Online-only banking has come a long way since the days of its earliest adopters. Now, even many traditional banks have embraced the hallmarks of these institutions, including free ATM access, robust websites and mobile-friendly features such as remote check deposit.
The best online banks usually offer higher interest rates and friendlier fee structures than brick-and-mortar banks, because of the costs they save from not owning branches or ATMs. And they are just as secure, being backed by the FDIC.
» MORE: Switch banks in four steps
Here are some of our favorite online checking accounts.
Best interest rate for all balances
BANK5 CONNECT HIGH-INTEREST CHECKING, 0.76% APY
You’ll have to put down $10 when opening an account, and will be asked to maintain a balance of at least $100 to trigger the strong rate. Although you might find slightly better rates at other banks, they won’t be as easy to qualify for as Bank5 Connect’s 0.76% APY is.
Best customer service
ALLY INTEREST CHECKING
- A call center staffed 24 hours a day, seven days a week.
- Real-time chat support.
- Secure messaging in online banking.
- Nonsecure messaging via a form on the main Ally website.
- The option to reach out to Ally on Twitter.
Notably, Ally was the only institution to get perfect scores on the Pew Charitable Trusts’ latest annual roundup of consumer-friendly banks.
Ally also offers a great digital experience, with all the essentials of online banking covered in an easy-to-use package. Customers can even conduct their banking business on Amazon Kindle, a rarity among online-only banks.
Best overdraft policy
360 CHECKING® BY CAPITAL ONE
This Capital One checking account gives you two ways to handle overdrafts. You can:
- Apply for an overdraft line of credit, a short-term borrowing option with a reasonable interest rate of 11.50% and no transfer fees.
- Allow the bank to decline to pay charges that you don’t have enough cash to cover.
In other words, you keep yourself out of trouble by having either no overdraft service or an affordable option that costs you a fraction of typical overdraft fees.
The 360 Checking account also offers an excellent lineup of online and mobile tools, along with fee-free access to over 38,000 Allpoint ATMs. And as with most debit cards, you can get cash back with no fee at many stores.
Best debit card alternatives to traditional checking
Instead of focusing on your available balance, a figure that can be misleading, Simple offers you a “safe to spend” number, an estimate of how much you can afford right now based on your balance, upcoming bills and savings goals.
Withdrawals within the massive Allpoint ATM network are fee-free, though total withdrawals in any 24-hour period are limited to $500, lower than some other online banks.
Best ATM options
BANK OF INTERNET REWARDS CHECKING
What’s more, the account charges no monthly maintenance or overdraft fees. Customers who receive monthly direct deposits of at least $1,000 and make at least 15 debit card transactions in the same timespan will qualify for an APY of 1.25%. Online bill pay and mobile check-deposit services are available, too.
SCHWAB HIGH YIELD INVESTOR CHECKING
Although the account has a relatively low APY of 0.02%, it also comes with a free brokerage account.
This article was updated April 8, 2016. It was originally published in December 2012.
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, 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.