Years of rock-bottom interest rates have continued to punish savers while rewarding borrowers. Experts say rates will continue to hover around historic lows until the end of 2015, which means if you have plans to save more money this year, it might not make sense to bank with a big-name, traditional institution. The idea of belonging to a bank that exists solely online might seem strange at first, but it’s no accident that many of the best savings accounts in the country right now are offered by online banks.
Leaving Your Brick-and-Mortar Bank Behind
In September 2014, GOBankingRates found online savings accounts offered interest rates nearly seven times higher than brick-and-mortar banks. Compared to local credit unions — which often boast better rates thanks to their not-for-profit status — online banks still outpaced returns from credit unions four times over.
If you’re hesitant to try an online bank, it might be tied to concerns over security. After all, 2014 was a tough year for data security, as major retailers and companies suffered security breaches that exposed sensitive information belonging to millions.
Rest assured, however, that online banks are FDIC-insured and offer your funds the same level of protection as any traditional bank. And because they function exclusively over the Web, online banks implement strict security measures to keep your financial data out of the hands of strangers.
Beyond security, there are other factors to consider: Without a physical branch to visit, will you be able to seek guidance from a bank representative? Will an online bank offer the same suite of services and products as its brick-and-mortar counterparts? These are all fair questions, but know that your banking experience doesn’t have to exist with just one bank. If you want to empower your finances in 2015, it might be time to diversify your banking products and try an online bank to get the highest interest rates and lowest fees.
10 Best Online Banks of 2015
So if you’re feeling motivated to look at your current deposit rates and possibly make a switch to a better bank, where should you start? GOBankingRates took the guesswork out of finding the best online banks by comparing 30 of the top online institutions to rank the 10 best. We examined checking account fees, savings account rates, one-year CD rates and BauerFinancial star ratings for overall financial strength, as well as whether banks offer 24/7 customer service via Web or phone, live chat with a representative and a mobile app for convenient banking on the go.
These are the top 10 online banks of 2015, according to the findings:
1. Ally Bank. Taking the top spot, Ally Bank doesn’t charge customers monthly maintenance fees on its checking account. It also offers high yields of 0.99 percent APY on its savings account and 1.05 percent APY on its one-year CD. Those who prioritize customer service are in luck as well; Ally Bank offers 24/7 online and phone support, live chat with a bank representative and a mobile app. BauerFinancial gave Ally Bank a 3.5 out of 5 star rating.
2. Bank5 Connect. With a slightly lower savings account yield of 0.90 percent APY and lower CD yield of 1 percent APY, Bank5 Connect fell into the No. 2 spot. The bank does, however, boast a BauerFinancial star rating of 5 and doesn’t charge its customers any checking account maintenance fees. Live chat is available, as is a mobile app, but 24/7 customer service is not.
3. Discover Bank. Tied in savings and CD yields with Bank5 Connect, Discover Bank has a lower BauerFinancial rating of 4 but offers customers 24/7 phone support in addition to live chat capabilities and a mobile app. Discover Bank customers that hold a checking account are not charged a monthly account maintenance fee.
4. GE Capital Bank. With a higher savings account yield of 1.05 percent APY and CD rate of 1.10 percent APY, GE Capital Bank ranked No. 4 due to its lack of a checking account product. Interest rates are a big bonus for GE Capital Bank customers, and the bank has a high BauerFinancial star rating of 4. However, the bank’s account access and customer service are weaker. Customers do not have access to a mobile app, live chat or 24/7 customer service via telephone or the Web.
5. Synchrony Bank. In comparison to GE Capital Bank, Synchrony Bank’s deposit rates are right on par. Customers can earn a solid 1 percent APY on savings and 1.15 percent APY* on its one-year CD. The bank does offer a mobile app, but not 24/7 telephone or Web access, or live chat. BauerFinancial gave Synchrony Bank a 4 out of 5 stars, but the bank does not offer a checking account product to its customers.
6. CIT Bank. With lower deposit yields than Synchrony Bank, CIT Bank ranked No. 6. CIT Bank also doesn’t offer its depositors a checking account product, though it still pays high deposit rates of 0.95 percent APY for savings and 1.10 percent APY for a one-year CD. Customers have mobile access to their accounts through the bank’s app, but 24/7 phone and Web customer service isn’t available, nor is live chat.
7. Sallie Mae Bank. With no checking account product, a lower savings yield of 0.80 percent APY, but higher CD rate of 1.15 percent APY, Sallie Mae Bank is a great option for those interested in investing with a CD this year. Just like CIT Bank, Sallie Mae Bank only offers a mobile app, not live chat or 24/7 customer service. BauerFinancial scored it the same as CIT Bank with 4 stars.
8. TIAA Direct. Depositors with TIAA Direct earn 0.80 percent APY on their savings accounts and 1.01 percent APY on the one-year CD. The bank’s checking account comes with no maintenance fee, but its BauerFinancial rating is 3 out of 5. TIAA Direct customers have access to a mobile app, but do not enjoy the convenience of 24/7 customer service or live chat.
9. First Internet Bank. BauerFinancial gave First Internet Bank a 5 star rating, the highest possible, and the bank offers customers a checking account product. However, its lower savings yield of 0.60 percent APY affected its ranking. First Internet Bank’s CD rate is a high 1 percent APY on its one-year term, and the bank offers customers a mobile app and live chat, but not 24/7 customer service.
10. Barclays Bank. Depositors with Barclays Bank don’t have access to a checking account, but its high savings yield of 1 percent APY and one-year CD rate of 0.80 percent APY might make up for it. BauerFinancial gave Barclays Bank 4 stars, and customers have access to their account information wherever they are through Barclays Bank’s mobile app. The bank does not offer 24/7 customer service or live chat.
Tenths of a percent might not seem like much when it comes to deposit rates, but in this low interest rate environment, every bit helps. Combine competitive rates with low fees and excellent customer service, and it’s easy to see why these banks are the best place to put your money in 2015.
*Synchrony Bank’s ranking is based on the one-year CD APY of 1.10 percent originally offered when GOBankingRates conducted the study.
More from U.S. News
9 Financial Tools You Should Be Using
8 Tips for Bond Investors Watching Rising Rates
10 Ways to Save More in the New Year
Should You Break Up With Your Bank and Go Online? originally appeared on usnews.com
