Visiting traditional banks with physical branches can take time and effort for many users. Fortunately, that’s not your only option anymore. The top online banks in the U.S. work just like brick-and-mortar banks, except you have an online bank account that lets you make transactions through a mobile app from the comfort of your couch.
Whether you want to check your account balance on the go or make wire transfers from your home, here is Remitly’s guide to the top online banks in the U.S. and the best perks account holders can get. We’ll also introduce you to one popular banking alternative.
5 of the top online banks
If you want to manage your finances without visiting a branch location, an account with an online bank might be right for you. With an online bank, you can usually choose from an array of financial products — from checking and savings to certificates of deposits (CDs) — with competitive interest rates or annual percentage yields (APYs).
Here are five online banks you might want to consider.
1. Ally Bank
Ally Bank is one of the top picks for the best online bank in the United States and used to be the financial arm of General Motors before it evolved into one of the largest banks in the country in terms of assets. This top online bank offers a full range of banking products and services like checking and savings accounts, money market account options, and CDs.
Why you might like Ally Bank
- No minimum balance or monthly maintenance fees
- No overdraft fees
- Attractive annual percentage yield rate, which sits at 4% APY on its high-yield savings account and 0.25% on its interest checking account as of June 21, 2023
- 24/7 phone support for an easy banking experience
- Wide range of online tools, including a brokerage bank account with a DIY option for investors
- $250,000 of protection through the Federal Deposit Insurance Corporation (FDIC)
What are the drawbacks of Ally Bank?
- You can’t make cash deposits despite having ATM access
- No physical branches
Is Ally Bank the right online bank for you?
Ally Bank is a good fit if you:
- You want to open a high-yield savings account.
- You are beginning to invest and want more options to grow your money.
- You primarily use online banking with a mobile app.
- You receive your wages as a direct deposit.
- You have an interest in investment services.
2. Axos Bank
Formerly known as Bank of Internet USA, this full-service online-only financial institution changed its name to Axos Bank in 2018. Aside from the usual range of banking products and services for individual account holders, it also offers banking solutions to business entities, separating it from many online banks that focus only on consumers.
Why you might like Axos Bank
- No minimum balance and no monthly maintenance fees
- Very attractive APY rate for its high-yield savings account at 0.61% APY as of June 21, 2023, with no minimum balance requirements
- Small business and commercial banking solutions, which include merchant services, business checking accounts, commercial lending, and lines of credit
- A wide range of checking accounts with rewards that cater to different demographics
- Unlimited ATM fee rebates for many types of accounts when you use ATMs in the U.S.
- No minimum deposit requirements for CDs
- FDIC-insured deposits up to $250,000
What are the drawbacks of Axos Bank?
- Its CD APY rates may not be as competitive compared to other banks
- You need to make a $250 initial deposit to open a high-yield savings account
- Cashback checking accounts have overdraft fees
Is Axos Bank the right online bank for you?
Axos Bank could be a good choice for you if:
- You’re a business owner looking for financial products and solutions for your enterprise
- You use ATMs regularly
- You’re a frequent debit card user
- You want to open a CD with an Internet bank
3. Capital One
Best known for its popular credit cards, Capital One also has an online banking division offering a suite of products and services, making it one of the best online banks of 2023. From money markets, custodial accounts, and IRAs on deposit accounts to business banking services, this online bank has a product for many customers.
Why you might like Capital One
- No monthly service fees or minimum balance
- Access to an extensive ATM network with over 70,000 ATMs nationwide
- Brick-and-mortar physical branches in select locations
- Competitive rates on savings accounts at 4.10% APY as of June 21, 2023
- No minimum opening deposit on CD accounts
- Flexible interest payment plans on CDs
- FDIC-insured deposits up to $250,000
- Wide range of business account holder perks for sole proprietorships, partnerships, LLCs, corporations, and small organizations
- The ability to view your credit card rewards and Creditwise credit scores in the mobile app
What are the drawbacks of Capital One?
- Overdraft fees of $35 if you fail to pay the overdrawn amount the next day
- Stiff early penalty withdrawal on CDs, which is equivalent to up to six months of interest
Is Capital One the right online bank for you?
With its many physical branches and mobile banking offers, Capital One is perfect if:
- You want the middle ground between online-only banks and traditional banks
- You want to start your kids’ financial journey with a joint, no-fee account
- You’re a small business owner or sole proprietor
- You have a Capital One credit card
4. Discover Bank
The company that introduced Discover It credit cards also offers online banking services. A subsidiary of Discover Financial Services, Discover Bank offers a wide range of financial products, which include checking, money market, retirement, and savings accounts.
Why you might like Discover Bank
- No minimum balance or monthly fees
- No insufficient balance or overdraft fees
- Discover offers 1% cash back on debit card purchases of up to $3,000
- Competitive rates on savings accounts, with a 4.00% APY as of June 21, 2023
- Allows you to grow your nest egg for retirement with an IRA certificate of deposit, which offers up to 4.75% APY as of June 21, 2023
- FDIC-insured deposits up to $250,000
- Offers student, home, personal, and auto loans
- 24/7 customer service
- Robust mobile banking app with an iOS rating of 4.9 out of 5 and an Android rating of 4.7 out of 5
What are the drawbacks of Discover Bank?
- Early withdrawal penalty for certificates of deposit
- An initial minimum deposit of $2,500 on CDs
Is Discover Bank the right online bank for you?
Discover Bank is a good choice if:
- You prefer cash back to earning interest
- You’re in the market for a personal loan
- You want direct access to Discover credit cards with generous cashback and rewards
- You like to pay bills and do other banking online through a mobile app
5. Varo Bank
Varo Bank is an online banking service with no hidden fees and a high-yield online savings account. Varo Bank’s checking and savings products do not have monthly fees, overdraft fees, or minimum balance requirements, which can help customers save money when opening deposit accounts.
Varo has a large fee-free ATM network. With more than 40,000 locations, you can withdraw money from Target, CVS, and Safeway nationwide. Varo also provides automatic savings tools for account holders.
Why you might like Varo Bank
- No monthly fees
- A high APY on savings accounts, offering up to 5% APY as of June 21, 2023
- Early access to your paycheck with direct deposit
- Up to $100 instant cash loan with the Varo Advance feature
- Federal Deposit Insurance Corp coverage on deposits up to $250,000
- Large ATM network
- No required credit check
- Visa debit card
What are the drawbacks of Varo Bank?
- Limits and fees for cash deposits
- Cash deposits are available only through third-party retailers that charge fees
- Must meet requirements to qualify for the highest savings rate
- External transfers limited to $10,000 per month
- No brick-and-mortar banks
Is Varo Bank the right online bank for you?
Varo Bank may be the best online bank for you if:
- You want to earn a high rate of interest on your savings account
- You currently pay a lot in ATM fees
- You receive direct deposit and don’t need to deposit cash
- You manage your bank accounts online and don’t need physical branches
Top online bank alternative
Online-only banks aren’t the only way to receive financial services without a bank location. Here is a non-banking app that offers convenient digital payments and money management solutions.
Chime
Chime is a relatively new financial technology company that’s designed for lower- and middle-income Americans. It’s not a bank. Rather, their banking services are provided by The Bancorp Bank or Stride Bank, N.A., Members FDIC.
Why you might like Chime
- No-fee checking accounts and high-yield savings accounts
- Special program for direct deposit that enables funds to arrive early
- Optional features that encourage saving (such as rounding transactions to the nearest dollar and adding the difference to your savings account)
- FDIC insurance on deposits up to $250,000
- Secured “Credit Builder” card available without a credit check
- Free mobile payments to family and friends, even if they don’t use Chime
Drawbacks of Chime
- Limited financial services
- No physical locations (true for other banks of this type)
Is Chime a good fit for you?
Chime is a great option if:
- You don’t need a full suite of banking services.
- You’re early on your savings and credit journey.
- You mostly use cashless payments and services.
Find the best online bank for you
While all of the above financial institutions offer products and services that make them among the best online banks, what’s most important is which one is the right fit for you.
To choose an online bank, consider what type of bank accounts you need to open, how you use your account, and what you prefer to do when you need help with your banking. As you compare online banks, read the complete listing of fees, so you’ll know what to expect when you use your savings and checking accounts.
Start comparing your options today and get on your way to enjoying all the conveniences and perks of having a bank account online.