Back in 2013 my friends and I graduated, got jobs, and strangely, began seeing positive numbers in our bank accounts (student loans notwithstanding).
To protect and organize this novel and exciting resource, the savvy among us downloaded budgeting apps. Others budgeted in Excel, and the rest (including me) spent blindly, dreading our monthly statement like a jury summons.
Point is, seven years ago there were plenty of options for virtually managing your budget. Today, there are perhaps too many. There are hundreds of apps for climbing out of debt, budgeting between spouses, investing a percentage of your savings, even budgeting as a freelancer.
With overwhelming options and data breaches still making headlines, is it time to return to good ol’ budget spreadsheet?
What’s Ahead:
Here’s why I budget using spreadsheets
For six months in 2015, I tried everything I could to start meditating. I knew the practice would be challenging, so I tried to flatten my learning curve with apps, books, and by carefully studying the esoteric ramblings of gurus on YouTube.
Nothing worked. I couldn’t close my eyes for six minutes without snatching up my phone like Bilbo Baggins to resume my consumerist coma. It wasn’t until I visited a Buddhist monastery, and meditated for 45 minutes straight with no apps, music, or guidance, that I finally mastered the practice.
I found budgeting to be the same way. I knew it wouldn’t be fun, so I spent weeks trying dozens of different budgeting apps. They sent me reminders, gold stars, and even performed many essential tasks for me.
I wasn’t learning. I was looking for the path of least resistance.
But critical life skills are sharpened through resistance. Budgeting in a spreadsheet is like meditating without music or lifting free weights instead of using machines. You’ll sweat more, but you’ll grow faster. If sweating isn’t your thing, using apps like Mint to track your finances is a great alternative to budgeting in spreadsheets.
As illustrated in the “Pros..” section below, there are plenty of objective advantages to budgeting in a spreadsheet versus an app. Spreadsheets are extremely reliable, built upon the most simple, stable, and well-supported software in the world. Spreadsheets won’t crash or hamper you with surprise “security updates.” They’re effortless to share, and there’s a free template for virtually every conceivable scenario. Best of all, spreadsheets are infallibly secure. While many apps will store your most compromising information using security that’s failed before, there’s nothing a virtual villain can do with your spreadsheet in plain view.
But it’s the subjective psychological advantages of spreadsheet budgets that I believe give them the edge. The security and stability lower stress. The raw journaling aspect offers moments of deep introspection. Finally, the act of learning a new skill in the most organic way offers rewards and nourishment.
My top three budgeting tips
If you’re reading this article, you’re either looking to start budgeting or considering changing up your current method. In either case, you deserve a high-five because budgeting isn’t easy.
There’s a psychological weight to knowing precisely how much money you do (or don’t) have at all times. But trust me, it’s much less burdensome than the pervasive anxiety of not knowing and making poor financial decisions as a result. Plus, budgeting helps you save more, invest more, and makes you a better partner.
Whether you’re just getting started or looking to refine your process, here are my top three budgeting tips:
Be as honest with your budget as you are with your doctor
What do your doctor, your therapist, and your budget all have in common? They all help you solve big problems, but they can only help if you’re honest with them.
It can be extremely hard to admit to yourself just how much you’re spending on certain things, and in tandem, how much money you’re not really saving. But like a mystery stomach pain, mystery spending only gets worse with time.
So when you begin the budgeting process, be honest with yourself. Record everything. If looking at a certain expense makes you cringe, good! Like a massage therapist finding knots in your back, discovering cringeworthy expenses is pretty much the whole point.
Don’t forget insurance and retirement
Perhaps the most common mistake among budgeters is forgetting to include big, routine expenses that fall outside of a monthly cycle. The two that are most oft-forgotten are retirement and insurance.
Generally speaking, you should consider putting away at least 10% of your monthly income into a retirement account. I highly recommend opening a Roth IRA. Remember to subtract whatever you stash away from your monthly income on your spreadsheet.
Similarly, be sure to factor your insurance premiums into each month’s budget. Even if you pay in full, whatever you pay in total annually for home/renters, medical, and auto should be divided by 12 and included in your monthly expenses.
Think of budgeting as “money journaling”
The process of journaling is excellent for your mental health because it “helps you prioritize problems, fears, and concerns” and “provides an opportunity for positive self-talk,” according to the University of Rochester Medical Center.
Because “budgeting” can have loaded connotations, I think of budgeting as “money journaling.” If I’m nervous about my income-to-spending ratio, I record everything to remove the fear of the unknown. Then, I either discover that I’m well within my spending limit, or that I’ve exceeded it and should go lean until the end of the month.
In either case, I feel much better.
Pros of budgeting in a spreadsheet
Versatile and easy to share
Perhaps you’re worried that budgeting in a spreadsheet will involve the complex drudgery of designing something from scratch. Thankfully, nothing could be further from the truth.
I like Google Sheets because it’s free, cloud-based, and doesn’t require surprise lengthy updates. Plus, the platform has hundreds of professional and user-sourced budget templates for every possible scenario. When you find a template you like, you can click FILE > MAKE A COPY, and ta-da, it’s yours forever.
Plus, Google Sheets makes it easier than most apps to share your spreadsheet with friends, family members, or your financial advisor. And when things get private, you can dynamically update the view, comment, or edit access (or revoke it entirely!).
Download Money Under 30’s official “Simple Budgeting Spreadsheet” for Excel here.
Here to stay
Apps come and go, regardless of popularity. Thousands of full-time Viners didn’t think they’d lose their primary source of income overnight until they did.
While budgeting apps are probably less volatile than social media platforms, it’s safe to say that Google Sheets and Microsoft Excel will be around much longer than many of the medium-sized budgeting apps competing on the Apple or Play Store.
By “investing” in a spreadsheet over an app, you can rest assured that your preferred budgeting tool will always be available (and offline, no less).
Better security
A lot of money management apps prompted me for my bank account information. Although they listed good reasons for the invasion of privacy (real-time budgeting data, auto-deposits into retirement, etc.), it still made me feel uneasy.
If the Equifax breach has taught us anything, it’s that a miserly approach to sharing personal information is probably a good idea. Keeping your budget spreadsheet and your accounts separated may be less convenient, but it’s indisputably safer.
There’s very little a hacker can do with a copy of your budget spreadsheet other than mock you for spending $41 on Ben & Jerry’s Chocolate Therapy.
Now that I’ve covered the advantages of budgeting with a spreadsheet, I should acknowledge some shortcomings.
Cons of budgeting in a spreadsheet
Can lack user-friendliness
Rather than overwhelm you with a sea of empty cells, apps YNAB (You Need a Budget) will ease you into the process by asking a few questions at a time to calculate your income, expenses, and goals.
If you feel especially psychologically intimidated by the budgeting process, or you need extra help cataloging your expenses, the Q&A format of many user-friendly apps may ease some of your troubles.
Short on features
Even the best-designed spreadsheet templates are still static in nature and require your input to work effectively. Apps, by contrast, can be more dynamic, automatically adjusting your data based upon the access you give it to your accounts, bills, etc.
While you can write those off as mere conveniences, it’s hard to ignore how some apps will even go so far as to drive behavior. A spreadsheet admittedly can’t send reminders to your phone to stop spending, nor can it automatically invest for you.
Not mobile-friendly
I’d hesitate to call Sheets or Excel “mobile-friendly” – a more apt descriptor would be “mobile-tolerable.” Before a medium-sized purchase, I can always take a quick glance at my budget on Sheets mobile, but I lack the dexterity or patience to make any actual changes until I find a laptop.
By contrast, virtually all budgeting apps are designed to be mobile-friendly. If you’re someone whose laptop stays sheathed most of the day as you do most admin tasks on your phone, an app may better fit your lifestyle.
Summary
My budgeting spreadsheet is like a Toyota SUV – it may be short on fancy features or connectivity, but it’ll always be there and it will never break down.
Even still, while I strongly prefer to budget using a spreadsheet, there’s really no right answer for everyone. What’s most important is that you’re budgeting somehow, somewhere.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
The most important feature of a high-yield savings account is its interest rate. But it’s nice when your account helps you manage your money too — or at least doesn’t get in the way of that.
The Marcus Online Savings account does both. It pays a yield that’s well above the national average for savings accounts (both online and at traditional banks) while offering some basic budgeting and money management tools, including automated savings. It also has an unusually large same-day transfer allowance, which could come in handy once in a while.
But Marcus Online Savings isn’t perfect, so take a few minutes to learn about its capabilities and shortcomings before opening one.
What Is the Marcus Online Savings Account?
Backed by Goldman Sachs, one of the biggest banks in the United States, the Marcus Online Savings account is a high-yield savings account that yields 4.15% APY on all balances. It has no monthly or annual maintenance fee and no minimum balance to open or earn interest.
Marcus Online Savings doesn’t come with an ATM card or person-to-person transfer capabilities, but it does have an unusually large same-day transfer limit ($100,000) and unusually robust money management features built into its online and mobile account dashboards. It complements a broader lineup of Marcus CDs and money market accounts.
What Sets the Marcus Online Savings Account Apart?
The Marcus Online Savings account has several standout features:
Excellent yield on all balances. Marcus Online Savings yields 4.15% APY on all balances, with no minimum required to earn interest at the headline rate.
No fees or minimums. This account has no minimum opening balance and no ongoing maintenance fees.
Useful tools for savers. Marcus offers useful money management tools, including automated savings, a built-in savings calculator that shows how much your cash could be worth at specific points in the future, and a comparison tool that shows how much you can earn with Marcus compared with other banks.
24/7 customer service. Marcus is one of the few banks of any size that still has 24/7 customer support by phone.
Key Features of the Marcus Online Savings Account
All things considered, Marcus Online Savings is a straightforward savings account from a straightforward online bank. But knowledge is power, so dig a bit deeper into its core features before deciding to apply.
Account Yield
Marcus Online Savings yields 4.15% APY on your entire balance, with no minimum required to earn interest.
Account Fees & Minimums
Marcus Online Savings has no monthly or annual maintenance fee. There’s no minimum balance to open or maintain an account either.
Money Management Tools
Marcus Online Savings has a handy savings automation tool that lets you deposit a set amount on a recurring basis — weekly, monthly, or another frequency. The mobile app and online dashboard also have useful savings calculators that show both how much you can earn on your balance over time and how that compares with potential earnings at another bank.
Deposit Options & Transfer Limits
You can deposit cash into your Marcus Online Savings account via:
Marcus Online Savings doesn’t have an ATM card or accept mobile check deposits. However, you can transfer up to $100,000 in or out of the account with same-day turnaround — just initiate the transfer by 12pm Eastern and your money moves by 5pm Eastern the same day.
Mobile Features
Marcus has a comprehensive mobile app that can do just about anything the online dashboard can. You can schedule online bill payments and external transfers on your phone, and link your account with third-party money management apps like Quickbooks.
Deposit Insurance
Through Goldman Sachs, Marcus Online Savings balances are FDIC-insured up to $250,000. In the unlikely event that Goldman Sachs fails, you won’t lose any funds below that amount.
Pros & Cons
Marcus Online Savings has more positive attributes than negative ones. In fact, it’s difficult to find too much wrong with this account.
Excellent yields on all balances
No maintenance fees
Same-day transfers up to $100,000
24/7 customer support by phone
No mobile check deposit
No ATM access
Pros
Marcus Online Savings is a well-rounded savings account with a mix of features that appeal to would-be users across the income and wealth spectrum.
Well above-average yield. This account has an excellent yield (currently 4.15% APY on all balances) that puts it comfortably ahead of most competing banks.
No monthly maintenance fee. Marcus charges no monthly or annual maintenance fees on this account, so your savings won’t erode over time unless you withdraw.
No minimum balance. There’s no minimum balance to open (or keep open) this account. There’s also no minimum balance to earn the full advertised interest rate.
Same-day transfers up to $100,000. You can transfer up to $100,000 into or out of your account with same-day delivery. That’s an unusually high limit, especially for external transfers, which usually take one to three business days to clear.
Helpful budgeting and money management tools. Marcus offers some basic but helpful budgeting and money management tools, including set-it-and-forget-it savings automation and customizable savings calculators.
24/7 customer support by phone. You can reach a Marcus customer service rep by phone at any time of day (or night). You’re unlikely to take advantage of Marcus’ customer service very often because the account is so simple, but it’s nice to know it’s there.
Cons
Marcus Online Savings has some notable gaps in its feature lineup that could impact your ability to access or top up your balance.
No mobile check deposit. Marcus Online Savings has no mobile check deposit feature. That’s a notable gap in its menu of deposit options, and one that’s increasingly rare among well-funded online banks.
No ATM access. Marcus Online Savings doesn’t come with an ATM card, so you can’t directly withdraw cash from your account.
How the Marcus Online Savings Account Stacks Up
Marcus Online Savings is among the best online savings accounts around, but it’s not the only one you should consider if you’re looking for a new home for your long-term savings. Before you apply, see how Marcus compares to another popular option: Upgrade Premier Savings.
Marcus Online Savings
Upgrade Premier Savings
Maximum Yield
4.15% APY
4.81% APY
Minimum Yield
4.15% APY
None
Minimum Balance
$0
$0
Minimum Interest Balance
$0
$1,000
Maintenance Fee
$0
$0
With no minimum balance to open the account or earn interest, Marcus Online Savings is ideal for if you’re just beginning your savings journey. Upgrade Premier Savings is a better fit if you can clear the $1,000 minimum balance to earn interest, as its yield is significantly higher.
Final Word
The Marcus Online Savings account is an excellent online savings account because it has a yield well above the national average, no maintenance fees, and no minimums of any kind. Sometimes, simpler is better.
Not that Marcus Online Savings is perfect. The ability to deposit checks remotely rather than mailing them and an ATM card to directly withdraw cash from the account would both be nice. You can also find higher savings yields if you know where to look. But all in all, there’s more to like than dislike about this account.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Marcus Online Savings
Marcus Online Savings has an excellent yield relative to other banks and no minimums or fees to get in the way of growing your savings. It’s customer-friendly too, thanks to a generous same-day transfer allowance and 24/7 service. But it has some missing features that make it less flexible than some users might like.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
The most important feature of a high-yield savings account is its interest rate. But it’s nice when your account helps you manage your money too — or at least doesn’t get in the way of that.
The Marcus Online Savings account does both. It pays a yield that’s well above the national average for savings accounts (both online and at traditional banks) while offering some basic budgeting and money management tools, including automated savings. It also has an unusually large same-day transfer allowance, which could come in handy once in a while.
But Marcus Online Savings isn’t perfect, so take a few minutes to learn about its capabilities and shortcomings before opening one.
What Is the Marcus Online Savings Account?
Backed by Goldman Sachs, one of the biggest banks in the United States, the Marcus Online Savings account is a high-yield savings account that yields 4.15% APY on all balances. It has no monthly or annual maintenance fee and no minimum balance to open or earn interest.
Marcus Online Savings doesn’t come with an ATM card or person-to-person transfer capabilities, but it does have an unusually large same-day transfer limit ($100,000) and unusually robust money management features built into its online and mobile account dashboards. It complements a broader lineup of Marcus CDs and money market accounts.
What Sets the Marcus Online Savings Account Apart?
The Marcus Online Savings account has several standout features:
Excellent yield on all balances. Marcus Online Savings yields 4.15% APY on all balances, with no minimum required to earn interest at the headline rate.
No fees or minimums. This account has no minimum opening balance and no ongoing maintenance fees.
Useful tools for savers. Marcus offers useful money management tools, including automated savings, a built-in savings calculator that shows how much your cash could be worth at specific points in the future, and a comparison tool that shows how much you can earn with Marcus compared with other banks.
24/7 customer service. Marcus is one of the few banks of any size that still has 24/7 customer support by phone.
Key Features of the Marcus Online Savings Account
All things considered, Marcus Online Savings is a straightforward savings account from a straightforward online bank. But knowledge is power, so dig a bit deeper into its core features before deciding to apply.
Account Yield
Marcus Online Savings yields 4.15% APY on your entire balance, with no minimum required to earn interest.
Account Fees & Minimums
Marcus Online Savings has no monthly or annual maintenance fee. There’s no minimum balance to open or maintain an account either.
Money Management Tools
Marcus Online Savings has a handy savings automation tool that lets you deposit a set amount on a recurring basis — weekly, monthly, or another frequency. The mobile app and online dashboard also have useful savings calculators that show both how much you can earn on your balance over time and how that compares with potential earnings at another bank.
Deposit Options & Transfer Limits
You can deposit cash into your Marcus Online Savings account via:
Marcus Online Savings doesn’t have an ATM card or accept mobile check deposits. However, you can transfer up to $100,000 in or out of the account with same-day turnaround — just initiate the transfer by 12pm Eastern and your money moves by 5pm Eastern the same day.
Mobile Features
Marcus has a comprehensive mobile app that can do just about anything the online dashboard can. You can schedule online bill payments and external transfers on your phone, and link your account with third-party money management apps like Quickbooks.
Deposit Insurance
Through Goldman Sachs, Marcus Online Savings balances are FDIC-insured up to $250,000. In the unlikely event that Goldman Sachs fails, you won’t lose any funds below that amount.
Pros & Cons
Marcus Online Savings has more positive attributes than negative ones. In fact, it’s difficult to find too much wrong with this account.
Excellent yields on all balances
No maintenance fees
Same-day transfers up to $100,000
24/7 customer support by phone
No mobile check deposit
No ATM access
Pros
Marcus Online Savings is a well-rounded savings account with a mix of features that appeal to would-be users across the income and wealth spectrum.
Well above-average yield. This account has an excellent yield (currently 4.15% APY on all balances) that puts it comfortably ahead of most competing banks.
No monthly maintenance fee. Marcus charges no monthly or annual maintenance fees on this account, so your savings won’t erode over time unless you withdraw.
No minimum balance. There’s no minimum balance to open (or keep open) this account. There’s also no minimum balance to earn the full advertised interest rate.
Same-day transfers up to $100,000. You can transfer up to $100,000 into or out of your account with same-day delivery. That’s an unusually high limit, especially for external transfers, which usually take one to three business days to clear.
Helpful budgeting and money management tools. Marcus offers some basic but helpful budgeting and money management tools, including set-it-and-forget-it savings automation and customizable savings calculators.
24/7 customer support by phone. You can reach a Marcus customer service rep by phone at any time of day (or night). You’re unlikely to take advantage of Marcus’ customer service very often because the account is so simple, but it’s nice to know it’s there.
Cons
Marcus Online Savings has some notable gaps in its feature lineup that could impact your ability to access or top up your balance.
No mobile check deposit. Marcus Online Savings has no mobile check deposit feature. That’s a notable gap in its menu of deposit options, and one that’s increasingly rare among well-funded online banks.
No ATM access. Marcus Online Savings doesn’t come with an ATM card, so you can’t directly withdraw cash from your account.
How the Marcus Online Savings Account Stacks Up
Marcus Online Savings is among the best online savings accounts around, but it’s not the only one you should consider if you’re looking for a new home for your long-term savings. Before you apply, see how Marcus compares to another popular option: Upgrade Premier Savings.
Marcus Online Savings
Upgrade Premier Savings
Maximum Yield
4.15% APY
4.81% APY
Minimum Yield
4.15% APY
None
Minimum Balance
$0
$0
Minimum Interest Balance
$0
$1,000
Maintenance Fee
$0
$0
With no minimum balance to open the account or earn interest, Marcus Online Savings is ideal for if you’re just beginning your savings journey. Upgrade Premier Savings is a better fit if you can clear the $1,000 minimum balance to earn interest, as its yield is significantly higher.
Final Word
The Marcus Online Savings account is an excellent online savings account because it has a yield well above the national average, no maintenance fees, and no minimums of any kind. Sometimes, simpler is better.
Not that Marcus Online Savings is perfect. The ability to deposit checks remotely rather than mailing them and an ATM card to directly withdraw cash from the account would both be nice. You can also find higher savings yields if you know where to look. But all in all, there’s more to like than dislike about this account.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Marcus Online Savings
Marcus Online Savings has an excellent yield relative to other banks and no minimums or fees to get in the way of growing your savings. It’s customer-friendly too, thanks to a generous same-day transfer allowance and 24/7 service. But it has some missing features that make it less flexible than some users might like.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
The savings offers that appear on this site are from companies from which MoneyCrashers.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MoneyCrashers.com does not include all savings companies or all savings offers available in the marketplace.
Years ago, finding a bank meant heading downtown and choosing from whichever options were available there. The Internet dramatically lessened the importance of physical branches and made it possible to bank from anywhere at any time.
Virtually all banks with physical locations have online portals, but a growing number now do the bulk of their business online. Some have ties to community banks and may have physical branches in select regions. Others exist only in the digital realm and have no physical branches.
What follows is a list of the best online banks on the market today.
Best Online Banks of May 2023
These are the best online banks on the market right now.
Each does at least one thing really well, whether it’s offering a potent lineup of budgeting and money management tools or delivering savings and CD rates well above the national average. Our top pick offers the most value for the greatest number of potential customers, in our opinion.
Unless otherwise noted, all the accounts on this list come with FDIC insurance up to $250,000 per account.
Best Overall: American Express® National Bank, Member FDIC
The American Express® High Yield Savings Account has a solid yield on all balances with $0 maintenance fees, a $0 minimum opening deposit, and a $0 minimum balance. The current savings yield is 3.90% Annual percentage Yield (APY) as of May 16, 2023.
Want to tie up your money for a while at a higher interest rate? Choose from seven CD options ranging from six months to five years.
CD yields are very good across the board: 3.00% Annual Percentage Yield (APY) on the longest-term product (60 months or 5 years) and 4.25% on the 12-month CD. Early withdrawal penalties are:
90 days’ interest for terms under 12 months
270 days’ interest for terms between 12 and 48 months (four years)
365 days’ interest for terms between 48 and 60 months (five years)
540 days’ interest for terms of 60 months or longer
Additional features:
Extensive lineup of personal credit products, including premium credit cards like The Platinum Card® from American Express
Move money between up to three external bank accounts in short order
24/7 customer service
Apply Now
Best Credit Union: Alliant Credit Union
When is an online bank not an online bank? When it’s an online credit union.
There’s no better branchless option than Alliant Credit Union. As a credit union, Alliant exists for its members rather than stockholders so they will always put you first.
Alliant has a comprehensive lineup of checking and savings accounts, like:
High-Rate Savings, a high yield savings account for goal-oriented savers (currently 3.10% APY¹)
High-Rate Checking, a checking account with competitive interest rates
Certificates of Deposit, which help you earn more with set interest rates for a fixed period of time (currently yielding 5.00% APY)
Kids Savings, a custodial account that helps you teach sound money management concepts to kids 12 and younger
Teen Checking, a joint account for kids aged 13 to 17 — there when you’re ready to loosen the reins
Additional features:
Get access to over 80,000 in-network ATMs with Alliant
No monthly service fee with eStatements
Low minimum deposit and balance requirements
Bank anywhere, anytime with the Alliant mobile app
Sign Up for Alliant Savings
Insured by NCUA
(¹For important additional disclosures, please refer to the corresponding footnote at the Sign Up link directly above.)
Best for High Yields: CIT Bank
CIT Bank offers several different accounts with category-leading yields:
Savings Connect has one of the best yields of any bank account, online or off: 4.50% APY.
Platinum Savings has an outstanding yield when you maintain a balance of $5,000 or more (4.75% APY) and a so-so yield when you don’t (0.25% APY).
Savings Builder yields up to 1.00% APY for accountholders who can meet minimum balance or deposit requirements.
The CIT Bank Money Market account has a very good yield on all balances (currently 1.55% APY) with no monthly maintenance or service fees.
Multiple CIT Bank CDs offer above-average yields, led by the 11-month CIT No Penalty CD at 4.80%
Additional features:
No monthly service fee
No early withdrawal penalty for No Penalty CDs
No ATM fees in-network
CIT may reimburse up to $30 in outside ATM fees
Earn interest on eligible eChecking funds
Sign up for CIT Bank
Best for Investors: Wealthfront
Wealthfront is a next-generation banking service that’s ideal for day-to-day money management. Its Cash Account features high-interest checking, no account fees, and a host of value-added features — and you can open an account with just $1.
But Wealthfront made its name in the investment business, and there’s where it continues to shine. Key features include:
Build semi-customized, automatically rebalanced, globally diversified portfolios of low-cost index funds optimized with daily tax-loss harvesting
Just $500 minimum to invest
Pay an annualized management fee of 0.25% assets under management (AUM) on all balances
Choose from individual and joint taxable accounts, IRAs, and 529 college savings plan accounts
Portfolio line of credit that lets you tap up to 30% of your account value once you have $25,000 or more under management
Consolidated view of all your accounts through Wealthfront’s free DIY financial planning tool
Additional features of the Wealthfront Cash Account include:
4.55% APY (variable) on all balances
$1 minimum opening deposit
No account fees
No overdraft fees
FDIC insurance on balances up to $5 million
Get paid up to two days early with direct deposit
Put your money to work in the market within minutes when you use your Cash Account to invest in a Wealthfront Investment Account
Mobile check deposit
Free bill pay and peer-to-peer (P2P) transfers
Complimentary debit card and free in-network ATM access
For a limited time, get $30 bonus cash when you open a Wealthfront Cash Account and fund your new account with at least $500 in new money. Terms apply.
Sign Up for Wealthfront
Money Crashers, LLC receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. Money Crashers, LLC is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.
Best for Customer Support: Albert
Albert is a powerful financial app that makes spending, saving, and investing easy. It’s among the growing crop of financial solutions that offer early payday with eligible direct deposit, and its automated savings and investing features put it well ahead of the pack.
But where Albert really shines is on the customer service front. The platform has a dedicated team of in-house financial experts — called Geniuses — to help you make sense of your money. That puts it heads and shoulders above its crop of fellow digital money management apps.
Additional features:
Albert Cash. This is the place to manage your day-to-day spending money with Albert. Earn up to 20% back on eligible debit card purchases and get paid up to two days early with qualifying direct deposit. Use the Albert Instant cash advance feature to get up to $250 from your next paycheck with no hidden fees.
Albert Savings. Albert’s Smart savings engine sizes up your cash flow and sets aside funds automatically so that you’re always moving toward your financial goals. Set specific goals within the app, such as building an emergency fund or saving for your next vacation. And get cash bonuses on your Albert Savings every year.
Albert Investing. Start investing with as little as $1 using Albert’s guided investment platform. Choose your own stocks or themes, or have Albert do it for you.
Sign Up for Albert
Best for Debit Card Rewards: GO2bank
GO2bank is a low-friction online bank with a mobile-friendly bank account (no monthly fee with eligible direct deposit) and impressive yields on savings (4.50% APY2 on savings up to $5,000).
Eligible electronic gift card purchases in the app earn up to 7% cash back; Amazon eGift Card purchases in the app earn 3% cash back. Terms and conditions apply.
Additional features:
No minimum opening deposit or ongoing balance requirement
Avoid the $5 monthly fee with an eligible direct deposit
Get paid up to two days early with ASAP Direct DepositTM 3
Deposit cash at participating retail stores, subject to fees and deposit limits
Enjoy up to $200 in overdraft protection with opt-in and eligible direct deposit.*
Earn 4.50% APY paid quarterly on savings up to $5,000 — over 10 times the national average savings rate2
* $15 fee may apply to each purchase transaction not repaid within 24 hours of authorization of the first transaction that overdrafts your account. Overdrafts paid at GO2bank’s discretion.
Sign Up for GO2Bank
1Active GO2bank account required to receive an eGift Card. eGift Card merchants subject to change.
2GO2bank, Member FDIC. Interest paid quarterly on the average daily balance of savings during the quarter up to a $5,000 balance and if the account is in good standing. 4.50% Annual Percentage Yield (APY) as of April 2023. APY may change before or after you open an account. The average national savings account interest rate of 0.39% is determined by the FDIC as of 4/18/23. Visit https://www.fdic.gov/regulations/resources/rates/ to learn more. Fees on your primary deposit account may reduce earnings on your savings account.
3Direct deposit early availability depends on the timing of the payor’s payment instructions and fraud prevention restrictions may apply. As such, the availability or timing of early direct deposit may vary from pay period to pay period. The name and Social Security number on file with your employer or benefits provider must match your GO2bank account exactly or GO2bank will decline your deposit.
Best for No Account Fees Ever: Rewards Checking via Upgrade
Rewards Checking via Upgrade4 has a slew of user benefits, but its defining feature couldn’t be simpler: no account fees, ever.
That’s right. As a user, you pay no account fees — no annual fees, overdraft fees, transfer fees, or ATM fees charged by Rewards Checking by Upgrade1.
There’s more, of course. Additional features of Rewards Checking via Upgrade include:
2% cash back on purchases at convenience stores, drugstores, restaurants, and bars, and on utility bills and certain monthly subscriptions2
Earn up to $500 cash back per year at the 2% rate
Earn 1% cash back on all other eligible purchases
Get up to five third-party ATM fee rebates each month1
You may receive discounts on loans and cards through Upgrade3
FDIC Insured up to $250,000 through Cross River Bank, Member FDIC
Sign Up for Rewards Checking via Upgrade
1 There are no account fees, overdraft fees, annual fees, or transfer fees associated with Rewards Checking accounts. Rewards Checking charges no ATM fees, but third-party institutions may charge you a fee if you use their ATM/network or if you use your Upgrade VISA® Debit Card internationally. Upgrade will rebate any ATM fee charged by another institution for debit card withdrawals in the United States, up to five times per calendar month. To be eligible to receive third-party ATM fee rebates in any calendar month for eligible ATM withdrawals made during that month, customers must have (i) an open Rewards Checking account and (ii) either maintained an average daily balance in their account of at least $2,500 in the prior calendar month or made direct deposits into their account totaling at least $1,000 during the prior calendar month. As a courtesy to new customers, Upgrade will provide third-party ATM fee rebates for up to the first 2 calendar months after account opening regardless of account activity. Some limitations apply and terms and conditions may change. Please refer to the applicable Cross River Bank Deposit Account Agreement and Upgrade VISA® Debit Card Agreement and Disclosures for more information.
2 Rewards Checking customers accrue 2% cash back on common everyday expenses at convenience stores, drugstores, restaurants, and bars – including deliveries – and gas stations, as well as recurring payments on utilities and monthly subscriptions including phone, cable, TV and other streaming services, and 1% cash back on all other debit card charges. 2% cash back is limited to $500 in rewards per calendar year; after $500, customers accrue 1% cash back on all eligible debit card charges for the remainder of the year. Some limitations apply. Please refer to the applicable Upgrade VISA® Debit Card Agreement and Disclosures for more information.
3 The interest rate on a new loan or credit line through Upgrade may be up to 20% lower than would otherwise be applicable without this discount, as long as you have an active Rewards Checking Account. Additional terms may apply. Please refer to the applicable Truth-in-Lending Disclosure and Loan Agreement.
4 Upgrade is a financial technology company, not a bank. Rewards Checking services provided by Cross River Bank, Member FDIC. Upgrade VISA® Debit Cards issued by Cross River Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Personal Loans made by Upgrade’s bank partners. Personal Credit Lines are issued by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. The Upgrade Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.
Best for Automated Budgeting: Douugh
Douugh is a money management app that makes it easy to stay on top of your day-to-day financial obligations while saving for a rainy day — and happier days too.
A single mobile-friendly dashboard makes it all possible.
How? That’s down to Salary Sweeper, an AI-enabled feature that automatically allocates income to two protected “jars”:
Your Bill Jar, complete with a virtual card of its own
Your Savings Jar, which is actually a customizable array of single-purpose savings buckets
The rest is yours to spend as you please using a debit card accepted by millions of merchants worldwide. Best of all, you never have to give manual budgeting a second thought.
Additional features:
Enjoy a free checking account with a Mastercard debit card
Use Apple Pay, PayPal, and other payment apps to make purchases online and IRL
Lock and unlock your card and change your PIN within the app — without calling customer service or visiting a branch.
Sign Up for Douugh
Best for Debt Refinancing: SoFi Checking and Savings
Need to refinance the student loans you’ve been carrying for years with no end in sight?
Open a SoFi Checking and Savings account, then head over to SoFi’s student loan refinancing portal to check out your options. SoFi is a category leader in the education loan refinancing business, with incredibly low rates, flexible terms, and an array of reasonable repayment options.
And since you’re also in the market for a new online bank, you’ll enjoy these great SoFi Checking and Savings perks and features:
No minimum opening deposit or balance requirement
Rate discounts on SoFi loans
Free peer-to-peer (P2P) transfers
Customized financial planning
Member-exclusive offers from SoFi partners
A referral program that pays up to $310 per successful referral
Up to 3.75% APY on eligible balances
Plus, for a limited time, sign up for SoFi Checking and Savings and earn a $250 opening bonus when you set up direct deposit of at least $1,000 into your account
Sign Up for SoFi Checking and Savings
Best for Teens and Young People: Copper Banking
Copper is a banking solution for teens age 13 and older — and their parents too.
It’s built around the Copper Card, a personalized debit card that leverages Apple Pay technology to facilitate seamless online and in-person transactions.
The Copper App allows parents to monitor spending and instantly send money in seconds. For teens, its Automatic Saving feature encourages saving — a lifelong financial habit — by automatically setting aside a portion of each paycheck or inflow.
Additional features:
Copper has a wealth of financial literacy content for parents and kids alike — it’s one of the best financial education tools around
Withdraw cash for free at over 55,000 ATMs
All Copper Accounts are FDIC-insured up to $250,000 through Evolve Bank & Trust
Sign Up for Copper
Best for Potential Returns on Savings & Spending: PrizePool
PrizePool is a truly unique financial app — the only FDIC-insured deposit account provider that offers users the chance to earn serious money based on your saving and spending habits.
PrizePool offers two ways to win:
Savings Balances: Get 1 ticket for PrizePool’s prize drawings for every $1 on deposit in your savings account, every day. So if you have $1,000 in your account, you get 1,000 tickets every day.
Debit Card Purchases: Earn 30 tickets for every $1 spent, plus get the chance to have your purchases reimbursed.
PrizePool holds a weekly drawing every Friday. There are almost 6,000 cash prizes every week, including a $10,000 grand prize drawing at least once every six weeks.
Additional features:
Earn 0.30% APY on eligible savings balances
Deposits are FDIC-insured up to $250,000
Refer new users to PrizePool and get 10% of their prize winnings forever
Sign Up for PrizePool
Best for Freelancers and Self-Employed People: Lili
Lili offers a totally free checking solution with a slew of value-added features designed to simplify your financial life.
Its core product is built with freelancers in mind, but it’s appropriate for a range of use cases, from solopreneurs to folks who supplement 9-to-5 income with side hustle revenue.
With powerful, automated tax savings and expense categorization tools, Lili eliminates the need to juggle separate bank accounts for business and personal needs — it’s just one deposit account for your entire financial life.
Additional features:
No minimum opening deposits or ongoing balance requirements and no account fees
Pay virtually anywhere with a Visa debit card that’s accepted worldwide
Lili’s Tax Bucket tool automatically sets aside funds earmarked for income tax payments
Utilize expense management and categorization tools that simplify business budgeting, cash flow management, and year-end accounting
Get real-time alerts for every transaction (and other account activities too)
Make mobile check deposits through the Lili mobile app
Make cash deposits at more than 90,000 retail locations across the U.S., including CVS, Walgreens, and Rite Aid
Get paid up to two days early with early direct deposit
Enjoy fee-free withdrawals at about 38,000 ATMs nationwide
For $9 per month, Lili Pro adds even more valuable features:
A premium Visa Business Debit Card that delivers cash-back rewards
BalanceUp, a fee-free overdraft solution that covers up to $200 in would-be overdrafts
Advanced expense tracking that helps business owners maximize their tax deductions
A savings account that pays interest
Sign Up for Lili
Best for Savers: Quontic Bank
Quontic Bank got its start as a New York City community bank that catered to thrifty types.
Today, Quontic’s branch-based banking options represent just a small fraction of its offerings. With a nationwide digital footprint, Quontic delivers category-leading checking and savings yields for consumers and small-business owners from all walks of life — all with no monthly service fees:
Cash Rewards Checking: Earn unlimited 1.5% cash back on qualifying debit card transactions after meeting the $100 minimum opening deposit.
Bitcoin Rewards Checking: Earn 1.5% Bitcoin on qualifying debit card transactions. The minimum opening deposit is $500. This account may not be available in all states.
High Interest Checking: Make 10 or more qualifying debit card point-of-sale transactions of $10 or more per statement cycle to earn interest at competitive rates based on account balance. The minimum opening deposit is $100.
High Yield Savings: Earn interest at category-leading rates (currently 4.25%) after meeting the $100 minimum opening deposit.
Money Market: Earn solid yields (currently 4.75%) after meeting the $100 minimum.
CDs: Quontic CDs have terms ranging from six months to three years and competitive yields that generally increase in proportion to term. The minimum opening deposit is $500. Early withdrawal penalties may apply.
Additional features:
Tap to pay with the Quontic Pay Ring — the first wearable debit card
Choose from an array of home loans, including community development loans that go beyond your traditional credit profile
Take advantage of special loans for foreign nationals and recent immigrants
Sign Up for Quontic Bank
Best for Borrowers: Discover Bank
Discover Bank is a full-service online bank with a wide range of deposit accounts. It’s a great (almost) one-stop shop for your digital financial needs.
Discover Bank’s real differentiator is its comprehensive lineup of secured and unsecured credit products. That includes unsecured personal loans, which many online banks don’t bother with due to perceived risk.
You’ll find home loans, home equity products, student loans, credit cards, and personal lines of credit here too.
Discover Bank’s deposit account options include:
Cashback Debit: This checking account has no yield, but you can earn 1% cash back on up to $3,000 in qualifying debit card spending each month. There’s no monthly maintenance fee.
Online Savings Account: This account has a very strong yield on all balances — currently 3.90% APY. There’s no maintenance fee or minimum to open.
Money Market Account: With a minimum opening deposit and balance requirement of $2,500, this account has competitive yields on all balances. Its two balance tiers cleave at $100,000, but yields on higher balances barely exceed those on lower balances. Enjoy a free, optional debit card, and no maintenance fee. There’s also no minimum balance fee, despite the minimum balance requirement.
Traditional CDs: CD terms range from three months to 10 years. Yields range widely, peaking on longer-term CDs. You need $2,500 to open any CD.
Additional features:
Structure any money market or CD as a traditional, Roth, or SEP IRA
Or roll over your 401(k), 457 deferred compensation plan, annuity, or IRA from another institution
Enjoy a coast-to-coast network of 60,000 fee-free ATMs
Enjoy 24/7 support by phone, live chat, and email
Make mobile check deposits from anywhere
Enjoy free, instant P2P money transfers
Sign Up for Discover Bank
Methodology: How We Select the Best Online Banks
We use several key factors to evaluate online banks and surface the very best ones for our readers. Each relates in some way to the overall user experience, and you’ll see many represented in our “Best For” categories above.
Available Account Types
The best online banks offer a range of different deposit account types: free checking, savings, CD, and money market accounts, among many others.
Truly comprehensive online banks go even further, with less-common account offerings like savings IRAs, jumbo CDs, and more. More accounts doesn’t necessarily mean a better banking experience, but it’s helpful if you’re looking for a one-stop financial shop.
Interest Rates
Online banks tend to have higher yields — interest rates paid to the account holder — as well as lower interest rates on certain types of loans, if offered.
You shouldn’t count on that though. It’s important to shop around and choose an online bank that consistently offers significantly better rates. Not all do.
Account Minimums
The best online banks have low or no minimum balances and low or no minimum opening deposit requirements on checking, savings, and money market accounts.
CDs generally do have minimum deposit requirements, even at the best online banks, but there’s lots of variation. Look for deposits at or below the $1,000 mark, if possible.
Monthly Maintenance Fees
Free is always better than not free, right?
Not necessarily. Some of the best online banks around charge modest monthly fees. In exchange, they offer a wealth of value-added features and services that can earn or save you money (and sometimes both at the same time).
That said, we do give preference to banks that don’t charge monthly fees at all. Because everyone could use a break.
Other Account Fees
The trusty monthly maintenance fee is just the most visible bank fee. Others include:
ATM fees (in-network and out-of-network)
Wire transfer fees
Excess transaction fees
Early withdrawal penalties
Minimum balance fees
Traditional banks are notorious for nickel-and-diming their customers. By contrast, most online banks do charge at least some fees, but they’re predictable and clearly disclosed on their websites and applications.
For example, many online bank CDs come with early withdrawal penalties. These can be equivalent to as little as one month’s interest on shorter-term CDs but may range up to 24 months of interest on very long-term CDs.
All else being equal, we prefer online banks that charge few if any fees — and hidden fees are a dealbreaker.
Investment and Tax-Advantaged Options
Many online banks stick to core banking services, like checking and savings. But a growing number of online banks offer a wider array of options for people who’d like to be able to do all their banking in the same place.
We’re particularly fond of online banks that offer tax-advantaged account options, such as savings IRAs and CD IRAs. We also like online banks that have in-house investment platforms — whether they’re self-directed brokerages like Ally Invest or low-cost robo-advisors like Wealthfront.
Credit Options
All online banks have at least one deposit account product. That’s what makes them online banks.
A smaller but growing number make loans or issue lines of credit — including credit cards — as well. Common online bank credit products include:
Mortgage loans, including purchase loans and refinance loans
Home equity products, including home equity loans and lines of credit
Auto loans
Student loans and student loan refinancing products
Personal loans
Credit cards and other types of credit lines
We don’t hold it against online banks that don’t make loans — it’s a big step for many a lean bank. But we do look out for banks that have taken the leap.
Budgeting and Money Management Features
Budgeting is hard to do right. That’s why we’re big fans of online banks with built-in budgeting and money management tools.
The more automated these tools are, the better. In fact, some make our list of the top budgeting apps on the market. Truly “set it and forget it” money management saves the typical consumer hundreds if not thousands of dollars per year.
Online Banking FAQs
Still have questions about online banks and managing money online? We have answers.
How Much Does Online Banking Cost?
Online bank rates, yields, and fees are subject to change at banks’ sole discretion. For up-to-date information about specific accounts and bank policies, check their websites or call customer service.
That said, online banks are generally more affordable than traditional banks. They’re less likely to charge monthly maintenance fees on checking and savings accounts, and many have fewer hidden fees too.
What’s the Interest Rate on an Online Bank Account?
That also depends on the individual bank. But many online accounts feature higher yields relative to those of traditional banks.
That’s because online banks have less overhead than traditional banks. They don’t need to pay to keep big, centrally located branches open or pay people to work at them. Their operations are more efficient, which allows them to pass the savings on to customers via higher rates and lower fees.
How Do You Enroll in Online Banking?
It depends on the bank and how its website or app is structured, but it’s usually straightforward. In fact, with an online-only bank, enrollment is usually automatic. You don’t have to complete a separate application or even click a button to activate your account.
However, you will need to create a unique username and password to get started. You may be asked to do this as part of the initial application process or once your account is approved. You’ll also need to link at least one external funding source to transfer money into your account.
Can You Get a Mortgage From an Online Bank?
Some online banks offer home loans (mortgages) and other credit products. These banks tend to be larger online banks with high name recognition, like Ally Bank and Capital One Bank. Look for a “Mortgages” or “Home Loans” tab on the homepage or in your account dashboard.
Be aware that some online banks outsource mortgage origination to other companies. In other words, if you apply for a mortgage through your bank, your loan officer might actually work for someone else. This isn’t necessarily a bad thing, but it could mean a different level or style of service than you’re used to.
And don’t expect your online bank to offer better mortgage rates than other lenders. The mortgage loan business is highly competitive, and direct lenders with even lower overhead may be able to undercut online banks.
How to Choose the Best Online Bank — Or Several
The institutions on this list offer a great combination of FDIC-insured banking products, solid yields, open access, and helpful customer service.
Before choosing one, take a closer look at the features that set it apart from the competition: rewards checking, flexible withdrawal terms for CDs, particularly high account yields, a socially responsible corporate philosophy, and so on.
And remember that, unlike in the old days, your banking choices aren’t bound by geography or other restrictions. If you can’t settle on a single online bank, why not open accounts at multiple banks and compare your experiences?
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Save more, spend smarter, and make your money go further
Mothers tend to have an opinion about everything, and the older we get, the more we realize just how right they are! This is especially true when it comes to being smart with money. So the next time your mom offers up some wisdom, consider her advice as a gift to you this Mother’s Day!
Stick to a budget
A recent survey shows that 60% of Americans do not have a budget! You can’t possibly manage your finances without one. An app like Mint will help you create a budget, track your spending and set financial goals. Plus, when you sync all financial accounts to the app, everything is in one place. Budgets lead to a better financial future. Mom wants that.
Monitor your bank balance
While it’s easier than ever to check a balance here or pay a bill there, you may think you don’t need to maintain your own records. You do! You may think your mom is a bit old-school for balancing a ledger, but it’s important to check your account monthly. Cross-reference your spending with your checking account to see if your balance is higher or lower than it should be. Look over receipts, payments and cancelled checks and double check the amounts. If there are any inaccuracies, report them immediately.
Secure your future
While 401(k)s may be going the way of mom jeans, many companies still offer them. If you are lucky enough to work for a company that offers one of them, max it out. You can contribute up to $18,000 this year. It’s the best way to build wealth for your future, and minimize the tax bite – a worker in the 25% tax bracket who contributes the maximum this year will save $4,500 on his 2015 tax bill. If your employer matches contributions (50 cents on the dollar up to a maximum of 6% is common), this will help grow your retirement account balance even faster. For a worker earning $60,000 per year, this employer match – aka “free money” – could be worth as much as an additional $1,800 toward that retirement account. Mom will be so proud!
Save before you spend
Saving before spending is one of the easiest ways to boost wealth and meet your long-term goals. If you are paying yourself last, chances are there may not be much left to save after you’ve covered your housing costs, groceries, and utilities. You may have heard your mother say “pay yourself first”: set aside a certain portion of your income the day you get paid before you spend any discretionary income. Direct deposit is an easy way to save automatically.
Homemade gifts are the best
A large portion of the $173 we are expecting to spend on mom this year will be at restaurants, according to the National Retail Federation. If mom taught you how to cook, avoid the crowds and make her brunch at home. You will be putting the lessons she taught you to work while saving money and showing her how much she’s appreciated in the most personal way!
– Vera Gibbons,Mint Contributor and Personal Finance expert
Save more, spend smarter, and make your money go further
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The world doesn’t need another online bank. Or does it?
Monzo isn’t technically a bank — it’s a personal finance app that offers banking services. But Monzo can do almost everything your current bank can, and in a mobile-friendly package to boot. With useful budgeting tools and above-and-beyond security features, it’s better than a traditional bank account in some ways too.
If you’re unhappy with your current bank or just want to see what else is out there, Monzo is worth a look. Just be sure to understand where it excels and where it falls short before you apply.
What Is Monzo?
Monzo is a financial technology app that can help you manage your spending money, savings, and household budget.
Monzo first launched in the United Kingdom, but it has a separate platform for customers in the United States now. The app includes comprehensive spending features that can replace a traditional checking account. It also has savings tools, though it doesn’t pay any interest.
Because it’s relatively new, Monzo is likely to add new features and capabilities in the coming months and years. Though subject to change, its public roadmap provides a preview of future initiatives.
What Sets Monzo Apart?
Monzo has some notable features that set it apart from most other personal finance apps:
Useful budgeting tools. Monzo automatically tracks and categorizes your purchases, giving you more insight into your spending patterns than a typical bank account.
Fee-free overdraft protection. Monzo offers overdraft protection at no cost to users. It does deserve the right to decline specific transactions, but you don’t pay a fee if it allows your account balance to go negative.
Robust security features. All personal finance apps with built-in bank accounts must have stringent security protocols, but Monzo goes above and beyond with instant transaction notifications, biometric authentication, and one-tap card locking and unlocking.
No account fees (third-party fees may apply). Monzo has no recurring account fees, no ATM fees, and no foreign transaction fees. Third-party fees may still apply, especially with international vendors, but you never pay a fee directly to Monzo.
Transparency around current initiatives and future plans. Monzo’s public roadmap offers a detailed view of the app’s in-progress initiatives and future plans. It runs on user feedback, so you can suggest and track improvements to the app.
Is Monzo Legit?
Yes, Monzo is legitimate. Though it’s relatively new to the United States and has little name recognition, it’s quite popular (over 7 million downloads) and is backed by an FDIC-insured U.S.-based bank (Evolve Bank & Trust). Monzo has a longer track record in the United Kingdom and appears to have built up goodwill among users there.
Key Features of Monzo
Monzo has the core spending, saving, money management, and budgeting capabilities you’d expect a modern financial app to have. Despite some important limitations, it’s a plausible replacement for a traditional brick-and-mortar or online bank.
Spending Account
Monzo is built around a spending account that operates exactly like a checking account. There’s no monthly maintenance fee or any other recurring fees, and you can make as many withdrawals or deposits as you’d like.
Mastercard Debit Card
Monzo comes with a Mastercard debit card that’s accepted at millions of locations worldwide. There’s no fee to use the card. You receive a physical card within a few business days of opening your account, but you can add a digital version to your digital wallet as soon as your account is open.
Savings Pots
This is Monzo’s savings feature. Pots are essentially savings subaccounts you can earmark for specific goals or simply use to separate your cash into more manageable buckets.
You can have up to 20 pots at one time. You can automate transfers into and out of any pot, making it easy to save a few dollars each toward multiple goals at a time.
Early Direct Deposit
If your employer or benefits payer qualifies, you can get paid up to two days early with Monzo. If you normally get your paycheck on Friday, you get it on Wednesday instead. You can also split your paycheck between your Monzo spending account, your savings pots, and one or more external accounts if you wish.
Budgeting Tools
Monzo automatically tracks and categorizes your purchases, giving you visibility into how and where you’re spending your money. If you use it as your primary spending and saving app, this visibility is comprehensive.
You can also use pots for envelope budgeting, with each pot assigned a spending category. And if you link external financial accounts, you can see how much is coming and going to those each month.
Joint Accounts
Monzo allows you to set up a shared joint account that’s separate from your personal account. Your joint account has its own debit card and a separate account number, so there’s no risk of commingling funds between your personal and joint accounts.
You can set up a joint account with anyone as long as they live in the United States and meet other basic qualifications, like being at least 18 years old. The most common joint account holder is a spouse or domestic partner, but you can also use a joint account to pool resources with a roommate or family member who doesn’t live with you.
Fee-Free ATM Network
Monzo has more than 40,000 fee-free ATMs. You pay no surcharges to withdraw cash at these ATMs, though the ATM owner may charge third-party fees outside Monzo’s control.
Fee-Free Overdraft Protection
Monzo reserves the right to decline transactions that would result in a negative balance. However, if it allows them to go through, Monzo charges no overdraft fees. You just have to make a deposit that’s at least equal to the negative amount, which you can wait for your next paycheck to do.
Digital Bill Pay
Monzo has a digital bill pay feature that lets you make electronic payments to external billers, such as utility companies and credit card issuers. Importantly, this feature can’t send paper checks, so you need to find another way to pay your rent if the property owner demands old-fashioned paper.
Public Roadmap
Monzo’s public roadmap is an unusually transparent window into Monzo’s current initiatives and future plans. Any user can suggest improvements or new features, which Monzo’s staff then has discretion to add to the roadmap.
Monzo makes no guarantees any particular feature makes it into the app on any particular timeline. But based on past activity in the roadmap, it makes a good-faith effort to integrate reasonable suggestions and has improved the app using user feedback.
Deposit Insurance
Balances in your Monzo account (including spending and pot balances) are FDIC-insured up to the current limit of $250,000. Monzo’s banking partner, Evolve Bank & Trust, is an FDIC member institution.
Advantages
Monzo has a lot of positives. It costs little if anything to use, offers separate joint and personal accounts within the same app, and goes above-and-beyond on account security.
No monthly or annual fees. Monzo charges no monthly or annual fees. In fact, it charges no recurring fees at all, so it costs nothing to use.
No overdraft fees. Monzo charges no overdraft fees when your account balance goes negative. It reserves the right to decline transactions that would result in a negative balance, but if it allows them, you don’t pay anything on top of the transaction value.
Get paid up to two days early. With Monzo, you can get your paycheck up to two days early (for example, Wednesday instead of Friday) with direct deposit if your employer qualifies. That’s a nice benefit if you live paycheck to paycheck or are waiting for a paycheck for a big purchase.
Separate joint and personal accounts within the same app. Monzo allows you to have two accounts within the same app interface: a personal account for your own expenses and a joint account for expenses shared with a spouse, domestic partner, roommate, or anyone else. That’s a convenient feature many traditional banks don’t offer.
Instant transaction notifications. Monzo instantly notifies you of transactions made on your account. That’s particularly useful if you share a joint account with someone else, though it’s also a nice security feature that could give you a heads up about compromised card info.
Big fee-free ATM network. Monzo has more than 40,000 fee-free ATMs in its network, which spans the continental United States. If you still use cash regularly, that’s a big advantage over online banks and finance apps that charge ATM fees.
Easy card lock and unlock capabilities. This is another notable Monzo security feature. If you can’t find your card or leave it at home when you travel, you can easily lock it until it’s back in your possession. Many banks and money management apps have this feature, but Monzo’s is particularly easy to use.
No additional foreign transaction fees. Monzo charges no foreign transaction fees of its own. Mastercard may charge currency exchange fees for purchases made overseas or with international vendors, but there’s no surcharge on top of that. Many other banks and credit card issuers do charge their own foreign transaction fees.
Disadvantages
Monzo is missing some important features, at least for now. The biggest gaps are interest on balances, ability to send checks, and the ability to deposit cash or checks into your account.
No interest on balances. Monzo pays no interest on spending or pots balances — at least, not yet. Monzo’s public roadmap shows interest on balances as a future initiative, but the timeline is unclear.
No rewards on debit card purchases. Monzo has no spending rewards program. That’s a downside in comparison to the growing number of finance apps that offer a return on spending.
No cash or check deposits. Monzo can’t accept cash or paper check deposits. Many competing apps allow cash deposits at retail locations like Walgreens and CVS, and a growing number have mobile check deposit features. Monzo could add this capability in the future, but there’s no timeline for that as of yet.
No check-based bill pay. You can’t send paper checks through Monzo. While not common overall anymore, it’s a big issue for renters who have to use checks.
How Monzo Stacks Up
Monzo shares the spotlight with dozens of other financial apps. Before you open an account, compare it against close competitors like Albert.
Monzo
Albert
Monthly Fee
$0
$0, but some features cost extra
Rewards
None
Up to 20% cash back
Yield
None
Depends on balance, but very low
Early Payday
Yes
Yes
Paycheck Advance
No
Yes, up to $250
Overdraft Protection
Free
None
Final Word
Monzo is not a full-service online bank, but it has nearly everything you need to manage your finances and save for the future. It boasts a fee-free spending account, an optional joint account that’s ideal for shared expenses, and up to 20 subaccounts that can really up your budgeting game or help you save for the future.
But Monzo falls short in some important ways. It doesn’t pay interest on balances, has no rewards program, and can’t accept cash or paper check deposits. If those tradeoffs are acceptable, then it could be right for you. Otherwise, there are plenty of other mobile finance apps out there.
The Verdict
Our rating
Minimum balance/deposit: $0
Monthly fee: $0
Rewards: None
Yield: None
Banking services provider: Evolve Bank & Trust, member FDIC
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
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