Best Banks
Based on In-Depth Reviews
- 200+Hours of research
- 75+Sources used
- 21Companies vetted
- 3Features reviewed
- 8Top
Picks
- The FDIC secures all bank deposits up to $250K (individuals) and $500K (joint).
- Online banks offer higher interest rates than brick-and-mortar banks.
- Watch out for any hidden fees that may lower your account balance.
- Banks, including those online, are one of the most regulated institutions in the US.
How We Found The Best Banks
Our Top Picks: Banks Reviews
One of the best things about the state of banking today is that there seems to be a bank for pretty much everyone. Want an online-only bank available 24/7 via your mobile phone or do you prefer brick-and-mortar for their in-person services? How about hybrid solutions offering traditional services alongside online features? Whatever it is you’re looking for in a bank, there’s probably a great option for you in this list.
The most essential aspect of banks is that they can be trusted with your money. If your bank is insured by the FDIC (more on this later, but know that all banks included in this review are FDIC-insured), you can rest assured that your money will be protected and readily available, up to a certain limit, even if the bank goes bankrupt.
Below, you’ll find our picks for the best banks—and one credit union—in the US in 2020.
Discover® review
Best Online-Only Bank
Screenshot Discover.com, October 2020
Known mainly for their credit cards, Discover is also one of the leading online-only banks in the US, offering savings and checking accounts, CDs, money market accounts, student loans, and IRAs. While the bank has zero retail locations, its mobile app and webpage are designed to help you make any transaction from wherever you are in the world. And, if you need to withdraw cash, Discover has over 60,000 fee-free ATMs across the US.
More about Discover Bank:
- Representatives are available via phone 24/7.
- CDs and money market accounts require a minimum deposit of $2,500, which is very competitive.
- Discover Bank is FDIC-insured, has a 5/5 rating by J.D. Power, and is considered “stable” by both S&P and Moody’s.
Chase review
Best for Sign-In Bonuses
Screenshot Chase.com, October 2020
The largest bank in the US is also the best when it comes to sign-in bonuses. With Chase Bank, you can earn $200 by opening a new Chase Total Checking account and setting up direct deposit, and/or $150 for opening a savings account, depositing a minimum of $10,000, and leaving the money untouched for 90 days. If you want to earn money by simply opening up an account, Chase may be right for you.
Chase offers all types of products and services to clients in over 100 countries, and has 4,900 branches and 16,000 ATMs across the US. Its website and app make it very easy to manage your accounts online.
More about Chase Bank:
- Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading global financial services firm with $2.6 trillion in assets and operations worldwide.
- Chase Bank is rated “stable” by S&P and Moody’s, and is one of the highest-rated banks for customer service, according to a 2020 report by J.D. Power.
Capital One review
Best for Small Businesses
Screenshot CapitalOne.com, October 2020
Capital One’s Spark Business offers several online banking services for small business owners, such as checking and savings accounts, credit cards, loans, and merchant services.
More about Capital One:
- Capital One has 775 locations and over 2,000 ATMs across the US.
- Its Spark Cash credit card for businesses is one of the most attractive in the US, offering 2% cash back on all purchases, a $500 cash bonus for spending over $4,500 in the first three months, $0 fees for the first year, and free employee cards with spending limits.
- Capital One ranks second in the category of mobile banking app satisfaction among US consumers, according to a report by J.D. Power.
Bank5 Connect review
Best for High Interest Rates on Savings and CDs
Screenshot Bank5Connect.com, October 2020
Bank5 Connect offers one of the highest interest rates on online savings accounts and CDs, with current rates of 0.75%APY for savings and 36-month CDs. To put this in perspective, the national average APY for savings accounts stands at a mere 0.05% and 0.29% for 36-month CDs, according to the FDIC.
For savings accounts, there is a required minimum deposit of $10 and a minimum balance of $100 to earn the APY. For 36-month CDs, a minimum of $500 is required as an initial deposit and as a minimum balance for APY purposes.
More about Bank5 Connect:
- The Bank5 Connect Visa Card gives you access to thousands of ATMs nationwide.
- Bank5 offers monthly reimbursements of up to $15 for using ATMs outside its network.
- Bank5 Connect offers 100% deposit insurance, meaning that it will go beyond the FDIC’s cap to insure every penny of your deposits.
Charles Schwab review
Best for International Travelers
Screenshot CharlesSchwab.com, October 2020
If you travel regularly, chances are you get your cash from ATMs all over the world. While most banks charge fees for customers that use foreign ATMs—ATMs outside their network—,one of the things that sets Charles Schwab Bank apart from its competitors is that it will reimburse 100% of ATM-related fees, regardless of amount, company, or country.
All checking accounts at Charles Schwab are linked to a Schwab One brokerage account for investing, require $0 monthly fees and account minimums, and include free online bill payment options.
More about Charles Schwab Bank:
- Online representatives are available 24/7.
- For the last two years, Charles Schwab Bank has been ranked #1 by J.D. Power’s Customer Satisfaction with Retail Banking.
Alliant review
Best Credit Union
Screenshot Alliant.com, October 2020
Founded in 1935, Alliant Credit Union is now one of the leading credit unions in the US because of its comprehensive online and mobile services, flexible membership requirements, extensive ATM network, and competitive rates. Deposits made to Alliant are insured up to $250k by the National Credit Union Administration.
Alliant Credit Union’s savings and checking accounts have zero maintenance fees and offer interest rates of 0.65% and 0.25% respectively, which are much higher than the FDIC’s national average. To keep your account open you must maintain a minimum balance of $5, and a minimum balance of $100 to earn interest. On the other hand, its checking accounts waive minimum balance requirements and include up to $20 in monthly ATM rebates.
Finally, while Alliant Credit Union does not have any branch locations, you do get access to over 80,000 fee-free ATMs across the US, one of the largest ATM networks in the nation.
More about Alliant Credit Union:
- Alliant offers 24/7 access via mobile banking, online banking, over 80k ATMs, and phone representatives.
- Its membership requirements are more flexible than other credit unions. Check out the requirements here.
- Alliant provides a free quarterly credit score to all its members.
Simple review
Best for Millennials and College Students
Screenshot Simple.com, October 2020
With its user-friendly app, budgeting features, high interest rates, and a network of over 40,000 ATMs across the US, Simple is the best mobile-first bank for millennials, college students, and pretty much anyone looking for an easy way to budget and manage their finances.
Checking accounts by Simple don’t charge any fees or require a minimum balance. Furthermore, you can add a high-yield savings component to your checking account—savings accounts are not offered as standalone products—with interest rates of 0.80% APY, one of the highest in the nation.
More about Simple:
- The Simple app includes comprehensive and easy-to-use budgeting tools to help you save and manage your money.
- Online bill payment options are not available.
- Shared accounts are available for couples and roommates.
- Simple also offers 12-month CDs at 0.70% APY with a minimum deposit of $250 and no early withdrawal fees.
Wells Fargo review
Best for Brick-and-Mortar Locations
Screenshot Wellsfargo.com, October 2020
If you need or prefer in-person transactions at brick-and-mortar locations, Wells Fargo has over 6,200 storefront branches across the US—the most in the US—offering every banking product and service you’d expect from a traditional “big bank,” including savings and checking accounts, CDs, loans, and mortgages.
Aside from its thousands of locations, Wells Fargo has a network of over 13,000 ATMs, as well as comprehensive mobile and online banking. However, with a 0.01%APY on its savings and checking accounts—much lower than the national average—and fees of $2.50 for using foreign ATMs, this is not the bank for people looking to make their money grow.
More about Wells Fargo:
- Wells Fargo is currently the third-largest bank in the US, bested only by Bank of America and JP Morgan Chase.
- The bank ranked 6th overall in customer satisfaction, according to a report by J.D. Power.
Further Insight Into Our Methodology
In order to find the best banks in the US, we spent dozens of hours analyzing over 20 banking institutions according to three factors that are essential for a bank to stand out in 2020: customer service, accounts and products, and financial strength. We also took note of hundreds of customer reviews and testimonials posted online. Once this process was complete, we compared the data and selected the banks that met or exceeded our criteria.
Let’s take a brief look at each of the three factors:
Availability/Customer Service
Your bank should be there whenever you need it, providing round-the-clock services online and/or in person. From a network of ATMs and brick-and-mortar branches to dedicated apps and online transactions, the best banks in 2020 have the infrastructure and technology necessary to allow for simple and seamless account managing.
Before choosing a bank, make sure that its customer services align with your lifestyle and financial reality. For example, if you mostly handle cash as part of your business, you’ll most probably need a bank that makes it easy for you to make cash deposits, either via ATMs or brick-and-mortar branches. On the other hand, if you hardly ever handle cash, you might be best served by an online-only bank.
Accounts Performance & Fees
The four main accounts offered by banks are savings, checking, CD, and money market. While each of these accounts is very similar in nature across all banks, they may vary drastically in their performance, by which we mean the interest rates that allow for your money to grow. The higher the APY, the better the account scored with us.
To evaluate this factor, we also looked at any fees and/or penalties related to the account—such as penalties for going over the withdrawal limit or for using foreign ATMs—and took note of any bonuses, discounts, and customer perks offered by banks.
Financial Strength
This factor is crucial in determining not only a bank’s capacity for managing all the money entrusted to it, but also its overall reputation among investors and customers. It is also a good indicator of whether or not an institution is on the road to bankruptcy.
Thankfully, several rating agencies produce reports that make it easy for the public to find out a bank’s overall financial strength. The data used for these reports is very thorough, including everything from capital assets to the most pressing liabilities. For this reason, we looked at data provided by J.D. Power, Moody’s, and Standard & Poor’s.
While we will expand on this subject later in this article, you should know that regardless of a bank’s financial rating, your money will be protected even if the bank goes down—so long as the bank is insured by the FDIC (Federal Deposit Insurance Corporation).
Helpful Information on Banks
In a nutshell, a bank is a financial institution that offers two main services: it receives deposits and makes loans. For this review, we focused on the former. While there are several types of banks—investment banks and central banks are two of the most prominent—for our purposes we will only be writing about retail banks, i.e., banks that provide basic services to individuals. For most of us, this is the type of financial institution that comes to mind when thinking about a “bank.”
Safest Place for Your Money
In the US, banks are one of the most regulated institutions due to their crucial role in the nation’s overall economy. As we learned from the 2008 financial crisis, the failure of only a couple of banks is enough for the whole country—and even the world at large—to fall into an economic depression.
With regards to everyday consumers and retail banks, the most important safeguard is undoubtedly the insurance provided by the Federal Deposit Insurance Corporation (FDIC), an independent government agency created by Congress with the purpose of maintaining stability and public confidence in financial institutions. By virtue of this insurance, any money you have deposited in a bank will be available to you even if the bank goes completely bankrupt, up to specific limits: $250k for individuals and $500k for joint accounts.
National banks are also regulated by the Office of the Comptroller of the Currency (OCC), an independent bureau of the US Department of Treasury responsible for making sure all banks comply with the laws governing them.
Brick-and-Mortar Goes Online
When it comes to US banks, in 2020 you can choose between traditional, online, or hybrid (a combination of the two). While traditional refers to brick-and-mortar branches that you can visit to make your transactions in person—usually with the help of a teller— online banks allow for on-the-go transactions and account management.
While the “best” type depends almost entirely on your financial needs and convenience, you should know that online banks almost always pay higher interest rates and require much lower fees than traditional banks. Because online banks pay only a fraction of the costs related to managing a physical branch, they can pass on these savings to their consumers. In fact, while the average traditional bank interest rate ranges between 0.1% and 0.5%, online banks in 2020 are offering interest rates up to 1.0%.
Finally, even if brick-and-mortar banking is more convenient for you, it is our opinion that you should choose a bank that offers online options alongside traditional services. This way, you’ll have access to a complete banking experience. For this reason, all brick-and-mortar banks included in this review also have a strong online presence.
The Accounts Insured by the FDIC: Savings, Checking, CD, and Money Market
Retail banks offer customers four basic types of accounts: savings, checking, CD, and money market. While these four options are all insured by the FDIC, they differ in two main aspects, namely, how often you’re allowed to withdraw from the account and how much interest the account accrues over time. Let’s take a look at each:
A savings account lets you deposit money so it can earn interest while being stored by the bank. In other words, its purpose is very similar to that of the piggy banks of yore, except that savings accounts are much safer and can make your money grow. Because this type of account is designed to help customers save their money for the future, there’s a limit on how many times you may withdraw your money—usually six withdrawals per month. If you want an “emergency fund,” a savings account is an ideal option for you. However, if you want an account for everyday transactions, you should consider a checking account, which we’ll talk about next.
A checking account allows customers to make as many transactions as they want without penalties or fees. In 2020, this type of account usually includes features such as physical checks, debit cards, direct deposit and automatic payment options, and unlimited withdrawals from ATMs. However, because your money is only temporarily stored by the bank, checking accounts usually do not accrue interest. If you want an account for everyday transactions, a checking account is the way to go.
A certificate of deposit (commonly known as CD) is similar to a savings account, except that CDs require that you deposit an initial lump sum and that you leave this money untouched for a determined amount of time. If you make early withdrawals from a CD, you will be charged a penalty. On average, this type of account generates higher interest than a regular savings account.
A money market deposit account is one where your money is traded by banks so that it can make interest according to the money market rates. Not to be confused with money market mutual funds, money market accounts offered by banks are insured by the FDIC because of their low risk.
A Quick Word on Credit Unions
A credit union offers services that are very similar to a bank, including loans, savings and checking accounts, and CDs. However, instead of being profit-driven like banks, credit unions are nonprofit institutions owned and administered by local communities for the benefit of these communities. Since they are tax-exempt, they offer better rates than regular banks.
There are two downsides to credit unions, though. First, not everyone can become a member. Because these institutions are community-minded, they require you meet certain criteria in order to join. Second, because they are significantly smaller and have much less capital than big banks, their services are often limited, especially when it comes to branch locations and ATMs.
According to James Barth, Lowder Eminent Scholar in Finance at Auburn University, Alabama: “Credit unions are a sore spot for banks, especially community banks, because they pay little or no taxes. This provides them with a competitive advantage for paying higher interest rates on deposits and charging lower interest rates on loans.”
Finally, you should know that all deposits made to credit unions are insured up to $250k by the National Credit Union Administration, an independent agency created by Congress to protect credit union members. Essentially, this means that your money will be safe, as the NCUA will guarantee your credit union deposits in the same way the FDIC protects your bank deposits.
What To Watch Out For With Banks
Aside from making sure that your bank’s services align with what’s more convenient for you, it’s very important that you also watch out for any fees related to your account. From maintenance fees for insufficient funds to penalties for going over the withdrawal limit, these can accumulate quickly and reduce your account balance significantly. You should also watch out for any fees related to the use of ATMs outside your bank’s network.
FAQs About Banks
We interviewed professor of finance James Barth, a Senior Finance Fellow at Milken Institute and co-editor of the Journal of Financial Economic Policy. Here are his answers to three of the most commonly asked questions regarding banks in the US.
- Is traditional banking more reliable than online banking?
“Online and traditional banking are equally reliable when used responsibly by both customers and banking staff. Technological glitches and human errors can occasionally occur with both types of banking.”
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What should customers be looking for in a bank in 2020?
“Customers today should be looking for easy and convenient access to low-cost banking services. This should include readily available access to services via online and mobile banking at all times given the coronavirus pandemic. In-person banking, moreover, should be available when needed under appropriate health-protecting conditions.”
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Should customers have accounts in several banks or is it preferable to stick to only one?
“Competitive shopping for banking services is always a wise strategy. The availability and prices of different banking services may differ across banks. This may lead to a mix of services from different banks. Some services may be provided by a local bank and others online by a distant bank, such as a mortgage loan. Also, some persons may choose to have deposit accounts at more than one bank due to the federal deposit insurance limit of $250,000 per account. Furthermore, one has to be aware of certain fees that may be imposed when daily account balances fall below specified minimums, which may limit the number of banks used.”