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:
The Best Checking Accounts in December 2018
Minimum Balance Amount
Up to 1.25%
Consumers Credit Union
Up to 5.09%
$10,000 - $20,000
1. No domestic ATM fees & high APY – Axos Bank – Rewards Checking – up to 1.25% APY
Axos Bank 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 the 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, Axos Bank can be a better option than Aspiration.
2. No fees: nbkc bank – No monthly fees + 1.01% APY
There are no monthly fees, no overdraft or non-sufficient funds fees, no fees to stop payments, no fees to get a box of checks, no fees for incoming domestic wires, no minimum balance to earn the APY once the account is opened, and no ATM fees as long as the ATM is part of the Moneypass® network. Even if the ATM is not part of the Moneypass® network, nbkc will reimburse up to $12 in ATM fees per month. And just to prove how transparent they are, they openly disclose that the only two fees that may apply are $5 to send a domestic wire and $45 to send or receive international wires.
Banking can be done online or through their mobile banking app, which allows you to deposit checks at no charge. If you want a checking account that charges hardly any fees and allows you earn a little interest, this account is a great option.
3. No ATM fees: Aspiration – The Summit Account – Unlimited ATM fee reimbursement + 1.00% APY
You can also earn interest on this account. For balances up to $2,500 the interest rate is 1.00% and it is a very healthy 1.00% APY on balances above $2,500. 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.
4. Ally – Interest Checking Account: $10 of ATM fees reimbursed monthly, and up to 0.60% APY
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.
5. No fees: Chime – No overdraft, maintenance, or ATM fees
While the no fee aspect of this account is very attractive, it does come with a couple downfalls: they don’t award interest on their checking account and the interest that can be earned on the savings account is 0.01%.
Chime is a great option for those who want a true free online checking account.
6. No fees & high APY – Simple – Checking Account + Protected Goals Account – 2.02% APY ($2,000 minimum)
Simple was created out of frustration over the banking industry. The founders were confounded by the complexities of certain bank accounts. So instead of just letting the problem be, they came up with a solution – a no fee bank account that earns interest and helps you budget your money “in one simple app”. What makes this bank account stand apart from other online checking accounts? Well, for starters, it’s a Checking Account + Protected Goals Account that doesn’t have any fees, not even if you use an international ATM (however, a fee may be charged by the ATM owner). Another standout feature is that you have the opportunity to earn 2.02% APY. To earn the APY, you’ll have to have a minimum of $2,000 in the Protected Goals Account. This account is meant to be used to help you save money towards a goal. It’s like a savings account without transfer limitations. You can make as many transfers between this account and the checking account as you’d like without running into excess transfer fees. There are a ton of other features that make this account worth considering.
7. Highest APY: MemoryBank – 1.60% APY (for the first year) on balances up to $250,000
8. TIAA Bank – High Yield Checking: 1.21% APY (for the first year) with $5,000 minimum to open
9. Consumers Credit Union – Free Checking: Unlimited ATM fee reimbursement + up to 5.09% APY possible
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 4.09% APY on balances up to $15,000. If you spend at least $1,000 a month, you can earn 5.09% APY on balance up to $20,000.
This is a valuable proposition – but it is complicated. We have included it because 5.09% 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 0.10%.
10. Charles Schwab – High Yield Checking: Unlimited ATM fee reimbursement + 0.35% APY
This account pays 0.35% 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.
Runner Up: Fidelity Cash Management Account: Unlimited domestic ATM fee reimbursement
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.
According to a MagnifyMoney analysis of FDIC data, in 2017 Americans paid over $36 billion in fees to banks, some of which include overdraft fees, ATM fees, and monthly maintenance fees. While total fees paid are down from over $41 billion in 2009, they are up over 10% from their lows in 2011.
Among the fees, overdraft fees are the biggest single burden on Americans, representing over one third of fees paid over the last five years. Account maintenance fees come in second, at over 10%, while ATM fees represent over 5%.
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.
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