- Ally Bank, which is online only, was rated the best bank for millennials by Kiplinger.
- It carries no monthly maintenance fees, requires no minimum balances, and offers competitive APYs.
- Discover Bank, also an online bank, was runner-up.
The appeal of online banking to millennials is growing; it’s convenient and practical for the generation who always has a smartphone in hand.
“Virtual banks with low fees and high rewards will suit budget-conscious millennials who are comfortable banking without access to a branch,” wrote Miriam Cross of Kiplinger.
Ally – which Kiplinger also named the best Internet bank – carries no monthly maintenance fees and requires no minimum balances. Its interest-bearing checking account has a competitive 0.1% APY (annual percentage rate) for balances below $US15,000 and a 0.6% APY for higher balances.
There are no Ally brick-and-mortars, but that’s not a problem. Users can withdraw from their account for free from 43,000 in-network ATMS around the US, and Ally reimburses up to $US10 in ATM fees per statement cycle if you withdraw from an out-of-network ATM. You can also link your Ally account to five digital payment apps, including Apple Pay and Google Pay. The only thing you can’t do is deposit cash.
And the perks are even better for saving and investing. According to its website, Ally offers a 1.75% APY for high-yield savings accounts. For a money market account, it offers a 0.9% APY, which increases to 1% APY once you hit a $US25,000 minimum daily balance. And for a CD account, Ally offers competitive APYs for various terms and balances, topping out at 2.3% for an account with at least $US25,000.
If your accounts are linked, you can overdraft without being penalised, unless the account you’re overdrafting from carries a balance less than $US100. You can make up to six savings account transfers without being charged a fee, and there’s no limit to depositing checks, which you can do remotely using the bank’s smartphone app.
Ally Bank also offers a cash back credit card with higher returns on purchases at gas stations and grocery stores.
Discover Bank, another online bank, took the honour of runner-up in the ranking of best banks for millennials. It also offers checking, savings, and money market accounts. However, the savings account offers a lower APY of 1.65% and its money market account requires a $US2,500 minimum to open, offering a 1.5% APY on sums below $US100,000. On the plus side, with Discover, you can make a withdrawal from any ATM in the world.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.