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NerdWallet’s Best Free Checking Accounts of 2016

April 8, 2016 Banking, Banks & Credit Unions, Checking Accounts
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NerdWallet's Best Free Checking Accounts

Unless you’re happy stuffing cash under your mattress, you’ll want a checking account. Like most things in life, though, these typically aren’t free. Many banks charge monthly maintenance fees on these accounts to offset the steep cost of running their brick-and-mortar branches.

But no-fee banking and free checking do exist. Some financial institutions — many of them online-only businesses, so no branches — don’t charge monthly fees and offer other free services on top of that. Here are some of our favorites.

Best interest rate

BANK5 CONNECT HIGH-INTEREST CHECKING, 0.76% APY

Along with its excellent annual percentage yield (APY), Bank5 Connect provides customers with access to thousands of free ATMs and reimburses them up to $15 per month for fees racked up at other banks’ cash machines.

What’s more, the online bank’s $15 overdraft penalty is significantly lower than the national median of $34. There is one minor caveat: You’ll have to put down an initial deposit of $10 when opening the account, and you’ll need to keep your balance above $100 to qualify for the 0.76% APY. Still, those are fairly easy requirements to meet, and certainly more straightforward than those of other banks that offer similarly high APYs.

» MORE: NerdWallet’s best checking accounts and debit cards

Best customer service

Ally Interest Checking

As well as offering a competitive interest rate on its checking account and over 43,000 free ATMs in the U.S., Ally makes customer service a top priority. The online-only bank has a call center that’s staffed 24 hours a day, seven days a week, as well as a real-time chat service that shows estimated wait times rarely exceeding a few minutes. As a customer, you’ll have access to secure messaging using Ally’s online banking platform, and if you don’t have an account yet, you can use the bank’s non-secure messaging service on its main website. You can also get help via Facebook and Twitter.

Need further assurance that Ally puts its customers first? The bank was the only institution to receive perfect scores on the Pew Charitable Trusts’ latest annual roundup of consumer-friendly banks.

» MORE: NerdWallet’s best online checking accounts

Best overdraft policy

360 Checking® by Capital One

This Capital One account’s overdraft policy deserves some major props. Instead of a flat fee, Capital One has an option in which you’re charged interest (an 11.50% annual percentage rate) on the amount that has been overdrawn. So if you try to buy something that exceeds your balance by $100 and it takes you a week to replenish your account, you’ll have to cough up only 22 cents in fees. That’s exceptionally affordable, especially when compared with overdraft fees at other banks. You also have the option of having the bank decline to pay charges that you don’t have enough cash to cover. That’s one simple way to avoid fees altogether.

Capital One is part of the Allpoint ATM network, giving its customers access to 38,000 free cash machines. Users can also visit Capital One 360 Cafés in seven cities around the country to speak with customer-service representatives. If you don’t live near one of these physical locations, you can get in touch with the bank via phone, email, Facebook or Twitter. Its online help center is one of the best we’ve come across, providing in-depth answers to dozens of questions that customers may have.

» MORE: NerdWallet’s top high yield online savings accounts

Best credit union

Alliant Credit Union High-Rate Checking

With 11 branches in five states, Alliant has a wider reach than most credit unions, and a $10 donation to an Alliant-affiliated nonprofit is all it takes to gain membership. To qualify for the High-Rate Checking Account, members have to opt out of paper statements and have at least one electronic deposit made to their accounts each month, which includes direct, ATM and mobile deposits and transfers from other financial institutions. Do this and you’ll qualify for a return of 0.65% APY on balances of any amount.

Alliant members can access more than 80,000 surcharge-free ATMs as well.

Connexus Xtraordinary Checking

The Connexus Xtraordinary Checking account comes with an APY of 1.75% on balances under $25,000. To qualify, customers are asked to enroll in electronic statements and do the following each month: make 15 debit card transactions, receive at least one direct deposit and schedule at least one online bill payment.

Connexus offers solid online tools and access to over 50,000 free ATMs. If you live outside of this credit union’s field of membership, a donation of at least $5 to Connexus Association will get you in the door.

Best debit card alternative to traditional checking

If you don’t care about walking into a branch or writing checks and are comfortable with just a debit card, a website and your smartphone, here is an alternative.

Simple

Simple, which is partnered with the Bancorp Bank, offers a checking account with a fully integrated budgeting tool called Safe-to-Spend. This service factors in customers’ upcoming bills and savings goals to show how much they can afford to spend on nonessential expenses without breaking the bank. Safe-to-Spend has an intuitive user interface that makes it easy to keep an eye on your personal finances.

The same can be said about Simple as a whole. This online bank offers all the tools and gizmos you’d want to see in a free bank account, including a feature to make check deposits remotely and a bill payment service.

Tony Armstrong is a staff writer at NerdWallet, a personal finance website. Email: tony@nerdwallet.com. Twitter: @tonystrongarm.

This article was updated April 8, 2016. It was originally published in July 2015.


Methodology

To narrow down our list of the best free checking accounts, we took a close look at more than 50 financial institutions: the largest U.S. banks based on assets, debit card volume and Internet search traffic, the nation’s largest credit unions with broad-based membership requirements, and other notable and/or emerging players in the industry. Those that charge monthly fees — even if they have fee-waiver options — were immediately eliminated. We then compared the features of the remaining institutions to determine our final list.

Financial institutions surveyed: ableBanking, Alliant Credit Union, Ally Bank, American Express, AmTrust Direct, Associated Bank, Bank5 Connect, Bank of America, Bank of Internet, Barclays, BB&T, BBVA Compass, Boeing Employees Credit Union, BMO Harris, Capital One, Charles Schwab Bank, Chase, CIT, Citibank, Citizens Bank, Comerica Bank, Connexus Credit Union, Discover Bank, EverBank, Fidelity, Fifth Third Bank, First Convenience Bank, GoBank, HSBC Bank USA, Huntington Bank, KeyBank, MetaBank, Moven, M&T Bank, MUFG Union Bank, Navy Federal Credit Union, Pentagon Federal Credit Union, PNC, Regions Bank, Santander, Security Service Federal Credit Union, Simple, State Employees’ Credit Union of North Carolina, SunTrust, Synchrony Bank, TD Bank, Union Bank, USAA, U.S. Bank and Wells Fargo.

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