Best Online Banks of 2021
May 3, 2021 (Investorideas.com Newswire) In this digital age, it's no wonder why a significant number of banking transactions are done online. And while physical, brick-and-mortar banking locations are here to stay, their numbers are rapidly decreasing. Why? A primary reason is most people don't need to visit a bank in person these days. Very often, they don't even need cash. Credit and debit cards are accepted virtually anywhere- even the neighbor kid's lemonade stand with payment processing capabilities of smartphones and tablets.
It is clear that online technology has changed investing and savings for the better.
As such, some banks have geared themselves almost entirely to remote customer service and financial advisors with very few physical locations. This strategy of having little to no physical banks frees up overhead, rent, and other upkeep fees the company would otherwise have to pay. Through these vast reductions in operational expenses, many "online banks" can offer increased benefits to their customers, such as high interest rates (compound interest for your money keeps it working instead of idling), rewards, and no ATM fees/reimbursements.
Leading the charge with the best online banking platforms are Axos Bank and CIT Bank. Both banks offer fantastic rates, various account types, and outstanding customer service. While both banks are great options, they have some differences that may benefit you better personally. So, continue reading for all the great benefits Axos and CIT have to offer!
The Benefits of Axos Bank
Axos Bank was originally known as Bank of Internet USA when it was originally founded in 1999. Since then, it's gone through two more name changes, changing to Bofl Federal Bank before landing on the current name of Axos Bank in 2018. Currently, Axos holds over $10 billion in assets while only employing 800 full-time employees. Check out this amazing review of Axos Bank to learn the full details about their service.
Axos Bank's checking and savings accounts come with absolutely zero fees and no minimum account balances, making it one of the most advantageous banking solutions for Americans today. Axos is FDIC insured, which means your first $250,000 is protected.
The awesome interest rates and rewards of Axos Bank's accounts virtually eliminate the financial problems most savers have had to deal with while saving in traditional banks.
ATMs with Axos Bank
Besides its two physical locations, Axos Bank does not have its own ATMs. However, they will refund 100% of all domestic ATMs. Additionally, if you need to make cash deposits, Axos Bank is partnered with Green Dot, providing access to 91,000 ATMs in its nationwide network.
Green Dot ATMs can be found in many retail locations such as 7-Eleven and CVS. However, there is one downside- this ATM cash deposit service costs $4.95 per transaction.
Types of Accounts with Axos Bank
Axos offers three competitive accounts- a high yield savings account (HYSA), Rewards Checking, and CDs (certificate of deposits). All three accounts have tremendous benefits that larger brick-and-mortar banks can't afford to offer.
Axost Bank Rewards Checking
The Axos Bank Rewards Checking account is one of the most "rewarding" banking options for anyone that needs a checking account. All domestic ATM fees are fully reimbursed, and there are no monthly fees nor minimum account balances required.
The current annual percentage yield is a whopping 1.25%. However, customers must meet and maintain two stipulations to get this benefit:
- Maintain $1,000 per month in direct deposits
- Make at least 15 debit card transactions each month
Axos Bank High Yield Savings Account
Axos Bank's high yield savings account provides a rate currently over six times the national average at 0.61% APY. It is one of their most popular accounts. It has no minimum balance requirements, no monthly service fees, and no withdrawal penalties. To open an account, customers need to deposit $250 initially. However, once the account is established, there are no minimum balance requirements.
Axos Bank CD
Axos Bank's CDs are not nearly the best you can find on the open market; at best, they are subpar. Their CD terms range from three months to five years. Sure, Axos Banks' annual percentage yield (APY) is much higher than most major banks. However, many online banks have even better CD rates than Axos Bank offers.
The minimum deposit in Axos Bank's CDs is $1,000, a standard minimum for almost all banks- traditional and online alike.
The Benefits of CIT Bank
CIT Bank is another highly competitive online banking platform that provides its clients with an intuitive user experience and various accounts. This critical review of CIT Bank goes into great detail on the different account types for further reference. CIT Bank is known and favored for having zero fees and some of the best interest rates available.
One area where CIT Bank falls short is having no free ATM network. Therefore, customers that wish to withdraw cash from an ATM cannot do so without paying both a local ATM fee and a fee from CIT Bank. Additionally, customers cannot deposit money through an ATM and can only transfer from other banking institutions.
For most savers, this lack of ATM support is a non-issue since they typically don't need to withdraw cash from their savings accounts and fund the account through ACH or direct transfers.
Types of Accounts with CIT Bank
CIT Bank provides a money market savings account, a checking account, and various CDs. All accounts have no monthly maintenance fees and great interest rates.
CIT Bank Checking Account
CIT Bank's checking account is not like other banks'. They apply an interest rate to all checking accounts. However, the interest rates are tiered based on the account balance, with the best APY being granted to accounts with $25,000 or more.
To open a checking account, you have to put $100 into the account initially. This minimum deposit to open is a downside compared to other online banking platforms that allow a $0 opening balance.
CIT Bank Money Market Accounts
CIT Bank's APY on their money market account is very competitive and one of the main driving factors pulling in new customers- which is currently at 0.45% APY regardless of the account balance. Even though this rate is high and competitive, there are other online banks with better rates.
Like the checking account, new accounts have to be funded with $100 and have no monthly service fees.
CIT Bank Certificate of Deposits
CIT's CDs minimum deposits are $1,000, much like any other bank that offers CDs. New customers can open a standard, jumbo, or no-penalty CD, each with their own APY. They have an extensive range of overall CD selections with very competitive rates.
Bonus Recommendation: Budget with Tiller Money
If you save lots of money in online checking, savings, and CD accounts, an online budgeting tool could help you better control your finances. If you're a saver with multiple checking, saving, CD, and other accounts, Tiller Money can help with your financial planning and budgeting.
It compiles all your financial information in an easy-to-navigate and understandable spreadsheet. Check out this full-fledged review of Tiller Money to get started.
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