Three CUs Make List of Best Online Financial Institutions

While operating costs for brick-and-mortar bank branches grow, online bank and credit union products consistently offer lower fees and higher rates than conventional banks. What are the best online financial institutions?

In the second edition of MagnifyMoney’s Best Online Banks roundup, three credit unions made the cut: The $1.2 billion, Boulder, Colo.-based Premier Members Credit Union (No. 1) and the $1.2 billion, Durham, N.C.-based Self-Help Credit Union (No. 4), under the best online “banks” for money market accounts category; and the $1.3 billion, Lake County, Ill.-based Consumers Credit Union (No. 3) for checking accounts.

As reported by Lauren Perez of MagnifyMoney, wholly-owned by LendingTree, “Since online banks incur lower overhead costs, they can pass the savings on to consumers in the form of higher yields and lower fees.” Perez added, “Despite the decline in the federal funds rate in 2019 and the corresponding reductions in deposit yields at financial institutions nationwide, average savings account rates at online banks and credit unions are still well above those offered by their brick-and-mortar counterparts. As of Jan. 2020, the yields paid on online savings deposits were averaging 1.75% APY, while savings accounts at brick-and-mortar banks were averaging a mere 0.27% APY.”

MagnifyMoney’s list of the best online banks included categories for CDs, savings, money market and checking accounts, overall online bank and new online bank

Here is a breakdown of the list:

• Best online banks for CDs: No. 1, Goldman Sachs Bank USA; No. 2, Ally Bank; No. 3, Capital One; No. 4, Synchrony Bank; No. 5, Barclays.
• Best online banks for savings accounts: No. 1, Goldman Sachs Bank USA; No. 2, Barclays; No. 3, Synchrony Bank; No. 4, American Express National Bank; No. 5, Ally Bank.
• Best online banks for money market accounts: No. 1, Premier Members Credit Union – Premier Members Credit Union offers a special competitive money market account rate that has consistently ranked on MagnifyMoney’s Best Money Market page for two years; No. 2, Virtual Bank; No.3, Sallie Mae Bank; No. 4, Self-Help Credit Union – its money market account’s high-yield interest rate requires a $500 minimum deposit and maintained balance; and No. 5, Ally Bank.
• Best online banks for checking accounts: No. 1, Aspiration; No. 2, Simple; No. 3, Consumers Credit Union – members must meet certain qualifications first to determine rates on balances up to $10,000; No. 4, Ally Bank; No. 5, Charles Schwab Bank.
• Best overall online bank, the institution that averaged the top-ranking checking, savings, money markets and CDs, winner, Ally Bank
• Best new online bank, BrioDirect. It’s a competitive new financial institution that MagnifyMoney said to keep your eye on. “BrioDirect has maintained one of the highest rates for a low-minimum online savings accounts since it was launched in the summer of 2019,” Ken Tumin, founder of LendingTree-owned DepositAccounts.com, said.