It’s certainly easy to do so.
Banks are famous for paying you 0% on your money, charging you $25 a month just to keep an account, and inventing a new fee or two every time you turn around.
But things are actually looking up in the banking world.
Money magazine recently rated the best banks for consumers, and believe it or not, you might just find some better places to stash your cash in 2014.
No surprise – online banks are the standout banking stars.
If you are looking for deals, you are more likely to find them at an online bank.
85% of online banks surveyed offer maintenance-free checking accounts, versus only 13% of brick-and-mortar banks.
One of the questions clients ask us all the time is where to keep their emergency cash, and we consistently recommend online banks. Ally Bank took top prize in Money’s poll, with Barclays and GE Capital also ranking at the top.
Why? They offer you the best rates on savings and CD options, plus frequently throw in free checking.
If the phrase “online bank” makes you nervous, keep in mind that these cyber financial institutions benefit from generous FDIC protection just like their brick-and-mortar cousins. Plus, it’s easy and free to transfer money back and forth between your online bank and your local checking account with the click of a mouse (or mobile app!).
Savings Tip: Most people should use online banks as a complement to their brick-and-mortar checking account, rather than as a replacement. Use your local bank for basic banking and bill paying, but keep your higher balances and emergency cash reserves (your “just in case” money) at the online bank to earn more.
Big banks don’t mean big savings
Money magazine says big banks are still “the worst of the worst” in terms of offering good deals on accounts and suggests turning to midsize banks – those with fewer than 1,000 branches – for better terms and offers.
Credit card company and relative banking newcomer Capital One topped the list for best midsize bank, and also placed first for best business checking for established businesses.
PNC bank gained top honors for best business banking for startups, offering one of the few free business checking accounts out there. (According to Money, only 15% of banks surveyed waived maintenance fees on business accounts).