5 Best Online Checking Accounts
The Internet provides us almost limitless choices, especially when it comes to finances. These days, you can choose to keep your money at almost any bank in the nation rather than limit yourself to the brick-and-mortar choices in your local area.
If you aren’t happy with your local offerings, turn to the Internet. There are plenty of online checking accounts with no fees, and some that even pay yields on your account balance. With low overheads, online checking account providers can afford to be more generous in their terms, and that benefits consumers.
How to Choose an Online Checking Account
The first thing you should look for is FDIC or NCUA protection — you want to make sure that your money is safe. You should also check into the reputation of the bank or credit union, since you don’t want to end up with a fly-by-night operation.
Consider your individual needs. Think about whether or not you can handle maintaining a large account balance. Will you use the checking account as your primary account, or is it more of an emergency fund? Paper checks, remote deposit of checks you receive, ATM access, and other perks are also things to consider.
You can also compare yields, but it’s important to recognize that yield isn’t everything. If you have to maintain a high balance to get a high yield, it might not be worth the trouble — especially if you can get a great account with a little lower yield, but fewer restrictions.
Here are five great options for online checking accounts, plus an honorable mention.
1. PerkStreet Financial
If you are wary of using credit cards to earn rewards, PerkStreet Financial might offer you an alternative. PerkStreet features a cash back rewards program, paying you up to 1% on every transaction, as long as you make a signature purchase rather than a PIN purchase. The checking account also offers up to 2% back on online purchases at major partner retailers and up to 25% back on personalized "PowerPerks" that come to your email inbox.
PerkStreet gets high marks for customer service and access to 42,000 surcharge-free ATMs. PerkStreet will send you paper checks and allows unlimited check writing and bill pay. You can connect to customer service through social media, as well as call anytime day or night.
This checking account is ideal for those who want to use it as a primary checking account, and who want to earn rewards without using a credit card.
2. Ally Interest Checking Account
Instead of rewards, Ally offers a checking account yield that is very competitive. You receive unlimited checks for check writing if you want, and there is free online bill pay. You don’t have to pay any monthly fees, and you can open an account without a deposit.
One of the great things about Ally, though, is that the overdraft fee is only $9. In a world where $25 to $45 is normal for overdraft charges, Ally doesn't penalize as much for slip-ups. Ally also reimburses you for ATM fees, offers great customer service, as well as eCheck Deposit to remotely add funds to your account.
The Ally account works well whether you want to use it as a very accessible emergency fund or as a primary checking account.
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3. Capital One 360 Checking (Formerly Electric Orange)
Capital One has taken over ING Direct, and so far has kept things business as usual. Even though yields have fallen since the merger, they are still there, and the checking account yield is about average.
You can access more than 35,000 free ATMs, and you pay no monthly fees. If you want checks written, the account will do it for you, printing out the check and mailing it on your behalf. Remote deposit of checks is possible, and you can use P2P payments to send money to others for free. Rather than paying an overdraft fee, this checking account charges you interest until the overdraft is paid.
Even though you won’t earn a yield on this account, it is still one of the best in the business. USAA is generally lauded for its outstanding customer service. You no longer have to be a member of the military to join. You also don’t have to worry about fees, and you are reimbursed for up to $15 in ATM transactions.
You can pay bills for free, as well as enjoy free unlimited funds transfers to any bank in the United States. USAA was one of the first financial institutions to offer remote check deposit. You can also send money to anyone using your iPhone or Android phone.
5. Mutual of Omaha Bank Online Advantage Checking
This is a great checking account, but it’s only available to residents of Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, and Virginia. The interest begins accruing on a relatively low balance of $1,500, and you have access to thousands of free ATMs and bill pay.
You do need to be aware of the fees that come if you are inactive with your account. Make sure that you swipe your debit card at least once a month to avoid dormant account and inactive card fees. This account is a great choice for a primary checking account.
Honorable Mention: EverBank Yield Pledge Money Market Account
EverBank generally gets points for high yields and solid customer service, but you need to have a high balance in order to make the most of any of EverBank’s accounts, including the Yield Pledge MMA. There are five tiers of rates, and you won’t get the best rate unless you have more than $100,000 in your account.
If you have less than $5,000 in your account, you will be charged for bill pay. There are a number of other fees that you might end up paying as well if you don’t maintain a relatively high balance.
This account is good as an emergency fund and for the occasional bill, but if you can’t keep at least $5,000 in your account, it’s probably not the best choice for you.