Online banking has grown tremendously over the past decade. What started as a niche service mainly used by tech-savvy consumers has now become mainstream. In 2024, most banks have robust online and mobile banking platforms that allow customers to carry out a wide range of financial transactions from the comfort of their homes.

According to market research, over 80 percent of American adults use online banking. The convenience, ease of use, and round-the-clock availability are some of the factors fueling this growth. On top of that, online banks typically offer higher interest rates on savings accounts compared to traditional brick-and-mortar banks. This makes them an attractive option for many customers.

In this blog post, we discuss the 10 best online banks of 2024. We have evaluated dozens of options and shortlisted the top contenders based on parameters such as interest rates, fees, account features, and customer service.

Key Takeaways

• Online banking has become extremely popular, with over 80% of American adults now using it for its convenience and higher interest rates.

• The top 10 online banks recommended are Discover Bank, American Express National Bank, CIT Bank, Ally Bank, Marcus by Goldman Sachs, Synchrony Bank, FNBO Direct, HSBC Direct Savings, Axos Bank, and UFB Direct.

• These banks offer great interest rates on savings accounts, CDs, and checking accounts, with little to no monthly fees or minimum balance requirements.

• Key factors to evaluate when choosing an online bank include types of accounts offered, interest rates, minimum balances, deposit insurance, financial health, digital platforms, and customer service.

• Benefits of online banking include convenience, higher interest rates, lower fees, advanced technology, and robust security features.

• Many top online banks also offer perks like sign-up bonuses, referral programs, loyalty programs, sweepstakes, and promotional high-yield events.

10 Best Online Banks Of 2024

1. Discover Bank

In operation for over 30 years now, Discover Bank offers top-tier interest rates on savings and CD accounts. The lack of monthly fees across all accounts also appeals to most customers. Discover Bank frequently has special offers running – especially for first-time customers – so you can grab a good deal.

The bank’s customer service enjoys positive feedback for being helpful and responsive. Discover Bank also scores high for its user-friendly website and mobile app.

2. American Express National Bank

While not a full-service bank, American Express National Bank offers world-class interest rates on CDs and high-yield savings accounts. So if you just want a lucrative place to park your money, this is one of the best options out there.

As you would expect, their mobile app and online banking platform are both stellar. To optimize interest accrual and avoid monthly fees, customers should maintain the minimum average monthly balance.

3. CIT Bank

CIT Bank has earned a reputation for offering some of the highest savings account interest rates in America. Their money market accounts also tend to rank at the top as do their 5-year and 7-year CDs.

There are no monthly service fees irrespective of your balance. CIT Bank features an intuitive online banking portal and robust mobile apps for iPhone and Android users. Phone support is also available 6 days a week.

4. Ally Bank

Ally Bank is one of the largest pure-play online banks in the US. They frequently offer best-in-class interest rates on savings accounts, checking accounts, money market accounts, and CDs. There are no monthly maintenance fees or minimum balance requirements.

Ally Bank’s highly-rated mobile app comes packed with advanced features like mobile check deposit and ATM locators. Customer service enjoys largely positive feedback as agents are well-informed and friendly.

5. Marcus by Goldman Sachs

Through Marcus, Goldman Sachs aims to cater to retail banking customers after years of focusing exclusively on investment banking. As a result, Marcus online savings accounts offer interest rates that traditional banks simply cannot match.

Marcus has no fees for transfers, incoming wires, statement copies, or dormant accounts. While not a full-service bank, Marcus offers all the basic retail banking features executed very well.

6. Synchrony Bank

Synchrony Bank is slowly but surely gaining popularity due to its high-yield savings accounts and certificate of deposits. Their savings account rates are often among the very best in the country.

Synchrony’s online banking platform and mobile apps receive praise for their intuitive interface. Bill pay is free as are several other banking services. Minimum balances to avoid fees are on the higher side though.

7. FNBO Direct

This online division of First National Bank of Omaha has been winning over customers with not just attractive rates but also transparent pricing and quality service. FNBO Direct offers checking accounts, savings accounts, and CDs with absolutely no hidden fees.

Their rates consistently rank among the best making them a reliable choice. FNBO Direct also operates on modern web and mobile platforms for convenient online banking.

8. HSBC Direct Savings

HSBC Bank revolutionized online banking when it launched HSBC Direct Savings in the early 2000s. While no longer as flashy as the new fintech banks, HSBC Direct Savings still offers respectable rates on savings accounts and CDs.

There are no monthly fees on any of their accounts – entry-level or otherwise. Customers can access their accounts through a clean online portal and mobile app. Phone support meets industry standards.

9. Axos Bank

Axos Bank is an online bank that provides deposit accounts, personal/business loans along digital investing services. So if you need full-service banking all through a digital platform, Axos Bank delivers.

Interest rates on deposit accounts are very competitive. The online banking platform and mobile app are packed with features including external transfers, Zelle payments, mobile deposits, and more.

10. UFB Direct

Operating nationwide, UFB Direct offers customers access to an online savings account, money market account, and CDs. Interest rates across all deposit accounts are at the higher end of the spectrum. So savers looking purely for high-yield accounts should consider UFB Direct.

Their online banking platform makes it easy to monitor accounts, initiate transfers, and set up alerts. Customer service also wins acclaim for being very responsive.

Benefits of Online Banking

What drives so many Americans to embrace online banking and abandon traditional branch-based banks? Well, there are several major benefits that online banks offer:

Convenience

This is arguably the biggest motivator to go for online banking. You can access your accounts 24/7 without physically visiting a bank. Most transactions can be completed instantly via desktop or phone. Easy accessibility makes it more likely for you to stay on top of banking activities rather than neglecting them.

Higher Interest Rates

Online banks manage to offer the best rates because they have lower overhead expenses. Without the costs of maintaining physical branches, they can pass on savings to customers in the form of higher yields on deposit accounts. The highest savings account and CD rates in America almost always come from online banks.

Lower Fees

Related to the above, online banks tend to charge very few fees (if any) because customers are largely self-served through digital channels. Transactions are automated, lowering labor costs. The lack of tellers, vaults, and clerical staff also contributes to reduced banking costs. Again, these savings translate into fewer fees on current and savings accounts.

Advanced Technology

Online banks design and continually upgrade digital platforms based on customer feedback. So their web and mobile apps tend to offer advanced features, security protections, design enhancements, and device integrations. Technology is a core priority rather than an afterthought for online banks.

Top Security

Without branches handling cash, online banks deploy sophisticated tools like multifactorial authentication and enhanced data encryption to reduce risks. Since managing risk is crucial when operating predominantly through digital channels, online banks are at the forefront when it comes to fraud monitoring and prevention.

Factors to Consider When Choosing an Online Bank

As you search for the best online bank for your specific needs, keep the below factors in mind:

Types of Accounts Offered

While savings accounts, CDs and even checking accounts are common across most online banks, only some provide more advanced account types like money market accounts. Make sure the bank offers all the core accounts you require.

Interest Rates

Compare interest rates on similar accounts across shortlisted banks. Going with the highest rates is advisable as long as the rest of the features meet your expectations.

Minimum Balances

To avoid monthly maintenance fees, you need to maintain a minimum average balance set by the bank. Find out this amount for each type of account you need.

Deposit Insurance

Your deposits must be insured by FDIC coverage up to $250,000 per account ownership category. This is mandatory for all banks that hold customer deposits.

Financial Health

Online or not, a bank must maintain sufficient capital reserves to operate safely and fulfill obligations even during times of economic uncertainties. Check an online bank’s health through credit rating reports and financial statements.

Digital Platform Reviews

Customer feedback on digital banking platforms can give you insight into potential issues that past users have faced. Excellent mobile and web functionality is crucial for online banks.

Customer Service Reachability

Having questions answered promptly is vital when you don’t have a human interface at local branches. Online chat, phone support, email, and social media channels should provide multiple contact options.

Privileges of Top Online Banks

Many online banks today attempt to attract customers by offering sign-up bonuses, high-yield promotional offers, cash rewards, and other associated perks. Here are some of the common incentives:

Sign-Up Offers

Special bonuses upon opening a new savings account, checking account, or CD are quite popular. These can be cash bonuses, rate boosters, fee waivers, etc. Of course, you must meet eligibility criteria.

Referral Bonuses

Some online banks give you cash rewards when you refer your friends and family to open accounts. This is becoming a popular customer acquisition strategy.

Loyalty Programs

A few online banks have started loyalty programs where long-term customers can earn points on transactions that are redeemable for gift cards, account fee waivers, and interest rate boosters.

Sweepstakes

Periodic promotions like sweepstakes contests, raffles, and prize giveaways keep existing customers engaged apart from attracting prospects.

High-Yield Events

Introductory rate boosters on savings accounts and short-term CD rate bonuses stimulate more deposited funds. Existing customers benefit mainly from these temporary bumps in yield.

Perks Checking

Special checking accounts come bundled with various perks including nationwide ATM withdrawal fee rebates, movie tickets, shopping discounts, travel insurance coverage, and more as part of the monthly fee.

Conclusion

And there you have it. The top 10 online banks that allow you to carry out all essential banking services from anywhere using just your computer or mobile device. Smart savers and checking account customers in 2024 should choose an option from this list for the optimal blend of high-interest earnings and low fees.

So ditch the tedious branch visits and embrace the convenience of pure online banking. With banks like Discover, American Express, CIT, Ally, and others mentioned above, you will enjoy a superior banking experience overall. Just be sure to evaluate all account features, rates, and service standards before making a choice.

As far as safety, reliability, and transparency go – rest assured that these banks score very high due to tight regulations and oversight of the US banking industry. But don’t just take our word for it. Visit the official website, talk to customer service reps, and read internet user reviews before finalizing an online bank for fulfilling your specific needs in the most lucrative way possible.

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