The Best Banks
How We Found the Best Banks
30 hours of research
21 banks compared
3 top picks
The Best Banks
Experts agree that the best bank maximizes the value of your money and won’t penalize you with fees every time you need to touch it. On a practical level, it should also be convenient and offer genuinely useful customer support.
We were looking for high returns and low fees, so we focused on "direct" or "online-only" banks, which handle all business online or through mobile apps. Because they don’t have physical branch locations, they’ve got a leg up financially. According to GoBankingRates.com, the average savings account from a brick-and-mortar bank has a 0.06% annual percentage yield (APY); direct banks like Ally offer up to 1.85%. In addition, our top picks offer 24/7 customer support — which eliminates the hassle of making it to a branch during banking hours.
"Because brick-and-mortar banks have to maintain their branches and branch employees they have to charge fees to customers in order to subsidize this cost. A digital bank can offer customers no to low fees and higher interest on savings since it doesn’t have these high overhead costs."
How We Chose the Best Banks
We started with a list of all the direct banks we could find — giants like Ally, plus slightly less well-known options, like Bank5 Connect or Simple that came highly recommended from industry resources like NerdWallet. We opted to focus exclusively on internet-only banking, skipping hybrid options like Capital One and E*Trade, which have physical locations in addition to online services.
To compare banks, we started with the Federal Deposit Insurance Corporation (FDIC), the government organization that insures private bank accounts. If your bank fails, the government will reimburse you (typically up to $250,000). FDIC insurance is an important safeguard. Most likely you’ll never need it, but you never want to find yourself in a scenario where you need it but don’t have it. Almost every bank on our list is covered except for EverBank.
Transparency and convenience
We combed our contenders' websites looking for information on interest rates, account minimums, service charges, and ATM fees. Some banks display these numbers front-and-center. With First Internet Bank, for example, rates and fees are just one click away from the homepage. Others didn’t make it so simple. We cut banks like UFB Direct, whose account details were buried in a 30-page PDF, and banks like Fidelity, whose interest rates we still haven’t managed to find anywhere on their site.
We evaluated each bank’s customer support tools, ranking them on the variety of channels available (call center support, email, chat, and social media presence) and the hours at which they could be reached. Ally Bank dazzled us with reps available 24/7 by phone, live chat, and email — they even had reps on standby via Facebook and Twitter.
Mobile tools are important too. These days people pay each other via PayPal, Venmo, Apple Pay, Google Wallet — the list goes on. Fund transfers and check deposits are expected to be easy and fast, and your bank should be capable of offering a platform to meet that expectation.
Rates and services
As a final step, we sat down to compare our finalists’ fees, rates, and product offerings. Different people have different banking needs, whether you’re looking for high-yield savings, no-fees checking, or the ability to take out a mortgage, so we wanted to be sure our finalists catered to a range of customers.
We gave the side-eye to Alliant for requiring a $25 checking balance (on top of a maintenance fee for some checking tiers) — but it compensates by offering free overdraft protection, versus the $25 to $30 overdraft fees charged by Ally, Alliant Credit Union, and Discover.
Finalists that performed well in one area typically lagged behind in others: First Internet Bank had the highest CD rates, at 3.20%, but offsets this with the lowest savings account APY of all our finalists (a modest 0.60%). Meanwhile, Synchrony offers an impressive 1.85% APY on its savings accounts but doesn’t offer checking services at all.
After comparing all the options, Ally, First Internet Bank, Discover, Synchrony, and Alliant Credit Union impressed us with their range of unique strengths. We dig into the best of the best below, but the best choice for you will depend on your specific banking needs, and you might even want to open accounts at more than one institution.
Our Picks for Best Bank
Why we chose it
Simple savings account
If you want to keep all your banking activity under one roof, we recommend starting your search with Ally Bank. Opening a checking and savings account with Ally is simple: Like most of our top picks, it has no minimum balance requirements or monthly maintenance charges. That means you can start with whatever you have on hand and Ally won’t eat away at your balance with unnecessary fees. It also offers one of the highest-yield savings accounts we found, at 1.85% APY.
A full suite of options
Ally offers a full suite of banking services. Customers can open up a credit card, take out an auto or home loan, invest in an IRA or CD, and more. Interest rates on Ally investments are well above average; with savings APY up to 1.85%, while the average across our contenders was only 1.06%.
You might be able to garner slightly better returns by banking at multiple institutions — say, by opening a savings account with Alliant and a CD with First Internet Bank — but Ally affords you the simplicity of keeping all your finances in one place.
The other reason we love Ally (and what put it at the top of our list) is its excellent customer support. Among all our contenders, Ally’s resources came out on top. Its reps are available 24/7 through live chat and over the phone; including phone lines for international callers and the hard of hearing. If you prefer, you can connect through email, Facebook, Google Plus, or Twitter.
When we reached out with questions about opening an account, we were told exactly where we were in the queue (third) and had our answers within a couple minutes — no long hold times, tinny elevator music, or being reassured that “our call was very important.”
Ally’s website also has a robust educational section that’s aimed at improving customers’ financial literacy. We like its Wallet Wise courses, which walk you through the basics of banking, budgeting, investing, and credit. When you’re ready to move beyond the basics, you can also check out Ally’s Do It Right Community. It’s chock-full of articles and discussion boards that share best financial practices for everything from college savings to estate planning. These tools let customers make smarter money decisions, and help them get the most value from their Ally accounts.
Points to consider
Some account restrictions
Though you won’t find fees for keeping an active and full savings account, too much activity is discouraged. Ally will charge a $10 fee for too many transactions. Customers who treat their savings account like a checking, will be warned. Eventually Ally will either close the account or convert it into a checking. Ally Bank will also close your account if no funds are deposited within the first 30 days of opening it.
Ally also has restrictions on wire transfers. While domestic outgoing transfers will cost $20 each, international transfers aren’t allowed.
Why we chose it
If you deal with cash frequently — cash tips, anyone? — then you might be worried about making the switch to an online bank. How are you supposed to deposit actual money without going into a branch? First Internet Bank has the answer. It’s part of the Visa PLUS ATM network, which includes 450,000 cash deposit-accepting ATMs across the United States. On a larger scale, the PLUS Network has more than two million ATMs in 200 countries, so you can access your accounts no matter where you go. To find deposit-friendly ATMs in your area, plug your zip code into First Internet Bank’s Global ATM Locator and filter for ‘Plus Shared Deposits.’ We found ten within just one mile of our Seattle office.
We also recommend First Internet Bank if you’re thinking about investing in a Certificate of Deposit (CD). First IB offers excellent returns on these fixed-term, high yield savings accounts: Up to 2.95% — the highest we saw anywhere. CD rates, as with savings rates, can change, so it’s always worth double-checking close competitors like Alliant. But First IB also offers one of the best return-to-deposit ratios on the market; you can qualify for its highest rates with a deposit as low as $1,000. Other banks, like Ally and Alliant, require deposits as high as $5,000 to qualify for rates above two percent. We appreciate that First Internet Bank offers its highest yield accounts to people who may not have upwards of $5,000 to spare.
Points to consider
We were less impressed, however, with First Internet Bank’s checking and savings options. It requires a $25 minimum deposit to open a checking account, and it may charge you up to $10 per month in maintenance fees. Its savings accounts don’t require a minimum balance but had lower APY than our other contenders. We’ll admit: These fees are by no means outlandish. But we prefer Ally, Alliant, and Discover’s no-minimum, fee-free checking and savings options.
Why we chose it
No international fees
What we really love about Discover, is that it doesn’t charge international fees. By comparison, our other top picks will slap you with a surcharge of one or two percent for every card transaction on foreign soil. It may not sound like a lot, but if you’re a frequent traveler those charges can add up quickly. We recommend looking into a Discover account if you travel often for business, if you’re a student studying abroad, or if you simply vacation a lot. Avoiding that one or two percent charge could save you a lot in the long run.
Discover customers will enjoy the same perks as with any of our other top picks: The bank offers a range of services including credit cards, loans, and IRAs. Like Ally and Alliant, it has no minimum balance requirements for checking and savings accounts. It even rings in the second highest savings APY among our finalists, at up to 2.10%.
Points to consider
Limited customer support
The main reason Discover isn’t higher up on our list is that it has poorer customer support than our other top picks. We couldn’t find an email address listed on its site, and you have to be a member to use its live chat function — which meant we couldn’t easily reach a rep while we were comparing accounts. Discover does have 24/7 phone support, which we appreciate, but it lacks the variety of channels that J.D. Power revealed to be so important for customer satisfaction.
Tips for Maximizing Value and Minimizing Costs
You don’t have to keep all your eggs in one basket
For brick-and-mortar banks, it makes sense to do all your banking in one place — traveling between different branches to manage separate accounts and investments can turn into a hassle. With direct banking, however, you can hand-select the best options from multiple institutions. Many experts even recommend it.
"Before you sign up for an account you should make sure you understand the fee structure. Hidden fees typically revolve around what your daily balance is, what ATM you use when you withdraw money, and whether or not you're overdrawn at any given time."
For example, you might open up a high-yield savings account at Alliant, but invest in a CD from First Internet Bank, or get a free checking account with Ally coupled with Discover checking for your annual vacations. This doesn’t mean you need to go overboard (most people would probably still find it a hassle to maintain four separate bank accounts), but be aware that online banking leaves you with many more options than you might typically have. You have the luxury of picking bank accounts based on what matters most to you.
Be sure to understand the fine print surrounding fees and penalties
It’s important to understand your bank’s information in full before opening an account. Often, it’s the fine-print fees that can eat away at your balance; you’d hate to accidentally overdraw your Discover checking by $1 and be charged a $30 penalty. If you know about the fee ahead of time (and know that you tend to accidentally overdraw) then you can choose a bank like First Internet Bank instead — which offers free overdraft protection transfers in increments of $50. Here’s how a few common fees compare among our finalists:
If you’re considering another bank, make sure to check for ‘hidden’ fees. These tend to be associated with your daily balance, ATM use, overdrawing, and monthly maintenance — you can usually find this information in the ‘Disclosures’ section of the website. And if a fee structure seems unclear, don’t hesitate to reach out for clarification. The best banks should be honest and transparent about their charges.
What’s the difference between APY and APR?
APY (Annual Percentage Yield) is the amount you earn on your investments over the course of the year. APR (Annual Percentage Rate) is commonly advertised by credit cards; it’s the interest you pay to take a loan from the bank.
What is the best way to save money?
There is no one best way to save money, and the answer may be different for everyone. We recommend you start by analyzing your current financial situation. Calculate your debt, income, and any other expenses. Create a monthly budget and intentionally set a portion of remaining income (after bills and essential expenses), to savings. You can even automate a monthly amount of money to be transfered into your savings account.
Which credit union is best?
Credit unions are not-for-profit banks that are member-owned. It’s essentially the co-op of the banking world. We considered credit unions in our search for the best bank, and Alliant Credit Union was the only to make our top picks. It offers every feature you’d need from a bank, including high CD rates and an APY of 1.80%. Though we were a bit disappointed in its online support, we’d recommend them as the best credit union.
The Best Banks: Summed Up
*Rates reflected in this review are current as of September 2018