The convenience factor and minimum fees connected with online banking have caused many people to abandon traditional banks for online ones. Selecting the right digital bank is one of the most crucial decisions when opening an account with an online bank. Some of the most well-known online banks today are Ally Bank, Chime, and Discover Bank; each has unique features and benefits. This article will give a detailed look at these three banks to help you decide which best serves your money needs.
A Quick Overview
Ally Bank: Ally Bank was founded in 2009 and is considered one of the well-known names in online banking. This bank offers several financial products in its portfolio, such as high-yield savings accounts, interest-earning checking accounts, certificates of deposit, and loans. Ally is known for reasonable interest rates, no fees, and decent customer support.
Chime: Chime is a comparatively new online banking institution founded in 2013. Its principle mainly focuses on mobile customers. Its main products and services are no-fee checking accounts, high-yield savings accounts, early direct deposit, and automated savings tools—Chime partners with Bancorp Bank and Stride Bank for its banking services.
Discover Bank: While most people know Discover for its credit cards, its online banking service, Discover Bank, is not devoid of desirable attributes either. It offers high-yield savings accounts, money market accounts, checking accounts, CDs, and retirement accounts. Like Ally, Discover Bank is well-regarded for its excellent interest rates and impressive customer service.
Bank Account Options and Features
Ally Bank:
- Savings Account: Ally’s Online Savings Account always has one of the highest interest rates. There are no monthly fees; additional features like “buckets” help you manage and reach savings goals.
- Checking Account: Ally Interest Checking Account lets you earn interest on your money and provides free access to more than 43,000 Allpoint ATMs. It also reimburses other ATM fees up to $10 each month.
- Certificates of Deposit: Ally offers different types of CDs, including High-Yield CDs, Raise-Your-Rate CDs, and No-Penalty CDs. Each has terms and rates.
- Money Market Account: This account offers competitive interest rates, great check-writing privileges, and a debit card for greater flexibility with your money.
Chime:
- Checking Account: The checking account with Chime has no fees and no required minimum balance. You will be mailed a Visa debit card, and you can receive direct deposits up to two days earlier.
- Savings Account: The Chime High-Yield Savings Account has a decent interest rate and two unique features: “Save When You Get Paid” automatically transfers part of your direct deposits to savings, and “Save When You Spend” rounds up your purchases to the nearest dollar and then moves that extra money into savings.
- Credit Builder Card: A unique secured credit card designed to help users build credit without fees or interest charges. No credit check is required to apply.
Discover Bank:
- Savings Account: The Online Savings Account by Discover boasts a moderate interest rate and does not charge any fees or minimum balances, making it easy to save.
- Checking Account: One of the very few, Discover’s Cashback Debit account pays 1% cashback on up to $3,000 in debit card purchases monthly with no monthly or overdraft fees.
- Certificates of Deposit: Discover offers a variety of CD terms from 3 months to 10 years, with no maintenance fees charged on any, though there are penalties for early withdrawal.
- Money Market Account: This is the same as the savings account but offers check-writing privileges and a debit card. It has a minimal requirement to open, with no monthly fee.
Fees and Charges
People prefer to avoid paying fees, a primary area where online banks usually excel. Here’s how these three compare:
- Ally Bank: Ally boasts of being big on no fees for most services. It never charges monthly maintenance fees, either for checking or savings accounts. It even offers reimbursement of up to $10 per statement cycle for out-of-network ATM fees. Additionally, it offers an overdraft protection transfer service that keeps dreaded overdraft fees away.
- Chime: Chime advertises that it is fee-free, and they mean it. No monthly, minimum balance, overdraft, or international transaction fees exist. They charge a fee if you use an ATM outside their network, but that is everywhere.
- Discover Bank: Discover brags about having no fees. No monthly fees are charged on savings, checking, and money market accounts; no fees for insufficient funds, stop payments, or incoming wire transfers. There are fees for outgoing wire transfers and a few less common services, but generally, they have very friendly fees.
Interest Rates and APYs
Annual percentage yields are essential to grow your savings, interest rates, or APYs. Here is a simple overview of what you can expect:
- Ally Bank: Ally’s Online Savings Account pays an excellent interest rate, often better than many brick-and-mortar banks. They also pay reasonable rates on their CDs and money market accounts.
- Chime: Chime’s High-Yield Savings Account is another good option to consider regarding APY, which might be a little higher than one would find in an average brick-and-mortar bank but a little lower compared with Ally or Discover.
- Discover Bank: Discover has excellent rates on its savings accounts and CDs. Often, it matches or beats the Ally rates. Its Cashback Debit account offers a 1% cashback on debit purchases. If you use your debit card frequently, this adds up.
Customer Experience
- Ally Bank: Ally has a good reputation for customer service, offering 24/7 phone and live chat support. Its mobile application is highly rated in ease of use and functionality, and it includes mobile check deposits, money transfers, bill payments, and budgeting tools.
- Chime: Chime focuses on the mobile experience. Its intuitive and user-friendly application provides real-time transaction notifications, automatic savings options, and easy transfers. Customer support is also available through the app, email, and phone chat. An active online community is also maintained for extra support.
- Discover Bank: Discover also excels at customer service with its 24×7 phone support system and excellent online banking services. Its mobile app is highly rated and features mobile check deposit, the ability to manage your accounts, and spending alerts for better tracking of your money.
Unique Features and Benefits: What Is So Special About Each Bank?
Ally Bank:
- Buckets and Boosters: Ally savings tools let you set crystal clear goals (buckets) and use means like regular transfers and round-ups to help you achieve those goals faster.
- A One-Stop Shop for All Your Financial Needs: In addition to traditional banking services, Ally offers investment services and loans.
Chime:
- Early Direct Deposit: One of Chime’s most critical features is offering your paycheck up to two days early with direct deposit.
- Automatic Savings Tools: Chime’s round-up feature and automatic savings transfers make it easy to save money without thinking about it.
- Credit Builder Card: The perfect tool for anyone looking to build or fix their credit at low costs regarding exorbitant fees or interest charges.
Discover Bank:
- Cashback Debit Card: The Cashback Debit account has 1% cashback on debit card purchases, which is unusual for a checking account.
- Many financial products: Discover offers a wide range of financial products beyond banking. These include credit cards, loans, and retirement accounts, which make it versatile.
Security and Reliability
All three banks are covered by FDIC insurance, so your money is covered up to $250,000 per depositor per bank. Each boasts excellent security features such as two-factor authentication, biometric logins (fingerprint and face recognition), and account alerts that will help protect your money from fraudsters.
- Ally Bank: Known for its high security, such as continuous fraud monitoring and multi-factor authentication.
- Chime: Provides real-time transaction alerts and a dedicated team for security and fraud prevention.
- Discover Bank offers multilayers of security, 24/7 fraud monitoring, and a $0 liability guarantee if there is ever an unauthorized transaction.
Which Bank is Right For You?
Which bank is best for you depends on what matters most to you in a banking relationship:
- Ally Bank can be best described as a great online bank with a full suite of services, reasonable interest rates, and solid customer support.
- Choose Chime if you want a no-fuss, fee-free banking experience with a robust mobile platform, early direct deposits, and automated savings tools.
- Discover Bank would be the choice if you want a solid bank with good customer service, a unique cashback debit card, and respectable savings and CD rates. You’ll find it easy to do all your banking in one place.
Now, consider what matters most to you, whether saving money, eliminating banking fees, or earning cashback rewards, and choose the bank that best suits your financial habits. Happy banking!
