NerdWallet’s Best Checking Accounts and Debit Cards, Spring 2014

by

Everyone’s talking about checking fees, but we’re totally over it. Contrary to what you may have heard, free checking isn’t a thing of the past. It’s alive and well at Internet banks, community banks and credit unions. In fact, many of these institutions offer better-than-free checking with interest or debit rewards. The only thing better than free checking is free money, right? If you’re new to the world of rewards checking, you’re in the perfect place. Check out NerdWallet’s newest picks for the best checking and debit rewards programs.

Best Online Checking Account: Capital One 360

0.20% APY
Capital+One+360
Capital One 360 is an Internet-only bank, which allows them to offer some of the most competitive rates in the nation. In addition to earning interest, this account has no minimum balance requirement and no monthly maintenance fees. It doesn’t even require a minimum opening deposit, making it perfect for all income levels. The tiered interest rate starts at 0.20% APY, which is more than double that national average APY for savings accounts! Not bad. And, although we don’t recommend using it, Capital One 360 has one of the most progressive overdraft programs in the nation. Instead of charging you a flat $35 fee, they’ll open an overdraft line of credit for you with an APR lower than most credit cards.

The downside of a bank with no physical branches is you can’t speak to a customer service representative in person. However, if you’re comfortable speaking with people online or over the phone, we think you’ll find online banking extremely convenient. Capital One 360′s customer service reps are available from 8 a.m. – 8 p.m. ET, seven days a week. Plus, you can use more than 38,000 ATMs in the U.S. for free through the Allpoint® network, and it’s pretty easy to deposit money via mail, electronic transfer, your mobile phone, or even your home scanner.

Best Debit Card & Checking Alternative: American Express Bluebird

Although NerdWallet doesn’t make a habit of encouraging prepaid debit card use, we are willing to budge a bit with Bluebird by American Express, which bills itself as an alternative to a traditional checking account. Bluebird brings a whole lot of features to the table that make it very similar in function to a regular bank or credit union checking account. For example, customers will get FDIC insurance, check-writing, access to mobile banking and fee-free use of MoneyPass network ATMs (over 22,000 nationwide).

There are also very few fees to worry about, since American Express charges no monthly service fees, activation fees or even overdraft fees! Pretty much the only exception is a $2 reload fee if you choose to top up online with another debit card. All other forms of adding money to your account, such as direct deposit, transfer from a bank account or in person at a Walmart location are all free. So, if you have already decided that a prepaid card is the better option for you, then look no further than this one.

Best Community Bank Checking Account: Legacy Bank & Trust

Community banks are locally-operated banks that do a majority of their business within their community. Legacy Bank & Trust, a community bank located in Rogersville, MO, has the best community bank checking account, if not the best checking account around. The i-Profit Checking account earns an incredible 4.00% yield on balances up to $10,000 and refunds all ATM fees monthly. That’s right, you can use any ATM nationwide and Legacy will refund the fee. i-Profit Checking is free of monthly fees and balance requirements, and also offers free online and mobile banking services, a free debit card, free fraud monitoring and free e-statements. To qualify for all the excellent perks associated with this account, just do the following:

  • Have a $100 minimum opening balance
  • Have one automatic payment or direct deposit each month
  • Make a minimum of 10 debit card transactions each month
  • Use online banking and receive e-statements

And don’t fret if you can’t meet the qualifications one month: your account remains free and you’ll still earn a 0.05% yield on your balance. Legacy Bank & Trust has branches in Rogersville, Plato, Sparta and Mountain Grove, Missouri.

Best Credit Union Checking Account: Lake Michigan Credit Union

Why join a credit union? Do it for yourself and your community. Credit unions are not-for-profit institutions owned by their members (you!), so you and your neighbors get a share of the profits in the form of reduced rates on loans and higher dividends. How much higher? How about 30 times higher than the national bank average for interest checking? Lake Michigan Credit Union blows away the competition with their Max Checking account. It pays out an incredible 3.00% yield on the first $15,000 of your balance and refunds up to $15 in out-of-network ATM surcharge fees. Like most credit unions, Lake Michigan does not charge monthly maintenance or debit fees.

Is there a catch? Sort of. To earn the high interest rate, you’ll need to use your account pretty frequently. Here’s what you’ll need to do each month:

  • Use direct deposit
  • Log into online banking at least 4 times
  • Make at least 10 debit card purchases
  • Sign up for e-statements and e-notices

Can’t meet all the requirements in any given month? Don’t worry. Your account’s still free; you just won’t earn interest for that particular month. You’ve got nothing to lose and a whole lot to gain by signing up. Lake Michigan Credit Union is open to anyone in the United States willing to donate to their partner charity, the Amyotrophic Lateral Sclerosis Association of Michigan. Visit their website for more details.

We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines, and avoid disclosing personal or sensitive information such as bank account or phone numbers. Any comments posted under NerdWallet's official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise.
  • Richard Berry

    This type of account offers winning combo of top interest rates and convenient services.This account not allow minumum balance requirement. This account is perfect for all income levels.

  • Johncito

    With the closing of Perkstreet, are there any online checking accounts that offer cash back and/or rewards for debit card use?

  • jessrabbit38

    I use Capital one 360. Great customer service! Only fees i’ve incurred are for ATM’s that aren’t part of their system. Downside is you can only desposit checks via your phone up to 3k. Anything larger needs to be mailed in. You also have no way of depositing cash if you wanted to. Other than that I have been very happy with them. Hope this helps!

  • Earl K.

    So, I guess the alllpoint network atm’s don’t allow deposits?

  • the_natis

    No love for Charles Schwab? ATM fees reimbursed, interest checking and no other fees that I can think of. They’ve been very pro-active in issuing new cards to me whenever a security breach is in the news.