America's Best Banks 2021

America's Best Banks 2021

America's Best Banks 2021


Introducing Newsweek's first ranking of the financial institutions that best serve their customers' needs in today's challenging times

Like virtually every other aspect of our lives—work, school, shopping, dating, entertainment, you name it—the pandemic is changing the way Americans bank. And those changes, in turn, are creating a new set of challenges and opportunities when it comes to picking the financial institution that best suits our banking needs.

For one thing, we have a newfound need and affection for savings accounts, evidenced by a more-than-doubling of the personal savings rate over the past several months, as the idea of building a solid emergency fund morphed from being an aspiration to an economic imperative. "The savings growth has been record-breaking," says Ken Tumin, founder of the bank comparison site DepositAccounts.com. But it's tougher than ever to find a suitable account to house those savings—one that doesn't actually cost you money after factoring in fees, given that the average savings rate is now near zero due to the Federal Reserve's efforts to to stimulate the economy via low interest rates.

Meanwhile, lockdown mode is pushing many of us to finally embrace online banking in a major way. Traffic at local banks is down substantially compared to last year, with about half of customers who previously relied on physical branches and ATMs saying they've increased their use of mobile apps and 35 percent making more use of their bank's website, according to a recent survey by Kearney, a management consulting group. Experts believe the shift is likely to stick. "Once you get used to the technology and how easy and convenient it is to bank this way, it's hard to go back," says Tumin.

Customer service is also becoming a more important consideration, as complaints about financial services providers have surged during the pandemic, up 50 percent from March through July compared with the same time period in 2019, according to the consumer advocacy group U.S. PIRG. "The record level of consumer complaints is a blaring red light signaling the huge challenges consumers are facing during the COVID-19 pandemic," says Gideon Weissman of Frontier Group, who co-authored the organization's report.

To help you navigate this new financial landscape and find the institution that best serves your needs, Newsweek has partnered with LendingTree, the online loan marketplace and comparison site for financial services, for our first-ever Best Banks rankings. From a universe of more than 2,500 FDIC-insured institutions, we assessed U.S. banks and the savings and checking accounts they offer based on 55 separate factors to come up with a best-in-class option in 19 categories—including the best big and small bank in every state, because banking in many ways remains a local endeavor. One or more of these winning banks may be the perfect choice for your family.

Diane Harris, Deputy Editor in Chief.

AwardDescriptionStateWinnerBranchesMore Info
Best Big BankWith interest rates near zero and the pandemic pushing people to do more of their banking online, a great bank needs to deliver competitive rates, low or easily-waived fees and a superior mobile app. The best-in-class also has to offer good customer service, the option to visit a local branch and a variety of financial products, including loans. The winner here delivers on all counts.N/ACitibank700Fee-free ATMS: 65,000+ / Recent top savings rate: 0.9% / Timely response to complaints: 100% / Mobile app score 4.78 of 5
Best Small Bank (tie)A hometown bank that offers the personalized feel of local branch service while delivering competitive rates and mobile banking performance on par with larger national banks can be a great choice for many customers. Add in low fees and a variety of financial products, including loans, and you have a small-bank winner.N/AFirst Guaranty Bank27Region: Louisiana / Mobile app score: 4.75 of 5
Best Small Bank (tie)A hometown bank that offers the personalized feel of local branch service while delivering competitive rates and mobile banking performance on par with larger national banks can be a great choice for many customers. Add in low fees and a variety of financial products, including loans, and you have a small-bank winner.N/A1st Constitution Bank27Region: New Jersey / Mobile app score: 4.61 of 5
Best Online BankWith lower overhead than brick-and-mortar institutions, banks that operate primarily online typically offer higher interest rates on checking and savings accounts, plus lower fees. Lately the rate advantage has shrunk, making low fees even more important, along with great customer service and a killer mobile app.N/ADiscover1Recent rate on checking: 1% on up to $3,000 in debit card purchases each month / Mobile app score: 4.79 of 5
Best Regional BankThe winner took the top spot in more big-bank state rankings than any other financial institution in the database, dominating in the Midwest and Western regions.N/AU.S. Bank2,728Number of state wins: 16 / Mobile app score: 4.75 of 5
Best Customer ServiceComplaints about banks have risen sharply during the pandemic—precisely when customers need good service the most. Banks with the fewest problems reported to the Consumer Financial Protection Bureau, a timely response rate, a helpful mobile app and a variety of dedicated customer service lines rose to the top of our list.N/ACommerce Bank171Complaints with timely response: 100% / Mobile app score: 4.7 of 5
Best Online Checking AccountA big advantage of many online checking accounts: no monthly maintenance fees or charges for using out-of-network ATMs. That was a minimum requirement for our winner, along with a well-regarded mobile app and a high interest rate—but you will have to meet direct deposit and debit-card purchase requirements to earn that top yield.N/AFirst Security Bank & Trust13Kasasa Cash / Recent interest rate: 2.01% on balances up to $50,000 / Mobile app score: 4.72 of 5
Best Online Savings AccountThe pandemic has sparked a big jump in the personal savings rate and online savings accounts—which offer higher-than-average interest rates, accessibility and safety—are a good choice for emergency funds. To identify a winner, Newsweek prioritized a combination of consistently high rates, low fees and an outstanding digital customer experienceN/AVaro Bank1Varo Savings Account / Recent interest rate: 2.80% up to $10,000, then 0.81% / Minimum to open account: $0
Best Checking AccountBrick-and-mortar banks typically pay zero or next-to-nothing on checking accounts; since they’re most often used for everyday cash and bill-paying, that may not matter much—as long as you’re not actually losing money due to high fees. That’s why low fees (service, ATM, overdraft) were the top consideration in this category for banks with more than 100 branches.N/ACentennial Bank169Freedom Checking / Monthly maintenance fee: $5, waived with e-statements / ATM fees: reimbursements offered
Best Savings AccountJust over half of bank customers prefer using branch services some of the time to a digital-only experience, J.D. Power reports—but you’ll sacrifice some yield to get this. To rise to the top in this category, a bank needed to have at least 100 branches, consistently above-average savings rates and low fees.N/AHSBC174High-Yield Savings Account / Recent interest rate: 0.5% / Monthly maintenance fee: $0
Best Savings Account for KidsYoung customers shouldn’t be penalized for having only modest sums to deposit. They’re kids, after all. For this category, only special accounts for those under 18 were considered; priority factors included a low minimum to open the account, no or low fees and a decent interest rate to keep young savers motivated.N/ACapital One433Kids Savings Account / Recent savings rate: 0.5% / Minimum to open: $0 / Monthly fee: $0
Best Checking Account for College StudentsCollege students need features that suit their age and lifestyle: no or low ATM charges because they may use out-of-network machines; low fees if they trip up and overdraw the account; low minimums to open an account and to avoid monthly charges. A decent rate and good mobile app also help.N/AAxos Bank3Essential Checking / ATM fees: unlimited reimbursement / Minimum to open: $0 / Monthly fee: $0
Best Traditional Checking AccountSome bank customers prefer to go old school for checking; they want branch access, physical checks and paper statements and don’t want to be forced to bank or pay bills online to receive top rates and avoid fees. The winner offers all that, plus free checks and ATM reimbursements, if you’re over age 50.N/ACentennial Bank169Diamond Checking / Minimum to open account: $100 / Monthly service charge: $0
Best Small Business Checking AccountBusiness owners need a good blend of solid interest rates and low fees to avoid eating into their profits, especially since many small business owners may not have a lot of cash on hand at the moment thanks to the pandemic. The winner offers no monthly fee, unlimited transactions, and $10 in ATM fee reimbursements each month.N/AFirst Internet Bank1Small Business Checking / Recent interest rate: 0.5% / Minimum to earn interest: $10,000
Best Free Checking AccountFee avoidance was the top consideration for this category. Only banks that do not charge a monthly maintenance or service fee were considered; other fees made up 40 percent of the score. A low minimum to open the account was another key factor, along with a competitive yield.N/ABay State Savings Bank7Free Kasasa Cash / Recent interest rate: 2.01%, up to $20,000 / ATM fees: unlimited reimbursement
Best High Yield Checking AccountWhen the category is all about high rates, a winner has to deliver a stellar payout; interest-rate factors made up two-thirds of the total score for these accounts and only those offering rates above 1 percent were considered. Fees for things like ATMs and overdrafts were also weighed.N/AFirst Security Bank & Trust13Kasasa Cash / Recent interest rate: 2.01% up to $50,000 / Monthly service fees: $0
Best Certificates of Deposit (Six-Month CD)These timed savings accounts offer higher interest rates for leaving your money untouched for a set period, so how much you earn was the most important consideration. Factors such as penalties for withdrawing your money before the end of the term and the minimum amount needed to open the account were also weighed.N/ALive Oak Bank1Recent rate: 0.60% / 12-month average rate: 1.52%
Best Certificates of Deposit (12-Month CD)These timed savings accounts offer higher interest rates for leaving your money untouched for a set period, so how much you earn was the most important consideration. Factors such as penalties for withdrawing your money before the end of the term and the minimum amount needed to open the account were also weighed.N/APrimary Bank3Recent rate: 0.95% / 12-month average rate: 1.52%

Methodology

To identify America's Best Banks, LendingTree in consultation with Newsweek culled candidates from an initial universe of more than 2,500 FDIC-insured financial institutions (credit unions were excluded from consideration). LendingTree then applied a series of filters to create a short list of eligible candidates in each category, based on the most salient features for each bank type or account; LendingTree supplied the data and made recommendations for a proprietary scoring system developed by Newsweek, based on the factors that would be most important to consumers for that type of bank or account. Data sources for the project included DepositAccounts.com, information published by each bank, quarterly call reports filed with the FDIC, Consumer Financial Protection Bureau complaints and mobile app reviews. All together, 55 separate factors were assessed, covering a wide variety of fees, current and historical interest rates, account terms, consumer service features, mobile app satisfaction and bank profile. Among the specific data collected: the average service charges collected on deposit accounts during the second quarter of 2020; average interest paid on deposit accounts during the second quarter of 2020; the number of complaints submitted to the Consumer Financial Protection Bureau and how quickly the bank responded, the kinds of loan and account products offered; mobile app scores; and, depending on the best bank accolade, branch presence. For best bank state winners, the best big bank in each state needed to have at least one branch per 100,000 residents and at least $10 billion in assets, while the best small bank in each state had less than $10 billion in assets and had to be among the five banks with the most branches in the state. A bank couldn't have more than one branch to be considered for best online bank, with factors like mobile app score carrying greater weight in this ranking. For best customer service, a bank had to have responded to at least 97 percent of complaints filed with the CFPB in a timely fashion to be considered; other features such as languages provided on the bank's website and app as well as banking and credit card service lines were also evaluated. Individual best bank account winners were selected based on different criteria, including: current interest rate; average interest rate over the past year; minimum deposit required to open an account, the monthly service fee changed to maintain the account, fees charged for nonsufficient funds, overdraft, or/and overdraft protection; amount charged to use an out-of-network ATM; amount refunded for out-of-network ATM usage; cost to replace debit card; and the bank's average mobile app score. To be considered for best online savings or online checking accounts, a bank had to have fewer than 100 branches, while banks needed more than 100 branches to win for either the best checking or best savings account award. The weighting given to each factor varied depending on the best bank accolade; Newsweek exercised final editorial judgment when selecting winners. Current interest rate information is accurate as of September 24, 2020 and represents the highest possible rate a customer could earn, if all qualifications are met (common qualifications include having direct deposit tied to the account, having more than one account with the bank or making a certain minimum number of debit-card transactions a month). The complete data set was last updated by LendingTree on September 10, 2020.