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Digital-only banks: Your 10 options to earn more bang for your buck(s)

“I haven't been inside a bank branch in years.”

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Finance startups have made it possible for people to open bank accounts without ever leaving home while offering extensive apps and higher interest rates.

“Digital-only banks usually have a robust mobile app and higher interest rates on deposit products,” Jim Wang, founder of Wallet Hacks, tells Inverse. “They're designed so that you never have to go into a branch, since they have none, so their apps tend to do everything you could possibly need. My main bank is the online-only Ally Bank, which has no minimum balance, no fees, and its app is easy to use. I haven't been inside a bank branch in years.”

The first online-only bank opened in 1999 with the launch of the aptly named First Internet Bank. Now, consumers who want a digital-only banking experience have many options to choose from, including the likes of Goldman Sachs and American Express.

If you’re considering opening a digital-only bank account, there are some pros and cons to consider.

Pro: higher interest rates

Digital-only banks rates are “typically much higher” than brick-and-mortar competitors, Wang says. “In a low-rate environment, such as the one we're in now, the difference is much lower, but it's not uncommon for a brick-and-mortar to offer 0.01% APY, while an online bank is closer to 1%.”

Pro: low or no fees

“The fees are also much lower,” Wang says. “Many online banks don't have a minimum balance requirement or a monthly fee.”

Con: lack of in-person help

“You lose the ability to walk into a branch and talk to someone, but you can always call them on your phone or use live chat,” Wang says. “You also aren't able to get a medallion signature guarantee, which is not something most people will need often, since there isn't a branch to visit.”

Con: depositing cash can be a hassle

“You can't deposit cash,” Wang says. “If you have cash and need to get it into an account, you'll have to find another way to deposit it.”

To be sure, almost every bank now offers online services, so if being able to visit a physical location is important to you, it may be best to stick with a traditional bank. But if you are able to sacrifice this aspect of banking, you’ll find the highest interest rates to earn more bang for your buck(s).

Here are the 10 checking accounts with the highest APY (annual percentage yield), according to DepositAccounts by LendingTree (as of Dec. 8).

Nationwide by Axos Bank

  • Account name: Advantage Checking
  • APY: 0.90%
  • Minimum to Open: $50
  • Required Number of Monthly Debits: 10
  • Fees: $25 for insufficient funds, $5 for paper statements

Paramount Bank

  • Account name: High-Interest Checking
  • APY: 0.85%
  • Minimum to Open: $100
  • Fees: None

Simple

  • Account name: Checking Account + Protected Goals
  • APY: 0.60%
  • Minimum to Open: $0
  • Fees: None

My eBanc

  • Account name: Advantage Checking Account
  • APY: 0.50%
  • Minimum to Open: $5,000
  • Fees: $15 for below minimum balance of around $5,000

Digital Federal Credit Union

Account name: Free Checking with Earn More

  • APY: 0.50%
  • Minimum to Open: $0
  • Required Number of Monthly Debits: 5
  • Fees: $15 for insufficient funds, $15 for overdraft, $10 for debit card replacement

Langley Federal Credit Union (physical locations available in Virginia)

  • Account name: Platinum Checking
  • APY: 0.50%
  • Minimum to Open: $10,000
  • Fees: $10 if below minimum balance, $30 for overdraft

NASA Federal Credit Union

  • Account name: Premier Preferred Checking
  • APY: 0.40%
  • Minimum to Open: $0
  • Minimum to Avoid Service Fee: $2,500
  • Fees: $32 for insufficient funds, $32 for overdraft

PenFed Credit Union (physical locations in D.C. area)

  • Account name: Access America Checking
  • APY: 0.40% (minimum of $20,000 balance needed)
  • Minimum to Open: $25
  • Minimum to Avoid Service Fee: $500
  • Fees: $30 for insufficient funds

TIAA Bank (physical locations in Florida)

  • Account name: Yield Pledge Checking
  • APY: 0.40% (first year only, 0.12% after)
  • Minimum to Open: $100
  • Fees: $30 for insufficient funds, $30 for overdraft

Georgia Banking Company

  • Account name: Gold Checking
  • APY: 0.35%
  • Minimum to Open: $1,000
  • Minimum to Avoid Service Fee: $500 and Direct Deposit
  • Fees: $30 for insufficient funds, $30 for overdraft
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