Finding the Best Banks in 2020
At SmartAsset, we pored over the various banking options throughout the country to determine which were the best for 2020. We chose banks that make it easy to access your money, do not charge you to maintain your account and have good interest rates. Below, we breakdown which are the best banks in six categories: online bank, major bank, credit union, small business, students and savings account.
|Ally Bank Read More||1.50%||$0|| |
|Chase Bank Read More||0.01%||$25|| |
|Alliant Credit Union Read More||1.60%||$5|| |
|Wells Fargo Read More||0.10%||$25|| |
|PNC Bank Read More||0.01%||$25|| |
|Varo Bank Read More||1.61%||$0|| |
|Charles Schwab Bank Read More||0.03%||$0|| |
How We Determine the Best Banks
SmartAsset’s team of personal finance experts rounded up an exhaustive list of the banks most available to you. We scored each according to their account access, charges for maintaining your account, interest rates, customer support, product offerings and customer experience.
The Best Online Bank: Ally Bank
Ally is an online-only bank offering an array of banking, auto, home loans and investing products. The company’s key banking products include savings, checking, individual retirement accounts (IRAs) certificate of deposit (CD) and money market accounts. For example, Ally’s online savings account boasts a 1.50% APY that comes without monthly maintenance fees or minimum balance requirements. But this account comes with a $25 overdraft fee and an excessive transactions fee of $10. The bank’s website also shows it charges users for expedited delivery, outgoing domestic wires, account research and returned deposit items.
Ally makes up for its lack of physical presence through its mobile offerings, online banking tools and 24/7 customer service support. The bank’s mobile app, which has a 4.8 rating on the iOS app store, allows users to make transfers, deposit checks and much more.
The Best Major Bank: Chase
Chase bank offers the most exhaustive banking experience in America for those who prefer in-person banking. You can find Chase in 28 states and the District of Columbia, with more than 5,100 branches and over 16,000 free ATMs. The only comparable bank is Wells Fargo (which has the most branches). Chase has a slight edge, however, for several reasons.
For one, even though it has fewer branches, Chase has more ATMs. Being able to access your money easily is an important consideration when choosing a bank. You’ll have more opportunity for free withdrawals with Chase - especially if you live in New York City, Chicago or Los Angeles. Another reason is the mobile app. Chase’s app has 4.5 stars on the app store and is arguably the most intuitive and easy to use banking app available. You can manage every one of your accounts on the go - including savings accounts, checking accounts, credit cards and even your mortgage.
Furthermore, if you’ve never banked with Chase before, you are also eligible for a $200 bonus when you make a qualifying deposit in a basic checking account. For that reason, we recommend you consider Chase if you have less than $2,000 to deposit. Even at a 1.30% APY, it would take almost eight years to make more than $200 in interest at another bank. The only downside to Chase checking is the $12 monthly fee. Therefore, we would not recommend Chase if you have less than $1,500 to deposit since that is the threshold to avoid the fee ($500 monthly deposits also waive the fee).
If You Live Outside of Chase’s Area
Chase serves a majority of Americans, but there are regions where branches are sparse or non-existent. If you live in the Midwest (beside Chicago) or the South (beside Atlanta and Florida) Wells Fargo does end up being the best option. New England has a dearth of both Wells Fargo and Chase branches, making T.D. Bank the best option there.
Best Credit Union: Alliant Credit Union
Alliant is the best credit union in the U.S. The rates and fee structures equal, and in some instances even surpass, what other banks we list offer. You’ll find a 1.60% APY on the savings account and a 0.45% on the checking account (both higher than Capital One). Both of those accounts also come with no minimum balances or monthly maintenance fees.
Alliant also provides the flexibility big banks offer, despite only having branches in five states. Alliant not only has an ATM network of 80,000 - five times greater than that of Chase - but also reimburses you up to $20 for out-of-network ATM fees. For the most part though, Alliant will be an online institution for the majority of members.
Furthermore, unlike most other credit unions, Alliant makes it easy to become a member. Alliant has a list of organizations and communities you can be a part of to become a member. However, if you do not qualify through those means, you can still join by just donating $10 to the Foster Care to Success organization. Lastly, given that credit unions are non-profits, they tend to have stronger customer service than some banks. Credit unions tend to emphasize the community aspect of their organization and strive to create a positive banking experience for all customers.
While Alliant stands as the best, SmartAsset's banking experts have further detailed the other top credit unions based on specific account holder needs.
Best Bank for Small Business: Wells Fargo
Wells Fargo excels at the main bank needs for small businesses: lending, banking accounts and merchant services. In terms of lending, no bank is more active with SBA loans than Wells Fargo. Since 2010, it has issued 37,700 SBA 7(a) loans at an average amount of $322,000. That’s by far the most in the country and 22% more than closest competitor, Chase.
In terms of deposit accounts, we do think the Chase small business checking accounts are slightly better, but you’ll still get a good product with Wells Fargo business checking. You have the choice between four types of accounts: Business Choice Checking, Platinum Business Checking, Simple Business Checking and Analyzed Business Checking. Each one is tailored for small businesses of different sizes and markets. The barrier to waive the $15 monthly fee is low, so it is essentially a free account.
The final piece that makes Wells Fargo the best bank for small business is its merchant services, which integrate seamlessly with the checking accounts. Wells Fargo will set you up with a system to monitor your incoming cash flow, as well as access to Clover to accept credit and debit cards. You can connect it with your business checking account so you can easily monitor your inflow and outflow of funds.
Best Bank for Students: PNC Bank
PNC is the best bank in terms of dedication to students. It offers the Virtual Wallet Student, which is built to help students manage their finances while juggling their busy lives. Potential first-time savers will have access to numerous educational resources on saving. Account holders can also set up alerts when they come close to a preset spending threshold or have an important bill coming up - features that can help students experiencing financial independence for the first time.
There are three account options: a checking account, a basic savings account and a growth savings account. All are free for six years as long as you can prove you’re a student. You will get a debit card that will be branded in your school’s design if you go to one of the 50 schools that partner with PNC. You will also get free ATM access at those partnered schools. The Virtual Wallet is also great if you’re an international student, as you can get your account in several common languages. PNC also allows one free international wire transfer per month.
Overall, PNC meets the needs of students. There is nothing extraordinary about any of the three accounts, and the interest rates on the savings accounts (even the growth one) are well below the national average. If you are a student and feel you don’t need the resources that PNC provides, you may do well to consider Capital One or Ally Bank.
The Best Bank for Savings: Varo Bank
Varo Bank offers mobile-only banking services for Apple and Android users. Though this bank doesn’t have any physical locations, it makes up for it with its deposit account offerings. For example, the Varo Savings Account comes with a 1.61% APY and no minimums or monthly fees. There is a minimum of $0.01 required to begin earning interest, but after that, there are no balance requirements to earn the base APY. Users can even push this rate up to 2.80% if they fulfill the following conditions: maintain a balance of $50,000 or less, use their Visa Varo® debit card to make a purchase at least five times a month and earn government or payroll direct deposits of at least $1,000 a month.
Varo offers fee-free access to more than 55,000 Allpoint® ATMs, and the bank’s app even features an ATM locator that pinpoints Allpoint ATMs near you. We mentioned that Varo doesn’t charge monthly maintenance fees, but you should note that the bank also excludes foreign transaction fees and transfer or debit card replacement fees. Varo’s savings account comes with competitive rates, but we would advise against using this bank if you prefer a company that has physical locations.
The Best Bank for ATMs: Charles Schwab
Charles Schwab’s High-Yield Investor Checking account comes with a low APY of 0.03%, but the bank’s fee-free offerings and global access seem to outweigh its lower rates. Schwab not only has 24/7 customer service access, but it also grants automatic reimbursements to any users accessing ATMs internationally. You also won’t have to account for foreign transaction fees, and users get the reimbursements back in a lump sum at the end of the month.
All Schwab users with the High-Yield Investor Checking account earn free standard checks and a free Schwab Bank Visa® Platinum debit card. Another perk that comes with this account is a free Schwab One® brokerage account for investments. All online equity trades come with a $4.95 rate, and there’s no fee to open or maintain the account.