Online banks — especially online savings accounts — have become increasingly popular over the past few years.

Online banks — especially online savings accounts —  have become increasingly popular over the past few years.

According to a recent Statista Report, the number of online banking customers in the U.S. rose by nearly 24 million from 2014 to 2018. That number is projected to increase even more in the coming years.
So, what is it about online banks that have customers signing up in droves?

Benefits of Online Banking

Higher interest rates: Online banks have lower overhead (since they have no physical branches, bank tellers, etc.). Having fewer expenses typically means that online banks are able to offer significantly higher APYs to customers than traditional brick-and-mortar banks.

Lower fees: Another perk of lower overhead is that online banks aren’t forced to nickel and dime their customers as much on extraneous fees.

Convenience: Driving around town to find a branch location for your bank, only to find that they close at 5 o’clock and aren’t open on weekends, is a pain. Many online banks are open 24/7, and you can access everything you need from your smartphone or computer.

Comparing the Best Banks

Editorial Disclaimer: Please note that, although we regularly update this page, you should research a bank’s website to get the most up to date information available (including information on annual percentage yields). Some of the links from this page are from paid partners of DollarSprout. Here’s how we make money.