Online-only banking has come a long way since the days of its earliest adopters. Now, many traditional banks have embraced some features of these institutions, including free ATM access, robust websites and mobile-friendly features, such as remote check deposit.
The best online banks still usually offer higher interest rates and friendlier fee structures than brick-and-mortar banks, because of the amount they save by not owning branches or ATMs. And they’re just as secure, backed by the FDIC.
» MORE: Switch banks in four steps
Here are some of our favorite online checking accounts.
Best interest rate for most balances
BANK5 CONNECT HIGH-INTEREST CHECKING, 0.76% APY
You’ll have to put down $10 to open an account and maintain a balance of at least $100 to earn interest. You might find slightly better rates at other banks, but they’ll be harder to qualify for than Bank5 Connect’s 0.76% APY.
Best customer service
ALLY INTEREST CHECKINGAlly provides strong rates, more than 43,000 surcharge-free ATMs and exceptional customer service. You can contact Ally via:
- A call center staffed 24 hours a day, seven days a week.
- Real-time chat.
- Secure messaging in online banking.
- Nonsecure messaging via a form on the main Ally website.
Ally also offers a great digital experience that includes all the online banking essentials in an easy-to-use package. Customers can even conduct their Ally business on Amazon Kindle, a rarity among online-only banks.
Best overdraft policy
360 CHECKING® BY CAPITAL ONECapital One checking account gives you several ways to handle overdrafts. You can:
- Apply for an overdraft line of credit, a short-term borrowing option with a reasonable 11.50% interest rate and no transfer fees.
- Use a 360 Savings account to cover overdrafts for free.
- Opt out of overdraft protection, allowing the bank to decline charges that you don’t have enough cash to cover.
In other words, you keep yourself out of trouble by declining overdraft protection. And if you do opt in, you’ll pay a fraction of typical overdraft fees — if you pay anything at all.
The 360 Checking account also offers excellent online and mobile tools and fee-free access to more than 43,000 Allpoint ATMs.
Best debit card alternative to traditional checking
SIMPLESimple had more than 100,000 checking customers when BBVA acquired it in early 2014. It built that user base by designing a top-notch set of digital tools.
Instead of making spending decisions based on your available balance, a figure that can be misleading, Simple users can check their “safe to spend” number. It’s an estimate of the amount you can afford to spend based on your balance, upcoming bills and savings goals.
Withdrawals within the massive Allpoint ATM network are fee-free, though you can withdraw only a total of $500 within any 24-hour period, a lower limit than some other online banks’.
Best ATM options
BANK OF INTERNET REWARDS CHECKING
What’s more, the account doesn’t charge monthly maintenance or overdraft fees. Customers who receive direct deposits totaling at least $1,000 and make at least 15 debit card transactions per month qualify for an APY of 1.25%. It offers online bill pay and mobile check-deposit services, too.
SCHWAB HIGH-YIELD INVESTOR CHECKING
The account has a relatively low APY of 0.02%, but it also comes with a free brokerage account.
Updated Oct. 11, 2016.
To determine the best 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.
Financial institutions surveyed: ableBanking, Alliant Credit Union, Ally Bank, American Express, AmTrust Direct, Associated Bank, Bank5 Connect, Bank of America, Bank of Internet USA, 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, 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.