The Manchester-based business has beaten off competition from the 13 largest high-street banks in the UK Retail Banking Customer Satisfaction Study.
The survey measures customer satisfaction based on six factors that drive overall satisfaction.
These are: transactions, account opening and product offerings, fees, account statement, problem resolution, and convenience.
The study has found that overall satisfaction amongst retail banking customers has increased to 667 points on a 1,000-point scale in 2008-up 16 points compared with 2007.
But the Co-operative Bank ranks highest in customer satisfaction with a score of 746, followed by Nationwide (706) and RBS (703).
Dick Parkhouse, the Co-operative's financial services managing director in retail, said: "I am delighted to see the continued recognition the Co-operative Bank and smile the internet bank receives and it is especially pleasing to also see these high levels customer satisfaction scores we achieve year on year.
"We believe that being part of a mutual organisation provides a real point of difference and combined with our ethical approach to banking provides consumers with a powerful alternative to the `big four'.
"Our customers are always safe in the knowledge that they will receive competitive products with high levels of service underpinned with an ethical difference."
It was the second year that the survey had been carried out by JD Power and Associates.
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