online banking

Best Internet Banks

These institutions operate fully online, which decreases their overhead costs and allows them to offer lower fees and higher rates than many other banks.

GOLD: Axos Bank

www.axosbank.com

Why it won: Axos offers a well-rounded group of free checking accounts that suit just about any need. 

Standout accounts: Rewards Checking yields as much as 1.25% if you meet various monthly requirements. Earn 0.61% on up to $25,000 with the High Yield Savings account.

Whether you’re looking for a checking account with a high yield, features tailored to students or seniors, or a no-frills option, Axos Bank has it. Rewards Checking offers interest in chunks. To start, you must have monthly direct deposits totaling at least $1,500 to earn 0.4%. If you do that, you’re eligible to earn an additional 0.3% if you use your debit card for at least 10 transactions monthly or use Axos’s Personal Finance Manager budgeting tool; an additional 0.2% if you have at least $2,500 in an Axos Invest Managed Portfolios Account; 0.2% extra if you have at least $2,500 in an Axos Invest Self Directed Trading Account; and another 0.15% if you use Rewards Checking to make Axos consumer loan payments. The basic Essential Checking offers the ability to access your direct-deposited paycheck up to two days early, and CashBack Checking provides 1% cash back (up to $2,000 earned per month) on sig-nature-based debit card purchases if you keep at least $1,500 in the account (0.5% back if your balance is lower). All three checking accounts reimburse unlimited domestic out-of-network ATM surcharges. 

For teens ages 13 to 17, First Checking provides a 0.1% rate and up to $12 monthly in domestic ATM fee reimbursement, and daily debit trans-actions are limited to $100 in cash withdrawals and $500 in purchases. Golden Checking, for those 55 and older, has a 0.1% yield, free personal checks and $8 monthly in domestic ATM surcharge refunds. For clients who keep large balances, Axos also offers premium accounts, such as World Checking and Premier Private Client Banking, with additional perks. 

Among savings options, High Yield Savings provides a healthy 0.61% rate on balances of up to $25,000, and the account comes with an ATM card upon request. For larger balances, consider the High Yield Money Market account, which yields 0.25% on all amounts and offers check-writing.

SILVER: TIAA Bank

www.tiaabank.com

Why it won: The bank’s free Yield Pledge accounts promise competitive interest rates, and the basic accounts are solid, too.

Standout accounts: The Yield Pledge Money Market account yields 0.7%, Basic Savings offers a 0.8% rate, and Basic CD rates include 1.3% for a one-year maturity and 2.55% for a five-year maturity ($1,000 minimum).

TIAA Bank, owned by investment and advisory firm TIAA, guarantees that rates on its Yield Pledge Checking and Yield Pledge Money Market accounts are in the top 5% among competitive accounts from the 10 largest banks and thrifts in the 10 largest U.S. banking markets. Yield Pledge Checking recently had a 0.1% rate, and it offers unlimited reimbursement of ATM surcharges if you maintain a balance of at least $5,000 (up to $15 in monthly refunds if your balance is lower). The Basic Checking account provides the same ATM and purchase benefits. And as noted above, the free Basic Savings account and Basic CDs offer high rates, too.

BRONZE: Ally Bank

www.ally.com

Why it won: Ally’s deposit accounts have no minimums, have low fees and offer decent yields.

Standout accounts: Interest Checking yields up to 0.25%. The Money Market and Online Savings accounts both recently had a rate of 0.75%. 

Ally Bank’s Interest Checking has long been a standout. It yields 0.25% on balances of $15,000 or more and 0.1% on lower balances, and it reimburses up to $10 monthly in out-of-network ATM fees. Last year, Ally removed all overdraft fees, and with the CoverDraft Service, the account provides as much as $250 in coverage if you overdraw it (you must have recurring direct deposits of at least $250 to maintain $250 in coverage). If you don’t make your balance positive within 14 days, Ally may restrict withdrawals. You can also transfer funds from a linked Ally savings or money market account to cover overdrafts. Standard checks, cashier’s checks, incoming wire transfers and expedited electronic fund transfers are free. 

Along with the money market and savings accounts, Ally’s High Yield CDs are worth a look, too. They require no minimum deposit and recently had rates of 1.4% for a one-year CD and 2.25% for five years. Early-withdrawal penalties are relatively modest, topping out at 150 days of interest for terms of four years or more. But if you’d rather avoid the penalty, consider the No Penalty CD, which has a 0.85% rate and an 11-month term.

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