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.
While you shouldn’t be keeping a ton of money in your checking account, online accounts offer great annual percentage yields (APY), especially when compared with regular savings accounts.
These are the five best online checking accounts available in 2017:
1. Aspiration – The Summit Account: Unlimited ATM fee reimbursement + 1.00% APY
Aspiration is a unique (recently created) company that is trying to change the face of banking. It has lofty ambitions – which translates into great consumer value. 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 $2,499.99 the interest rate is 0.25% and it is a very healthy 1.00% APY on balances above 1.00%.
Although the website is limited, the mobile app has extensive functionality. From the app, you can use BillPay and make mobile check deposits.
Your banking relationship will actually be with Radius Bank – and your funds will be FDIC insured. You can read our full review of Aspiration here. If you want an easy way to use any ATM, get free BillPay and earn a high (by checking account standards) interest rate, the Summit Account is our top choice. There is just one risk: Aspiration’s offer is so generous and lucrative, that we do not know how it will make money. Aspiration might have to start charging for this account if the losses become too big. But rest assured – your money is FDIC-insured and you can enjoy the benefits while they last.
2. Charles Schwab – High Yield Checking: Unlimited ATM fee reimbursement + 0.13% 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 0.13% 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.
3. 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%.
4. 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 1.05% APY), and it will provide free overdraft protection.
The checking account pays 0.10% APY on balances less than $15,000, and .060% 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.
5. 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 0.07% 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.