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Best Savings Accounts for Kids

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Piggy banks are fun for small change, but if you want to teach your kids important lessons about managing money and the power of compound interest, get them their own savings account. While your local bank branch probably offers more than one savings account product, you might consider looking online for one that’s designed with children in mind.

To aid in your search, we have chosen six savings accounts tailored for kids from a selection of nearly 100 kids’ savings options offered at banks and credit unions around the country. We based our selections on how well they met these five criteria:

  • Competitive annual percentage yield (APY): Accounts should demonstrate the rewards you can get by saving your money, and a competitive interest rate helps achieve that objective.
  • Low fees: Kids don’t need to lose their money to fees, so finding an account with zero fees was important.
  • Low minimum deposits: Most kids don’t have a large amount of money to save when they first open an account. Having a low minimum deposit requirement can help them get started quicker.
  • Broad geographical reach: Banks and credit unions need to be available to a large geographic market, with extra points for physical locations where kids can go and deposit cash and coins.
  • Great educational tools: Savings accounts that are geared to kids should have some educational tools to help them learn about what it takes to achieve financial success. Bonus points if the tools are fun, too.

 

Best overall savings account for kids: Capital One

Kids Savings Account from Capital One Capital One’s Kids Savings Account has all of the features you’d expect to see in a savings account for adults but with the additional feature of parental controls, which makes it a great overall solution for kids of all ages. The account earns 0.50% APY, has no monthly fees and can be opened with $0. You can set it up the account, and make your initial deposit at a later date.

The Kids Savings Account parental controls allows parents to sign into the account under their own usernames and passwords to help their children manage their funds. Parents always control transfers in and out of the account, offering good balance between independence for the young holder and parental oversight. Kids get to view their balance and watch their money grow.

Capital One lets you create an automatic savings plan linked with other accounts, so you can automatically transfer your child’s allowance into their Kids Savings Account. When it comes to geographical reach, Capital One has approximately 500 branch locations, as well as a great mobile banking app, which allows you to deposit checks and check balances.

Capital One Kids Savings Account
APY: 0.50%
Monthly Fees: $0
Minimum Opening Balance: $0

SEE DETAILS Secured

on Capital One’s secure website

Member FDIC

Best savings account for college savings: Citizens Bank

CollegeSaver from Citizens Bank (RI) If you want to be rewarded for consistent savings, the Citizens Bank CollegeSaver account has a bonus you might consider. If you open the account before your child is six and make a deposit of at least $25 each month until your child turns 18, Citizens Bank will give you a $1,000 bonus (the current account APY is a low 0.05%). You can also open this account if your child is between 6 and 12 years of age, but the minimum monthly deposit will be $50 and opening deposit is $500.

If you were to open the account today with an initial deposit of $25 upon the birth of a child (and assume the current APY held for 18 years), and then deposit $25 a month for 18 years, your $5,400 investment would accrue $24.48 in interest. Add the bonus and you’ll end up with $6,449.48. The bank doesn’t put any stipulations on how the money can be spent, so you can use the balance for college or any other financial needs.

Citizens Bank CollegeSaver
APY: 0.05%
Monthly Fees: $0
Minimum Opening Balance: $25 for children under six years old; $500 for children age six to 12

SEE DETAILS Secured

on Citizens Bank (RI)’s secure website

Member FDIC

Best savings account for a young child: PNC Bank

S is for Savings from PNC Bank If you want to engage your child with educational tools, PNC’s S is for Savings account offers a lot. Granted, this account offers the lowest APY of the banks that made this list, but it makes up for it with its interactive online banking experience.

The Learning Center features Sesame Street characters that will help them learn basic money concepts. The site has fun activities you and your child can do together.

Features include the ability to set up automatic savings deposits that help them see the benefits of having a savings routine. Kids can work towards goals and learn about the three components of money: saving, sharing and spending. As your child gets older, you may choose to transfer their accumulated balance to a savings account at a bank that offers a higher interest rate.

PNC Bank’s S is for Savings
APY: 0.01%
Monthly Fees: $0 for account holders under 18
Minimum Opening Balance: $25

SEE DETAILS 

Member FDIC

Best savings account for teens: Alliant Credit Union

Kids Savings Account from Alliant Credit Union When your child turns 13, Alliant Credit Union considers them to be a young adult, offering their High-Rate Savings Account with a 1.20% APY and no monthly fees. For teens who want to set savings goals, the credit union allows them to set up supplemental accounts that can be earmarked for specific items, such as saving for a new car.

What makes this a great option for a teen is that Alliant also offers an interest-paying teen checking account for kids ages 13-17. The checking account earns an APY of 0.25%. The two accounts can be linked and both will earn your teen interest. Alliant also refunds up to $20 per month in ATM fees if the teen uses out-of-network machines.

To open an account at Alliant Credit Union, you must be a member. Membership is open to employees or former employees of partner businesses or organizations. Or you can join by making a $10 donation to the Foster Care to Success Foundation.

Alliant Credit Union High-Rate Savings:
APY: 1.20%
Monthly Fees: $0
Minimum Opening Balance: $5

SEE DETAILS Secured

on Alliant Credit Union’s secure website

NCUA Insured

Best APY for a kid’s savings account: Spectrum Credit Union

MySavings from Spectrum Credit Union Spectrum Credit Union currently offers the highest interest rate on the market for a kid’s savings account, but only on a relatively limited balance. Spectrum’s MySavings account earns 7.00% APY on account balances up to $1,000, making for a rate that’s higher than many CDs. Balances over $1,000 earn the regular savings rate, which is 0.40%. A high interest rate can help get kids excited about savings as their balance will grow quicker.

Spectrum Credit Union currently has branches in six states, but deposits can be made nationwide through the Credit Union CO-OP Shared Network. Membership is open to anyone by joining the Contra Costa County Historical Society ($15 membership fee) or the Navy League of the United States ($25 annual membership fee).

Spectrum Credit Union MySavings
APY: 7.00% for the first $1,000; 0.40% on balances above $1,000
Monthly Fees: $0 for account holders under 18
Minimum Opening Balance: $0

SEE DETAILS Secured

on Spectrum Credit Union’s secure website

NCUA Insured

Best online tools for a kid’s savings account: Capital One

Kids Savings Account from Capital One Kids are digital natives, and that makes a kid’s savings account’s online banking features extra important. In addition to being our pick for best overall savings account for kids, the Capital One Kids Savings Account offers a great selection of online saving and budgeting tools that will keep kids engaged and informed.

One of the best features is the ability to create additional savings accounts and set a target goal for each account. For example, you child may set a goal for holiday gifts, another goal for a new bike or car and another goal for vacation money. They can even give each account a nickname, such as “My Wheels Fund.”

Capital One has a full suite of online tools for your child to track their progress and success, helping to keep them focused on their goals. Capital One also offers standard features on its mobile banking app, some of which are available for kids, including the ability to check their balance or make a mobile deposit.

Capital One Kids Savings Account
APY: 0.50%
Monthly Fees: $0
Minimum Balance: $0

SEE DETAILS Secured

on Capital One’s secure website

Member FDIC

Why your kid should have a savings account

It’s never too early to start teaching your kids about money, and a savings account is a great tool to help accomplish this aim. According to the 9th Annual Parents, Kids & Money Survey by T. Rowe Price, 55% of parents said their child has a savings account, but just 23% of kids said that they talk to their parents frequently about money. Parents who discuss financial topics with their kids at least once a week are more likely to have kids who say they are smart about money than than those who do not have a discussion with their children.

Savings accounts show kids the value of saving at an early age. They get to watch their money grow as compound interest work its magic, and they can set short- and long-term goals for the money they save. The reward of achieving the goals will teach life lessons on patience and planning. Once you open an account for your kids, share money management tips with them, things like “paying yourself first” by saving a portion of gifts and allowances they receive instead of spending it all.

When you teach your child good money habits early on, you help set them up for success later in life. Putting your child on the path for financial responsibility and independence by choosing the best savings account for kids could be the greatest gift you can give them.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Banking

ACH Transfers: Explained

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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ACH transfers in action
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You may have come across the term ACH when looking at different banking options or making certain banking transactions.

ACH stands for Automated Clearing House, which is a network and processing system that financial institutions use to transmit funds electronically between banks and credit unions. ACH transfers help to cut down on costs and processing times.

ACH transfers can include depositing funds directly to your account (transfers in, or credits to you), or transferring money out of your account to make payments (debits to you). For example, when your employer deposits your paycheck to your bank instead of handing you a paper check, that is an ACH transfer. Other direct deposits made by ACH transfer can include income tax refunds or other types of refunds. ACH direct payments (transfers out) often are used when you pay credit card or retailers’ bills (either one-off or recurring).

How long does it take for an ACH transfer to process?

ACH debit and credit transactions tend to process pretty fast. The National Automated Clearing House Association (NACHA) has operating rules that specifically require ACH credits — when you receive money — to settle within one-to-two business days. ACH debits — when you pay money — will settle the next business day. In most cases, all ACH transfers are settled within the same business day. But that doesn’t mean that money will land in your bank account that quickly. It could take as long as a few days, depending on your bank or credit union’s rules and regulations.

ACH money transfers — rules and fine print

Most financial institutions don’t charge a fee for incoming or outgoing ACH transfers. However, you are limited to six withdrawals per month for a savings account based on the Regulation D rule. So, if you go over that limit, your bank or credit union may charge you what’s known as an excess transaction fee.

Another fee you may encounter is a non-sufficient funds (NSF) fee — when you don’t have enough funds to cover the amount you’re transferring. Whether this fee is charged at all, and its amount, depends on the financial institution, so it’s best to check with yours.

Also depending on the financial institution, the limits on transfer amounts will differ. NACHA imposes a $25,000 daily limit on individual transactions. In other words, if you make multiple transactions, each one is limited to $25,000 in a single day. If you go over that amount, then your transfer will be processed the next day.

Wire transfers vs. ACH transfers

Both wire and an ACH transfers involve one financial institution sending funds to another one. Although both are electronic transfers, wire transfers use a different network, called Fedwire, and can involve transfers within the U.S. or internationally. Wire transfers are sent directly from one physical place to another, whereas ACH transfers are sent through a network.

In addition to making a wire transfer at a bank, you may make it at a nonbank provider — companies specifically designed to help you send money domestically or abroad. These companies may not require you to give your bank information. Instead you’ll need the receiver’s name, your personal details and the cash upfront that you intend to send. With an ACH transfer, on the other hand, don’t have this option.

Free and fast ways to transfer money

ACH transfers aren’t the only way to send or receive money. There are many other options that allow you to get almost instant access to funds with no fees involved. Two of these are cited below.

Zelle

Zelle is a peer-to-peer payment service where users can receive, send or request money to and from other bank accounts by using either an email address or phone number. This works even if the sender and receiver use different banks. Zelle claims that it can send money within minutes for no fee.

Many banks already offer Zelle via their existing online platform or mobile banking app. So, you may access it that way. However, if your bank does not have Zelle embedded in its system, then you may download Zelle’s own mobile app, create an account and use it to send and receive money.

Popmoney

Similar to Zelle, Popmoney is is a payment service that may be available at your bank (via their mobile or online banking services) for free. All you need is the recipient’s email address or phone number and you can send money. If you decide to use the service via PopMoney’s website, you’ll be charged $0.95 per transaction. There is also a monthly limit of $5,000 if transfering from a bank account and $1,000 if doing so with a debit card. If you’re using PopMoney via your financial institution, you’ll need to check with them to see what their limits are.

Tips for sending money safely

When sending money online, you want to be sure that you’re sending the money to the right person and that your own personal details are protected. Sounds obvious, but for example, double check your Wi-Fi connection to make sure that it’s secured. Of course you don’t want hackers to steal your sensitive information.

You’ll also want to ensure that you are sending money to a reputable place. NACHA created a booklet to help consumers spot scams and fraudulent behavior, such as merchant impersonations — that is, when someone pretends to be a company and states that you owe money on a purchase or a bill.

If you find fraudulent activity in your account, notify your bank as soon as possible. Sometimes you can reverse your ACH transfer if you accidentally sent the wrong amount or you suspect that there’s been an error.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Banking

Editors’ Choice: Best Checking Accounts for May 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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The best checking accounts can provide a competitive interest rate, ATM fee reimbursements and even cashback rewards. If your current account doesn’t offer any of these features, it may be time to switch.

Why Trust Us?

At MagnifyMoney, it is our mission to inform our readers about the best financial opportunities out there. Our insights have been cited by top financial publications including Marketwatch, CNBC and the Wall Street Journal.

Our dedicated team of financial experts spent dozens of hours grading each checking account on its features, including fees, minimum balance requirements, ATM and branch network availability, APYs and customer satisfaction. We distilled our picks from a list that included hundreds of banks, credit unions and online institutions nationwide.

We ensure our list is updated every month as new banks are added to our database, and we update information as banks change their terms. Check out our best checking account picks for May 2020 and click on the links in the table below to read about why we picked each bank.

Please note: While this list is up-to-date as of this writing, many banks have cut back on or even halted their hours temporarily in response to the COVID-19 outbreak to protect their customers and employees. Many banks continue to offer standard services online and over the phone as well as through automated ATMs.

Best Checking Accounts of May 2020

Summary of the Best Checking Accounts for May 2020

Best Overall Checking Account

Simple Checking Account

Simple Review

Best High-Yield Checking Account

Consumer Credit Union Rewards Checking

Consumer Credit Union Review

Best Free Checking Account

Axos Bank Rewards Checking

Axos Bank Review

Best No-Fee Checking Account

BBVA Free Checking

BBVA Compass Review

Best Checking Account Bonus

Wells Fargo Everyday Checking

Wells Fargo Review

Best Rewards Checking Account

Discover Cashback Debit

Discover Bank Review

Best No-ATM Fee Checking Account

TD Bank Beyond Checking

TD Bank Review

Best Business Checking Account

Axos Bank Business Interest Checking

Axos Bank Review

Best Checking Account for Students

Chase College Checking

Chase Bank Review

Best Joint Checking Account

Ally Bank Interest Checking

Ally Bank Review

Best Overall Checking Account – Simple

Simple

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on Simple’s secure website

Highlights:

  • Free access to 40,000 Allpoint ATMs
  • No overdraft fees
  • Access to tools that allow you to automate your budgeting and savings
  • APY: 1.40% on balances in Protected Goals
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: Through a partnership with BBVA, Simple offers a great checking account with attractive budgeting features and a competitive APY. This account is great for those looking for a traditional checking account without unnecessary fees and stocked with benefits like interest and free ATM access.

What to watch out for: While you can earn a decent APY on the funds in your Protected Goals account, Simple doles out a dismal 0.01% APY on funds that are not in your Protected Goals account, a sub-account designed for money you set aside for savings. It’s also worth noting that fees may apply to ATMs outside of its Allpoint ATM network, and there is a Visa fee of up to 1% if the card is used internationally.

Best High Yield Checking Account – Consumers Credit Union Rewards Checking

Consumers Credit Union (IL)

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on Consumers Credit Union (IL)’s secure website

NCUA Insured

Highlights:

  • Access to over 30,000 ATMs
  • Most lucrative rates require minimum direct deposits or spend on CCU Visa credit card
  • APY: up to 2.09%
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: The Consumers Credit Union has routinely offered sky-high rates, even in a plummeting rate environment, earning this account the title of Best High-Yield Checking account.

While this is a tiered rate account, the lower tiers — which can be earned with fewer requirements — still offer attractive rates that are well above those offered by other banks and credit unions.

What to watch out for: While balances between $10,000 and $25,000 — regardless of your tier — earn an APY of 0.20%, it’s worth noting that balances over $25,000 earn an APY of just 0.10%.

Additionally, if you don’t meet the monthly activity requirements, you’ll earn an APY of just 0.01% and won’t receive ATM refunds. The account also has an overdraft fee of $30.

Best Free Checking Account – Axos Bank Rewards Checking

Axos Bank

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on Axos Bank’s secure website

Member FDIC

Highlights:

  • No overdraft or non-sufficient funds fees
  • Unlimited domestic ATM fee reimbursements
  • APY: up to 1.25%
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: We have crowned the Axos Bank Rewards Checking account as the Best Free Checking account not only for its attractive features, but for its consistency, too.

The Axos Bank Rewards Checking account has consistently offered competitive APYs — even as earning rates drop at other banks. This account also offers all of the bells and whistles that the best standard checking accounts have been known to include, like ATM fee reimbursements and no overdraft fees.

What to watch out for: The Axos Bank Rewards Checking account is a tiered, interest-earning variable rate account. So, in order to earn the 1.25% APY, you must meet the following requirements:

  • Receive monthly direct deposits totaling $1,000 or more
  • Use your debit card for a total of 15 transactions per month minimum of $3 per transaction)

If you don’t meet those requirements, you will receive a reduced APY from what is advertised. There is also a $50 minimum balance required to open this account.

Best No-Fee Checking Account – BBVA Free Checking

BBVA

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on BBVA’s secure website

Member FDIC

Highlights:

  • Free ATM access at BBVA ATMs
  • For $5 per month, you can receive up to four rebates per statement cycle for ATM fees charged by other banks, as well as no BBVA fees at non-BBVA ATMs
  • APY: None
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: If you’re looking for a basic checking account that gets the job with no fees or frills, the BBVA Free Checking account is a product worth exploring.

This checking account provides you with the basic checking necessities, with no monthly fees. Additionally, it gives you the ability to customize your account further for additional charges. For example, an extra fee of $2 a month will give you unlimited cashier’s checks.

What to watch out for: With the BBVA Free Checking account, there is a $25 minimum balance required to open an account and a potential overdraft fee of $38.

Best Checking Account Bonus – Wells Fargo Everyday Checking

Wells Fargo Bank

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on Wells Fargo Bank’s secure website

Member FDIC

Highlights:

  • Access to over 13,000 Wells Fargo ATMs
  • Features budgeting, cash flow and spending tools
  • $10 monthly service is waived if you meet any one of their requirements
  • APY: None
  • Maintenance Fee: $10
  • Current Promotions: $400 bonus with $4,000 in direct deposits

Read the full review

Why we picked it: Wells Fargo’s Everyday Checking account is currently offering an attractive bonus offer, expiring July 31, 2020. Upon opening a new Wells Fargo Everyday Checking account and depositing a minimum of $4,000 in qualifying direct deposits within 90 days of opening, you’ll receive a $400 bonus.

This offer is only available to new Wells Fargo checking and savings customers in Denver, Houston, Miami, Orlando, Fla., Phoenix and Seattle. You also must not have received a bonus for opening a Wells Fargo consumer checking or savings account within the past 12 months.

What to watch out for: This account requires a $25 initial deposit to open. You should also be aware of the not-so-obvious fees associated with this account, which include a $2.50 fee for cash withdrawals at non-Wells Fargo ATMs in the U.S ($5 outside of the U.S.) and a $35 overdraft fee.

Best Rewards Checking Account – Discover Cashback Debit

Discover Bank

SEE DETAILS 

Discover Bank's website is secure

Member FDIC

Highlights:

  • 1% cash back on up to $3,000 of debit card purchases per month
  • No insufficient funds fee
  • Access to over 60,000 no-fee ATMs
  • APY: None
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: The Discover Cashback Debit checking account is a standout account, with no fees and access to over 60,000 ATMs.

What really earns this account the title of Best Rewards Checking account, though, is the fact that it offers 1% cash back on all debit card purchases, up to $3,000 per month. This is a unique perk among checking accounts, and if you prefer cash back to earning interest, this could be the account for you.

What to watch out for: There aren’t too many surprises with this account, just be aware that fees for non-Discover ATMs may apply.

Best No-ATM Fee Checking Account – TD Bank Beyond Checking

TD Bank

SEE DETAILS 

Member FDIC

Highlights:

  • No fees at TD Bank ATMs, and reimbursed fees for out-of-network ATMs for accounts that maintain a daily balance of at least $2,500
  • No required minimum opening deposit
  • Overdraft fees reimbursement offered up to two times per year
  • APY: Up to 0.03%
  • Maintenance Fee: $25
  • Current Promotions: N/A

Read the full review

Why we picked it: TD Bank’s Beyond Checking account is a great option for those who prioritize fee-free access to ATMs.

With this account, not only do you receive fee-free ATM access to TD Bank’s network of ATMS, but if you maintain a minimum daily balance of at least $2,500, TD Bank will reimburse you for any fees incurred at out-of-network ATMs. As the cherry on top, this account also doles out a little bit of interest.

What to watch out for: Be aware that the 0.05% APY is available only to accounts with a minimum daily balance of $50,000. Accounts with balances between $10,000 and $49,999 receive an APY of just 0.03%, while balances under $10,000 receive an APY of just 0.01%. There is also a $35 overdraft fee associated with this account.

Best Business Checking Account – Axos Bank Business Interest Checking

Axos Bank

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on Axos Bank’s secure website

Member FDIC

Highlights:

  • Unlimited domestic ATM fee reimbursement
  • Up to 50 free transaction items per month
  • Monthly service fee can be waived if you maintain an average, daily minimum balance of $5,000
  • APY: Up to 0.80%
  • Maintenance Fee: $10
  • Current Promotions: New business owners eligible for a $50 Welcome Bonus

Read the full review

Why we picked it: Axos Bank’s Business Interest Checking account stands out among other business checking account products for a myriad of reasons, most notably its surprisingly low fees.

Additionally, Axos Bank throws in a number of freebies with its Business Interest Checking account, from ATM fee reimbursements to free checks, making it our pick for the Best Business Checking Account.

What to watch out for:Transactions are $0.50 each after the first 50, and there is a $100 minimum opening deposit required for this account.

Best Checking Account for Students – Chase College Checking

Chase Bank

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on Chase Bank’s secure website

Member FDIC

Highlights:

  • $6 monthly service fee waived for up to five years if you are 17 to 24 years old, have proof of student status and are enrolled in college, or if you meet any one of Chase’s monthly requirements
  • No monthly service fee on a Chase Savings account linked to this account for overdraft protection
  • APY: None
  • Maintenance Fee: $6
  • Current Promotions: $100 bonus for new Chase customers with qualifying activities

Read the full review

Why we picked it: The Chase College Checking account is a great option for students, as it waives its monthly service fee for those between the ages of 17 and 24 who have proof of a student status, for up to five years while in college.

With widespread ATM access, the ability to pay friends with QuickPay or Zelle and a robust mobile app, this account checks all the boxes for college students.

What to watch out for: For this account, you’ll need to show proof of student status. Also, there’s a $2.50 non-Chase ATM fee and $34 overdraft fee associated with this account.

Best Joint Checking Account – Ally Bank Interest Checking

Ally Bank

SEE DETAILS 

Member FDIC

Highlights:

  • Free access to Allpoint ATMs and up to $10 in ATM fee reimbursements per statement cycle
  • No required minimum opening deposit
  • 0.10% APY on balances less than $15,000; 0.50% APY on accounts with a minimum daily balance of $15,000
  • APY: Up to 0.50%
  • Maintenance Fee: $0
  • Current Promotions: N/A

Read the full review

Why we picked it: Ally Bank’s Interest Checking account features minimal fees, variable interest and added perks like up to $10 in ATM fee reimbursements every month.

All of Ally Bank’s banking products support joint ownership, and you are allowed up to four owners on the account without any additional fees, making this an easy pick for our Best Joint Checking account.

What to watch out for: There’s not much to watch out for with this account, just be aware of the $25 overdraft fee.

Other Honorable Mentions

Charles Schwab High Yield Investor Checking: This account from investment firm Charles Schwab offers a few attractive perks like unlimited ATM fee rebates worldwide, no monthly fees or minimums and no foreign transaction fees. However, the Charles Schwab High Yield Investor Checking account falls flat with its paltry 0% APY, which can’t quite compete with the Best High Yield Checking Account, the Consumers Credit Union Rewards Checking account, which earns up to 2.09% APY.

Aspiration Spend and Save: The Aspiration Spend and Save cash management account is one of the most fee-friendly accounts out there, even allowing you to pay a monthly fee in an amount that you think is fair. Aspiration comes with the added bonus of access to over 55,000 ATMs, cash back rewards — especially at conscience-minded businesses — and up to up to 1.00% APY. The interest rate applies only to your Save balance, however, which makes for a more disjointed money management process.

Betterment Everyday: Another cash management account, Betterment Everyday maximizes your FDIC insurance up to $1 million and provides unlimited transfers in and out of your account. It also earns interest at 0.40% APY. However, without a debit card, the Betterment Everyday account leaves a gap for those looking for a traditional free checking account.

Chase Premier Checking: A step up from Chase’s basic checking account, the Chase Premier Checking account earns interest (although at a paltry 0.01% APY) and waives select fees, including on the first four non-Chase ATM transactions per month. However, its features don’t quite justify the $25 monthly service fee, which you can only waive by meeting certain requirements.

PNC Performance Checking: PNC Virtual Wallet with Performance Spend is unique in that it comes with a checking account and two savings accounts. The Performance Spend checking account comes with handy budgeting tools. You can only access 9,000 PNC-branded ATMs and the account charges $15 per month, which is why we ended up picking its rival for the Best No-ATM Fee Checking Account.

Chime: The mobile-first Chime account is great for individuals who have trouble with traditional checking accounts. It allows you to receive direct deposit up to a couple days early, grow savings automatically and even overdraw your account for free if you meet certain eligibility requirements. Chime also provides free access to over 38,000 ATMs, which you can access with the account’s linked debit card. Despite all these perks, Chime doesn’t earn any interest on account balances.

TIAA Bank Yield Pledge Checking: Despite TIAA Bank’s Yield Pledge promise, which ensures their rate will always remain among the top 5% of competitive accounts, the Yield Pledge Checking account earns a pretty low 0.20% APY, with even lower rates for smaller balances. Luckily, there is no monthly service fee, nor fees for out-of-network ATM usage. Plus, you can get reimbursed for ATM surcharges. This made it a strong contender for our Best Overall Checking Account.

Varo Money: Pioneering fintech company Varo offers a pretty much fee-free, checking-like cash management account, where customers who meet certain requirements can overdraft up to $50 at no cost. Varo also can get you your paycheck up to two days early with direct deposit, offers fee-free access at over 55,000 Allpoint® ATMs and provides a free Varo Visa® Debit Card, which you can lock in the app at any time. Though all of these perks are nice, the checking account doesn’t earn interest; you’ll have to open the Varo Savings Account for that.

Capital One 360 Checking: The Capital One 360 Checking account is easily accessible via its debit card, mobile and online. There’s no fee or minimum balance to worry about. You also get access to over 39,000 Capital One or Allpoint ATMs for free. However, it can’t quite keep up with its competitors with its low 0.10% APY.

Bank5 Connect High-Interest Checking: Bank5 Connect’s High-Interest Checking account isn’t always so high-yield, as it earns 0.25% APY. Still, the account is relatively customer friendly as it doesn’t charge any monthly maintenance fees and offers free access to thousands of ATMs nationwide in addition to up to $15 in surcharge reimbursements.

How we chose the best checking accounts

We took a look at hundreds of financial institutions and reviews. We considered the following factors:

  1. Checking account rates: We heavily weighted the APYs offered by each institution on their checking accounts, paying attention to both high interest rates and consistent rates. Higher and more consistently competitive interest rates were prioritized over others, respectively.
  2. Minimum deposit and balance requirements: We also controlled for accessibility by looking at minimum deposit and balance requirements, prioritizing banks and accounts that have low requirements or none at all.
  3. Bank account fees: The best bank accounts are the ones that don’t cut into your hard-earned money. We favored checking accounts that don’t charge monthly service fees or ATM fees, as well as those that offer ATM-fee reimbursements.
  4. Special offers: As an added bonus to their checking accounts, some institutions offer cash bonus offers for new customers or even cash-back rewards for debit card usage. We made sure to include these special accounts and offers so you can get more from your account.
  5. Specialized accounts: Checking accounts aren’t one-size-fits-all — nor should they be. We looked for specialized accounts that have specific features made for certain groups, like students to joint account holders.

What are the best banks for checking accounts?

In summary, these are our picks for the best checking accounts:

What should I look for in a checking account?

When shopping for a checking account, keep in mind that their main purpose is to provide a convenient and safe place to stash the cash you use for your daily spending. With that in mind, factors such as safety, ease of use and minimal costs should be top-of-mind. When looking for checking accounts, that means finding accounts with zero fees, a wide ATM network, Federal Deposit Insurance Corporation (FDIC) insurance and overdraft protection. Accounts with these features, alongside earned interest or rewards, are your best bet.

Understand what you want from a checking account

A great first step to finding the right checking account is first understanding what you want from a checking account. Of course, you’ll want an account that’s easily accessible. But only you can decide whether that means prioritizing brick-and-mortar branches, mobile app access or worldwide ATMs. As debit cards are a big part of accessibility, also make sure you’re getting a debit card that’s protected.

Figure out what kind of fees — if any — you want to pay for your checking account. No fee checking accounts exist, and they’re some of the best checking accounts on the market.

If you’re a senior citizen, a student or perhaps a couple looking for joint account ownership, these are things to consider when making your checking account wishlist. There are several specialized accounts out there that offer special deals and features for members of these groups.

Then determine whether you want your checking account to earn interest or other rewards. Often these rewards only add to the checking account experience, rewarding you for owning the account rather than you paying to own it. Rewards on some accounts may also offset any fees you face.

If you don’t know where to start, it helps to check out high-yield checking accounts first. These accounts are most often free, easily accessible, provided by reputable institutions and, as an added bonus, can earn you money.

Also consider that perhaps it’s not a checking account you need at all, but rather a prepaid debit card account. You deposit money into prepaid cards as you would with a checking account, but you cannot use more than what’s in the account. This allows you to avoid overdrafting your account and paying the exorbitant fees that often come with that. Just watch out: prepaid debit cards are also known for their multiple fees for reloading the card, monthly service, ATM usage and more.

Find an account with few or zero fees

There are many checking accounts that charge little to no fees. Online banks, in particular, offer checking accounts with zero fees, as they are able to save on the operational costs that burden brick-and-mortar banks. Some checking accounts even offer unlimited ATM-reimbursements or a monthly allowance for reimbursable ATM surcharges.

Since many checking accounts offer little to no interest, it’s even more critical to opt for an account with minimal fees. Common checking account fees include:

  • Maintenance fees
  • Minimum balance fees
  • ATM fees
  • Overdraft fees

Even if you’re using a high-yield checking account, why pay your bank fees for access to your own cash? It’s a good idea to check for bank fees when shopping for a checking account. If your checking account has any monthly balance or spending requirements, make sure you stay within those limits to avoid any unnecessary fees.

Check for widespread ATM access

There’s nothing worse than needing cash in a pinch and not having any way to get some. Then even when you find an ATM, it’s out of your bank’s network so to add insult to injury, you’re charged a fee (or two) for using the ATM.

Avoid this situation by finding a checking account that offers widespread ATM access. Often, this isn’t even brick-and-mortar banks which may offer free access to a few thousand branded ATMs across the country. Online banks tend to go above and beyond, offering free access to tens of thousands of ATMs, often worldwide, through ATM networks like AllPoint and MoneyPass.

Look for FDIC Insurance

You want to make sure your money is protected no matter what. FDIC insurance — and National Credit Union Administration insurance for credit unions — insures your money up to legal limits, which for an individual’s checking account would amount to $250,000. This means that up to $250,000 in your checking account will be recovered if your bank or credit union fails.

In the event of institution failure, you’ll either get a check for the amount that was in your checking account, or set up with a new account for the same amount at another insured institution.

Look for Overdraft Protection

Overdraft protection is a crucial feature, especially if you’re often at risk of overextending your funds. This feature works in a few different ways, depending on the institution and the account. Often, a bank’s overdraft protection will link your checking and savings accounts, drawing on your savings account when you overdraft from your checking account. Other iterations may simply not allow you to overdraft the account at all.

Typically, you have to enroll in overdraft protection. Some accounts charge an extra fee for overdraft protection, but many of the best no-fee checking accounts offer this feature for free.

Look for a checking account that pairs with a high-yield savings account

You might want to pair your checking account with a high-yield savings account if you’d like to maintain your day-to-day spending but stash away a portion of your cash to earn a higher rate of return in longer-term savings.
This is also a great option for those who don’t want to be tempted with the ability to easily spend their savings on everyday needs.

If this is what you’re looking for, start by finding a checking account that fits your daily spending needs, is easily accessible and FDIC-insured. You can then track your spending and set up regular deposits into a separate, high-yield savings account for any excess cash you don’t spend. Keep in mind that not all savings accounts are created the same, and it’s worth shopping around for the best rates when it comes to your savings account.

If you want your money to do more for you with less maintenance, online checking is the way to go.

FAQs: What should I know about checking accounts?

A checking account is a bank account for your day-to-day spending needs. They typically come with a debit card, which allows you to make purchases and provides quick and easy access to cash, making it a safer option than carrying cash. Many checking accounts are also offered with paper checks.

Unlike savings accounts, checking accounts typically have no transaction limits, making them the most liquid option for your money aside from holding large amounts of cash. Checking accounts are also FDIC-insured which adds peace of mind.

Checking accounts are used for your everyday spending needs and generally don’t carry interest (however high-interest checking accounts do exist); by contrast, savings accounts usually carry higher interest rates and are meant for you to save money over the long-run.

Keep in mind that savings accounts will typically restrict access to your cash to around six withdrawals per month while checking accounts allow you almost unrestricted access to any cash you hold in the account.

It’s a good idea to maintain a free or no-fee checking account for day-to-day use. Generally speaking, the best checking accounts allow unfettered access to cash and carry no monthly fees, ATM-fees, or other account surcharges.

It’s generally better to keep just enough in your checking account to cover your daily needs, meet any minimum balance requirements and avoid any possible overdraft charges.

Despite their everyday usefulness, checking accounts aren’t the best places to stash your cash long-term. Savings accounts usually offer higher interest rates, making them a better place to store cash.

There are many free checking account options out there. Some options — especially those offered by online banks — are free accounts that even offer extra features like interest and rewards. Keep in mind that many banks will still feature things like inactivity fees, minimum balance requirements or paper statement charges for their “free checking” accounts.

If you’re paying monthly maintenance fees, minimum balances fees or even third-party ATM fees, it’s worth it to do some research, as there are other accounts out there that will give you more bang for your buck and won’t nickel and dime you for it either. Shop around to find the best free checking account for you.

Yes, many checking accounts earn interest, although the amount offered is typically far less than rates offered by savings accounts or money market accounts.

If you’re looking for the best high-yield checking account, many smaller banks and credit unions offer Kasasa checking accounts, which are essentially free checking accounts that offer higher interest rates, so long as you meet a few monthly requirements.

Checking account interest is taxed if you earned $10 or more in interest in a year. For all your interest-earning deposit accounts, your bank should send you a copy of Form 1099-INT, which they will also send to the IRS. This form will help you report the interest income on your tax return. If you don’t receive this form from your institution, but still earned $10 or more in interest, you will still have to report the interest on your taxes.

If you were lucky enough to earn $1,500 or more in interest, you will have to detail the sources of that income on Schedule B of Form 1040.

Almost every checking account offered by major banking institutions is insured by the FDIC, which provides an account holder with up to $250,000 in federal deposit insurance in the event the underlying bank runs into trouble.

As with any other deposit account, it’s easy to find out whether your checking account has FDIC coverage. You can check to see if your financial institution has FDIC insurance by looking for the “Member FDIC” tag that often appears at the bottom of the bank’s marketing materials.

FDIC insurance covers deposits in checking accounts, savings accounts, CDs and money market accounts, up to $250,000 per ownership category per person within a single financial institution. Credit unions receive deposit insurance from the National Credit Union Administration (NCUA), up to $250,000 per owner, per insured credit union, per account category.

One checking account should suffice for most shoppers. However, there may be instances where you’d want to open multiple checking accounts to help keep your finances organized or separated for different purposes.

For example, many small business owners have their own business checking account to segregate their professional finances from their personal finances.

Some parents may even want to open separate student checking accounts to help teach their kids or budding college students financial responsibility and keep track of their finances.

Keep in mind that you can also open joint checking accounts, which make it easier for couples and those who share their lives to also share finances and track spending. With a joint account, two or more people share ownership, and can deposit and withdraw funds from the same checking account.

Every checking account will feature a routing number and an account number. These two numbers are associated with your bank account and serve as unique identifiers for your account.

The routing number associated with your checking account is a nine-digit string of numbers that identifies the institution that manages your checking account.

Your bank account number identifies your personal account and is the unique identifier that your bank uses to direct cash or wire transfers, track your balance, and rout payments as needed.

If you were rejected after trying to open a checking account, it’s probably because you have a rocky past with previous accounts. When you apply for new bank accounts, most institutions run your information through ChexSystems, which keeps a record of your banking history when institutions report it. This means any history of overdrafts, negative account balances, account closures and the like will be available for ChexSystems users to see.
If you were rejected from opening a new checking account, take a look at your ChexSystems report. It may help to figure out what bad marks on there you may be able to change. There may even be errors on the report that you can dispute and have removed.

A second-chance checking account is a type of checking account available to those who might not otherwise qualify for a traditional checking account due to their credit or ChexSystems history.

It may be worth exploring a second-chance checking account if your banking history might have been blemished by closing an account with a negative balance or outstanding fees.

Typically, second-chance checking accounts have lower spending limits, fewer features and may charge monthly maintenance fees. However they exist mainly to assist people who are determined to get their financial lives back on track. Once you’ve had the chance to rebuild your credit history, you may be able to trade back up for a standard checking account.

Deposit accounts, including checking and savings accounts, are not included in your credit report, since you’re not borrowing money from these kinds of accounts. So the way you use your checking account or even when you close a checking account doesn’t affect your credit.

If you overdraft your checking account and don’t pay back what you owe to your institution, however, that can land in your credit report if the institution sends it to collections. That’s because it’s become more about your debt, which is reported in credit reports, than simply your checking account.

Overdraft protection works a lot like it sounds: it protects you when you overdraft your account. Often, overdraft protection links your checking account to a savings account. Any time you overdraft your checking account, funds are automatically pulled from the savings account to cover the purchase.

Other institutions may offer overdraft protection that simply doesn’t allow you to overdraft the account. This prevents the transaction from going through, but also prevents you from facing an overdraft fee and recovering the extra cost.

Depending on the type of overdraft protection and the institution, overdraft protection can come at an extra fee, or it could be free.

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