthly fees: None
SoFi (short for Social Finance) was the brainchild of Stanford Business School graduates who created an alumni-funded lending source that initially focused on refinancing student loans. Since then, SoFi has expanded into a variety of loan categories and now offers online checking and savings accounts. You automatically get a savings account when you open a SoFi checking account. The checking account doesn’t require a minimum deposit or charge monthly maintenance fees or overdraft fees. Its high-yield savings account has a competitive APY and doesn’t have a minimum deposit requirement or monthly fees. Some applicants may qualify for a new account bonus of up to $300.
Read our full SoFi banking review.
Pros
- Competitive APYs on checking and savings accounts
- Low deposits required to open savings and CD account
- No monthly maintenance or overdraft fees
- Fee-free network of 55,000 Allpoint ATMs
- Direct deposits accessible two days early
Cons
- Fee charged for depositing cash
Products offered:
- Savings: 4.75% APY
- 1-year CD: 4.90% APY
- Money Market: 2.25% APY
Monthly fees: None
Synchrony takes advantage of its limited overhead to offer competitive rates on deposit accounts. In addition to a wide variety of financial products such as IRA CDs and IRA money market accounts, Synchrony offers niche types of CDs, including a bump-up (which automatically adjusts to a higher APY when available) and no-penalty varieties.
Read our full Synchrony Bank review.
Pros
- Competitive APYs on deposit accounts
- No monthly maintenance or overdraft fees
- Up to $5 out-of-network rebate per month
- No minimum deposit requirements
Cons
Products offered:
- Savings: 5.27% APY
- 1-year CD: 5.27% APY
- Checking: 0.10% APY
- Money Market: 0.25% APY
Monthly fees: None
TAB Bank is an online-only bank that originally catered to professionals in the transportation industry. It offers highly competitive APYs for its high-yield savings and CD accounts. There are no monthly fees and its savings, checking and money market accounts have no or low initial deposit requirements to open an account.
We also like that you can receive mobile alerts and text messages for withdrawals when your account falls below a certain dollar amount. Another benefit is that TAB has extended customer service hours: Monday through Friday from 6 a.m. to 7 p.m. MT and Saturdays from 9 a.m. to 3 p.m. MT, excluding federal holidays.
Pros
- Competitive APYs on savings, money market and CD accounts
- No monthly maintenance or overdraft fees
- No minimum deposit required to open a savings account
- Low minimum deposit requirements to open a checking and money market account
- Mobile check deposit
Cons
- High minimum deposit required for CDs
- No cash deposits accepted
Products offered:
- Savings: 5.00% APY
- Checking: 2.00% APY
- Money Market: 5.00% APY
Monthly fees: None
Zynlo Bank is a relative newcomer to online banking, launching in 2020 as the digital-only arm of PeoplesBank. It offers competitive rates on savings, checking and money market accounts. In addition to high yields, this bank offers tools to assist you in reaching your savings goals. For example, it has savings folders that help you label your savings goals in separate accounts, and Zyng, an automated roundup savings service with a bank match for every debit card purchase.
Zynlo accounts are FDIC-insured up to $250,000, per depositor, per type of account, in case of bank failure. The bank also covers deposits beyond the allotted FDIC limit through the Depositor Insurance Fund.
Pros
- Competitive APYs on savings, checking and money market accounts
- No monthly maintenance or overdraft fees
- Low minimum deposit requirements to open accounts
- 24/7 access to live customer service
- Extended FDIC insurance
- Fee-free network of 55,000 ATMs
- Early payday feature available with direct deposit
Cons
- No cash deposits accepted
Note: APYs shown are as of March 1, 2024. CNET’s editorial team updates this information regularly. APYs may have changed since they were last updated and may vary by region for some products.
What is an online bank?
An online bank, credit union or financial services firm lets you fully manage your money and accounts online via a website, mobile device or app. Most banking services can also be handled online, including transferring funds and depositing checks.
“More people are leaning toward online banking,” said Bola Sokunbi, founder of Clever Girl Finance and CNET expert review board member.
Though technology makes everything we do more accessible from a smartphone, there are some drawbacks to online banks. Online-only banks lack in-person assistance, and some might not accept cash deposits, making it tricky to bank there if you’re often paid in cash. On the other hand, if you’re comfortable managing your money online, digital banks are a convenient, low-cost option.
“Just make sure the bank meets your needs and it’s not going to cost you a ton of money to keep your money there,” Sokunbi said.
Online banks typically offer higher interest rates than traditional banks, Sokunbi said. And one major advantage is that some let you earn interest on your checking account, a feature most big banks don’t offer.
Although online accounts generally have fewer fees, you can save a lot of money by taking note of any additional fees, Sokunbi said. An online checking account, for example, might charge an ATM withdrawal fee. And an online savings account might charge you an excessive withdrawal fee if you go beyond six transfers or withdrawals per statement cycle, said Shang Saavedra, founder and CEO of Save My Cents and CNET expert review board member.
Transferring money out of an online account can also take time. Make sure you feel comfortable with how you can access your money — including withdrawing or transferring funds and making deposits. If you need assistance, you’ll need to navigate the bank’s customer service line, email support or chat.
How do I deposit and withdraw money from an online bank account?
The way in which you deposit and withdraw money, and the transfer time, will depend on the specific bank you choose.
Bank transfer
A bank transfer is one of the most common and seamless ways to transfer money online from one bank account to another. You can transfer money to or from an existing account using the account and routing numbers through your online account or mobile app. Some banks also let you transfer money through banking platforms like Plaid or Zelle. While some banks may transfer your money instantly or within two business days, some can take as long as seven — which can make a big difference, Sokunbi said.
Mail or wire transfer
Even if the only bank you choose doesn’t have a physical branch you can visit, you may still be able to mail a paper check or wire transfer with the funds to deposit into your account. However, this route will likely take longer for your money to hit your account compared with other options.
ATM deposit and withdrawal
Many online banks offer an ATM network for fee-free deposits and withdrawals, and you may be reimbursed for out-of-network ATMs. Some online banks partner with brick-and-mortar financial institutions or offer ATM deposit access if you prefer to make transfers in person. Cash deposits are usually available instantly, but checks may take a few days. Not all online banks allow you to deposit cash at an ATM. And not all online accounts come with ATM access to withdraw your money.
Mobile check deposit
If your online bank offers mobile account access, you can deposit a paper check using the mobile app and your smartphone camera. Usually, there’s no fee, and the money is available in one to two business days, depending on the bank.
Pros and cons of online banks
Cons
-
Limited banking services
-
No in-person physical assistance
-
May not accept cash deposits
-
Limited ATM availability without fees
Are online banks safe?
Like traditional banks, money stored at an online bank is safe as long as it is FDIC- or NCUA-insured to protect your deposits up to $250,000 per individual, per bank.
But keeping your financial and personal data secure when banking online is also important. Choose an online bank with robust safety and security features to protect your account. Some essential features to look for include two-factor or biometric authentication, end-to-end encryption and no liability for unauthorized transactions. This can help keep your account more secure and protect it from data breaches and hackers. Before opening an account at an online bank, ask customer service about any safety features and be sure to enable them for your safety.
How to open an account with an online bank
Opening an account with an online bank is usually straightforward. Once you’ve compared different bank options and are ready to open an account, follow these steps:
- Go to the bank’s official website.
- Narrow down which account(s) you want to open and review any requirements and fees.
- Complete the application with any required personal information and verification.
- Fund your account using the bank’s approved deposit methods.
From there, you can download the bank’s official mobile app and request a debit card (if available).
Methodology
CNET reviews online banks based on the latest APY information, fees charged and services offered from issuer websites. We evaluated online banks from among more than 50 banks, credit unions and financial companies. We selected the banks with the highest APYs that were insured up to $250,000 by the FDIC or NCUA.
Banks surveyed include: Alliant Credit Union, Ally Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank of America, Bank of the West, Bank5 Connect, Barclays, BMO, Bread Savings, BrioDirect, Capital One, CFG Community Bank, Citizens Access, Colorado Federal Savings Bank, Connexus Credit Union, Consumers Credit Union, Credit One Bank, Discover Bank, First Internet Bank of Indiana, First Tech Federal Credit Union, FNBO Direct, GO2bank, Golden 1 Credit Union, HSBC Bank, Huntington Bank, Lake Michigan Credit Union, LendingClub Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Merrick Bank, Nationwide (by Axos), Navy Federal Credit Union, NBKC, OneUnited Bank, Pentagon Federal Credit Union, PNC, Popular Direct, PurePoint Financial, Quontic Bank, Rising Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Synchrony Bank, TAB Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, USAA Bank, Vio Bank and Wells Fargo.
This article includes some material that was previously published on NextAdvisor, a CNET Money sister site that was also owned by Red Ventures and that has merged with CNET Money. It has been edited and updated by CNET Money editors.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
