Best Banks for Checking Accounts of 2020

Your Everyday Money Management Account

Your checking account might be the most important financial account in your everyday life. You receive income, pay bills, and make purchases from that account, so it’s crucial to have everything working smoothly. Not only do you need an account that functions well, but a bank that minimizes fees so you can keep more of what you earn, too.

With those goals in mind, we’ve identified the best banks for your next checking account. These accounts all offer essential checking account features, and your deposits are insured up to federal limits by the FDIC or NCUA.

Best for Cash-Back Rewards: Discover Bank

Discover

Discover 

Cash-back rewards may seem plentiful with credit cards, but debit cards are less generous. Discover Bank’s Cashback Debit account is a free online checking account with unique rewards. Earn 1% cash back on up to $3,000 of qualifying debit card purchases each month, for total monthly rewards up to $30. There are no monthly fees, and there’s no minimum balance requirement. If you already use your debit card for everyday spending, the extra cash is a bonus. But credit cards also offer rewards, and they create a buffer between your checking account and potential problems. So if you’re all about the credit card rewards, this may not be the best fit. 

What we like:

  • Rare opportunity to earn rewards on debit card spending
  • Discover’s robust offering of accounts for one-stop shopping

What we don’t like:

  • Potentially requires giving up advantages of spending with a credit card

Best for Earning Interest: nbkc Bank

nbkc Bank

nbkc Bank

If you hate the idea of funds sitting idle in your checking account, nbkc Bank should appeal to you. Earn 0.75% APY on funds in your personal account, with no monthly fees (as of April 2020). Unlike some payment accounts that pay interest, nbkc Bank does not set significant restrictions. For example, you don’t need to use your debit card numerous times per month or limit certain withdrawals to six per month. The minimum to open an account is $5, and you can deposit checks with your mobile device.

What we like:

  • Easy to qualify for the rate
  • Up to $12 per month in global ATM fee rebates

What we don’t like:

  • Modern, informal vibe might not appeal to fans of traditional banking

Best for Your Monthly Budget: Simple

Simple

Simple

Simple helps you keep your checking account in good shape. The account tracks your spending automatically and allows you to add tags and notes for additional clarity on your finances. With that information, as well as any goals you specify, Simple predicts how much you can safely spend without causing problems later in the month. There are no monthly fees or account minimums, and there are also no overdraft charges.

What we like:

  • An extremely short list of fees
  • Robust budgeting tools to help you spend wisely

What we don’t like:

  • A book of 25 checks still costs $5

Best for Minors: Capital One

Capital One

Capital One

Capital One helps children and teenagers learn about money with a free checking account designed for kids. Teenagers get a debit card for spending, and there are no monthly fees or account minimums. Parents or guardians can monitor the account with online access and account activity alerts. The account pays 0.20% APY (as of April 2020), which may help children learn about money and encourage saving.

Capital One’s 360 Checking also offers an APY of 0.20% as of January 2020. 

The mobile app promotes intentional spending with the ability to set up budgeting categories and savings goals. You can also lock your card via the app if you ever lose it.

What we like:

  • Interest-bearing account for kids and teens ages 8 to 17
  • Provides a substantial level of autonomy (if parents want that)

What we don’t like:

  • No paper checks, though teens may not need those often

Best Credit Union: Alliant Credit Union

Alliant Credit Union

Alliant Credit Union

For fans of customer-owned institutions, Alliant Credit Union offers a free checking account that pays 0.25% APY on your balance (as of April 2020). Credit unions require you to be eligible before joining, but that’s easy with Alliant. Anybody can become a member after joining Foster Care to Success, which helps teens in foster care throughout the U.S.

To earn interest on your balance, you need to sign up for electronic statements and complete at least one electronic deposit into your account each month. If you don’t meet those requirements, you won’t earn anything, but there are still no monthly fees.

What we like:

  • No account minimum or monthly fees
  • ATM rebates up to $20 per month

What we don’t like:

  • Must have electronic statements and make one electronic deposit per month to earn interest

Best With Branches: Chase Bank

Chase

Chase

Big banks may not have a reputation for low-cost accounts, but Chase Bank’s Total Checking account comes pretty close. With over 5,000 branches available, you can bank in person if you so choose. You can also waive the monthly fee by direct depositing at least $500 per month or keeping a daily balance of at least $1,500 in the account. If you don’t qualify for a waiver, expect to pay $12 per month. Although big banks aren’t always as competitive as online banks, Chase ranked No. 1 overall in the J.D. Power 2019 U.S. Retail Banking Satisfaction Study.

What we like:

  • Several ways to eliminate the monthly fee
  • A basic, adequate account with numerous physical locations

What we don’t like:

  • Potential for steep ATM, overdraft, and other fees

Best for Global Travel: Schwab Bank

Charles Schwab

Charles Schwab

The Charles Schwab Bank High Yield Investor Checking account has the essential features you’d expect in a checking account, and it’s well-suited for travel. Schwab provides unlimited ATM fee rebates around the world, and there is no foreign transaction fee for purchases or withdrawals in foreign currency. There are no monthly fees or account minimums, and you earn 0.30% APY on your checking account balance (as of April 2020). That’s not the highest rate in the world, but it’s more than most banks pay in interest for checking accounts, and those accounts might not be the best place for long-term savings anyway.

What we like:

  • Unlimited ATM fee rebates in the U.S. and abroad
  • No monthly fees or minimums required

What we don’t like:

  • Must open a linked brokerage account whether you want it or not

What Is a Checking Account?

A checking account is a bank account that allows for frequent transactions. You might deposit your pay (or have your employer do it automatically through direct deposit) and use the account as a holding area for funds you plan to use soon. Spending money from these accounts is easy. For example, you can:

  • Transfer money from the account to pay bills online
  • Make purchases with a debit card
  • Instruct billers to deduct funds automatically every month
  • Withdraw cash for spending at an ATM or the bank
  • Write checks
  • Link your account to payment apps like PayPal, Venmo, and more

It’s often wise to keep funds in a checking account and spend electronically instead of walking around with large sums of cash. When your bank or credit union is federally insured, your deposits are covered up to $250,000 if the bank goes under.

What Makes a Good Checking Account?

A checking account should be inexpensive and easy to use. Monthly fees are particularly problematic because they’re easy to avoid, and they slowly drain your account. Overdraft charges and other fees can also add up to hundreds of dollars per year.

Be sure to choose a checking account with the services you need. Several features you might find valuable include:

  • Online bill pay that allows you to schedule payments and make on-demand payments
  • Remote or mobile check deposit 
  • The ability to link external accounts
  • ATM fee reimbursements
  • The option to lock your debit card when you don’t plan to use it
  • Official payments like cashier’s checks and money orders
  • Customer service by chat, phone, or mobile app to help when you need a hand
  • ATMs that accept deposits

Key Checking Account Terminology

Available balance: The amount that you’re free to spend from your checking account. The available balance might be different from your account balance due to new deposits into your account or holds on funds in your account.

Debit card: A debit card is a plastic payment card linked to your account. You can use that card like a credit card for in-person purchases or with online merchants. You can also withdraw cash from an ATM with your debit card.

PIN: Your personal identification number (PIN) is a numeric code that helps to protect your account. You may need to enter your PIN when you withdraw cash at an ATM or perform other transactions. Keep that number secret because it helps prevent unauthorized users from accessing your account.

Insufficient funds: If you try to spend more than your available balance, you may have to pay an insufficient funds fee. Always check your balance and stay up-to-date on your account by balancing the account monthly and setting up alerts.

Overdraft: When your bank allows you to spend more money than you have in your account, you become overdrawn. Banks often allow you to opt in to a feature known as “overdraft protection,” which allows you to cover the difference between the amount you want to spend and the amount you have in your account. Overdraft protection often has a maximum limit and may come with a fee. It may be smart to pass on this feature and only spend what you can afford.

Remote or mobile deposit: When you receive a check, you can deposit the funds by taking a picture of the check with your bank’s mobile app.

Endorsement: To deposit funds, you may need to sign the back of checks and other payments you receive. This is known as endorsing the item, and you can add restrictions, such as endorsing a check “for deposit only.”

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Article Sources

  1. Discover. "Checking Account." Accessed April 9, 2020.

  2. nbkc Bank. "Rate and Fee Schedule (Including TIS Disclosure), and Account Disclosures." Accessed April 9, 2020.

  3. nbkc Bank. "Personal." Accessed April 9, 2020.

  4. Simple. "Expenses." Accessed April 9, 2020.

  5. Simple. "Safe to Spend." Accessed April 9, 2020.

  6. Simple. "Simple Checking Account Truth in Savings Disclosure." Accessed April 9, 2020.

  7. Simple. "Frequently Asked Questions: Does Simple Charge Fees?" Accessed April 9, 2020.

  8. Capital One. "Mobile Solutions." Accessed April 9, 2020.

  9. Capital One. "Teen Checking Account." Accessed April 9, 2020.

  10. Alliant Credit Union. "Why Alliant: Membership." Accessed April 9, 2020.

  11. Alliant Credit Union. "High-Rate Checking." Accessed April 9, 2020.

  12. Chase. "Chase Checking Accounts." Accessed April 9, 2020.

  13. J.D. Power. "Ten Years After Great Recession, Innovation Overcomes Reputation as Bank Switching Hits Record Low, J.D. Power Finds." Accessed April 9, 2020.

  14. Chase. "Chase Total Checking: A Guide to Your Account." Accessed April 9, 2020.

  15. Charles Schwab Bank. "Schwab Bank High Yield Investor Checking Account." Accessed April 9, 2020.

  16. FDIC. "Deposit Insurance FAQs." Accessed April 9, 2020.

  17. Consumer Financial Protection Bureau. "Student Banking 101." Accessed April 9, 2020.