The best online checking accounts provide a trove of perks, including higher yields and lower fees due to competition between banks to win potential customers.
I've compiled a list of the best online checking accounts in terms of interest rates, features, and minimum required balances. I compared the different options available and uncovered the top online checking accounts.
About one in four U.S. households do not use bank accounts. However, online checking accounts will save you time and money because they typically have fewer fees than traditional banks.
The Best Online Checking Account - In This Guide
The Best Online Checking Accounts: Our Top Picks
The following is a breakdown of the three most prominent options for the best online bank account. It includes an overview of each institution's checking account offers, along with the pros and cons of each one. Everyone's needs are different when it comes to banking so it's important to look at the features which will work best for you.
Capital One 360 Checking Account Review
- Mobile check deposits
- No minimum amount required for account opening
- Zero dollar balance requirement
- FDIC insured
- No monthly fee
- Can be challenging to deposit cash
- No online chat function for customer support - only phone
- Only one 360 checking account permitted per customer
This is a good checking account from Capital One, with all the features you have come to expect from big banking names. The company is known for innovative banking and credit card lending, and this account fits right in with the organization's product strategy.
It has three variable rates depending on the initial deposit. The first interest rate is applied to balances ranging from $0 to $49,999.99, the second rate is applied to balances from $50,000 to $99,999.99, and the third applies to $100,000 or more. Seeing as how these rates fluctuate so frequently, it's best to consult Capital One directly for up-to-date figures.
As part of its suite of mobile capable features, they accept mobile checks deposits which can greatly increase the speed with which your funds clear. Plus they have 38,000 fee-free Allpoint ATMS, no overdraft charges and no excessive monthly fees like some other banks.
Last, but certainly not least, it's FDIC insured up to $250,000 and the BBB gives the company a B rating. The few negative reviews I found were regarding difficulties logging into personal accounts. After further reading, I think it was just a few select cases that were eventually resolved.
This is a great free online checking account to apply for, especially if you have Capital One credit cards or carry other products. They don't require a starting balance although their APR offerings are distributed across three tiers, they don't charge fees, and overall have a decent BBB rating. Customer reviews are, for the most part, positive and individuals are satisfied with the level of service they receive through the client relations department.
Ally Bank Interest Checking Account Review
- No monthly maintenance fee
- No fee if you withdraw at an Allpoint ATM
- Customer service via phone and online chat
- Free checks - including reorders
- No cash deposits
- Limit of $10 per month reimbursement for using non-Allpoint ATMs
Ally Bank has a number of features that appeal to customers. They have two variable interest rates--one if your daily balance is less than $15,000 and another one if your daily balance is more than $15,000. For specific annual percentage yields, contact Ally directly.
They offer free checks, no monthly maintenance fees, and online/mobile banking. The mobile banking feature is a great way to receive balance alerts and stay up-to-date on the status of your account. They're also FDIC insured for the standard $250,000.
In terms of negatives, they do charge an overdraft item paid (or overdraft item returned) fee, stop payment fee, and insufficient funds fee. And, the BBB gives them a rather low rating (C+) compared to other institutions on our list. Ally's interest rate (at the time of writing this review) is slightly higher than Schwab's but Schwab's doesn't charge you the multitude of fees. If you're in the habit of racking up fees, I would suggest opting for Schwab's checking account instead since they don't tack on those fees.
An online account I like and would recommend to you if you are in the market for a web-based checking account. They were named the #1 best online bank three years in a row by Money Magazine, and have great online perks as well as freebies including checks, balance alerts, and more. The few fees they do have like the overdraft item paid/returned fee and insufficient funds tend to be common across the industry so it's not by any means a deal breaker.
USAA Checking Account Review
- No monthly fees
- No minimum balance requirement
- Free nationwide ATMs
- Cash and check deposits via ATM
- USAA money manager tool
- Requires minimum opening deposit ($25)
- Charges $25 for overdrafts
- No interest earned on balances under $1000
USAA combines strong military values with premier financial service in this online checking account. You'll get free nationwide ATM use, account access anywhere and anytime, deposits at your fingertips and a host of additional security features. Before I continue, it's worth acknowledging that you'll only earn an annual percentage yield on balances over $1,000. At some point in the future this may change but it's best to consult with USAA for APY specifications.
There are over 60,000 USAA-preferred ATMs nationwide and in the event that you have to use another one, USAA will refund your bank fees. The mobile banking app, also available on Apple devices allows you to quickly check your account and manage the incoming or outgoing funds.
USAA's money manager tool provides additional information to learn effective strategies and the value of proper spending habits. Easy deposit is a feature which allows you to deposit checks at more than 2,000 select UPS Store locations.
USAA's offerings are quite wide ranging considering that this provider used to be exclusively available to military personnel. They were rated highly by the Better Business Bureau, and have positive reviews regarding their customer service. While their APY is low, this has the possibility to change.
Schwab Bank High-Yield Checking Account Review
- No balance required to maintain account
- No minimum amount required to open
- FDIC insured
- No monthly fee
- Online banking
- Must have a Schwab brokerage account to qualify
- No cash deposits
- Limited deposit methods
What's great about this online account is the fact that it gives you the hybrid benefits of both checking and savings accounts, but it's only available if linked to a Schwab One brokerage account. Before you read any further, brokerage products are not FDIC-insured, are not guaranteed by the bank and may therefore lose value. If you've understood this stipulation and are willing to give it a gamble then we'll move on.
It has an APY variable interest rate on any balance, which means there's no minimum amount required to open it and the checking side of it is FDIC insured up to $250,000. As part of the account features you get online banking, mobile applications and access to free standard checks. The downside of this account as previously mentioned is that it must be tied to a Schwab One brokerage account. Apart from that it also has a fee for returned and insufficient funds plus the low BBB rating.
Although this account has all the positives you would want in a web-based checking account, it gets 3 stars predominantly because it needs to be linked to a brokerage account which is not FDIC insured, plus it has a low BBB rating and a few excessive fees. It does, however, have some really neat features which hold value, making it one of the best checking account offers if you're already a client.
- Member FDIC
- iOS and Android apps available
- User-friendly interface
- Visa Zero Liability policy
- No possibility of overdraft, thus no fees
- No cash deposit
- No paper checks available
- No joint or business accounts
Another noteworthy stipulation is you have to own a device/smartphone which can operate the Simple mobile app. Most iOS devices with 8.0 or higher will work. While you can access some of the features though the traditional web application, you just won't access the full scope without the proper mobile application. This may be a deal breaker already, depending on your proficiency with mobile technology.
Simple has a very proficient fraud policy, which should appease some of your concerns. The Visa Zero Liability policy allows you to block your card as soon as you notice suspicious activity right away through the mobile app or web portal.
According to their website, "for transactions processed as credit, you're not liable for fraud as long as you notify us within two business days after you notice it (after two business days, you can be liable for up to $500). With debit transactions, you're only liable for the first $50 as long as you notify us within 2 business days. These protections don't apply to ATMs or transactions processed outside the Visa network".
So how does depositing funds work? You have a number of options including direct deposit, which will be the easiest for most individuals. Otherwise, you can deposit checks by taking a photo of them with the Simple mobile app. They also take deposits by mail.
In terms of fees, this provider claims not to charge any apart from an International Service Assessment (ISA) fee and ATM fees for those that are out-of-network. Bill pay is also available with Simple. You can utilize their Payments and Transfers feature to pay anyone you'd like to and a check will be mailed to them. For payments to larger businesses, you can opt to have them paid electronically and the funds will arrive in about two business days.
Overall, we're quite impressed by the offerings that Simple boasts. While they're not as prominent in the market as some of the other providers like Schwab, Ally Bank, and Capital One, they do possess some features that will appeal to many individuals.
In particular, Simple is attractive to those who want all the simplicity of mobile banking with the additional goal tracking feature, fraud protection, limited fees, and user-friendly interface. If you haven't already done so, browse this provider's client reviews - which for the most part are positive.
Key Considerations for Online Checking Accounts
While perusing the following online checking accounts, I took the following factors into consideration:
1. Balance Requirement
This is the minimum dollar amount necessary to open and/or maintain the account. Clarify this contingency with the institution to avoid penalties.
2. BBB Rating
The Better Business Bureau rates institutions on a variety of factors including customer satisfaction, business operations, and compliance with legal regulations.
3. Interest Rate
Be sure the institution you open your online checking account with offers a competitive interest rate. Since this number fluctuates alongside economic conditions, it's difficult to specify what a "good" or "bad" rate is. As this is the case, evaluate them based on your individual situation.
Monthly, insufficient funds and overdraft fees are just a handful of the ones to look out for when deciding which online checking account to open.
ATM fees can be particularly painful. In my research, I found that the best checking accounts available online will actually reimburse at least some of your ATM fees. The reason for this is that online-only banks don't normally offer their own machines. With the average ATM fee sitting at $2.90, this can mean significant savings.
5. Extra Features
Explore the extra features offered, as these can make an online checking account even more convenient. The most useful features I put on my list include:
- Mobile banking: If you live life on the go like many people do these days, this feature can be a lifesaver. You can check your balance, move money around between accounts, and even make deposits by simply photographing a check.
- Mobile alerts: These typically arrive via text message, and can notify you of a number of events depending on your settings. Get low balance warnings, transaction alerts, and even security alerts which tell you if your PIN or other vital information has been changed. This can help you by letting you know you need to contact your bank immediately.
- Bill pay: According to the Pew Charitable Trusts (a civic research and policy firm), 24% of Americans have used their smartphone to pay a bill. This trend is only increasing, so it's important to make sure you're getting the most up-to-date features when you open a checking account online.
- 24/7 customer service: If you've ever gotten stuck trying to pay for something only to have your card declined, you know why round-the-clock service matters. Technology isn't perfect, and sometimes you need an issue resolved right now, not at the open of business. The best checking accounts online include expanded service hours.
6. FDIC Insurance
The Federal Deposit Insurance Corporation insures deposits in banks up to $250,000. This is a valuable component to look for when evaluating different online checking accounts because it's a trusted agency of the federal government and will protect your funds in the event that the banking institution fails.
Online Checking Accounts vs Savings Accounts
What exactly is a checking account? Investopedia defines it as an account held at a financial institution, allowing you to make both deposits and withdrawals.
What Is a Checking Account?
To expand on the simple definition itself, I also looked at other components which make this financial tool a checking account, as opposed to other types. Typically, this type - including free checking accounts - will include:
- The ability to access funds using paper checks
- The use of ATMs (automated teller machines)
- The use of a debit card for point-of-sale and other mobile purchases
- Transactional liquidity - allowance of numerous withdrawals and typically unlimited deposits, unlike other account types which limit these transactions
In addition to these characteristics, checking accounts are available to meet different needs. Student accounts often come with lower, or no, fees. Business accounts help you keep your personal and business transactions separate. Joint accounts allow you to add other people like your spouse so that they can also carry out transactions like deposits and purchases.
When you're in the market to open a checking account online, you may also be looking for an option that offers you a savings account as well. But how do you know which one you need, or if you need both?
When you're in the market to open a checking account online, you may also be looking for an option that offers you a savings account as well. But how do you know which one you need, or if you need both? I took a look at this aspect of online-only banking when investigating the best bank accounts online in order to give you the big picture:
Online Checking Accounts
- Intended for daily or frequent use
- No (or very lenient) restrictions on withdrawals and deposits
- Access at any time
- Ability to use automatic bill pay, money transfers, and other external transactions
- Low (or no) interest rate earned
Online Savings Accounts
- Intended for moderate- to long-term use in order to save and earn interest
- Restrictions on withdrawals, typically between 3 and 6 permitted per month
- Access limited, sometimes requiring transfer to checking first
- Typically no external facility transfers permitted
- Higher interest rate than checking One factor that can vary to a high degree among both checking and savings accounts is the fee structure. When shopping for the best bank accounts be sure to read all of the fine print on fees, regardless of the type you're looking to open.
Why use an Online Checking Account?
You may be wondering, why not just stick with traditional brick-and-mortar banking? It's no secret that nearly everything is moving into cyberspace, and financial transactions are no different. The better question may be, why not? Some of the most advanced, convenient features are being offered through online banking. Getting the most out of your money may mean taking advantage of the best free checking accounts on the Internet.
The best checking accounts available online will actually reimburse at least some of your ATM fees. The reason for this is that online-only banks don't normally offer their own machines. With the average ATM fee sitting at $2.90, this can mean significant savings.
To figure out what online account is ideal for your financial situation, consider the interest rates offered, monthly and ATM fees, and minimum balance. Once you've decided on the right online checking account for you, continue your financial makeover by checking out our guide to the best online savings accounts as well as our review of the best personal loans.