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The Best Bank…

  • March 2, 2018We’ve surveyed the 2018 banking landscape and updated our review to stay current, with four new top picks that offer competitive rates.

The Best Banks

Experts agree that the best bank maximizes the value of your money and won’t penalize you with fees every time you need to touch it. On a practical level, it should also be convenient and offer genuinely useful customer support.

Because we were looking for high returns and low fees, we focused on ‘direct’ or ‘online-only’ banks, which handle all business online or through mobile apps. Because they don’t have physical branch locations, they’ve got a leg up financially. According to GoBankingRates.com, the average savings account from a brick-and-mortar bank has a 0.06% annual percentage yield (APY); direct banks like Alliant offer up to 1.45%. In addition, our top picks offer 24/7 customer support — which eliminates the hassle of making it to a branch during ‘banking hours.’

Ally, Alliant, and Discover all offer completely fee-free checking accounts with no minimum balance requirement. They also carry some of the best interest rates on the market for savings accounts — between 1.35 and 1.45%. Our fourth finalist, First Internet Bank, offers returns on CDs as high as 2.55% (although it has a $25 minimum for checking accounts).

“Because brick-and-mortar banks have to maintain their branches and branch employees they have to charge fees to customers in order to subsidize this cost. A digital bank, like BankMobile, can offer customers no to low fees and higher interest on savings since it doesn’t have these high overhead costs.”

Our Picks for Best Bank

Best
One-Stop Shop

Ally Bank

Ally

Outstanding customer support, minimal fees, and a wide range of financial products and services.

If you want to keep all your banking activity under one roof, then we recommend starting your search with Ally Bank. Opening a checking and savings account with Ally is simple: Like most of our top picks, it has no minimum balance requirements or monthly maintenance charges, and offers high-yield investment options. That means you can start with whatever you have on hand and Ally won’t eat away at your savings with unnecessary fees.

In addition to checking and savings, Ally offers a full suite of banking services. Customers can open up a credit card, take out an auto or home loan, invest in an IRA or CD, and more. Interest rates on Ally investments are well above average; with savings APY up to 1.35%, while the average across our contenders was only 1.06%. You might be able to garner slightly better returns by banking at multiple institutions — say, by opening a savings account with Alliant and a CD with First Internet Bank — but Ally affords you the simplicity of keeping all your finances in one place.

The other reason we love Ally (and what put it at the top of our list) is its excellent customer support. Among all our contenders, Ally’s resources came out on top. Its reps are available 24/7 through live chat and over the phone; including phone lines for international callers and the hard of hearing. Or, if you prefer, you can connect through email, Facebook, Google Plus, or Twitter. When we reached out with questions about opening an account, we were told exactly where we were in the queue (third) and had our answers within a couple minutes — no long holds, tinny elevator music, or being reassured that “our call was very important.”

Ally’s website also has a robust educational section that’s aimed at improving customers’ financial literacy. We like its Wallet Wise courses, which walk you through the basics of banking, budgeting, investing, and credit. When you’re ready to move beyond the basics, you can also check out Ally’s Do It Right Community. It’s chock-full of articles and discussion boards that share best financial practices for everything from college savings to estate planning. These tools let customers make smarter money decisions, and help them get the most value from their Ally accounts.

It’s worth noting that Ally doesn’t offer the highest interest rates of our top picks. Alliant has higher potential yield for savings accounts, and First Internet Bank offer better value CDs. If you’re already feeling confident about banking and finances, you may want to start with those banks — or even consider choosing more than one. But if you’re looking for a full-service bank that will also help you navigate your finances, then Ally is a great choice.

Best
Savings Account

Alliant Credit Union

Alliant

APYs as high as 1.45%, plus fee-free checking and savings.

Alliant came in a very close second to Ally, and — we’ll be honest — there’s a good chance it will deliver even better returns. When we checked in on rates, Alliant’s savings accounts had APY as high as 1.45%, while Ally’s topped out at 1.35%. Alliant’s checking and savings are also fee-free with no minimum deposit (its savings account requires five dollars down, but they’ll pay that for you), and it offers most services; including credit cards, loans, and IRA accounts. To top it off, this bank has an extensive network of participating no-fee ATMs, with more than 80,000 nationwide.

There’s one main reason Alliant didn’t squeak by into first place: We were less enamoured with its customer support than Ally’s. Alliant doesn’t have live chat — a tool that we loved using with other contenders for quick, easy Q&As. On top of that, we found its online resources to be lacking. Its ‘Help’ tab takes you to a paltry five-question FAQ, and using the search bar left us with unsatisfactory answers to simple questions like: Can I deposit cash at an in-network ATM? (“Not all of them”). If you’re a first time account holder, or feel like you’ll want more personalized service, you might be better off with the more consumer-friendly Ally.

That said, Alliant has excellent account offerings and the highest interest rates we found. It definitely fits the bill of ‘best bank’ — you just might have to do a bit more searching to get your questions answered.

Best for
Cash Deposits and CDs

First Internet Bank

First Internet

The widest network of ATMs among our finalists (450,000+), plus CD rates as high as 2.55%.

If you deal with cash frequently — cash tips, anyone? — then you might be worried about making the switch to an online bank. How are you supposed to deposit actual money without going into a branch? First Internet Bank has the answer. It’s part of the Visa PLUS ATM network, which includes 450,000 cash deposit-accepting ATMs across the United States. On a larger scale, the PLUS Network has more than two million ATMs in 200 countries, so you can access your accounts no matter where you go. To find deposit-friendly ATMs in your area, plug your zip code into First Internet Bank’s Global ATM Locator and filter for ‘Plus Shared Deposits.’ We found ten within just one mile of our Seattle office.

We also recommend First Internet Bank if you’re thinking about investing in a Certificate of Deposit (CD). First Internet Bank offers excellent returns on these fixed-term, high yield savings accounts: Interest rates as high as 2.55%, with deposit requirements as low as $1,000. By comparison, Ally’s highest APY for a CD is 1.85%, with its lowest deposit requirement starting at $5,000. No other contenders could match First internet Bank’s combination of low deposit requirements and high returns on CDs.

We were less impressed, however, with its checking and savings options. First Internet Bank requires a $25 minimum deposit to open a checking account, and may charge you up to $10 per month in maintenance fees. Its savings accounts don’t require a minimum balance, but had lower APY than our other contenders. We’ll admit: These fees are by no means outlandish. But with Ally, Alliant, and Discover offering no-minimum, fee-free checking and savings, they might be a better bet.

That said, if you know you’ll be depositing cash on a regular basis, then First Internet Bank is the vastly more convenient option — none of our other picks have nearly as many cash-accepting ATMs.

Best for
Travelers

Discover

Discover

A wide range of services, no international fees, and APY rates up to 1.40%.

Discover customers will enjoy the same perks as with any of our other top picks: The bank offers a range of services including credit cards, loans, and IRAs. Like Ally and Alliant, it has no minimum balance requirements for checking and savings accounts. It even rings in the second highest APY for savings, at up to 1.40%.

What we really love about Discover, though, is that it doesn’t charge international fees. By comparison, our other top picks will slap you with a surcharge of one or two percent for every card transaction on foreign soil. It may not sound like a lot, but if you’re a frequent traveler those charges can add up quickly. We recommend looking into a Discover account if you travel often for business, if you’re a student studying abroad, or if you simply vacation a lot. Avoiding that one or two percent charge could save you a lot in the long run.

The main reason Discover isn’t higher up on our list is that it has poorer customer support than our other top picks. We couldn’t find an email address listed on its site, and you have to be a member to use its live chat function — which meant we couldn’t easily reach a rep while we were comparing accounts. Discover does have 24/7 phone support, which we appreciate, but it lacks the variety of channels that JD Power revealed to be so important for customer satisfaction. Still, if you don’t mind using phone support over other methods, Discover has some good options and is worth a look.

Bank Like a Pro: Tips for Maximizing Value and Minimizing Costs.

You don’t have to keep all your eggs in one basket.

For brick-and-mortar banks, it makes sense to do all your banking in one place — traveling between different branches to manage separate accounts and investments can turn into a hassle. With direct banking, however, you can hand-select the best options from multiple institutions. Many experts even recommend it.

“Before you sign up for an account you should make sure you understand the fee structure. Hidden fees typically revolve around what your daily balance is, what ATM you use when you withdraw money, and whether or not you’re overdrawn at any given time.”

For example, you might open up a high-yield savings account at Alliant, but invest in a CD from First Internet Bank, or get a free checking account with Ally coupled with Discover checking for your annual vacations. This doesn’t mean you need to go overboard (most people would probably still find it a hassle to maintain four separate bank accounts), but be aware that online banking leaves you with many more options than you might typically have. You have the luxury of picking bank accounts based on what matters most to you.

Be sure to understand the fine print surrounding fees and penalties.

It’s important to understand your bank’s information in full before opening an account. Oftentimes, it’s the fine-print fees that can eat away at your balance; you’d hate to accidentally overdraw your Discover checking by $1 and be charged a $30 penalty. If you know about the fee ahead of time (and know that you tend to accidentally overdraw) then you can choose a bank like First Internet Bank instead — which offers free overdraft protection transfers in increments of $50. Here’s how a few common fees compare among our finalists:

If you’re considering another bank, make sure to check for ‘hidden’ fees. These tend to be associated with your daily balance, ATM use, overdrawing, and monthly maintenance — you can usually find this information in the ‘Disclosures’ section of the website. And if a fee structure seems unclear, don’t hesitate to reach out for clarification. The best banks should be honest and transparent about their charges.

Our Bank Review: Summed Up


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