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Truly Free Checking Accounts: NerdWallet’s Picks

by on March 12, 2012

Here’s a little secret big banks may not want you to know: free checking is alive and well at banks and credit unions across the country. And when we say free checking, we don’t mean conditionally free. We mean really and truly free: no minimum balance requirements or monthly fees. Although most checking accounts are free when you meet some basic requirements, such as setting up direct deposit or maintaining a minimum balance, you don’t have to deal with the hassle if you look for other offerings elsewhere. Better yet, some of these truly free checking accounts also earn interest! The only thing better than free checking is free money. After searching high and low, we found the best deals at Internet banks, community banks and credit unions. Here are ten of our top picks.

Internet Banks

If you’re the tech-savvy type who doesn’t mind managing their money online, it’s time to consider an Internet bank. Internet banks save a ton of money on operating expenses by not having physical branches. The result is more money for you: no fees and higher interest payments. The catch? You’ll have to speak with someone online or over-the-phone if you have questions.

In addition to offering free checking, Perkstreet is the undisputed king of debit card rewards. Their debit card offers a minimum of 1% back on all signature-based debit card purchases and 2% back when you “spend with a friend”. For special partner retailers, including Walmart and Amazon.com, you’ll earn 2% back for online purchases, and, if your balance is $5,000 or more, you’ll earn 2% back in-store as well. The PerkStreet debit card also has monthly rotating bonus categories that give you 5% back on qualifying purchases. Your card is just like a cash back credit card, without the potential for debt.

Capital One 360 | 360 Checking
Capital+One+360
  • $50 cash bonus for new accounts
  • Access to over 38,000 surcharge-free Allpoint ATMs
  • Use a mobile app or computer to deposit checks from anywhere with CheckMate
  • No foreign transaction fee
Monthly Fee Minimum Balance APY
$0.00 $0.00 0.20%

Capital One 360 grew out of another online bank, ING Direct, which is famous for being one of the first high-yield Internet banks. The 360 Checking account earns 0.20% APY on balances less that $50,000, but their unique overdraft protection program also deserves a mention. If you overdraw your account, they don’t charge you a flat fee. Instead, they let you borrow your overdrawn amount as a loan. As long as you pay quickly, this can end up being a much better deal than a flat fee. As an added bonus, Capital One charges no foreign transaction fees when travelling abroad.

Ally Bank | Interest Checking Account
Ally+Bank
  • Balances of $15,000 or more get an even higher rate
  • Make deposits from home with Ally eCheck Deposit
  • No ATM fees nationwide - plus Ally will automatically reimburse fees charged by other banks at the end of your monthly statement period
Monthly Fee Minimum Balance APY
$0.00 $0.00 0.10%

This interest checking account offers one of the best rates in the nation. You can earn 0.10% APY and balances $15,000 or higher earn earn even more. Ally lets you deposit checks with a scanner or mobile app, but they’re happy to send you free deposit envelopes if you’d prefer to send them in yourself. You can also earn cash back with your debit card through the Ally Perks program.

Community Banks and Credit Unions

If you’re looking for a traditional brick-and-mortar bank, small banks and credit unions just can’t be beat. More often than not, they’ve got the best rates (and the best customer service too). Credit unions are not-for-profit financial institutions that typically have a limited field of membership, but we picked ones that anyone in the nation can join.

State Street Bank – Free Checking (Quincy, IL)

Founded in 1890, State Street bank is the oldest community bank in Quincy. They’ve got a suite of free checking accounts that allow you to keep it simple or earn rewards, depending on which suits your needs. Their Free Checking account has no frills and is easy to manage. If you’re making at least 10 debit card purchases every month, consider signing up for their RealTunes checking account to receive $5 worth of iTunes or Amazon.com downloads each month. The opening deposit for both accounts is $100.

Patelco – Free Checking (San Francisco, CA)

Patelco has 40 branches in the San Francisco Bay Area. Their Free Checking account only requires a $10 minimum deposit to open, and it’s easy to apply online. You can also enroll your debit card in the UChoose Rewards Points Program to earn points that you can redeem for travel purchases, gift cards and merchandise. Anyone can join by becoming a member of the Community Association for Engaging Youth.

Solvay Bank – Simply Free Checking (Solvay, NY)

Solvay Bank is a community bank that has been serving the Greater Central New York area for nearly a century. Their Simply Free Checking Account is easy to maintain, but Solvay also offers free accounts with perks for using your debit card. If you’re able to make at least 12 transactions per month, consider their High Interest Checking Account, which earns 0.35% APY on balances under $15,000 and 2.25% for balances over that. If you can make 15 debit card purchases each month, the Free Tunes Checking Account gives you $5 worth of iTunes downloads each month and $20 worth of downloads just for signing up.

Northwest Federal Credit Union – Basic Checking (Chantilly, VA)

Northwest Federal Credit Union’s Basic Checking Account is a great, no-frills account that automatically qualifies you for discounts on other Northwest Federal products. If you decide to get an auto loan with them, you’ll get a discounted interest rate and a free CARFAX report. There’s also a version of the account for young people ages 15 – 22 called First Checking, which comes with all the same perks plus the option to receive a lower interest rate on a First Visa Credit Card. Anyone can join by becoming a member of the Financial Awareness Network.

Kinecta Federal Credit Union – Free Checking (Manhattan Beach, CA)

Kinecta is one of the biggest credit unions in the country, with locations in every state. Their Free Checking account comes with online banking, bill pay and unlimited free check writing, though you’ll need to sign up for e-statements to keep the account free. Your minimum opening deposit is your $5 membership fee, provided you live in the postal area of a credit union branch. If not, you may have to deposit an additional $10, which is still extremely reasonable.

Lake Michigan Credit Union – Free Checking Account (Grand Rapids, MI)

Lake Michigan Credit Union has a low-maintenance free checking account for basic use. However, their Max Checking Account is also free, and it offers great rewards for active users. You’ll get a staggering 3% APY on balances up to $15,000 when you meet a series of basic requirements: set up a regular direct deposit into any Lake Michigan account (it doesn’t have to be checking), make 10 debit card purchases each month, sign up for e-statements and log into home banking at least four times each month. Switching over from a different bank? Lake Michigan will reimburse you for your unused checks for $2 a pack ($10 limit). Anyone can join by becoming a member of the Amyotrophic Lateral Sclerosis (ALS) Association of Michigan.

First Tech Federal Credit Union – Carefree Checking (Palo Alto, CA)

First Tech Federal Credit Union has three physical branches in the heart of Silicon Valley (Palo Alto, San Jose and Cupertino), but their members come from everywhere in the United States and nearly 20 other countries. They have a total of 31 branches in the United States and Puerto Rico. The Carefree Checking account comes with free e-deposits and, should you ever need them, free overdraft deposits from a linked account (savings account, credit card or home equity line of credit). Anyone can join by becoming a member of the Financial Fitness Association.

Still think you’d prefer a big bank?

Learn how to waive fees at big banks with our latest checking fee study. This article also includes our recommendations for big bank checking accounts.

Looking for a checking account?
Use our tool to find the best checking account for your financial needs.
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  • http://twitter.com/hawaii2000 mike swanson

    Don’t forget PerkStreet allows you to deposit cash to your checking account without a fee via MoneyGram locations in thousands of Walmarts across the US. For me, that benefit alone stands above all the others PerkStreet has to offer.

    • Laura Edgar

      You’re quite right! Thanks for the tip.

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  • Greeder

    First Tech Federal also has branches in the Portland, OR metro area and Redmond, WA. Awesome credit union. I have been a member since 2000.

    • Laura Edgar

      They do! We mentioned the three branches in Silicon Valley to emphasize their tech roots, but we can see how that might be misleading. We updated the article to mention the other locations. Glad to hear you’re a happy member.

  • Apriljforlife

    Help. I’m 21 and I just got a decent paying job and I want to open a checking account, but dont want those crazy monthly fees, so who should I bank with????

    • NW_Laura

      Hi there! You can open an account at an Internet bank no matter where you live. PerkStreet has debit card rewards, Ally has high interest, and ING has awesome overdraft protection. You can also check out your local community bank or credit union. If you’re not near any of the institutions this list, check out our credit union search tool to locate a closer one: http://www.nerdwallet.com/credit-union/

      It definitely pays to do your homework and ask questions before opening your first checking account. We think all the ones listed here are a good fit for most people, but you may find one that’s a better fit for your spending habits.

  • Nhint1470

    What about those people whom their credit is not good at all but in need of a checking acct? Which bank would be more beneifical for them? Thanks

    • https://plus.google.com/111226307647889720768?rel=author Laura

      Hi there. People who can’t qualify for a regular checking account can sign up for a second chance checking account. These accounts usually aren’t free, but they’re a great gateway to a free checking account. We have an article about second chance checking here:
      http://www.nerdwallet.com/blog/checking/second-chance-checking/

  • Angela Shaw-Smith

    Not understanding why I would need another checking account to open an online checking account. If I had a checking account, I would just continue to use that checking account. Every bank has online banking. Does not make sense.

  • Yomomma

    If I bounce a bank transaction it should deny the charges and not charge me fees because I have no money.

    • denver41

      you shouldnt bounce…at all:) keep it straight!!!