Tired of banking the traditional way, having to run to a local branch to deposit a check, or dealing with too many fees and minimum requirements? Then opening an online checking account could be your solution.
Most online banks offer checking accounts with little to no minimums, and little to no fees to worry about. They also have some of the best mobile apps, making banking on-the-go easier than ever.
The best online checking accounts offer:
- No monthly account fee
- No ATM fees and reimbursement of other bank ATM fees
- Interest income on the deposited funds
- Strong mobile banking app and user interface (which is needed, given you will not have a branch to visit)
There is not one account that is the "best" across every dimension. You will have to make a trade-off. For example, the account with the highest interest rate does not have unlimited ATM fee reimbursements.
Here are our favorite checking accounts available in 2018:
1. No ATM fees: Aspiration – The Summit Account - Unlimited ATM fee reimbursement + 1.00% APY
Aspiration is a unique company that is trying to change the face of banking. This account is a great way to avoid fees. There is no monthly fee and no minimum deposit. Even better, there are no ATM fees and unlimited reimbursement of ATM fees charged by others. You can use your ATM card anywhere in the world and never pay a dime.
You decide how much you want to pay for the account - and that can be $0. Aspiration is making the bet that you will appreciate the value and decide to pay them something. But you are not obligated to make any payment.
You can also earn interest on this account. For balances up to $2,500 the interest rate is 0.25% and it is a very healthy 1.00% APY on balances above 1.00%. And the best part: you don't have to "do things" (like use your debit card) to get the rate. So long as you have the account, you get the interest rate.
Aspiration has recently launched a mobile banking app, making it even easier to get everything you need done. You can read our full review of Aspiration here. If you want an easy way to use any ATM, free BillPay and earn a good (by checking account standards) interest rate, the Summit Account is a great choice.
2. Ally – Interest Checking Account: $10 of ATM fees reimbursed monthly, and up to 0.60% APY
Ally is a great all-around online bank with no monthly fees and no minimum balance or direct deposit requirement. Ally charges no ATM fees, and it reimburses up to $10 each month. You can link your savings account (which is one of the best in the country, paying 1.35% APY), and it will provide free overdraft protection.
The checking account pays 0.10% APY on balances less than $15,000, and 0.60% APY on balances of over $15,000.
Banking with Ally also gives you 24/7 access to customer service, which is just a phone call or chat session away. They also use 21st century technology like remote deposit through their mobile banking app and Zelle®, which allows you to securely send and receive money from friends and family.
3. Highest APY: MemoryBank - 1.60% APY (for the first year) on balances up to $250,000
If you are looking for a high interest rate on a big balance, it is hard to beat MemoryBank. You can earn 1.60% APY on balances up to $250,000 for the first year so long as you do the following three things. (1) You must receive at least one electronic deposit every month. If you have your payroll deposited into the account, that works. (2) You will need to use your debit card for at least 5 in-person or online purchases. And (3) you need to get your statements online (no paper statements). If you have a large balance and want to find the best liquid account, MemoryBank has a good offer. You need at least $50 to open the account. You will get access to AllPoint ATMs.
4. No domestic ATM fees & high APY - Bank of Internet USA Rewards Checking - up to 1.25% APY
Bank of Internet (BofI) offers a nice combination of a good interest rate and ATM fee reimbursement. You can receive up to 1.25% APY based upon your activity in the account. There are three requirements, and each requirement gives you 0.4166%. If you receive a monthly direct deposit totaling $1,000 or more, you can earn 0.4166%. If you use your debit card at least 10 times per month, you can get another 0.4166%. And if you use your debit card 15 times a month, you get another 0.4166%. So - if you get your direct deposit and use your card 15 times a month - you will get 1.25% APY. You can also get unlimited domestic ATM reimbursement. If you are a heavy debit card user and do not travel overseas very often, BofI can be a better option than Aspiration.
5. Charles Schwab – High Yield Checking: Unlimited ATM fee reimbursement + 0.15% APY
If you want to be able to use your ATM card anywhere in the world - for free - this account is a good option. With Charles Schwab’s High Yield Investor Checking Account, you will not be charged a fee for using an ATM. If you use an ATM overseas, there will be no foreign transaction fee. And - best of all - if the ATM charges a fee of its own, Schwab provides unlimited ATM fee reimbursement.
This account pays 0.15% APY, and there are no minimums or monthly service fees.
There are no fees to cover overdrafts when funds are available from a linked Schwab brokerage or savings account.
6. Consumers Credit Union – Free Checking: Unlimited ATM fee reimbursement + up to 4.59% APY possible
Anyone can join Consumers Credit Union, which has been around since 1930 and is based in Lake County, IL. In order to join, you only need to pay a one-time, non-refundable $5 fee to their sponsor, the Consumers Cooperative Association. Once you are a member, you are eligible for all products, including the Free Checking Account.
This account can offer incredible value, but you need to meet certain conditions. In order to get unlimited ATM fee reimbursement, you need to:
- Make at least 12 debit card purchases per month. The purchases cannot use the 4-digit pin code - it has to be treated as a credit transaction (so that the credit union earns the maximum interchange possible)
- Each month there must be at least one direct deposit OR one ACH debit OR one online bill payment.
- Login to online banking at least once per month, and
- Receive eDocuments / eStatements (no paper statements).
If you meet those requirement, you will earn a 3.09% APY on balances up to $10,000. You have the opportunity to earn an even higher rate of return if you open a Visa credit card from the credit union. If you spend at least $500 a month on the credit card, your interest rate increases to 3.59% APY on balances up to $15,000. If you spend at least $1,000 a month, you can earn 4.59% APY on balance up to $20,000.
This is a valuable proposition - but it is complicated. We have included it because 4.59% APY and unlimited ATM fee reimbursement is an amazing deal. However, if you don't meet the requirements you will not get ATM reimbursement and will only earn 0.01%.
7. Fidelity Cash Management Account: Unlimited domestic ATM fee reimbursement
Fidelity’s Cash Management Account is great for those that have larger balances, as there is a $1,250,000 insurance limit, but there is no minimum balance required.
Similar to Charles Schwab, there are no ATM fees to worry about – they’ll reimburse you the same day if you’re charged. There are also no monthly or overdraft fees to worry about. There is one big difference to Schwab: if you get charged for using your ATM outside of the country, that fee will not be reimbursed.
Fidelity currently offers 0.13% APY, but it is a brokerage account rather than a “regular” checking account. They offer cash management tools so you can set up custom alerts when you reach a certain balance that will remind you it’s time to invest.
Unfortunately, there’s no option to open a line of credit – you have to link a savings or brokerage account to your Fidelity account in case you overdraft and want items to clear.
Why You Shouldn't Hoard Money in a Checking Account
There are two main reasons your money would be better off not sitting in checking.
1) Interest Rates
Interest rates on checking accounts are typically pretty pitiful and even when they seem high (perhaps 0.60% or even 1.00%) there are often a lot of hoops to jump through in order to secure that interest rate. Instead, consider putting your money into one of the nation's best savings account, best money market account or CD. There it can easily earn 1.00% or more.
Fraud is another reason you want a minimal amount in checking. Credit card fraud is so prevalent you'll likely get smacked by it at some point, but it isn't as worrisome because the money charged to a credit card isn't coming directly out of your bank account. Debit card fraud means a crook gains direct access to your money and can be draining your actual funds. You'll reduce the damage a thief can do by not keeping a ton of money in checking. Even if you bank reimburses you for the funds, it's still a hassle to go through not having the money for a period of time.
It's Probably Time to Ditch Your Bank
Ditch your brick-and-mortar bank in favor of fewer fees, less hassle, more convenience, and higher interest rates. All of these banks offer mobile apps that let you deposit checks by taking a photo, so you don’t have to worry about running out to a local branch. These apps also make it easier to transfer money between your accounts, pay bills online, or send money to family and friends in a pinch.
If you want your money to do more for you with less maintenance, online checking is the way to go.
Goldman Sachs Bank USA High-yield 12 Month CD
Synchrony Bank 12 Month CD
Synchrony Bank High Yield Savings
Barclays Online Savings Account
* All banks listed are a Member FDIC.