Interest rates have been rising rapidly in recent months, and you may be pleasantly surprised to see how much. If you\u2019re currently holding your money in a bank that\u2019s paying 0.0-something percent on your balance, you need to seriously investigate the alternatives. <\/p>\n
In this guide, we\u2019re going to provide 11 of the best online banks, most of which pay interest rates on deposits well above \u201ctraditional\u201d banks.<\/p>\n
Let\u2019s start with a high-altitude summary with the table below. We\u2019ve listed all 11 banks and their basic features. Take a quick glance through the table, then move down to the summary reviews of any you\u2019re interested in just below the table.<\/p>\n
Below is our list of the 11 best online banks, and what each bank is especially good at:<\/p>\n
Ally Bank<\/a> got our vote as the best all-around online bank. Not only do they pay 4.40% APY on their money market accounts<\/a>, but they also offer interest-bearing checking, and high-yield certificates of deposit (CDs).<\/p>\n But that\u2019s not all that makes this online bank stand out. In addition to interest-bearing deposit accounts, they also offer mortgages, car loans, and personal loans<\/a>. They also offer self-directed trading of most investment securities, as well as a robo-advisor<\/a> and wealth management services.<\/p>\n<\/blockquote>\n Ally Bank offers interest checking with two tiers. The account pays 0.10% APY on balances less than $15,000, and 0.25% APY on balances above. The account also comes with a Round Up feature enabling you to save money as you spend.<\/p>\n Ally Bank also offers CDs with terms between three months and five years, and interest rates ranging from 0.50% and 2.75% APY.<\/p>\n Best known for its high-rewards credit cards<\/a>, Discover<\/a> also offers online banking with high interest. Though their online savings account pays the highest rate at 3.60% APY, their money market comes close, with 3.50% APY on balances up to $100,000, and 3.55% APY on higher balances. They also offer CDs in terms of 12, 24, and 60 months, with interest rates ranging between 4.15% and 4.30% APY.<\/p>\n Much like Ally Bank, Discover has none of the usual fees. They even waive the excess withdrawal fee on their online savings account. Meanwhile, you can receive 1% cashback on debit card purchases up to $3000 each month with their no-fee checking account.<\/p>\n Alliant Credit Union<\/a> is one of the largest credit unions in the nation. And though based in Illinois, it\u2019s available to depositors nationwide. As a credit union<\/a>, they offer a full line of banking services. This includes credit cards, mortgages<\/a>, home equity lines of credit, auto loans<\/a>, personal loans, and even commercial real estate financing.<\/p>\n Their High-Rate Savings Account currently pays 1.00% APY with a minimum balance of $100, and no monthly fee if you choose electronic statements (paper statements are $1 per month). Meanwhile, the high-yield checking account pays 0.25% APY with no monthly service fee or overdraft fees and has no minimum balance requirement.<\/p>\n CIT Bank\u2019s star account is their Savings Connect account. It currently pays 1.35% APY and requires a minimum of $100 to open. It requires connecting the savings account with an eChecking account. And speaking of eChecking, that account pays interest of 0.10% APY on balances less than $25,000 or 0.25% above. It also requires a minimum opening balance of $100.<\/p>\n Meanwhile, the money market account pays 1.00% APY and requires a minimum of $100 to open. They also offer their Savings Builder account, which pays up to 0.70% APY. But this savings account is a bit complicated. It requires a minimum balance of $25,000 or making monthly deposits of at least $100, to earn the maximum interest rate. The rate falls to 0.34% if you don\u2019t.<\/p>\n<\/blockquote>\n CIT Bank<\/a> also offers an interesting array of CDs. Unfortunately, other than the No Penalty 11-month CD, currently paying 1.40% APY, the interest rate returns on their CD products pay well below 1%. CIT Bank also offers home mortgage loans, as well as business and commercial financing.<\/p>\n Much like Discover, Capital One<\/a> is perhaps best known for its line of very attractive credit cards. But they also offer online banking that includes interest-bearing checking and savings accounts, as well as a wide range of CDs. The most impressive program is the 360 Performance Savings account, which currently pays 1.00% APY on all balances. There are no monthly fees and no minimum balance requirement.<\/p>\n Their 360 Checking account is an interest-bearing checking account, currently paying 0.10% APY. Like the 360 savings account, there is no minimum balance and no monthly fees. Capital One also offers CDs with terms ranging from six months to 60 months, and interest rates between 0.75% APY and 2.90% APY.<\/p>\n If you\u2019ve been unable to open a checking account because of either bad credit<\/a> or an unsatisfactory relationship with a previous bank, Chime<\/a> can help. You can open an account with no money, and no credit check. Chime also offers fee-free overdraft protection with their SpotMe program which provides you with up to $200 in overdraft spending.<\/p>\n Chime also offers other services to help you better manage your finances and even improve your credit. Their Credit Builder program offers a secure Visa credit card with no annual fees or interest that will report to all three major credit bureaus.<\/p>\n<\/blockquote>\n Chime, however, is on the low end of the interest scale, with their top rate being 0.50% APY on their High Yield Chime Savings Account. But Chime is more a banking app for individuals looking to build credit, and not about paying high interest.<\/p>\n PenFed <\/a>is a credit union offering complete banking services. That includes checking, savings, and money market accounts, as well as high-yield CDs, credit cards, auto loans, personal loans and lines of credit, student loans<\/a>, and the full range of mortgages and home loan products.<\/p>\n Their CDs are where they\u2019re strongest. That starts with their five-year certificate which currently pays 3.45% APY on balances as low as $1,000. Meanwhile, their Premium Online Savings is currently paying 0.75% APY with a minimum of $5 to open an account.<\/p>\n They also offer a free checking account with no minimum balance and no monthly fees, as well as their Access America checking account paying up to 0.15% APY on balances below $20,000, and 0.35% APY on higher balances. The account requires a monthly direct deposit of at least $500, or a minimum daily balance of $500 to avoid a $10 monthly fee.<\/p>\n There\u2019s good news and bad news with Bank of America<\/a>. Let\u2019s start with the bad news\u2014interest on their checking, savings, and CDs is downright dismal. We\u2019re talking rates of below 0.10% across the board, even with the recent increase in interest rates in general. Bank of America is simply not an institution where you\u2019ll want to hold a large amount of cash for the purpose of earning interest on your money.<\/p>\n But what Bank of America is good at is being a full-service bank. Unlike many of the other banks on this list, Bank of America is a traditional brick-and-mortar bank. They have more than 4,000 retail financial centers across the country, which means the possibility of face-to-face banking is very high. But like an increasing number of traditional banks, they also offer complete online banking services.<\/p>\n<\/blockquote>\n As a full-service bank, they offer several credit cards, home loan programs, auto loans, and investing through Merrill Edge. And if that\u2019s not enough, they also offer small business banking and wealth management. Bank of America is the perfect choice if those are the services you\u2019re looking for.<\/p>\n NBKC<\/a> is a small, Kansas City-based bank with just four brick-and-mortar branches in the Kansas City area. But they distinguish themselves as an online bank, and one that provides full banking services. That includes home loans<\/a>, personal loans, auto loans, bridge loans, and credit cards, in addition to checking and money market accounts and CDs. If that\u2019s not enough, they also offer business services, like funds, disbursements and payments, fraud management, collections, and cash management.<\/p>\n On the bank deposit side, they pay interest on both their money market and checking accounts. The Personal Money Market currently pays 0.40% APY on all account balances, has no minimum balance requirement, and charges no monthly fees. Their Everything (checking) Account pays 0.25% APY on all account balances, has no minimum deposit requirement, and no monthly fees.<\/p>\n<\/blockquote>\n CDs have terms of between three months and five years, with interest rates between 0.10% and 0.75% APY. Each requires a minimum investment of $1,000 or $250.<\/p>\n PNC<\/a> is another brick-and-mortar bank with a strong online presence. It\u2019s one of the largest regional banks in the country, and it provides full banking services to individuals and businesses. They offer checking and savings accounts, credit cards, home financing, auto loans, and retirement plans<\/a>, as well as business banking services.<\/p>\n Much like Bank of America, as a large banking concern, interest rates paid by PNC on deposit accounts are poor. For example, they offer multiple savings accounts, all with interest rates well below 0.10% APY, regardless of account balance. The situation is much the same with their CDs, with terms ranging from as little as one month to as long as 10 years.<\/p>\n But if PNC has a distinguishing feature, it\u2019s their Virtual Wallet. That\u2019s a feature that combines checking and savings accounts with money management tools. It will set you up with the primary checking account representing your spending account, a secondary checking account that will act as a reserve, and then a long-term savings account for growth. It will then add digital tools to track your spending and automate your savings.<\/p>\n\n
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