5 online banks that totally rock

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5 online banks that totally rock
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Are you looking to ditch your mega bank? Or maybe you haven’t even thought about that yet. Well, considering the customer service and sky-high fee issues associated with the biggest banks, you really should consider leaving for greener pastures. And although local community banks and credit unions are great for different reasons (you should join one of those too), you should also strongly consider using an online bank for much of your day to day banking needs.

Read more: Credit union membership is growing

These five banks in particular are the cream of the crop, most of them offering a combination of outstanding customer service, high savings rates and lower account costs.

So here are five great online banks for you to consider – in no particular order

Simple. Simple launched three years ago and has developed an extremely loyal following. That’s probably due to their incredible customer service as well as their fantastic banking features. We’re in a world where bank fees are so ubiquitous that they no longer seem to faze us — the three biggest banks collected 6 billion in overdraft and ATM fees alone last year. Yet Simple is running in the opposite direction. They have completely eliminated fees. And if you like tools like Mint.com, Simple has a really great budgeting tool that helps you save up for bigger purchases you want to make in the future. Oh, and don’t forget the hand-written thank you notes! The one downside, however, is the lack of competitive interest rates they offer.

Schwab. One of the top 5 banks on this list isn’t even a bank. How amazing is that? That just goes to show you how much the financial industry has changed with the advent of online banks and some really fantastic technology. In order to bank with Schwab you will need to open up a brokerage account. But they don’t require you to execute any trades or deposit any money into that account — although you might want to think about it because Schwab has some of the lowest ETF fees in the industry! The main highlight of the Schwab high yield checking account is their offer to reimburse you for all ATM fees on both sides of the transaction with no limits. They also offer free standard checks and, like any decent online bank, mobile check deposit.

Capital One 360. This bank used to be called ING Direct and they’ve been making customers happy for years. They were one of the original online banks and they are also incredibly customer focused. And, oddly enough, after they were acquired by Capital One, they’ve only gotten better. If you love to travel, you’ll love the 0% foreign transaction fee. They are always competitive on savings rates and their network of free ATMs is substantial and easy to discover on their app or website. Since Capital One 360 offers both checking and savings accounts, you can stash part of your money in the checking account that earns less and the rest of your funds in a savings account earning 0.75%.

USAA bank. This is the only bank listed which isn’t open for deposits from everyone. USAA bank serves our military and the family of our soldiers. And they do an incredible job — which is probably why their loyalty score is off the charts. They don’t have any minimum balance requirements or monthly service requirements on their basic checking or savings although you will need $25 to open an account. They do have a few fees, but nothing even close to what you would be facing at a giant bank. USAA won’t refund unlimited ATM withdrawals like Charles Schwab, but they will refund the first $15 in fees you incur every month. All in all, they have very competitive online banking options for our service members. And if you like keeping things all in one place for simplicity, their home and car insurance products are very highly rated too.

Ally bank. Ally runs a great operation and has grown to be a huge player in the online banking world. They’ve done that by paying exceptionally high rates of interest on their savings accounts and offering versatile CD products. One of their CD products allows you to raise your interest rate if it changes once during the life of your term and another lets you pull your money out at any point during the CD term, although it pays less in interest. Ally does charge some fees including an overdraft fee of $25. But their competitive interest rates, great product offerings and customer service make them a great online banking choice.

Conclusion

Online banks have changed the way banking works in our country. While most folks still do a lot of their banking with the giant banking monoliths, the online bank upstarts are gaining ground. If you care about lower fees, better technology and getting incredible customer service you should strongly consider signing up with one of these online banks.

Read more: How to choose (and switch to) a better bank for you

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Joel Larsgaard About the author: Joel Larsgaard
I love saving money. And drinking good beer. Eternal optimist. Founder of SaveOutsideTheBox.com, and producer for The Clark Howard Show.
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