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When customers grew tired of high cable and satellite bills, streaming giants Netflix and Hulu entered the playing field.
When customers lamented their experiences with taxis, Uber and Lyft offered a new way to get around town.
And when customers saw that their financial institutions were not working with their best interests in mind, online bank accounts came onto the scene to offer more.
The best online checking accounts offer members lower fees (or sometimes even no fees) and higher interest rates than their traditional bank and credit union competitors. They also have responsive websites and advanced mobile apps to provide the same convenience of in-person banking on the go.
And despite what you might think about an account that is entirely online, they are incredibly safe. (Lack of safety is just one of many myths about online banks.)
All this makes online bank accounts highly appealing to savvy Penny Hoarders — or, in the case of online checking accounts, savvy penny spenders.
The Best Online Checking Accounts of 2021, Ranked
If the pros of online banking far outweigh the cons for your personal needs, spend some time researching online checking accounts available in 2021. Remember: Not all online banks are created equal.
To determine my top 9 list, I researched 20 of the most popular online checking accounts and compared key elements, including APYs, minimum account balances, ATM fees, monthly service fees, foreign transaction fees and overdraft fees.
Based on these factors, I ranked them by best features overall. While the 12 other popular accounts I researched had merits, I couldn’t justify choosing any of them over the nine listed here.
My most crucial advice during your pursuit: Always read the fine print before signing up for an account.
1. nbkc bank
The National Bank of Kansas City, more popularly known as nbkc, isn’t just for Kansans — and with its high APY, lack of fees and easy ATM access, that’s a good thing for those of us living outside the state.
APY: 0.15%, no matter the balance.
Minimum balance requirement: You’ll need $5 to open the account, but no minimum balance is required.
ATM fees: Members get fee-free access to more than 37,000 MoneyPass ATMs. If you can’t find one near you, you can withdraw from other ATMs and receive up to $12 per month in ATM fee reimbursements.
Monthly fees: None.
Foreign transaction fees: None.
Overdraft fees: No overdraft fees. The only two conceivable fees you might incur with nkbc are for sending a domestic wire in the U.S. ($5) and sending or receiving an international wire ($45).
Details: National Bank of Kansas City
2. Axos Rewards Checking
Formerly known as Bank of Internet, Axos Bank offers a great online checking account with the potential to earn up to 1.25% APY.
APY: You have the potential to earn a 1.25% APY, assuming you fulfill three conditions each month (each worth 0.4166% APY):
- Receive at least one direct deposit of $1,000 or more.
- Use your debit card 10 times per month.
- Use your debit card 15 times per month.
So if you receive one direct deposit from your employer each month and use your debit card 10 times, you will receive two-thirds of the available APY (0.8332%). Five more swipes of the debit card would earn you the full 1.25% APY. Note: Only transactions of $3 or more apply.
Minimum balance requirement: None.
ATM fees: Unlimited ATM fee reimbursements, none outside the U.S.
Monthly fees: None.
Foreign transaction fees: Yes, 1% of each transaction.
Overdraft fees: None.
Details: Axos Rewards checking account
Notes: Replacement debit cards cost $10 (or $50 for rush delivery), so hold on tight to your wallet.
3. Wealthfront Cash Account
The Wealthfront Cash Account is a new high-interest checking offering from Wealthfront, a popular banking service. It does everything that traditional checking accounts do — but it’ll pay you double the national average interest, and you can get paid up to two days early when you directly deposit your paycheck. Plus, Wealthfront insures your deposits up to $1 million.
APY: 0.10%
Minimum balance requirement: You only need $1 to open an account, and there are no account minimums.
ATM fees: You get a debit card that works at 19,000 fee-free ATMs across the U.S.
Monthly fees: Wealthfront won’t charge you any monthly or maintenance fees.
Foreign transaction fees: 2.75%
Overdraft fees: There is no overdraft option, so you don’t have to worry about overdraft fees.
Details: Wealthfront Cash Account
4. Charles Schwab High Yield Investor Checking
Travelers will love the Charles Schwab High Yield Investor Checking account, thanks to its universal ATM fee reimbursements.
APY: 0.03%.
Minimum balance requirement: When you open a checking account with Charles Schwab, you must also open a Schwab brokerage account, but don’t worry: It also has no minimum balance requirements.
ATM fees: Universal ATM fee reimbursements.
Monthly fees: None.
Foreign transaction fees: None.
Overdraft fees: You may want to keep something in the brokerage account, because Charles Schwab doesn’t charge overdraft fees if the funds are available in the linked account.
Details: Charles Schwab High Yield Investor Checking account
5. Ally Interest Checking Account
Ally Bank offers both checking and savings accounts that are worth your consideration, especially with easy ATM access and lack of monthly maintenance fees.
APY: This online checking account offers 0.25% APY on balances over $15,000. For balances less than $15,000, Ally offers 0.10% APY. The available linked savings account, however, pays out 0.60% APY, so it makes more sense to keep your money there.
Minimum balance requirement: None.
ATM fees: Offers U.S.-based ATM reimbursements up to $10 and all U.S. Allpoint ATMs are free. However, Ally’s checking account does fail travelers. There are no ATM fee reimbursements outside the U.S. and foreign transaction fees total 1% of the transaction.
Monthly fees: None.
Foreign transaction fees: Yes, 1% of each transaction.
Overdraft fees: None.
Details: Ally Interest checking account
6. Discover Bank Cashback Debit
The biggest reason I love this high-yield checking account: Your earnings are all about how you spend.
APY: Unlike other banks on this list, Discover does not pay out an APY. Instead, it rewards you for using the money in your checking account. Right now, Discover gives you 1% cash back on up to $3,000 in debit card purchases every month. That’s up to $30, just for spending as you normally would.
Minimum balance requirement: None.
ATM fees: Access to more than 60,000 fee-free ATMs, though you may incur fees for out-of-network ATMs.
Monthly fees: None.
Foreign transaction fees: It depends on the country. See which countries you can use your debit card in without incurring a foreign transaction fee.
Overdraft fees: None.
Details: Discover Cash checking account
7. Chime Spending Account
Chime is unique in that it earns very little interest but still has plenty of benefits to merit a spot on this list, including cool savings tools for young savers, easy access to ATMs and early access to paychecks.
APY: The checking account does not earn interest. But the associated savings account that comes with every Chime spending account earns 0.50% APY.
Minimum balance requirement: None.
ATM fees: 60,000 fee-free ATMs in the U.S. ATM withdrawals are limited to $500 per day, however, and cards come with a daily spending limit of $2,500.
Monthly fees: None.
Foreign transaction fees: None.
Overdraft fees: None.
Details: Chime Spending Account
Notes: What makes Chime unique is how it helps users build up their savings. Chime can automatically transfer 10% of any direct deposit into your savings. Even more helpful is the automatic rounding tool. If you buy an iced coffee for $3.14, Chime rounds the charge up to $4 and puts the extra $0.86 into your savings account. You can turn off both features at any time.
One final cool feature: Chime can get you access to your paycheck via direct deposit up to two days ahead of payday.
Check out our Chime Bank review for more details.
8. Consumers Credit Union Free Rewards Checking
If you have your sights set on the highest APY possible, go with Consumers Credit Union. Just be ready to meet some strict criteria first.
APY: This bank offers the best APY on this list. But you’ll have to meet a lot of conditions to earn the full 4.09%. First, you have to have a $5 minimum opening deposit.
To earn 3.09% APY on balances up to $10,000 and unlimited ATM fee reimbursement, you need to do four things:
- Use the debit card at least 12 times per month (and run it as credit rather than debit).
- Have one or more direct deposits or ACH debit to your account totaling $500 a month.
- Spend at least $500 on your CCU Visa credit card.
- Receive all your paperwork digitally (instead of by mail).
To bump the APY up to 4.09% on balances up to $10,000, you’ll have to spend at least $1,000 per month with the credit union’s Visa credit card.
In short, you need to be a power user to earn the fantastic APY. Otherwise, the APY is just 0.01%.
Minimum balance requirement: None.
ATM fees: None, with unlimited ATM fee reimbursement if you meet minimum Rewards Checking requirements. Consumers Credit Union has more than 30,000 fee-free ATMs nationwide.
Monthly fees: None.
Foreign transaction fees: Yes, 1% of each transaction.
Overdraft fees: $30 for every overdraft. You can link the account to a savings account and get overdraft protection, which will cost $10 per transfer.
Details: Consumers Credit Union Free Rewards checking account
Notes: One small highlight for the Consumers Credit Union: There are 10 physical locations in the Chicago area and 1,800 shared branches nationwide, should you have a need for in-person help.
9. Capital One 360
Capital One 360’s checking account is not the strongest, but its potentially high APY, its access to ATMs and its lack of foreign transaction fees are its saving grace.
APY: 0.10%
Minimum balance requirement: None.
ATM fees: 70,000 Capital One and Allpoint fee-free ATMs, but there is no fee reimbursement for out-of-network ATMs.
Monthly fees: None.
Foreign transaction fees: None.
Overdraft fees: Choose what happens when you overdraw. You can set up auto-decline, free savings transfer, or next day grace (a day to replace the amount before you are charged $35).
Details: Capital One 360 checking account
Comparing the Best Online Checking Accounts of 2021
| Online Checking Account | APY | Minimum Account Balance | ATM Fees | Monthly Fees | Foreign Transaction Fees | Overdraft Fees | Notes |
|---|---|---|---|---|---|---|---|
| nbkc bank | 0.15% | None | None at 32,000 Moneypass fee-free ATMs; reimburses up to $12/month in ATM fees | None | None | None | Costs $5 to open account |
| Axos Rewards Checking | Up to 1.25% | None | None; unlimited ATM fee reimbursement | None | 1% of each transaction | None | Must meet qualifications to earn APY; ATM fee reimbursement only applies to U.S. ATM locations |
| Wealthfront Cash Account | 0.10% | None | None for 19,000 ATMs in U.S. | None | 2.75% | None | Get paid up to two days early with direct deposit |
| Charles Schwab High Yield Checking | 0.03% | None | None; unlimited ATM fee reimbursement | None | None | None | Linked with Schwab brokerage account |
| Ally Interest Checking Account | 0.25% or none | None | None; reimburses up to $10/month in ATM fees in U.S. | None | Yes, 1% of transaction | None; free overdraft protection | Can link savings account (which pays 0.6% APY) |
| Discover Bank Cashback Debit | 1% cash back on debit card purchases up to $3,000 each month | None | None at 60,000 fee-free ATMs; no ATM fee reimbursement | It depends on the country | Yes, 1% of transaction | Getting cash back on debit card purchases could earn you up to $30 a month | APY requires $0.01 in Protected Goals Account |
| Chime | None | None | None at 60,000 fee-free locations in U.S. | None | None | None | Earn 0.50% APY in the connected savings account; account also offers savings features |
| Consumers Credit Union Free Rewards Checking | Up to 4.09% | $5 | None; unlimited ATM fee reimbursement if you meet requirements | None | Yes, 1% of transaction | Yes, $30 per overdraft | APY and ATM reimbursement are linked to a lot of conditions that must be met |
| Capital One 360 | 0.1% | None | None at 70,000 Capital One and Allpoint ATMs; no ATM fee reimbursement | None | None | $35, but you can opt for auto-decline, free savings transfer, or next day grace | Link this account with a high-yield savings account or money market account |
Visit our list of bank promotions to learn about how you could gain a bonus when signing up for a new bank account.
What to Look for in an Online Checking Account
If you keep your cash in a traditional bank or credit union but are drawn to the convenience and higher returns of an online checking account, consider several important factors:
- Annual percentage yield (APY): An annual percentage yield, according to Investopedia, is “the effective annual rate of return taking into account the effect of compounding interest.” If you are intrigued by complex math formulas, Investopedia even explains the calculation. But for those who, like me, shudder at the thought of high school math, here’s the easier thing to remember: The higher the APY, the more money you earn. An alternative to consider to APY is cash back. Some accounts, like Discover, offer cash back in place of interest. Depending on how much you spend in debit card purchases, cash back could be the better option.
- Minimum balance: The best online checking accounts typically require no minimum balance — or a reasonably low balance. Some banks may require minimum balances to achieve certain benefits, like a higher APY or ATM fee reimbursements.
- ATM fees: Speaking of ATMs, look for a mobile-based checking account with a large network of fee-free ATMs nationally, or even globally. A truly good checking account should even reimburse you for fees other ATMs outside of the network may charge you.
- Monthly fees: Make free checking accounts a top criterion when selecting an online bank account; this is often a key differentiator from checking accounts at traditional banks. If an online bank includes “monthly maintenance fee” in its fine print, take your money elsewhere.
- Foreign transaction fees: If you travel out of the country frequently, find a checking account with a debit card that does not charge you a fee to use an ATM or make a transaction abroad. However, this may not be the most important criterion, as many savvy online bank members also have travel rewards credit cards that are fee-free globally.
- Overdraft fees: Everybody makes mistakes. Don’t let your online bank punish you for it. Find a checking account that will not charge you an overdraft fee if you accidentally overspend.
Downsides of Online Checking Accounts
Even the best free online checking accounts have their disadvantages.
The biggest downside: Many online financial institutions do not contract with ATMs, so depositing cash can be difficult. Even those of us who live by the plastic in our wallets may sometimes need to deposit cash, like if Grandma gives you $100 for your birthday or you wait tables and amass a fair amount in cash tips each week.
If you don’t want to carry a lot of cash, purchase a money order for as little as $1 and then deposit the money order electronically. Or give it to a friend who can Venmo you the equivalent.
Other drawbacks include a lack of cashier’s checks (you may have to order one and wait a few days for it to arrive) and a lack of in-person service. When I am stressed about my finances or troubled by activity I see in my account, I find it satisfying to go into one of my credit union’s physical branch locations to get assistance. But if you think you can keep your cool while getting help over the phone or online, this shouldn’t be a problem.
Frequently Asked Questions (FAQs)
If you are making the move from a checking account at a traditional bank to an online account, you likely have some questions. Here, we’ll tackle some of the most frequently asked questions about online checking accounts:
What Other Banks are Like Chime?
Chime is certainly one of the more interesting online banking accounts out there, but its app-based approach is not wholly unique. Some of Chime’s competitors—and thus alternatives for you to consider—include Current Bank, Varo, and Acorns.
Current Bank allows you to set up Savings Pods, little sub savings accounts to work toward a goal. You can also get your paycheck two days early.
Varo Bank has checking and savings accounts, the latter with an automatic savings tool. Varo also has early direct deposits.
Finally, Acorns allows you to get involved in micro-investing, rounding up your purchases and investing the remaining amount. There is a monthly service fee for this account, however.
A bank account with any of these institutions could be worthwhile, but in general, Chime tends to be the most popular option.
Who Has the Best Free Checking Account?
This is a good question, but a challenging one to answer. It really comes down to your specific needs. Accounts are often advertised as “fee-free,” but that could just mean no monthly fees, which are kind of “catch-all” service fees. They still might charge foreign transaction fees, overdraft fees and even lost debit card fees.
Think about your lifestyle. Do you travel abroad regularly? Look for an account with no foreign transaction fees. Have you paid one too many overdraft fees? Avoid accounts that overcharge you for those mistakes.
But there’s more to a checking account than being fee-free. Do you want a high interest checking account? Are you interested in a free checking account with a highly rated mobile app? Do you want to be able to link your checking account to a savings account? How important is easy ATM access to you? Would you benefit from early direct deposits?
There are so many factors to consider. Our rankings include the best of the best, but you’ll want to use the table above to zero in on the checking account that is right for you.
Can I Open a Checking Account With No Money?
Many banks require a minimum deposit amount when opening a new account, and others still have minimum balance requirements. That said, you can find banks with no minimum deposit at opening and no minimum balance. So yes, some banks do allow you to open a checking account with no money.
How Do I Deposit and Withdraw Money With an Online Checking Account?
Depositing checks at online banks is easy. Any account worth considering will have a mobile check deposit feature that allows you to take pictures of the front and back of the check. Funds will not be immediately available when you use this option, so hold onto the paper check until the money has cleared.
If you have another savings or checking account with a physical bank, most online banking accounts will allow you to connect the two accounts so that you can transfer funds. Having an online account with good rewards that is connected with a brick-and-mortar bank that is close to your home makes depositing funds easy.
To deposit cash, just go to an ATM within your online bank’s network. You can also buy a money order, which will carry some level of fee, albeit a minimal one.
Withdrawing money from your online bank account works similarly. You can go to an ATM that is in network for free withdrawals. You can also transfer money to a connected account and withdraw in person. Finally, online checking accounts should come with debit cards, which you can use to spend your money.
Are Online Checking Accounts Safe?
Yes, online banks are safe. Choose a bank that is insured by the Federal Deposit Insurance Corporation (FDIC) or a credit union that is insured by the National Credit Union Administration (NCUA). Not sure whether you should go with a bank or credit union? Check out the pros and cons of banks and credit unions before making a decision.
Secure online banks will also offer account security features like multi-factor authentication and biometrics.
Tips for Choosing the Best Online Checking Account
Still not sure which online checking account to choose? Here are a few tips that might help.
Think About Your Needs
Most online checking accounts — especially the ones on my top nine list — offer some combination of good perks, though they might be missing out on others. Ultimately, you have to decide which benefits are more important to you.
Are you looking at your checking account as a small but smart investment strategy? Go with an account with a higher APY. Do you regularly rely on cash when traveling? Look for an online bank without ATM surcharges and that reimburses you out of network.
You should also consider whether banks or credit unions are the right option for you.
You don’t need every feature, so think about your needs before choosing an account. Opening accounts with multiple institutions could help you secure the best features.
Maintain More Than One Account
You don’t have to have all your accounts through the same financial institution. You can start a savings account at a local credit union, sign up for an online checking account for the high APY and easy access to ATMs and utilize a national brick-and-mortar bank for your car loan.
Many of those traditional banks and credit unions also offer their own online bank accounts for a “hybrid solution” that gives you in-person access to assistance and that still offers the benefits of an online account.
Know What You’re Signing
Before signing with an online checking account — or any account with any financial institution — read the fine print. Closely.
APYs that sound too good to be true may only apply for a set amount of time or under set conditions; ordering checks in the mail or wiring money may cost an unexpected fee; and foreign transactions may be free, but foreign ATMs may include a fee.
Reading the fine print may also help you discover other benefits (like no wire fees) that may be important to you but that are not commonly advertised.
Timothy Moore is a market research editor and freelance writer covering topics on personal finance, careers, education, pet care and automotive. He has worked in the field since 2012 and has been featured on sites like The Penny Hoarder, Debt.com, Ladders, Glassdoor and The News Wheel.
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