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Best Internet Banks, 2020

Online banks offer several perks you won't find at brick-and-mortar locations; and in the coronavirus era, their no-touch services might entice more consumers to make the switch.

Thanks to smaller overhead costs, banks that operate primarily online usually offer higher interest rates and lower fees than brick-and-mortar institutions. And during a pandemic, their no-touch services are more attractive than ever.

GOLD: Ally Bank

Courtesy of Ally Bank

  • Why it won: Ally provides a simple and attractive lineup of checking and savings options, with no monthly fees and no minimums required to open or maintain the accounts.
  • Standout accounts: Interest Checking offers 0.1% interest on balances of less than $15,000 or 0.5% on $15,000 or more. Online Savings yields 1.1% on all balances.

Ally Bank is a familiar name in our rankings, topping the list of best internet banks each of the four years we've crowned winners. A consistently strong selection of deposit accounts with minimal fees and decent interest rates pushes Ally to the number-one slot, and the bank makes the most of its online platform. 

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Earlier this year, Ally introduced digital tools to its Online Savings account that help customers reach their savings goals. With the Buckets feature, you can dedicate funds to different goals—say, with one “bucket” to save for a vacation and another for holiday shopping. The Boosters tool helps you increase savings by arranging automated transfers into the account or allowing Ally to periodically analyze your linked checking account (studying cash flow, spending patterns, upcoming bills and other details) and transfer money that it deems available to your savings. 

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The Interest Checking account offers free access to more than 43,000 ATMs in the Allpoint network nationwide. Plus, Ally reimburses up to $10 monthly in out-of-network fees that other U.S. ATM operators charge. There's no fee for standard or expedited fund transfers, incoming domestic or international wires ($20 per outgoing domestic wire), cashier's checks, or overdraft transfers from a linked savings account. 

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Besides putting funds in the Online Savings account, savers have the option of using the bank's money market account, which recently yielded 0.5%. Ally also offers a variety of CDs, including the High Yield CD, with a 1.1% rate on a one-year term and 1.25% on a five-year term. The early-withdrawal penalty is relatively light—for example, you'll lose 60 days' worth of interest if you withdraw money early from a CD with a term of two years or less—but you can also choose a No-Penalty CD, with a 1.05% yield on an 11-month term.

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SILVER: TIAA Bank

Courtesy of TIAA Bank

  • Why it won: TIAA guarantees competitive interest rates on its selection  of free Yield Pledge deposit accounts.
  • Standout accounts: For the first year you're a customer, Yield Pledge Checking has a 0.4% rate. The Yield Pledge CD ($5,000 minimum) offers 1.05% for a one-year term and 1.6% for a five-year certificate.
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In 2017, investment and advisory company TIAA acquired online bank EverBank and rebranded it as TIAA Bank. The bank's no-fee Yield Pledge checking account, money market account and CDs come with an interesting twist: They promise that their interest rates will be among the top 5% of competitive accounts—by TIAA's definition, those are similar accounts from the country's 10 largest banks and thrifts in 10 large markets. 

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After a one-year introductory rate of 0.4% on balances of up to $250,000, Yield Pledge Checking offers an ongoing rate of 0.15% to 0.3%, depending on the balance. If you have less than $5,000 in the account, you get up to $15 reimbursed monthly in out-of-network ATM fees; for those with higher balances, refunds are unlimited. For purchases that you make with the debit card, you'll enjoy perks that often come only with credit cards: an extension of up to one year of manufacturer warranties, price protection (providing reimbursement of the difference if you find a lower price on an item that you purchased within the past 60 days), and return protection, which reimburses you if a retailer won't accept a return within 90 days of purchase. The Yield Pledge money market account has a 1.01% rate the first year (0.65% to 0.95% thereafter, depending on the balance).

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TIAA also offers a basic checking and savings account, and each requires a $25 minimum balance to waive a $5 monthly fee; the savings account yields 0.75%. The basic CD requires a $1,000 minimum deposit and yields 0.9% on a one-year term and 1.45% on a five-year term.

BRONZE: Axos Bank

Courtesy of Axos Bank

  • Why it won: Axos offers several flexible no-fee checking accounts, and the savings account has a competitive rate.
  • Standout accounts: Rewards Checking yields 1.25% if you meet certain requirements. High Yield Savings offers a 1.3% rate on all balances.

You shouldn't have trouble finding a free checking account to fit your needs with Axos. If you have monthly direct deposits of $1,000 or more and make at least 15 debit card purchases per month (minimum $3 per transaction), you'll earn a healthy 1.25% on your balance with Rewards Checking. With CashBack checking, keep a $1,500 balance to get 1% back each time you make a purchase with your debit card and sign for the transaction (rather than enter a PIN). The no-frills Essential Checking pays no interest, but like Rewards and CashBack checking, it provides unlimited reimbursement of domestic out-of-network ATM fees. Axos also offers Golden Checking for those age 55 and older—with free personal checks, a 0.2% interest rate and $8 monthly in ATM fee reimbursements—and an account for teens (see our round-up of the Best Banks for Parents and Kids). 

The no-fee High-Yield Savings account offers a 1.3% rate, and you can get an ATM card upon request. The High-Yield Money Market yields 1.05% and requires an opening deposit of at least $1,000 (no ongoing balance minimum is required), but it comes with check writing and a debit card. Axos offers CDs with a $1,000 minimum, with rates hovering at 0.4% for both a one-year and five-year term.

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