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Many people scoff at online banking — maybe you’re one of them — because it seems like such an “unsafe” idea. However, while any online-centric business will have a certain measure of risk, there are legitimate online banks that are safe and well worth using.

Still not convinced? Check out our look at these online banking features The 7 Best Online Banking Features For Simplifying Your Life The 7 Best Online Banking Features For Simplifying Your Life Does money management stress you out? What if you could effortlessly alleviate some of that stress for good? Online banking offers a lot of benefits that can help to simplify the headaches of money. Read More that can inject convenience into your life and simplify your errands. Handling money has never been easier. Worried about safety and security Five Things Banks Will Never Ask You Online Five Things Banks Will Never Ask You Online Ever received an email from your bank conerning suspicious account activity? Such messages are almost always scams, so here are a few things your bank will never request online – but fraudsters will. Read More ? All of these banks are long-running and FDIC-insured.

Let’s look at each one to see what they offer above their competitors.

These banks cover the United States only. (It’s where I live, thus where I have the necessary experience.) Some of the listed banks may service people from outside of the country but I can’t speak to any sort of fees or regulations that may apply, so please be sure to read the fine print if you decide to sign up.

Ally Bank

Ally Bank, formerly known as GMAC Bank, is an online-only bank that offers tremendous rates and features when compared to the average brick-and-mortar bank. GMAC was founded in 1919, so you don’t have to be afraid that they’ll pack their bags and run away with your money.

Web Interface: Compared to the local banks that I’ve done business with in the past, Ally’s web interface is truly on another level. The design is sleek and modern, neither cramped nor clunky. Everything is easy to find and you’ll be comfortable within minutes.

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Financial Rates: Ally offers: three certificate of deposit accounts (CDs) between 0.87% and 1.30% annual percent yield (APY) which is compounded daily; three individual retirement accounts (IRAs) between 0.99% and 1.30% APY; a money market account at 0.85% APY; a checking account between 0.10% and 0.60% APY (depending on your balance); and a savings account at 0.99% APY. There are no minimum deposits required to open accounts.

Limitations: Savings accounts are limited to six outgoing transactions per statement cycle. APY rates for savings accounts are variable and CD accounts may incur early withdrawal penalties. Most transactions require 3-4 business days to process.

Security Features: All online communications are SSL encrypted What Is HTTPS & How To Enable Secure Connections Per Default What Is HTTPS & How To Enable Secure Connections Per Default Security concerns are spreading far and wide and have reached the forefront of most everybody's mind. Terms like antivirus or firewall are no longer strange vocabulary and are not only understood, but also used by... Read More . Account holders are encouraged to enable two-factor authentication and add several security questions. Ally provides 24/7 live support through their toll-free phone line.

Other Perks: Ally provides mobile apps for both Android and iOS. Checks can be electronically deposited through Ally eCheck Deposit as long as you have a scanner. Finally, they will cover all ATM fees you incur (Ally does not operate their own ATMs).

Capital One 360

Capital One 360, formerly known as ING Direct, is the online banking division of Capital One. They belong to the same organization but operate separately, so opening a Capital One 360 account does not give you access to Capital One branches. However, Capital One 360 does have some physical locations for servicing their clients.

Web Interface: While the Capital One 360 website is certainly better than most of the online bank interfaces I’ve used, there is room for improvement. It feels dated and isn’t very inviting, which can be a psychological damper when you’re dealing with money. But functionally? It’s fine.

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Financial Rates: Capital One 360 offers: CD accounts between 0.40% and 0.90% APY which is compounded monthly; a checking account between 0.20% and 0.90% APY depending on your balance; and a savings account with a variable 0.75% APY. Other options include mortgage loans as well as IRA and investment accounts through ShareBuilder.

Limitations: All accounts must be opened with at least a $0.01 deposit. Savings accounts have a limit of six outgoing transactions per statement cycle. Savings account deposits have a 10-day hold when first opened, and a 5-day hold afterwards. Checking account deposits have a 2-day hold.

Security Features: There are no extraordinary security features. However, their security guarantee will cover all losses from unauthorized account activity as long as it’s reported within 60 days. They also provide free help for identity theft victims through a toll-free number.

Other Perks: Deep integration with the online budgeting tool Mint How To Use Mint To Manage Your Budget & Spendings Online How To Use Mint To Manage Your Budget & Spendings Online Read More .

Discover Bank

What many people don’t realize is that Discover is more than just a credit card company. They are a financial group that’s been around for 25 years and have been consistently ranked #1 in customer service and customer loyalty for the last 18 years.

Web Interface: There’s not much to say about Discover’s online interface other than “It works.” It feels like any other online banking portal you might find with at traditional bank, but it’s well-organized with a clean design. I certainly don’t feel uncomfortable using it.

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Financial Rates: Discover Bank offers: CD accounts between 0.35% and 2.30% APY which is compounded daily; a money market account between 0.75% and 0.80% APY; and a savings account at 0.90% APY. They also offer IRA accounts between 0.35% and 2.30% APY. There is no minimum balance necessary for savings accounts.

Limitations: Savings accounts have a limit of six outgoing transactions per statement cycle. CD accounts and money market accounts have a minimum opening deposit of $2,500. Savings accounts have a minimum opening deposit of $500. IRA accounts have a minimum opening deposit of $2,500.

Security Features: You are not responsible for any unauthorized transactions as long as you notify Discover immediately. All online communications are encrypted with SSL.

Other Perks: Discover accounts include Bill Pay Protection where they will reimburse any fees or costs incurred to you due to a late bill payment (if lateness was due to an error on Discover’s part). They also provide mobile apps for Android and iOS.

Barclays

Barclays is actually a multinational bank based in the UK, but their online banking for the US is done through Barclays Bank Delaware, which was formerly known as Juniper Bank. Barclays has a long, rich history in the financial world and was noted as the seventh largest world bank in 2011.

Web Interface: The interface for Barclays is a strange mixture of clean-yet-crowded. The actual aesthetics are fine and pleasant on the eyes, but it’s easy to feel overwhelmed by all of the information being thrown your way. You’ll get used to it, but it can be off-putting at first.

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Financial Rates: Barclays offers: CD accounts between 0.35% and 2.25% APY which is compounded daily; a savings account at 1.00% APY; and a Dream savings account at 1.05% APY with a 2.5% bonus on interest earned if consecutive deposits are made for six months. There is no minimum deposit necessary to open any accounts.

Limitations: Savings accounts have a limit of six outgoing transactions per statement cycle. The Dream account has a maximum monthly deposit of $1,000. Penalties apply for early withdrawal from CD accounts.

Security Features: All online communications are encrypted with SSL/TLS and signed by VeriSign What Is an SSL Certificate, and Do You Need One? What Is an SSL Certificate, and Do You Need One? Browsing the Internet can be scary when personal information is involved. Read More .

Other Perks: Web tools like the Savings Assistant that can help you set financial goals.

Save More With an Online Bank

I don’t recommend that you empty all of your brick-and-mortar accounts and shift it all into online accounts. Brick-and-mortar banks are useful for their own reasons and shouldn’t be overlooked.

If you’re still averse to online banking, that’s fine. At least you now know what’s out there! But regardless, you won’t find these kind of interest rates elsewhere. Being online-only means these banks can pass the gains to you. My personal bank of choice? Ally, due to their slick web interface, great rates, and security measures.

Want to save even more money? Check out these money savings apps 10 Great Apps To Manage And Save Money In 2014 10 Great Apps To Manage And Save Money In 2014 Since your smartphone is always with you, it’s a great resource for monitoring your budget, calculating interest or finding coupons. Read More  that help make the saving process a little bit easier on your soul.

Are you an online banker? If so, which banks do you like the best? If not, what’s keeping you from making the leap? Have you had a bad experience with online banks? Share your experiences with us in the comments below!

Image Credits: Woman Banking Online Via Shutterstock

  1. YearOfTheGoat
    April 23, 2015 at 9:34 am

    Response to Dan Price: Lithuania, so should be good anything what supports euros or at least offers easy convert to (from) dollars. Tried to search myself, but found nothing or did it wrong.

  2. A41202813GMAIL
    April 21, 2015 at 4:18 pm

    Yeah, Right.

    Even Old Brick And Mortar Big Bank Agencies Started To Go Bankrupt In The Recent Years, And I Am Supposed To Trust My Money To Someone I Will Never Physically Meet ?

    If bernard madoff Had Started This Kind Of Business In The First Place, No One Would Even Know Who He Really Was, Let Alone Caught And Send Him To Jail.

    Buyer, Beware.

    • Dan Price
      April 22, 2015 at 8:11 pm

      Very cynical. You trust lots of things to people you'll never meet... Why should money be different? These banks etc are regulated by exactly the same bodies as regular banks.

      That said, buyer beware is good advice. Research everything thoroughly, especially when money is involved.

      Cheers.

    • A41202813GMAIL
      April 24, 2015 at 7:15 am

      Yes And No.

      - I Am A Realist - I Have Been Burned Three, Or So, Too Many Times In The Last Decade, By People I Really Met In Person,

      - I Do My Business Old School - I Live In A City Of 1 Million And All Kinds Of Brick And Mortar Buildings Are An Half An Hour Car Ride Away, Tops,

      - I Do Not Use Electronic Advanced Payments In Excess Of 50 Dollars, Period,

      - Raw Money Is More Appealing For Scams Than Any Other Value,

      - In The Last Few Years, Regulators Became A Joke Worldwide ( In My Country Even More So ).

      Cheers.

  3. Paul R
    April 20, 2015 at 9:23 pm

    One thing we like about our online bank (that most brick and mortar banks don't offer) is a rebate on ATM fees--some $6-8 a month. Most banks will let you pull out money from their own ATMs at their own branch, but then if you go anywhere else you are stuck. Online banks typically rebate a certain amount of those fees each month. That can add up to a decent savings over the course of a year (let's face it, its hard to get excited about the difference between 0.25% and 0.89% interest rates).

    This article takes me back. When online banking was all the rage, I had a checking account with something like USABank or USABankshares or something like that---a checking account with a 5% APR. Of course, most of those banks failed. We are still paying on a credit transfer that another online bank offered us--3% for the life of the balance, so of course we're paying only the minimum each month. That bank also failed, and was taken over by another one with more sensible policies. :)

    • Dan Price
      April 22, 2015 at 8:12 pm

      Awesome about the ATM rebate. I had no idea that was a 'thing'.

    • Joel Lee
      May 2, 2015 at 4:30 am

      Ally, mentioned in the article, covers any ATM fees you incur since they don't have any ATMs of their own. I'm not sure if the others do that. But yeah, ATMs are an important "feature", though I'm personally relying on them less these days as I do most of my shopping through a credit card, then pay it in full at the end of every statement.

  4. buytick
    April 20, 2015 at 6:09 pm

    What about ATMs?

    • Dan Price
      April 22, 2015 at 8:12 pm

      Are you referring to what Paul mentions in a comment below?

  5. Logan
    April 20, 2015 at 1:46 pm

    Pretty much missed the best online bank out there right now: Simple. You can check it out at http://www.simple.com. But they have hands-down the best customer support. They also have no fees and they're online interface is the best around. Simple lets you arrange the money in your account into envelopes, or "goals," which makes saving money so much easier. I've been with them for a couple of years and love it!

    • Dan Price
      April 22, 2015 at 8:13 pm

      Simple lets you arrange the money in your account into envelopes, or “goals". --- Love that as an idea. All online banking portals are generally rubbish, tools like this should be more widespread.

    • Joel Lee
      May 2, 2015 at 4:28 am

      Very nice suggestion. How long have they been around? This is the first time I'm hearing about Simple. Where's all the publicity and word of mouth? (I guess your comment counts as one!)

  6. YearOfTheGoat
    April 20, 2015 at 1:43 pm

    Are those banks useful or even usable for not US or UK countries?

    • Dan Price
      April 22, 2015 at 8:14 pm

      Joel does mention that they are mainly for the US as that is where he lives. Where are you based?

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