Safest Banks in the U.S. to Trust With Your Money | The Motley Fool (2024)

It's easy to have an emotional reaction to bank failures. I've written about finances for decades, and still have a moment of low-level panic when news of a bank failure breaks. Fortunately, it doesn't last long because I know there are safety features in place, designed to protect us if our financial institutions go belly up.

There were a few prominent bank failures in 2023 that shook a lot of people's confidence. Other people worry about how safe their bank might be in case of identity theft. The good news is: despite a few alarming headlines when banks fail, most people's bank accounts (or credit union accounts) are safer than ever before.

If you bank with a federally insured financial institution, your deposits are protected against bank failure up to $250,000. And there are other protections in case you become a victim of identity theft or fraudulent transactions with your bank account.

To determine the safest banks, we looked for large, established institutions with FDIC protection, different types of security features, and 24/7 customer service. Here are our top picks for the safest banks in the United States.

The safest banks in the U.S. for June 2024

Details on the safest banks

Below is a deeper dive on each of our safest banks, along with an account to consider at each bank.

An account we love: SoFi Checking and Savings

Not only does SoFi have standard FDIC backing, but customers can enroll in the SoFi Insured Deposit Program and get access to up to $2 million in FDIC coverage. And did we mention up to 4.60% APY on savings?

An account we love: Capital One 360 Performance Savings

With no fees and no minimum deposit required, the Capital One 360 Performance Savings Account blows our hair back with an APY of 4.25%.

An account we love: American Express® High Yield Savings

Member FDIC, one of the most trusted names in financial services, 24/7 service and support, and a 4.25% annual percentage yield (APY) as of April 25, 2024.

An account we love: Axos Bank Rewards Checking

FDIC insurance plus key security features like two-step authentication, 128-bit SSL encryption, and anti-fraud account monitoring. And this checking account actually pays interest: 0.40% (up to 3.30%) APY.

An account we love: Quontic 1-Year CD

FDIC insurance, 4.50% APY, plus added security features like multi-factor authentication and mobile app TouchID.

An account we love: Western Alliance Bank CD 1-Year CD

FDIC insurance, a well-respected $65 billion bank, and a great 5.05% APY.

An account we love: Chase Total Checking®

The Chase Total Checking® account is a great option for those who place a premium on customer service, easy access to their funds, and a large branch network. As long as you keep enough money here to avoid the maintenance fee, you shouldn't have any problems with this account.

What are standard bank security features?

Before handing your hard-earned cash over to a bank for safekeeping, you want to know that the bank is safe. Although there's not one single quality that marks the safest bank, there are a collection of features that can help you rest easy.

Here are the most common security features you should look for in any bank:

• FDIC protection against loss
• Large, established bank
• Security features like two-factor authentication
• Cards with EMV chips in place
• 24/7 customer service

We'll go into these in more detail below.

What are extra bank security features?

If you're looking for a bank that's especially locked down, you may want to keep an eye out for some more unusual security features. Here are some of the features that are considered "extra":

• Debit card blocking: Allows you to access your account and freeze your debit card before a pickpocket has time to make it down the block.
• Guarantee to return stolen money: This guarantee promises to make you whole if someone messes with your account. It's like having a financial insurance policy in your back pocket.
• Single-use card numbers: Some banks have begun to offer one-time virtual account numbers that allow you to shop online while keeping your actual card number away from the eyes of fraudsters.
• Next-day cash reimbursem*nt: If you're the victim of theft or fraud, next-day cash reimbursem*nt puts money in your account by the next business day.

These extra layers of protection are great to have, but may not be available -- even at a strong bank. For example, a bank may be solid as a rock, FDIC insured, and offer a great APY, but not be available 24 hours a day.

If a bank does not offer a particular feature, ask yourself how directly it will impact the security of your deposits.

Are credit unions safer than banks?

Not necessarily.

You may hear someone say that credit unions are "safer" than banks (or vice versa). The reality is that a financial institution is as safe as its security measures.

Just as a secure bank is FDIC insured, a secure credit union is insured by the government-backed National Credit Union Administration (NCUA). The point is not whether it's a bank or credit union that houses your money. It's how serious that institution is about protecting your funds.

While bank failures are rare, they do happen. According to FDIC data, during 2001-2024, there were a total of 567 bank failures in the U.S. There are laws in place to make banks more secure, but as consumers, we still play a role. Before parking our money anywhere, we need to do our due diligence to make sure the bank in question has enough security in place to help us rest easier at night.

How Federal Deposit Insurance Corporation (FDIC) works

The Federal Deposit Insurance Corporation (FDIC) is an independent federal government agency that protects depositors like you against the loss of deposits due to bank failure. The FDIC is backed by the full faith and credit of the U.S. government.

Deposits in certain account types are insured for up to $250,000 per depositor, per FDIC-insured bank, and per ownership category. For example, if you and spouse each have $175,000 deposited at the same bank, the full $350,000 would be insured because it is split between two depositors.

Keep in mind that just because a bank has FDIC insurance, that doesn't mean your money is protected by FDIC insurance from all possible risks and threats. FDIC insurance only protects your money from bank failure, and only up to $250,000 per depositor, per bank, and per ownership category.

Here are a couple examples of risks and threats not covered by FDIC insurance:

Deposits greater than $250,000 FDIC limit

What if you have more than $250,000 in your bank account, or more than FDIC insurance will cover? These are also called "uninsured deposits." In case you have more money in the bank than the FDIC insures, you might need to open multiple accounts at multiple FDIC-insured banks.

If you're concerned that you might have too much cash in the bank to be protected by the FDIC, use the FDIC's Electronic Deposit Insurance Estimator (EDIE) to see how much deposit insurance you qualify for.

Identity theft and fraud

In case someone steals money from your bank account, commits identity theft against you, or otherwise creates unauthorized transactions with your account, this activity is not protected by FDIC insurance.

However, as a bank customer in the U.S., you have other protections. As long as you report the fraud, missing money, or other unauthorized transactions promptly, the bank or credit union cannot hold you accountable for more than $50 or $500 of unauthorized transactions.

As a bank or credit union account customer, you have a responsibility to keep an eye on your account balance and watch out for any unauthorized activity. If someone has stolen money from you, stolen your identity, or otherwise used your account in a fraudulent way, contact your bank or credit union immediately.

Our bank and credit union methodology

Our methodology for scoring banks and credit unions revolves around evaluating key aspects such as annual percentage yield (APY), brand reputation, fees and minimum requirements, and additional perks.

These criteria are weighted differently across various account types, ensuring a comprehensive assessment that reflects the competitive landscape and economic conditions.

We strictly feature products that offer federal insurance and high customer satisfaction, keeping our recommendations unbiased by advertiser influence. This robust evaluation process helps us generate balanced, reliable best-of lists that guide consumers to top financial products.

Learn more about how The Motley Fool Ascent rates bank accounts.