What are the so-called Online Banks?
An online bank is a financial institution that operates primarily (or exclusively) online. This can offer you more affordable accounts that are usually easy to access online or through the mobile app. Best online service bank.
The best online banks charge minimal fees, and some don’t charge any fees at all, even if your balance is zero. It would help if you also got a great interest rate on your savings account. Secure online banking and mobile app with products and easy-to-use and valuable additional features. As a budget and savings tool. There are specific criteria that financial experts consider when selecting the best online banks.
Best Online Bank Selection Criteria.
According to financial experts, they look at quite a few sides when they decide to choose the best online bank. So let us select some of the standard criteria and the expectations from those.
- Fees – Monthly maintenance fees are the most common and add up quickly. Annoying fees can quickly eat up your entire bank balance. Find an online bank that keeps all types of fees to a minimum. This includes monthly payments, overdraft fees, and ATM fees. It is considered to be better if the bank reimburses for third party ATM charges. You have to observe your banking behaviour in detail to determine which fees you need to worry about most. You can often avoid fees with the right bank.
- APYs – If you’re looking to get the most for your money, find a bank that pays a competitive APY on its financial products. Online banks tend to pay higher rates, so do some comparisons and information hunting to get the best rates you can.
- Minimums – Low minimum deposit and balance requirements make it easier to maintain an account. Some bank accounts require a minimum monthly balance to keep the account open, while others avoid fees. The best online banks have no minimum balance requirements, so you don’t have to worry about keeping your balance at a certain level. However, if there is a bank with minimum balance requirements, look for an online bank with the minimum requirements for your financial comfort level.
- ATM network – It is sometimes essential to have quick access to cash. So, look for an online bank that offers an extensive surcharge-free ATM network. Check the bank’s site to make sure there are ATMs close to your location or in the areas where you travel most or where you work.
- Customer and digital banking experience – Online banks don’t usually offer branch access, and if so, they’re often limited. That’s why it’s essential to keep customer support in mind when buying an online bank. Find an easily accessible customer service representative or a bank that offers an alternative to chatting online.
The digital banking experience is an essential convenience in the digital banking world. The primary interaction is through the bank’s website and mobile app in online banking. The best online banks offer a simple online interface and highly acclaimed mobile app for on-the-go banking. Check out mobile app reviews on the App Store and Google Play.
- Safety – Find a bank covered by the Federal Deposit Insurance Corporation (FDIC). The bank offers insurance up to $250,000 per depositor, bank, and account ownership category in case of bankruptcy. For credit unions, ensure the account is insured by the National Credit Union Administration (NCUA).
Top 5 online banks as per financial analysis sites.
Online banking does not incur the costs associated with traditional physical institutions. As such, they tend to pass these savings on to their customers in the form of lower fees, higher interest rates, and intuitive digital banking products. However, not all online banks are the same, and some banks offer better products and features than others.
There are two main financial analysis sites we will take references from. That is ‘Forbes‘ and ‘Investopedia‘. We will discuss their respective top 5 online bank lists and their respective pros and cons.
– Quontic is the adaptive digital bank which is headquartered in Manhattan, New York with customers across the United States. As a Community Development Financial Institution, its mission is to provide banking solutions and home financing opportunities to the underserved and underbanked.
– Axos Bank is an American federally chartered savings and loan association and direct bank, whose headquarters is in San Diego, California. It is the leading consumer brand of Axos Financial.
– American Express Company (AmEx) is a multinational payment card service providing company headquarters at 200 Vesey Street in Battery Park City, Lower Manhattan, New York. This company was founded in 1850.
– Ally Financial is a bank holding company organized in Delaware and headquartered in Detroit, Michigan. The company provides financial services including car finance, online banking via a direct bank and an electronic trading platform to trade financial assets.
– Synchrony Financial is a consumer financial services company headquartered in Stamford, Connecticut, United States. The company offers consumer financing products, including credit and FDIC-insured consumer savings products through Synchrony Bank, its wholly-owned online bank subsidiary.
|Quontic||Best overall||Not mentioned||
|Axos||Best for ATM||Best for couples||
|American Express||Mentioned in Forbes. Mentioned in many other sites like No. 1||
|Ally||Best for savings tools||Best overall||
|Synchrony||Not mentioned||Best for saving||
These are purely the opinions of the authors based on observations of financial platforms and a study of public ratings of online banks in 2022. Excerpts from various sources have been used to clarify the facts of this article. A glossary of all sources used can be found at the end of the article. This article is for educational purposes only and is not financial advice.