Banking

The best banks and credit unions in California for 2021

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

 

Here are the savings rates you’ll earn with the biggest banks in California. Two of these, Chase and Citibank, made our list.

We didn’t choose others because they didn’t have branches in as many parts of California as some of our top picks, or they lacked distinguishing features, such as high APYs or sign-up bonuses.

However, you may still decide one of these California banks is a good fit for you, and you might like banking with a widespread institution you’re familiar with.

*As of April 2021, the national average APY on savings accounts is 0.06% according to the FDIC.

Below you’ll find our top picks for the

best banks
and

credit unions
in California. Each of these is federally insured and offers a variety of products, including bank accounts, investment accounts, and loans.

Our expert panel for this guide

We consulted banking and financial planning experts to inform these picks and provide their advice on finding the best banks and credit unions for your needs. You can read their insights at the bottom of this post.

PFI Banking Expert Panel



Insider


We’re focusing on what will make a bank most useful, including customer service, fees, rates, and more.

Annual Percentage Yield (APY)

0.50% APY

  • Pros & Cons
  • Details

  • Pros
    • High APY
    • No minimum opening deposit
    • No monthly service fees
    • Savings buckets help you save for different goals
    • Surprise savings transfers help you save extra money from your checking account
    Cons
    • No physical branch locations
    • No way to deposit cash
    • Create separate savings buckets in a savings account
    • Link to your Ally checking account and enroll in surprise savings transfers to have extra money transferred to savings three times per week
    • Interest compounded daily, paid monthly
    • FDIC insured


    Read Our Review
    Read Our ReviewA looong arrow, pointing right

    Why it stands out: Ally pays 0.50% APY, which is one of the highest rates out there right now. The bank also doesn’t charge any monthly maintenance fees.

    The Ally High Yield Savings Account has been a power player in the high-yield savings space for a few years now, and it consistently nabs top awards for online banking. Although it’s an online bank, you can use over 40,000 Allpoint ATMs for free around the US. 

    Ally makes it easy to save for specific goals. You may decide to open a separate account for each goal, but Ally has a bucket feature that allows you save for multiple goals in one account.. Assign each one a nickname, like “Emergency Fund” or “Travel Account” to track your progress and stay motivated. 

    What to look out for: While Ally is extremely competitive, other banks offer similar online

    high-yield savings accounts
    . Ally is certainly one of the best out there, but depending on your needs and your existing banking, you may find you prefer a different bank, such as Capital One 360, Varo, or Discover.

    See Insider’s picks for the best high-yield savings accounts »

    See Insider’s picks for the best online banks »

    Annual Percentage Yield (APY)

    None

    Featured Reward

    $100 bonus offer when you receive 2 recurring direct deposits of $250 within first 90 days

  • Pros & Cons
  • Details

  • Pros
    • No overdraft fees
    • 4,600 branch locations and 16,000 ATMs
    Cons
    • $25 opening deposit
    • $4.95 monthly fee
    • $2.50 out-of-network ATM fee
    • Doesn’t reimburse out-of-network ATM fees charged by providers
    • No paper checks
    • No interest earned
    • Access to 4,600 branch locations and 16,000 ATMs
    • $100 bonus offer when you receive 2 recurring direct deposits of $250 within first 90 days
    • Waive $4.95 monthly fee as a student under age 24, OR as a Preferred Rewards client

    Why it stands out: Bank of America is the third-largest bank in California by branch locations. You can receive a $100 sign-up bonus for opening a checking account with Bank of America. The bank also doesn’t charge any overdraft fees. 

    What to look out for: On the downside, the bank charges an out-of-network ATM fee and you won’t earn interest on the money you deposit.

    Best bank for opening a checking and savings account: Citibank

    Annual Percentage Yield (APY)

    0% – 0.01% APY

    Featured Reward

    $300 when you deposit $15,000 in the first 30 days and maintain balance for 60 days

  • Pros & Cons
  • Details

  • Pros
    • Earn interest when you link to a savings account
    • No opening deposit
    Cons
    • $25 monthly service fee
    • $2.50 out-of-network ATM fee
    • BBB gives Citi an F in trustworthiness
    • 700 US branches, 1,800 branches overseas, and 65,000 ATMs
    • Earn $300 bonus when you deposit $15,000 in the first 30 days and maintain balance for 60 days
    • Waive $25 monthly fee when you maintain a total of $10,000 average monthly balance in all Citi accounts


    Read Our Review
    Read Our ReviewA looong arrow, pointing right

    Why it stands out: Citibank is the sixth-largest bank in California by branch locations. The bank pays large sign-up bonuses if you open certain checking and savings accounts together and meet deposit requirements.

    Citibank divides its accounts into separate “packages.” If you open a checking and savings account in the Citibank Account Package and meet the deposit requirements, you’ll receive a $300 bonus. You’ll get a $700 sign-up bonus with the Citibank Priority Package.

    What to look out for: The package system can be confusing. Citibank has six bank account packages, which can become overwhelming. Each package offers various benefits and charges different fees. You may decide to open accounts in the package that pays the highest bonus you qualify for, but make sure you won’t get stuck with high fees before you sign up.

    See Insider’s complete review of Citibank »

    Annual Percentage Yield (APY)

    0.05% APY

  • Pros & Cons
  • Details

  • Pros
    • $1 opening deposit
    • No monthly service fee
    Cons
    • Mediocre APY
    • Compounds interest monthly, not daily
    • $3 excess withdrawal fee
    • Any California resident or employee can become a Golden 1 Credit Union member
    • Earn a higher APY with a balance of $10,000 or more
    • Interest compounded monthly, paid monthly
    • Federally insured by the NCUA

    Why it stands out: Maybe you prefer a credit union over a bank. Each option comes with trade-offs — credit unions often have higher APYs and better customer service, while brick-and-mortar banks may have more locations and adapt to new technology faster.

    If you’re looking for a credit union in California, then Golden 1 is a good choice. It’s easier to join than some of the other major credit unions in the state, like SchoolsFirst. There are also more locations around California than other prominent credit unions, such as First Technology Federal Credit Union.

    To join Golden 1, you just have to either live or work in California, and you can open a Golden 1 savings account with $1.

    There are more than 70 branch locations around California, and around 240 Golden 1 ATMs. You also have free access to 30,000 CO-OP ATMs nationwide, which is convenient if you travel out of state.

    Golden 1 pays lower rates on some accounts than

    online banks
    , but higher than many brick-and-mortar banks.

    What to look out for: Compounded interest. Like many credit unions, Golden 1 compounds your interest monthly rather than daily, which affects how much you’ll earn in the long run. If your biggest priority is earning a good rate, then you may want to use a bank rather than a credit union, or search for a credit union that compounds daily.

    Are these banks and credit unions trustworthy?

    The Better Business Bureau grades companies’ trustworthiness based on responses to customer complaints, advertising, and transparency about business practices. Here are the BBB scores for our favorite banks and credit unions in California:

    Golden 1 has a great BBB grade. Ally has a C, mainly because of the high number of customer complaints on the BBB website. Citibank has an F due to lack of response to customer complaints and government action against the bank.

    In the last few years, Citi has dealt with the following public scandals:

    If any of these issues worry you, you may decide you’d rather bank with Ally or Golden 1.

    Why trust our recommendations?

    Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don’t have to.

    How did we choose the best banks in California?

    We looked at the banks and credit unions with the most branches in the state. Then we zeroed in on those that offered appealing features, like sign-up bonuses or high interest rates. None of the biggest banks in California paid high rates on savings accounts, so we chose an online bank, Ally, as our top choice for a savings account.

    For the best credit union, we chose one that is easy for California residents to join and has branches in multiple parts of the state.

    What is the No. 1 bank in America?

    It depends on what you’re looking for. Wells Fargo has the most branches in the US, followed closely by Chase and Bank of America. If you’re looking for high savings rates and low fees, then you’ll probably want to go with an online bank. (See our picks for the best online banks here.)

    What’s the safest bank to put your money in?

    As long as an institution has federal insurance, then your money should be safe. Banks need to be insured by the Federal Deposit Insurance Corporation (FDIC), and credit unions need to be insured by the National Credit Union Administration (NCUA).

    An individual account is insured for up to $250,000, and a joint account is insured for up to $500,000. This means you won’t lose all your money should the bank go under.

    To learn more about what makes a good bank or credit union and how to choose the best fit, four experts weighed in:

    Here’s what they had to say about finding a bank. (Some text may be lightly edited for clarity.)

    How can someone determine whether a bank is the right fit for them?

    Mykail James, CFEI:

    “The No. 1 thing about a checking account is you should know what provider the debit card is coming from. And a lot of people don’t think about that, because there are places that don’t accept MasterCard or don’t accept an Amex.”

    Laura Grace Tarpley, Personal Finance Insider:

    “I would look for the bank that charges you the least in fees. This means either no monthly fees, or you qualify to waive the monthly fees. If you never overdraw from your account, then a bank’s overdraft fees won’t matter much to you. But if you occasionally overdraw, then I’d look at the fees or overdraft protection options.”

    What should someone look for in a brick-and-mortar bank?

    Tania Brown, CFP:

    “How can that bank grow with you? If you are 25, single or newly married, and all you need is a checking account, that’s going to look very different 15 years from now when you may have had a couple of jobs, you may have an IRA roll over, or you may want a financial adviser.”

    Mykail James, CFEI:

    “How accessible it is. So where are the branches? And if I am to go out of town or something, how accessible is my money to me?”

    What should someone look for in an online bank?

    Tania Brown, CFP:

    “With an online bank, absolutely online customer service, because you do not have the advantage of walking inside and talking to a human being. How often are you able to get them? What are their hours?”

    Roger Ma, CFP:

    “How onerous the transfer process is, transferring money in and transferring money out. Is it same day, next day? Is it pretty easy to sync a brick-and-mortar checking account to this particular high-yield savings account?”

    Mykail James, CFEI:

    “When it comes to online banks, you want to be a little bit more strict about what type of interest rates they’re providing. That’s the biggest thing, because online banks are supposed to have the higher interest rate because they don’t have the overhead of the brick-and-mortar. You want to make sure that it’s well above the national average. What type of securities do they provide? Do they have two-factor identification? If it’s an online bank, they should definitely have — at the bare minimum — two-factor authentication in how easy it is to change your passwords and things like that, because you want to be a little more hypersensitive about the cyber security for a strictly online bank.”

    Laura Grace Tarpley is an editor at Personal Finance Insider, covering mortgages, refinancing, bank accounts, and bank reviews. She is also a Certified Educator in Personal Finance (CEPF). Over her four years of covering personal finance, she has written extensively about ways to save, invest, and navigate loans.

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