When it comes to choosing an online bank, there are a few things to consider:
Skip the fees. Choose a bank account that will charge you no monthly fees. This might depend on your behavior—maintaining a minimum balance, for instance, or linking the account to another account—but you can often avoid fees with the right bank.
Read the fine print. There are a variety of fees banks charge other than monthly fees, so make sure you understand what those are. Just because it’s an online-only bank doesn’t mean there aren’t rules to be followed.
Earn some interest. Online banks tend to pay higher rates, so do some comparison shopping to get the best rate you can. The top online savings accounts currently are paying 1.05% to 1.36% APY, compared to a national average savings account rate of 0.06% as of June 15, 2020.
Check out the website and app. With an online bank, your primary interactions will take place via the bank’s website and its mobile app. Make sure you understand the available account management features. Both the App Store and Google Play provide reviews of the mobile apps for more insights.
Make sure you’re protected. Be certain that the bank is FDIC insured, which means that your deposits are insured, in the event of a bank failure, for up to $250,000 per account holder, for each account ownership category.