As consumers grow increasingly frustrated by the checking account options offered by traditional banks, more are seeking out the best online checking accounts for better interest rates and service. Large banks are continuing to add fees, such as debit card fees, and are not concerned with scaring the less profitable customers away. This is part of a larger plan to increase profitability, which includes firing the customers who don’t have large balances and sending them to online banks, small banks, and credit unions. If these customers remain unprofitable at their new institutions, those organizations may be forced to enact fees, as well.
Regardless of the larger situation, including industry-directed changes and regulations, the best thing a customer can do is find the best checking account that meets his or her needs at that particular time, with the information that is currently available. Here are my picks for stable, convenient online checking accounts.
Ally Bank. Ally Bank (formerly GMAC Bank) offers a checking account with no monthly fees and no minimum balance. The no-fee, no-minimum accounts are becoming increasingly rare, and even those banks that have held out with these accounts, very few offer interest on the accounts, as Ally Bank does.
EverBank. EverBank’s Yield Pledge Checking Account comes with the unique promise that the account will always offer a rate within the top 5 percent of comparable accounts. Other perks include a lack of monthly fees, unlimited ATM fee reimbursements as long as the minimum balance is met, and mobile check deposits. The minimum to open this account is $1,500.
Capital One 360. The ING Direct “Electric Orange” online checking account was my primary online checking account for almost as long as the account had been offered by the bank, but ING Direct is now Capital One 360. Like Ally, this account charges no fees, requires no minimum balance, and offers interest to account holders. Rather than overdraft coverage from a linked savings account, the 360 Checking account takes advantage of a line of credit offered to approved customers and also offers paper checks.
FNBO Direct. FNBO Direct offers a savings account with a competitive interest rate, and the Online BillPay Account is a competitive offer as well. FNBO offers a high interest rate on their BillPay Account and integrates PopMoney, a system that allows you to easily transfer money to and from your friends (or anyone else who uses PopMoney).
I’ve had an FNBO Direct savings account for a long time, and it has consistently offered high rates.
USAA. USAA is taking advantage of banks charging $5 debit card fees, heavily advertising that their debit card is free to use. The USAA checking account is certainly a favorite among experts, earning its place as a finalist at the 2nd Annual Plutus Awards. USAA was also named one of CNN Money’s least evil banks.
The bank serves primarily members of the military, but membership is open to the public. The checking account has no fees and does not charge for up to the first 10 AM withdrawals each month. USAA also reimburses customers for up to $15 in ATM transactions each month, making any convenient location an “in-network” ATM. USAA also offers remote deposit, a convenient way to deposit checks into the account by scanning or taking a photograph of both sides of the check.
With the largest banks finding ways to eliminate the least profitable customers through the addition of fees, as of today, there are still plenty of options available for people who are interested in sticking with an institution that generates revenue in another manner. If the above options don’t work for you, there are credit unions that would be happy for an influx of customers. Every financial institution is a business, however, and if new customers end up being unprofitable in the future, free checking will become extinct.
Updated December 28, 2015 and originally published October 10, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.