banking

Best Internet Banks

Banks that operate primarily online have lower overhead costs than those with brick-and-mortar branches, which translates into lower fees and higher interest rates. These institutions make it easy to bank from home or on the go with mobile apps and remote check deposit.

Gold: Ally Bank

www.ally.com

Why it won: All of Ally’s accounts are low on fees, and they consistently offer healthy yields, too.

Standout accounts: The free Interest Checking account yields 0.1% on balances of less than $15,000 or 0.25% on larger amounts. The no-fee Online Savings Account and Money Market Account both yield 0.5%.

Ally’s accounts are simple (down to their names) and attractive for just about anyone who is comfortable banking online, boosting the bank to the top of our list of best internet banks year after year. Interest Checking offers free access to more than 43,000 ATMs in the Allpoint network and reimburses up to $10 monthly in out-of-network ATM charges. Account holders also get free standard or expedited fund transfers, incoming wire transfers ($20 per outgoing domestic wire), overdraft transfers, standard checks and cashier’s checks. Ally recently eliminated overdraft fees for all accounts.

The 0.5% yield on the bank’s Online Savings Account and Money Market Account is competitive among online accounts. The Money Market Account comes with a debit card and checks for easy access. The Online Savings Account provides digital tools to organize and increase your savings. With the Buckets feature, you can divide your savings among up to 10 categories—for example, for an emergency fund, a vacation and a down payment on a home. With Boosters, you can let Ally study your linked checking accounts for money that is safe to move (without jeopardizing upcoming payments or other needs for the cash). Ally will then transfer money that it deems available to savings. Another Booster feature looks for transactions within your Ally checking account that can be rounded up to the nearest dollar, and when you accumulate at least $5 in round-ups, Ally transfers it to savings.

The no-minimum High-Yield CD recently yielded 0.55% for a one-year term or 0.8% for a five-year term. The early-withdrawal penalty is relatively painless, ranging from 60 days’ worth of interest on ma­turities of two years or less to 150 days of interest for terms of 49 months or longer. If you’d rather not worry about such fees, check out the No Penalty CD, which recently yielded 0.5% for an 11-month term. Currently, you get an extra 0.05 percentage point of yield when you renew any Ally CD.

Silver: TIAA Bank

www.tiaabank.com

Why it won: TIAA’s Yield Pledge accounts promise interest rates that beat those of competitors.

Standout accounts: Yield Pledge Checking charges no monthly fee, pays interest and reimburses ATM fees. The Basic Savings account yields 0.5%.

TIAA, an investment and advisory firm that has been in operation for more than a century, began running an internet bank after it purchased EverBank in 2017. TIAA’s Yield Pledge checking and money market deposit accounts guarantee that they will deliver a yield in the top 5% of similar accounts among a set of 10 large banks and thrifts in 10 large U.S. markets. The free Yield Pledge Checking account recently paid a 0.1% interest rate, and it offers free overdraft transfers and refunds up to $15 monthly in out-of-network ATM fees. Better yet, you’ll get unlimited ATM-fee reimbursement if you keep at least $5,000 in the account. The debit card touts benefits usually found only on credit cards: extending the warranty for up to one year on items you purchase and offering price protection (you get reimbursed for the difference if the price for an item you buy falls within 60 days) and return protection (you get a refund if a merchant won’t accept an item for return within 90 days). The no-fee Yield Pledge Money Market yields 0.4%.

TIAA also has a line of basic, low-minimum accounts. Notably, the Basic Savings account, which requires a $25 minimum balance to avoid a $5 monthly fee, recently yielded 0.5%—a bit more than the money market account. The Basic CDs have a $1,000 minimum and yield 0.55% for a one-year term and 0.85% for a five-year term. The Bump-Rate CD ($1,500 minimum and a 3.5-year maturity) yields 0.7% and allows you to increase the rate once during the term if the advertised rate increases.

Bronze: Axos Bank

www.axosbank.com

Why it won: Axos has appealing no-fee checking accounts for teens, seniors and everyone in between.

Standout accounts: Rewards Checking has long offered a yield of up to 1.25%, and it reimburses ATM fees. High Yield Savings offers a 0.61% rate.

Most customers should be able to find something they like among Axos’s main trio of free checking accounts, which all offer unlimited reimbursement of domestic out-of-network ATM fees. The basic Essential Checking comes with automatic Direct Deposit Express, which provides access to your direct-deposited paycheck up to two days early. For those who have monthly direct deposits of at least $1,000 and use their debit card at least 15 times per month (minimum $3 per transaction), Rewards Checking yields 1.25% on up to $150,000. Cashback Checking pays 1% cash back on debit card purchases that you verify with a signature (rather than entering a PIN) if you keep a $1,500 balance (0.5% if your balance is lower).

Customers who are 55 or older can use the free Golden Checking, which yields 0.1%, reimburses $8 monthly in ATM fees and provides standard checks free. First Checking is for teens (for more, see the “Best for Parents With Kids” runner-up). You can set up free overdraft transfers to checking from a savings account.

The 0.61% rate on balances of up to $25,000 with the free High Yield Savings account was recently one of the top savings yields in the country. The free High Yield Money Market, which comes with checks and a debit card, has a 0.25% rate. All CD terms have a 0.2% rate ($1,000 minimum).

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