A checking account is practically a necessity for day-to-day life. Unless you’re walking around with wads of cash in your pocket (which we don’t recommend), then a debit card tied to a checking account can be a safe way to make daily purchases, and you can write checks or transfer money online to pay the monthly bills.
With 32 fewer bank branches per 100,000 American consumers, according to the Federal Reserve Bank of St. Louis, finding a physical bank to visit in your neighborhood may be getting more difficult.
Most big banks offer online banking, and high fees and little or no interest paid on checking accounts is a thing of the past. Many, in fact, offer a free checking account with fee-free ATMs, low fees, and pay an annual percentage yield that beat what traditional banks offer. And these national banks are FDIC insured financial institutions.
Here are the 10 best online checking accounts, with each featured by what it does best.
Overview of the 10 best online checking accounts
|Ally Bank||Mobile app|
|Capital One 360||Customer service|
|Charles Schwab Bank||Unlimited ATM rebates|
|Axos Bank||Rewards checking|
|Chase||$200 bonus offer|
|Discover Bank||1% cash back|
|Radius Bank||Rewards checking|
|TIAA Bank||Basic checking for beginners|
|Simple||Linked high-yield savings|
10 best online checking accounts
Having an online checking account doesn’t mean you have to do all of your banking online. You may still need to, or want to, visit a physical branch from time to time. Some of our favorite online checking accounts also have physical offices that customers can visit, though that may not be necessary for everyone’s needs.
Ally Bank has many great features as an online-only bank. It has no monthly maintenance fee, a minimum deposit isn’t needed to open a bank account, and standard checks are fee-free.
One of its best features, however, may be its top-rated online mobile banking app. Research by the nonprofit Bank Administration Institute found that 51% of millennials would switch banks for a better banking app.
Ally Bank’s app receives a 4.7 rating out of 5 at the Apple app store, and 4.1 out of 5 at the Google Play app store.
Its mobile app offers standard features you’d expect, such as mobile check deposit, money transfers, bill pay, transaction history search, and a locator for nearby ATM access. Its user-friendly interface makes it easy to view various accounts at Ally, such as a savings account, certificate of deposit, or individual retirement account. Stocks can also be traded and tracked on the app.
Capital One 360
You never realize how much you appreciate good customer service until you need it. Capital One 360 checking covers the basics that many online banks do: no monthly fee, pays 0.10 APY on its checking account that doesn’t require a minimum balance, among other things.
An area it excels at is strong customer support and service. Start with its ATMs. They’re the best way to withdraw cash from an online checking account if you can’t visit a physical branch.
Capital One has ATMs at its bank branches that can be used for free, of course, but it also offers free access at more than 40,000 ATMs in the Allpoint nationwide network. Some Allpoint ATMs can be found at CVS, Target, and Walgreens stores.
A physical check can be deposited through a mobile app, but you may want to do it in person with a teller. If you can’t find an ATM that Capital One works with for free, then it also has Capital One Cafes, which are starting to reopen as coronavirus restrictions ease. The cafes offer free wifi and power outlets, and Capital one cardholders get 50% off Peet’s beverages in the cafes.
Customers can also call bank representatives any day of the week, including evening hours. Online chats and Twitter support are also available.
Chime is an online-only company that partners with two banks for its checking and savings accounts. Accounts are insured by the FDIC.
Chime has a few interesting features. With direct deposit it allows you to have access to your paycheck up to two days earlier than you would with your employer’s scheduled payment date.
That’s nice, but not as nice as its round-up program that grows your Chime savings account automatically. Just use its debit card to buy anything, and the cost is rounded up and deducted from your checking account. The amount that’s rounded up is transferred to your savings account.
Buy a $4.55 cup of coffee and the price is rounded up to $5. That 45 cents difference is saved for you. It’s not free money, but it’s a small and regular way to save your change and pay yourself each time you use the debit card.
The company’s online checking account, which Chime calls a “Spending Account,” doesn’t pay interest. Its savings account, however, pays one of the best higher interest rates around, at 1% APY.
Charles Schwab Bank
The first thing to know about a Charles Schwab Bank High Yield Investor Checking account is that account holders must have a Schwab One brokerage account with it. If you don’t already have a brokerage account with Schwab, you’ll have to simultaneously open one and link it to your checking account if you want a checking account there.
You don’t have to fund the brokerage account or use it at all, but it’s there if you want to be a stock trader. The linked checking account makes transferring money to it and Charles Schwab financial products easy.
Compared to other online checking accounts, Schwab pays a low, variable interest rate of 0.03 APY. Still, it has no monthly service fees or account minimums and received the top ranking in J.D. Power’s 2020 U.S. Direct Banking Satisfaction Survey.
The Charles Schwab Bank feature we like the most is its unlimited ATM fee rebates. There’s no fee to use a Schwab Bank ATM, which makes sense if you can find one, but it also offers unlimited, worldwide usage of ATMs without paying a fee. If there is a fee, you’ll get refunded for it.
It allows withdrawing $1,000 daily from ATMs and spending up to $15,000 per day with its Visa debit card.
Started in 2001 with the basic name of Bank of Internet USA, what’s now called Axos Bank was one of the first banks to offer banking services exclusively online.
What it’s well known for now is a rewards checking account with no monthly fee and no minimum deposit.
To earn up to 1.25% APY, which is a variable rate, you have to meet three criteria each month:
- Direct deposits of $1,000 or more.
- Use a debit card at least 15 times.
- Minimum $3 purchase on each debit card transaction.
Each of the three reward tiers earns 0.4166% APY, totaling 1.25% for reaching all three. After direct deposits of $1,000, the other tiers are 10 debit card transactions, and then five more to reach the third tier. Don’t do any of these things and you won’t earn interest.
Balances up to $150,000 will earn interest, so don’t expect the interest-earning party to continue when you’re that well off.
It’s rare for a bank to offer money to open a checking account. Chase gives new customers a free checking account for setting up direct deposit.
The Chase Total Checking account pays $200 for opening an account by Jan. 20, 2021, setting up direct deposit, and then receiving your money within 10 business days.
If a customer closes the account within six months, the bonus will be deducted at closing.
A $12 monthly service charge can be avoided by doing one of three things:
- Direct deposit of at least $500 per month.
- $1,500 minimum daily balance.
- $5,000 average daily balance.
Since opening a checking account to get the $200 bonus requires setting up direct deposit, then keeping direct deposit will get the fee waived each month. It’s a lot simpler than the requirements that some banks have to waive monthly fees.
This checking account doesn’t pay interest. Only two of its accounts do, at 0.01%.
Known for cash back rewards on its credit cards, Discover does the same thing with its rewards checking account.
Discover Bank’s Cashback Debit account pays 1% cash back on spending up to $3,000 in debit card purchases each month. Maximizing it pays $30 per month or $360 per year. Like the bounty that Chase pays for opening a checking account, this account at Discover Bank pays for keeping an account open at almost double the amount in a year.
Keeping a Discover Bank Cashback Debit account open is easy too because there are no fees.
There’s no monthly account fee, has free ATM withdrawals, and there’s no minimum initial deposit or ongoing balance requirement, among other free services.
Discover’s checking account doesn’t pay interest, though its online savings account pays 0.60% APY.
Radius Bank is one of the rare online banks that offer rewards checking that pays cash back rewards on purchases and pays interest. But there’s a big “if” involved.
The Rewards Checking account pays off well if you maintain a minimum balance of $2,500. Also, at least $2,500 worth of direct deposits must be made each month to have this account.
That can be high for some people, but if it fits your current checking balance, then a move to Radius can be worthwhile.
Currently, Radius pays 0.10% APY on balances of $2,500 to $99,999.99. Bump your checking balance up to $100,000 or more and the interest rate increases to 0.15%. You’re probably never going to see that 0.15% rate, and if you’re holding that much money in an interest checking account, there are other ways to earn more interest.
The Rewards Checking debit card earns 1% cash back on signature-based purchases, meaning you select “credit” instead of “debit” at store checkouts. An extra 0.5% cash back is paid in the categories of health, food, entertainment, and social service organizations.
TIAA Bank’s Yield Pledge Checking account offers a one-year, introductory APY of 0.40% on deposits up to $250,000. After a year, the rate changes to tiers ranging from 0.12% to 0.40%. Currently, the tiers are each set at 0.12%.
The account has no monthly fee, requires only $100 to open, and reimburses up to $15 for ATM fees paid at other ATMs each month.
While the introductory rate is great, it won’t make you rich. A rate calculator on the bank’s website shows that a $10,000 deposit would earn $40 in interest in the first year. That’s a lot of money to leave in a checking account for a year for just $40.
An option we like better at TIAA Bank is its Basic Checking account. It doesn’t pay interest, but the opening deposit and balance minimum are less, making an account easier to fund.
Only a $25 deposit is needed to open the account, which has no monthly account fee if the average daily balance is $25. Otherwise, the monthly fee is $5.
ATM fee reimbursements are the same as for the Yield Pledge account. Its debit card offers features not often seen in debit cards: purchase benefits including extended warranty and price protection.
The online-only bank Simple offers a high-yield checking account that sounds almost too good to be true. It currently pays 0.60% APY on an account tied to its free checking account, which is about what many online savings accounts currently pay.
The added account isn’t a high-yield savings account, Simple says, though it sounds like one. It’s used as a place to put extra cash from your checking account, and it earns high interest and won’t be spent until you need it.
Here’s how it works, according to Simple: Open what’s called a Simple Account, which is a free online checking account for day-to-day spending. It comes with a Visa debit card, paper checks, and other features such as budgeting help.
To earn the high-interest rate, you then set up and link a separate account called a High-Yield Protected Goals Account. This account also has no fees. It’s meant to set aside the money you want to save up, such as by setting an amount and date to save by so you can contribute savings automatically.
The money in it is protected from accidental spending because it’s not money in your daily checking account that can be used with a debit card.
We know, this sounds like a savings account. But it isn’t in a few respects.
Money can be transferred between the accounts in the Simple app. Neither account has fees, a minimum balance, or withdrawal limits. Some savings accounts have minimum balance requirements, and penalties can be charged for pulling money out of a CD early.
According to Simple, the Protected Goals account is different from a savings account because there are no limits to how often money can be taken out.
If you’ve ever thought that your checking account had too high of a balance for an account that pays little or no interest, the Simple accounts are an easy way to set savings goals and fund them without tying your money up in a savings account or CD.
Best online checking accounts summary
|Bank||Monthly fee||APY||Minimum||Key feature|
|Ally Bank||$0||0.10%||$0||Mobile app|
|Capital One 360||$0||0.10%||$0||+40,000 ATMs|
|Charles Schwab||$0||0.03%||$0||Unlimited ATM fee rebates|
|Axos Bank||$0||0-1.25%||$0||Rewards checking|
|Discover Bank||$0||0%||$0||1% cash back|
|Radius Bank||$0||0.10%||$2,500||Rewards checking|
|TIAA Bank||$0||0.12%||$100||Basic checking|
Is online checking online only?
No, it doesn’t have to be, but doing business online only without physical branches is a way for banks to save money and hopefully give some of it back to customers with good interest rates and other perks.
If you’re planning on opening an online checking account, expect to do most of your banking online. If you have a question or problem, can it be solved without having to walk into a bank’s office?
Look for a bank that has good customer service offered in many ways. They include:
- Online app
- 24-hour phone service help
- Live chat
- Secure messaging
If a brick-and-mortar bank with offices around the country, and ATMs everywhere, are what you’re looking for, then an online checking account may not be for you. Some physical banks, however, do offer great online checking accounts, so don’t discount them.
How do I avoid fees?
Few online banks charge monthly account maintenance fees. If they do, you can often get around it by having direct deposit of your paycheck or using the bank’s debit card a few days a week.
Is an online checking account secure?
It should be in many ways, though identity fraud can happen to anyone and to online banks.
To avoid bank fraud, sign up for fraud alerts from your bank. And check your credit reports at least once a year for signs of criminals opening accounts in your name.
When shopping for online banks, check if your account is insured by the Federal Deposit Insurance Corporation, or FDIC, for up to $250,000. If the bank goes out of business, the federal government insures your deposit.
How do I open an online checking account?
Each bank’s website should be pretty straightforward. Not all have the same procedures, but they should generally require these steps:
- Click on a link on the bank’s official website that sends you to a page to open an account.
- Have documentation ready, such as your Social Security number and a valid form of ID such as a U.S. driver’s license or government ID, proof of a physical address, and proof of citizenship or being a resident alien.
- Create a login with a username and password.
- Pick the account type. A joint account will require that person’s documentation.
- Deposit money through a debit from an account you have elsewhere, or use routing and account numbers. A minimum deposit of $25 may be required.
You may also be able to open the account over the phone.
Why you should open an online checking account
One of the biggest advantages to opening an online checking account is that your day-to-day banking will get a lot easier.
You can still get physical checks if you want them, but you can use banking apps to access your checking account to pay businesses and transfer money from your account to someone else’s.
Most online banks have zero fees. If there is a monthly fee to keep an account open, it can often be avoided by having direct deposit and maintaining a small account balance.
Deposits are easy. Instead of going to an ATM or bank office, you can use your smartphone to take photos of checks you want to deposit and complete a deposit within a minute.
Most online checking accounts include free access to ATMs. If a fee is charged, many will reimburse you each month for the ATM fees you’re charged.
Those are just some of the features of online checking accounts.
On the downside, not all online banks have physical offices. Some do, but if the one you like doesn’t, then you’ll have to contact the bank online, on the phone or some other way instead of walking into a branch and talking to someone in person.
Traditional banks offer online and in-person service, so it’s worth considering a traditional bank if you want the best online bank.
The bottom line
Online checking accounts don’t pay high-interest rates, but if your money is going to sit around in a checking account, they can be an easy way to earn a little bit of money instead of doing nothing. The annual percentage yield, or APY, is currently at about 0.10% for most online checking accounts, so don’t expect to get rich with one.
Finding a free checking account shouldn’t be difficult. Most don’t charge monthly fees, and only a minimum deposit is often required to open one.
An online checking account won’t drastically change how you bank, and in fact, it should improve it. At the very least, it should make your financial life a lot easier.