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."

Luvleen SidhuCo-Founder, President and Chief Strategy Officer of BankMobile
Editor's Note
  • March 29, 2018 - We’ve surveyed the 2018 banking landscape and updated our review to stay current, with three new top picks (plus two runners-up) that offer competitive rates and outstanding service.
  • September 14, 2018 - Our top picks' APY has risen slightly in the last several months. We've updated this review to reflect the most recent rate increases.

Our Picks for Best Bank

Best for
Checking & Savings
Ally Bank
Ally
Outstanding customer support, minimal fees, and a wide range of financial products and services.
Pros
Simple savings account
A full suite of options
Customer service
Educational resources
Cons
Some account restrictions

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.

Customer service

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.”

Educational resources

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.

Best for
Cash Deposits & CDs
First Internet Bank
First Internet Bank
The widest network of ATMs among our finalists (over 450,000), plus CD rates as high as 2.95%.
Pros
ATM network
Investment yields
Cons
Account fees

Why we chose it

ATM network

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.

Investment yields

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

Account fees

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.

Best for
Frequent Travelers
Discover
Discover
A wide range of services, no international fees, and APY rates up to 1.80%.
Pros
No international fees
Well-rounded services
Cons
Limited customer support

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.

Well-rounded services

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 1.80%.

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:

Checking Maintenance Fee
Savings Maintenance Fee
Overdraft Fee
International Fee
Out-of-Network ATM Fee
Ally Bank
$0
$0
$25
1%
$0
Alliant Credit Union
$0
$0
$25
1%
$0
First Internet Bank
Up to $10 (varies by account tier)
$0
Free Overdraft Protection
2%
$0
Discover Bank
$0
$0
$30
0%
$0
Synchrony
N/A
$0
N/A
3%
$0

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.

Bank FAQ

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

Ally Bank
Discover Bank
First Internet Bank
Minimum Checking Requirement
None
None
$25
Minimum Savings Requirement
None
None
None
Highest-Yield Savings Account*
1.85% APY
1.80% APY
0.60% APY
Highest-Yield CD*
2.75%
3.10%
3.20%
Fee-Free In-Network ATMs (US)
43,000+
60,000+
450,000+

*Rates reflected in this review are current as of September 2018