This has encouraged the spread of online-only banks, which offer a variety of options, including checking accounts. Even traditional banks are launching their own online accounts. As well as convenience, online accounts tend to offer better interest rates and low (or no) fees due to their lower overhead costs.
Here are some of the best options available to those who would rather bank in the comfort of their own home.
Best Online Checking Accounts
Here are the 11 best online checking accounts for 2020:
Capital One 360
1. CIT Bank
No monthly fees
$100 minimum deposit
CIT Bank gives a 0.10%% APY to all customers, and if you want higher you can also open a Savings Builder account with the bank and get up to 1.85% APY. Unlike most of the other banks on this list, you’ll need $100 to start your account. There are no monthly fees, but there are fees for a few other services:
Stop payment fee: $3
Overdraft fee and not-sufficient funds fee: $30
Deposited item and returned fee: $10
Outgoing wire transfer fee: $10 (or free for a balance of $25,000 or more)
Debit card replacement: $10 (but one free card per year)
Debit card rush delivery: $45
To avoid an overdraft fee, you can set up overdraft protection to automatically transfer money from a savings account to cover the expense.
Unfortunately, there’s no free ATM network, but CIT does offer $15 per month in reimbursements – since most surcharges for ATMs are from $3 to $5, this should cover the charges. You also won’t be able to write checks. If you use your card abroad, there’s a 1% of the amount withdrawn plus the fee of the local ATM.
There’s a great mobile app, which is useful since CIT bank is online-only and has no brick-and-mortar branches.
CIT Bank is an online-only bank that offers checking accounts with no monthly fees.
If you know anything about personal finance, you probably know that credit cards are a great way to get some extra money through cashback. There aren’t many debit cards that offer the same – but Discover is one of the few banks offering this.
You can claim 1% cashback on up to $3,000 of purchases with your debit card every month – this could help you earn hundreds over the course of a year if you have high spending habits. There are also no fees associated with the account.
Discover is also part of the Zelle network, which means you can easily and quickly send money to anyone with a participating bank and rest assured you’ll receive no fees.
From the app, you can find your closest ATM, cancel your debit card, deposit a check into your bank account (if you take a photo with your phone), and check your account.
However, be aware that a Discover card isn’t as widely accepted as a Visa or Mastercard – make sure you have a backup card instead of relying solely on Discover.
Discover Checking Accounts offer 1% cash back on up to $3,000 in debit card purchases each month along with no monthly fees or balance requirements.
$50 account minimum
Axos Bank has a few different checking accounts, but its Rewards Checking account has the most perks and the highest interest rate.
You can deposit checks from your computer or mobile, pay bills online, and manage your account from the mobile app.
There’s a $50 minimum balance to open an account initially, but you don’t need to deposit a monthly amount to keep it open – however, a minimum amount is needed for the top perks.
You’ll need to keep an average balance of at least $1,500 to achieve the top cashback rate (or it will drop back to 0.50%) and $1,000 to get the top APY. For the APY, you’ll also need to use your debit card at least 15 times a month.
There are no monthly fees, and the fees from using other ATMs are reimbursed. However, foreign transaction fees are 1% of each transaction.
Axos also take pride in their security features, with 128-bit SSL encryption, anti-virus protection, and regular account monitoring.
Axos Bank offers user-friendly online banking tools and customized online banking solutions.
Use ATMs for free worldwide
No monthly fees
Radius is an online bank that offers both cashback and a good interest rate, which is why the account is called a ‘Checking Account with Rewards.’ As long as you receive $2,500 worth of direct deposits or keep a balance of the same amount, you can earn cashback. There’s an APY of 1.20% for those with a balance of $100,000, or 1.00% for those with $2,500 or more.
The account is also free of monthly fees, and the minimum balance is just $100. This includes ATM fees for other networks, which are paid by Radius.
There’s a feature to receive your paycheck two days early if you set up direct deposits from your employer into your bank. If you sometimes find yourself with a cash flow problem towards the end of the month, this is a great perk.
Through the app you’ll be able to make mobile check deposits, make payments, and manage accounts. You can also set up alerts for your debit card, set spending restrictions, and freeze your card.
For those interested in managing their finances, the integrated financial dashboard will be of interest. This lets you create a budget, track your spending, and analyze trends. You can also look at your debt, other accounts, or estimate your net worth.
Radius Bank offers great rates for online checking with no monthly fees. You will also earn 1% cashback on your debit card purchases.
5. NBKC Bank
$5 to open
No minimum balance
The NBCK Bank (National Bank of Kansas City) offers free, no-nonsense banking with no fees – even for foreign transactions and overdraft. You can use an unlimited number of MoneyPass ATMs for free and can be reimbursed up to $12 a month for using other ATMs, which should be enough to cover your withdrawals. The only fees involved are $5 to send a domestic wire and $45 to send or receive international wires.
Although you’ll need $5 to open your account, once it’s open, there are no further requirements regarding the minimum monthly deposits or average account balance.
The nbkc Bank current account stands out for the number of accolades it has received – numerous websites have named it within their top checking accounts list. Customers and critics alike appreciate the no-nonsense approach to online banking.
NBKC offers hassle-free online checking with no fees or minimum balance requirement.
Monthly fees on some accounts (but can be waived)
No minimum deposit
APY of 0.01% on some accounts
Signup and referral bonuses
Chase offers three checking accounts: Chase Total Checking, Chase Premier Plus Checking, and Chase Sapphire Checking. The former is the basic model, whilst the Premier and Sapphire options offer better features. For instance, the basic account has no APY whilst the other two have an APY of 0.01%.
The Chase Total Checking account has a monthly service fee of $12, but this fee is waived for anyone who receives direct deposits of $500 or more each month or has a daily average balance of $1,500. For the Chase Premier Plus Checking account, the monthly service fee is $25, but it’s waived for anyone with a daily average balance of $15,000 or more – for the Sapphire account, the fee is the same, but the daily average balance must be $75,000 to have the fee waived.
You can pay your bill online. There’s access to 16,000 ATMs and 5,000 branches for all accounts, but to have your non-Chase ATM fees reimbursed, you must have a Premier Plus or Sapphire account.
Each account has a signup bonus of varying amounts – for Total Checking the bonus is $200, for Premier Plus Checking the bonus is $300, and for Sapphire Checking the bonus is $1,000. There are also bonuses available for referring friends to use Chase. You can earn up to $350 in total by referring friends for $50 each. Your friends will also get a sign-up bonus, so you have a good chance at persuading them!
Sign-up for Chase Total Checking Here
Sign-up for Chase Premier Plus Checking Here
Sign-up for Chase Sapphire Checking Here
Get paid early
No hidden fees
No interest rate
No minimum balance
Chime is an online-only bank that is one of the fastest-growing in America. If you set up a direct deposit of your paycheck into your Chime account, you’ll be able to receive it two days earlier – it’s like a payday loan, but minus the fees! There’s also Automatic Savings feature, which transfers money directly from your checking account to your savings account.
There are no fees, including if you go into your overdraft and even carry out foreign transactions. You can withdraw for free at all MoneyPass and Visa Plus Alliance ATMs. However, bear in mind that you can only withdraw $500 per day from ATMs.
You can manage your debit card, spending account, and (optional) savings account straight from the app. As is the case with many mobile banks, you’ll receive instant transaction alerts and can set up daily balance notifications too.
A major disadvantage of a Chime account is that you won’t get any interest rate payments. None. Even if you open a savings account, you’ll receive just 0.01%. The primary focus of Chime is on money management and budgeting, so if this isn’t important to you then you should probably choose an account elsewhere.
Simple offers great features for anyone with the primary goals of using their account to save and earn as much as possible in interest. As well as getting up to 1.90% APY, you can start a savings goal in a high-interest account and round-up change. You can also track your spending straight from the app.
To earn the top 1.90% APY you’ll need a balance of $10,000; otherwise, the rate drops down to 1.75%. You can achieve an even higher interest rate if you open a Protected Goals account (savings account) with Simple, where you can earn up to $2.02% APY if you keep $2,000 or more in the account.
There are no fees, but to withdraw money from an ATM with no fees you’ll have to choose an AllPoint ATM and you’ll have to pay 1% of each transaction if you travel abroad. There’s also no checkbook, although you can opt to have checks printed and mailed for you.
9. Capital One 360
$0 to open an account
APY of 0.20%
The Capital One 360 Online Checking account is a great no-fees account. This includes no monthly recurring charges and maintenance fees, regardless of how low or high your balance is. The checkbook and using ATMs are also free.
In theory, it’s possible to achieve a 1% APY, but you’ll need an extremely high balance to do so.
You can choose between using the mobile app or online. You can do almost everything from the app, including transferring money and depositing checks.
However, you can also visit physical Capital One locations to open your account and manage it.
There are options for an overdraft too. You can choose between an auto-decline, a next-day grace (you have one day to cover the excess), an overdraft line of credit (loan with 12.75% interest) and free savings transfer (automatically takes funds from a savings account).
APY of 0.10% or 0.50%
No monthly fees
No minimum balance requirements
Ally Bank is an online-only bank with lots of great features, including the lack of fees and ATM reimbursement for ATMs up to $10 (plus unlimited free withdrawals from Allpoint ATMs). It also has a good internal transfer system – as a member of the Zelle network, you can make a same-day transfer to anyone whose bank is also a participant in this scheme
There’s 24/7 support available, over both chat and email.
Despite being an online bank, Ally’s deposits are fully insured by the FDIC. There are no monthly maintenance fees or opening deposit requirement. However, there are a few fees for returned deposits, overdraft items, and excessive transactions.
Because Ally is an online-only establishment, there are no physical establishments. This means you can’t deposit cash directly or talk to a representative in person. Amongst the other disadvantages are a foreign transaction fee of 1% of the transaction and a low interest rate. For anyone with a balance below $15,000 the APY is just 0.1% and otherwise, it’s 0.6%, which is still lower than others.
11. BBVA Compass
Opening deposit of $25
APY of 0.05%
Monthly charge of $19 (can be waived)
Like Chase, BBVA Compass offers three accounts: a free checking account; the BBVA online checking account, and the BBVA premium checking account. The premium account is the only one with a fee and the only account that earns interest. The main difference between the online checking account and free checking account is hat the former gives you access to more ATMs.
There’s a monthly service charge of $19 for the Premium Checking Account, but this can be waived if you have a daily collected balance of at least $4,000 or receive $4,000 into your account every month. The other accounts have no monthly service charge
There are no ATM fees for using BBVA ATMs. If you have a paid account this includes AllPoint ATMs, 7-Eleven ATMs, and rebates for other banks (up to two a month).
How do online checking accounts work?
Online checking accounts work almost the same as traditional checking accounts, except they don’t have branches. This brings both pros and cons.
Online banking can be much more convenient since you can access your account at all hours, including straight from your phone, and you’ll often have extra perks such as lower fees.
However, banking online can mean greater security threats since you’ll be more susceptible to hackers, and for online-only banks, you won’t have the option to speak with staff in person even if you want to. Activities like depositing money can be particularly difficult – although you might be able to use an ATM or use a workaround.
What banks offer free checking accounts?
Most of the banks mentioned in this article offer checking accounts that are completely free to open and use, with no monthly fee. The only exceptions are Chase and BBVA Compass, both of which have a monthly fee to pay – but it’s possible to get this fee waived as long as you maintain a large enough balance.
This is one of the biggest advantages of online checking accounts. If you’re the one paying your bank, you’re doing something wrong – the bank should be paying you since you’re effectively lending it money, and this payment is received in the form of interest.
However, even though monthly fees are unusual when it comes to online checking accounts, that doesn’t mean the accounts are completely free – most of them offer some kinds of fees. Banks often bring attention to the fact their account has no monthly fees, because this gives the impression there are no fees associated with the account at all, but this isn’t always the case.
In most cases, you’ll be charged for activities such as using ATMs that aren’t associated with the branch or for using your account abroad. Make sure you’re aware of the full terms before you sign up for a new account.
Which bank is best for online checking?
When comparing accounts, there are a few things you should pay attention to:
Annual percentage yield (APY)
All banks use a slightly different interest rate structure, so the APY is used to compare all accounts consistently without avoiding confusion. A higher APY means you’ll be earning more interest from the bank – something you want to capitalize on as much as possible. It’s easy to let this be the only factor in your decision, but there are some other things to watch out for too.
One of the trickiest factors to watch out for is fees. Some banks claim to have ‘no monthly fees’, but this can be misleading. Even if there are no monthly maintenance fees involved, you might get charged for other activities, like ordering a checkbook or going into your overdraft.
It’s essential to have a think about which charges are most likely to hit you and make sure you understand a bank’s holiday before you submit your application. For most people, it’s a good idea to watch out for accounts that will reimburse your ATM fees and let you use your card abroad for free, as these are some of the most common charges.
Some banks also require a minimum balance before you can open them, or avoid a monthly maintenance fee. These are generally quite reasonable since most people keep a modest amount of money in their checking account anyway, but it could be worth considering.
You may also be interested in some of the additional perks associated with an online checking account. If you’re prudent about budgeting, you might like an account that offers good tools to help with this. Others might like a card that offers cashback to help them maximize savings or dedicated savings account with a high interest rate.
Ultimately, the choice is personal and depends on your situation.
Online Checking Accounts Have Added Benefits
Achieving financial freedom is all about making your money work for you and being smart about where you put it. The biggest gains can be made through high-yield savings accounts and investments, but that doesn’t mean you should ignore checking accounts completely.
They might not bring many benefits traditionally, but the new class of online checking accounts often have higher interest rates, and may also bring perks like cashback. They can also stop you from wasting money on unnecessary fees that hit you when using your card abroad or withdrawing from ATMs. It’s easy to see that choosing the right checking account for your needs can go a long way towards helping you meet your goals.
The best part is that it’s easy to get started – most of the time you don’t even need to leave your home to complete the sign-up process. What are you waiting for?
The post Online Checking Accounts appeared first on Millennial Money.