If you are still banking with a physical bank, it may be time to go digital instead. Digital banks offer several benefits and features that physical banks can’t, or don’t, offer due to the cost of operating a physical location. Because online banks don’t have these overhead costs, they can offer more benefits to help customers save money on fees, and earn more money via interest too.
There are several online banks from which financially savvy customers can choose from these days. If you are looking to go digital with your banking, here are a few good options to consider.
Ally is a digital bank with a full range of services, including online savings accounts, money market accounts, CDs, IRAs, checking accounts, credit cards, and more. It has also been named the “Best Online Bank” 5 years in a row from 2011 to 2015 by Money Magazine.
Ally has become a popular place for people to store their savings in an online savings account due to the 1.00% APY currently available on all balance tiers. It also offers 0.85% on all money market balances. These accounts offer daily compounded interest, FDIC insurance deposits, and no monthly maintenance fees.
Checking accounts with Ally Bank allow customers to earn interest on their money, which is something that is not as common with physical banks. Daily balances of less than $15,000 earn 0.10% APY, and accounts with a daily balance over $15,000 earn 0.60% APY.
Customers of Ally Bank also enjoy the ability to use any of the 43,000+ Allpoint ATMs in the U.S. for free. Plus, Ally Bank reimburses up to $10 per statement cycle for fees incurred at other ATMS. It also offers exceptional customer service with 24/7 live customer care.
Charles Schwab is another bank that started offering more digital products for its customers, including checking and savings, lending, and investing.
The High Yield Investor Checking account is a popular choice for many customers as Schwab offers this account with no ATM fees worldwide and unlimited ATM reimbursement for fees incurred each billing cycle. It also offers no account minimums or monthly services fees, and easy banking 24/7 with Schwab Mobile. The Schwab Bank High Yield Investor Checking account is linked to your existing Schwab One brokerage account so you can manage both accounts with one login.
The interest rate on the Schwab Bank High Yield Investor Checking account is 0.06% APY no matter your balance, but you do have to open a Schwab One brokerage account in order to use a Schwab Bank High Yield Investor Checking account. There are no fees or minimum balance for the Schwab One brokerage account, and you can transfer funds between the two accounts for free.
Schwab also offers a High Yield Investor Savings account with no minimum balance or monthly service charge. The interest rate is 0.10% APY on all balances. It also qualifies for the unlimited ATM fee rebates.
USAA offers checking accounts, savings accounts, credit cards, and many different loan products for cars, homes, and more. According to its website, they have been rated 4.5 out of 5 stars by over 16,000 members.
USAA offers free checking with a minimum opening balance of $25. After you open a free checking account, there is no minimum balance, no monthly service fee, overdraft protection, fee bill pay, and free ATMs nationwide. USAA reimburses up to $15 in ATM fees per month.
Like most digital banks, USAA offers interest on its checking accounts, although it is lower than many competitors at only 0.01% APY. Its savings accounts offer rates of 0.05% APY to 0.15% APY depending on the balance of your account.
There is a catch: you need military affiliation to be able to open an account. This can include a connection through a family member, such as a parent or spouse.
Capital One 360
Capital One 360 offers “no fees, no kidding” checking and savings accounts with no fees and no minimums. While it doesn’t offer ATM fee reimbursement, Capital One does offer a unique feature compared to many other digital banks: the ability to deposit cash into your checking or savings account with select Capital One ATMs in a 360 Café or Capital One Bank location.
The interest rates on a 360 Checking account range from 0.20% APY to 0.90% APY, depending on your balance.
- $0 – $49,999.99: 0.20% APY
- $50,000 – $99,999.99: 0.75% APY
- $100,000 or more: 0.90% APY
The interest rate on a 360 Savings account is 0.75% APY.
If you’re a Capital One credit card customer, you can also conveniently access both your credit card information and Capital One 360 banking information with a single sign-on.
Another unique feature of Capital One 360 is the ability to create multiple savings account with any nickname you choose. You can also use their “My Saving Goals” section to make automatic savings deposits and set goals for your various savings accounts.
Which Digital Bank Is Right for You?
As digital banks become more popular, it can be difficult to determine which one might be the best fit for you. Of course, it depends on several factors, such as the features and services you most value, how you plan to use your account, and more. No matter which digital bank you choose, the important thing is that you are making the right decision for you and your money.