In early October, I will announce the winners of the Second Annual Plutus Awards, which will include the best bank, best credit card, best brokerage, and a number of other categories. Later today, the Plutus Awards website will list the finalists. Money Magazine has already completed its survey and announced the publication’s editor’s picks for best bank this year.
For an alternative to these selections, I’ve reviewed what I believe to be the best online savings accounts, looking past the antiquated notion that a physical branch is necessary for a good banking experience.
For the best national checking account, Money Magazine recommends U.S. Bank, citing the bank’s high customer satisfaction ranking in J.D. Power & Associates. With no branches in my region and one ATM within 100 miles, U.S. Bank is not an option for me. For checking accounts, I appreciate having not only nearby ATMs but convenient branches. Wells Fargo is not my favorite bank, and like other national banks they rely on increasing fees to maintain their profits, but I have a checking account there because the branches are ubiquitous. I prefer TD Bank, but a less professional website prevents me from keeping my primary checking accounts there.
Money Magazine picked the Discover® Bank Online Savings Account for best savings account. It’s difficult to argue with this selection. Although I closed my Discover® account to consolidate my savings, I had a positive experience with that bank, and the interest rates they have been offering have been solid. The rates have been higher than the online banking mainstay, ING Direct.
Ally Bank wins Money Magazine’s selection for best online package, thanks to great rates, unlimited ATM fee reimbursements, and remote check deposit. The magazine also mentions that Ally introduced a debit rewards program at the same time other banks are eliminating them. I expect this benefit to be short-lived, though. Ally Bank is a result of General Motors and its subsidiaries distancing themselves from the negative public image of the company. The rebranding worked so well that more GMAC departments eventually changed their names to Ally. Here’s my review of the Ally Bank Savings Account.
Money Magazine chose Alliant Credit Union for the best credit union category. Credit unions often have regional or local associations, making it hard to determine a best credit union relevant to all Americans. I’m a fan of moving away from large banks towards credit unions, but not everyone can qualify. I’ve searched, and it doesn’t appear that I can become a member of any credit union near me.
The survey also recognizes the best regional banks: Bank of the West in the west, Huntington in the mid-west and TD Bank in the east.
Overall, the above selections are good choices for best bank. I think it’s good that the formerly innovative ING Direct receives some serious competition in the online space. With ING’s large customer base, the company has little incentive to staying competitive. Executives know that most customers will not switch to other banks just to chase higher interest rates. The more other online banks can improve their services and offer compelling products, the more ING Direct will need to worry about staying competitive.
National banks, with their overzealous fees and impersonal customer service, should be concerned about losing business to regional and local banks, credit unions, and online banks that offer more convenient services like remote check deposit and ATM reimbursements.
Updated June 24, 2016 and originally published August 31, 2011.