Checking account fees have been taking a toll on consumers for some time now, but many people are unaware that there is a better option out there. Online checking accounts generally offer much lower or no monthly fees, and also pay interest on balances (something that is nearly extinct at most banks).
You may wonder how an online checking account works when you need to withdraw cash or deposit a check. Luckily, many offer fee waivers for using out of network ATMs as well as various options for making a deposit to your account. The best online banks have great ways to manage your accounts online, over the phone, by mail and through mobile banking.
How does it work?
Concerns about security? Not to worry, online banks are insured through the FDIC, meaning online checking deposits at an insured bank are backed by the full faith and credit of the United States government.
What are the best accounts?
| Capital One 360 | 360 Checking | ||
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| Monthly Fee | Minimum Balance | APY |
| $0.00 | N/A | 0.20% |
Capital One’s new checking account is noteworthy for it’s low or non-existant fees across the board. Besides no monthly fee, there are hardly any others that customers will encounter while using their account (stop payments being one of the only exceptions). You can even use your card abroad without incurring foreign transaction fees. Earn 0.20% interest on balances up to $50,000. You can use your computer or a mobile app to scan and deposit personal checks to your 360 Checking account.
| Ally Bank | Interest Checking Account | ||
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| Monthly Fee | Minimum Balance | APY |
| $0.00 | N/A | 0.40% |
Ally makes it easy to conveniently deposit money into their checking accounts. In addition to sending checks by mail, you can scan and upload them yourself with Ally eCheck Deposit, or just take a picture with your smartphone and deposit the check via Ally’s mobile app. Their Interest Checking account includes no monthly fee and very limited other service fees (such as $9 for an overdraft, limited to 1 per day – that’s nearly 1/4 the industry norm). Ally also pays a respectable 0.40% on all checking balances up to $15,000. Use their online tool to quickly calculate your future interest earnings.
| EverBank | Interest Checking | ||
|---|---|---|
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| Monthly Fee | Minimum Balance | APY |
| $0.00 | N/A | 0.39% |
Everbank requires a substantial opening deposit, but there’s no monthly fee to worry about once you’ve opened your Interest Checking account and you’ll enjoy above-average interest rates. Balances up to $10,000 earn 0.39% APY, but with increased deposits you can earn much more. Even better, new customers can enjoy a bonus rate of 1.25% on balances up to $100,000 for the first 6 months. Everbank also guarantees interest rates within the nation’s top 5%. Plus, with a balance of $5,000+ you’ll automatically be reimbursed for all ATM fees.
| Bank of Internet USA | High Interest Checking | ||
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| Monthly Fee | Minimum Balance | APY |
| $7.50 | $5,000.00 | 0.71% |
Bank of Internet has two online checking options for consumers to choose from. One is a rewards checking account, which is a free account that has the potential to earn an excellent interest rate. Sign up for direct deposit, use online bill pay and use your debit card regularly to boost your rate up to the maximum amount. You also have the opportunity to earn unlimited ATM reimbursements. If you can’t meet these requirements you won’t earn any interest, but at least you’ll still get a truly free account.
BofI’s second option is a high interest checking account that doesn’t require any special actions, like their rewards account, except to maintain a minimum balance of $5,000 (otherwise a $7.50 monthly fee applies). There are also no rate tiers with this account. You’ll earn a fantastic 0.71% APY on all balances, whether it’s $1 or $100,000.
| First Internet Bank | Interest Checking | ||
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| Monthly Fee | Minimum Balance | APY |
| $10.00 | $500.00 | 0.55% |
First Internet Bank’s two checking accounts offer something for either type of customer: those looking to minimize fees or those looking for higher yields. Luckily, those in between can choose a little of both with the interest checking account. The minimum balance to waive a monthly fee is just $500, and the yield beats many other competing checking accounts these days.
| FNBO Direct | Online BillPay Account | ||
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| Monthly Fee | Minimum Balance | APY |
| $0.00 | N/A | 0.65% |
FNBO Direct, online division of First National Bank of Omaha, has a great online checking account that really emphasizes the convenient bill pay options. Customers can make quick payments to individuals through Popmoney, or even schedule automatic payments for recurring bills. You can use your check card for free at any First National Bank of Nebraska ATM, but those with higher balances ($25,000 or more) will receive reimbursements for the first 4 foreign ATM fees each month. Another notable feature of this account is the highly competitive interest rate of 0.65% – that’s far more than you’ll earn right now with most savings accounts, especially at the big banks.
| PerkStreet Financial | Online Checking | ||
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| Monthly Fee | Minimum Balance | APY |
| $0.00 | N/A | 0.00% |
PerkStreet’s Online Checking Account is unique among these online options in that you get cash back on purchases rather than earning interest. Earn up to 1% cash back on all debit card purchases, or boost that to 2% when shopping online at stores like Amazon.com, iTunes, Wal-Mart and more. You’ll even get personalized “Power Perks” sent via weekly email, which are offers that will get you up to 25% cash back! Perks are redeemable with gift cards to retailers and restaurants, or with direct account credits (though with the 2nd option, you only get $20 for every 22 perks). You can easily manage your account and pay bills with PerkStreet online, and access cash at over 20,000 surcharge-free ATMs nationwide. Finally, their mobile app makes it really easy to deposit any checks you might receive.
Why bank online?
Online banks save a ton of money on personnel and maintenance costs because they have no physical branches. The result is more money for you. You have to manage your account online, but you can access your money 24/7 and transfer it between accounts anytime. You can’t talk to a representative in person, but they’re always available online or over the phone. Thus, if you’re tech-savvy, an online savings account is incredibly convenient.
Looking for an account with a brick-and-mortar bank instead?
Check out our tool to find a checking account closer to home.
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