Thanks to technology and the increasingly-digital nature of our money, it’s possible to do your banking with an free online checking account — no need to walk into a branch location tied to a specific geographic area.
Plus, many online accounts offer perks that you won’t find with traditional brick-and-mortar banks, including interest-bearing checking accounts.
Online checking accounts can be convenient, and many of them come without the fees that are starting to crop up at “regular” banks.
Online banks tend to have lower overhead, and can offer to pay interest, or even to provide rewards.
Most online banks will also send you debit cards and checks so that you can access your money at ATMs around the country and make paper check payments.
Compare Best Online Checking Accounts
But with so many online checking account options, how do you know which bank to choose? Here are some of the absolute best online checking accounts:
Ally Interest Checking Account
Ally Bank was built on the premise of getting rid of all the crazy fees that normal banks charge while giving customers great rates and great customer service.
They have been winning points for customer service and convenience for quite some time, and the interest checking account is another popular product. This is because Ally offers a bunch of freebies with its account. These are freebies that have largely disappeared from the world of brick-and-mortar banking. When you have an interest checking account from Ally, you get:
- Industry-leading interest rate
- Free online bill pay
- Free unlimited check writing
- Unlimited free checks
- Free ATMs (you are reimbursed for fees)
- No monthly maintenance fee
One of the last strongholds of brick-and-mortar banks was the question of “What do I do if someone gives me a paper check?” The answer used to be: go to the brick-and-mortar bank. You don’t need to do that anymore.
Ally now offers free eCheck Deposit. You simply can scan your check in to your computer and then upload it to the bank’s web site. You don’t have to go in to the bank to deposit checks if you have an Ally online checking account – you can do it from the comfort of your own home.
You can open an account with no deposit, and there are no minimum balance requirements. If you slip up and overdraft your account the fee is only $9. Not $9 per overdraft charge (which is how normal banks make a killing off of customers), but one $9 fee per day you have an overdraft, even if you had 10 overdrafts that day. A normal bank would charge you $35 per overdraft for a total of $350 for the same number of overdrafts. That’s unbelievable.
PerkStreet Financial
This is a new checking account that is rapidly growing in popularity, mainly because it offers a rather generous cash back rewards program. PerkStreet Financial pays between 1% and 2% cash back when you use the debit card on the account. On top of that, there are rotating categories (or specific retailers) and promotions that allow you to 5% cash back throughout the year. PerkStreet doesn’t limit your rewards, meaning that you can earn plenty of cash back in a year.
If you want ATM access to your money, PerkStreet provides that as well. There are more than 42,000 ATMs that allow you free PerkStreet transactions. You do need $25 to open an account, but after that there are no minimum balances, and no activity requirements.
- Cash back rewards
- Free online bill pay
- Free unlimited check writing
- Free checks
- 42,000+ free ATMs
While we love PerkStreet, there is one downside to using a cash back checking account versus an interest-bearing checking account: you only earn cash back on the money you spend. With an online checking account that pays interest (like Ally Bank and others listed), you earn interest on money that you have sitting in the account. This is not a big deal if you don’t leave a ton of money in your online checking account and prefer to have it sit in an online savings account. You can still rack up significant rewards for using your debit card without having to run the risk of going into debt with a cash back credit card.
PerkStreet does charge an inactivity fee of $4.50 for each month that you don’t use the card at least once. That shouldn’t be a problem if you are actively using the account. The bank does charge an overdraft fee of $32 for each overdraft, so you must be careful not to overdraft. (You can easily wipe out the cash back you earned with a bad run of overdrafts.) Also, they will give you deposit envelopes to mail off a check to them — for free. It’s not quite as good as eDepositing your check directly, but it is minimal hassle to drop a check in the mail.
ING Electric Orange Checking Account
ING Direct is one of the most beloved online banking institutions out there because they were one of the first online accounts that paid great interest on savings. Over time the bank has branched out and now offers an online checking account called ING Electric Orange.
Here’s what you get with this account:
- $50 bonus
- Competitive interest rate
- Free online bill pay
- Free unlimited check writing (ING prints and mails the check for you!)
- 35,000+ free ATMs
- No monthly maintenance fee
- Incredibly low overdraft costs
If you open an account today, ING will give you $50 just for using your debit card 3 times in the first 45 days. (Alternatively, you can use the free Person2Person payment system 3 times, or any combination of the two.) That’s a free $50 just for trying out the account.
The overdraft protection is called an Overdraft Line of Credit. Instead of hitting you with massive fees for each charge you overdraft, ING gives you a $165 line of credit to pull against if you need to. Let’s say you have $500 in your account, but need to spend $600 during an emergency. The charge will go through and you will draw down your line of credit from $165 to $65. The $100 you borrowed is now charging you interest for borrowing the money, but we’re talking pennies on the dollar for the overdraft. If you borrowed $100 for 10 days on overdraft your total fee would be approximately $0.31. Compared to the $30 to $35 a normal bank would charge you for each overdraft charge you’re looking at a 99% savings for the overdraft.
ING also provides an extensive network of free ATMs, and doesn’t force you into account minimums (although you do need a minimum deposit to open an account) or activity requirements. A great perk of using ING’s Electric Orange account is you can easily connect to all of your other ING accounts like savings, CDs, and even ShareBuilder. ING offers free online bill pay, and will send out paper checks if that is needed. You can receive a debit card and order checks from ING. Additionally, it’s possible engage in Person2Person banking transactions — sending payments to any bank account.
EverBank
This is a popular choice among people who can maintain a higher account balance. EverBank promises that it will pay a yield in the top 5% of banks nationally, but that high yield also comes with strings attached.
First of all, you need $1,500 to open an account. You will pay a fee unless you keep $5,000 in your account. Once you reach that $5,000 threshold, you will be able to take advantage of free bill pay and ATM reimbursement. EverBank also allows online check deposit.
EverBank’s interest rates are set up in five different tiers. The lowest tier is everything under $10,000, but the rate is still competitive. In order to get the absolute best available rates, you need to have more than $100,000 on deposit. (However, the middle tiers do pay competitive rates compared to other online checking accounts.)
- Competitive interest rate
- Free online bill pay (if your average monthly balance is > $5,000; otherwise $8.95)
- Free ATM reimbursement (if your average monthly balance is > $5,000)
- No monthly maintenance fee
- Deposit checks from home
EverBank also has a $50 guarantee. The bank rates highly for customer service, and is willing to back it up. If you close aren’t satisfied after three months, EverBank will send you $50. Of course, there are requirements you have to meet, such as using online bill pay, as well as providing proper notice of account closing, within three months of opening your account.
Schwab High Yield Investor Checking
The brokerage giant Schwab actually offers banking services as well. This account is linked to a Schwab One brokerage account, and you don’t pay any fees to maintain either account. The checking account earns a yield (variable) of 0.10% at the time of this writing. There are no account minimums, and there is no minimum opening deposit for this account. You are issued free standard checks as well as a debit card.
One of the great perks of Schwab’s checking account is that you get free ATM access worldwide. No matter where you go, you will receive a rebate for the ATM fees you pay. If you are a frequent traveler, this can be quite useful, as can the fact that your debit card is a Visa branded platinum card that can be swiped as a credit card in most businesses around the world.
Choosing an Online Checking Account
First and foremost, you want to make sure that any online checking account you open is insured by the FDIC. All of the banks above are FDIC-insured, so your deposits are insured for up to $250,000.
Next, consider your own needs and requirements. For those who are looking for a safe place to park a large emergency fund, EverBank can be a good choice, since you can maintain the $5,000 minimum to keep the fees at bay. However, if you are using your online checking account as a primary account, you’ll want an account that has no minimum balance requirements.
You should also consider the perks available, and the interest yield paid. Figure out which bank will help you get the most bang for your buck, and which is likely to provide you with all of the services that you need.