The 7 Best Online Checking Accounts of 2020
How often do you actually visit your bank branch? If you are like most people these days, the answer is not very often. American Banker, a publication for banking industry professionals, recently reported that 92 percent of Millennials, now the largest U.S. population segment, choose their bank based on digital offerings. Sixty-eight percent use online banking to manage their finances. With such a high reliance on the web for managing money, it is no surprise that online-only banks are growing in popularity.
There are many great choices for online banking today, so we whittled down the list to the top online banks that could be a good fit for your money.
The winning online checking account today is Capital One’s 360 Checking, which offers great features and almost no fees. There are no monthly recurring charges, no maintenance fees and you can open an account with no minimum balance. Even your first book of checks is free, as is your debit and ATM card. Capital One 360 offers 39,000 fee-free ATMs across the country through the AllPoint ATM network.
In addition to its low fee structure and free ATM use, you get everything you would expect from an online bank, including bill pay, mobile check deposit and four overdraft options that give you the flexibility to choose to have transactions automatically declined, draw from a savings account or line-of-credit or pay the transaction with a one-day grace period before overdraft fees apply.
Ally offers competitive interest rates, a great online and mobile experience, as well as all of the features you would expect from an online bank. But one place where Ally stands out is its online transfer options.
People with kids, active social lives or complex finances are familiar with sending transfers to other accounts. But some banks make this harder than it should be, and everyone doesn’t use money transfer apps such as Venmo or Square Cash. Ally has its own internal transfer system that works well, and it is a member of the Zelle network offering same-day transfers to anyone with an account at a participating bank. Account holders also get ATM fee rebates up to $10 per month using out-of-network ATMs.
Charles Schwab is known more for investing than banking, but its popular Investor Checking account deserves an important spot on this list. Investor Checking is a fee-free, online account that requires a basic Schwab investing account. It offers bill pay, easy transfers to Schwab accounts and external accounts, and shows up on the same investment dashboard as other Schwab accounts for investors. But that isn’t what makes this account so special for travel.
Schwab Bank checking accounts come with an ATM debit card that is fee free to use anywhere in the world. In your hometown and need cash? Don’t worry about finding your own bank to withdraw cash, you can go to the ATM at the store, the bar or any other bank. Schwab does not charge any fees for domestic or foreign ATMs, and automatically reimburses you for fees charged by other banks. It doesn’t matter if you are in the U.S., Europe, Asia, Africa or anywhere else. If there is an ATM, you can use it for free. You might be stuck without cash in Antarctica, but banking services there are pretty limited anyway.
Want to learn more? Check out our full review of Charles Schwab.
Discover is best known for credit cards, but it has a full bank as well. And if you want to earn cash back on every debit card swipe and online purchase, Discover’s Cashback Checking is the way to go. Customers earn one percent cash back on all standard purchases up to $3,000 per month, leading to a maximum $360 per year in rewards.
The account is fee-free for regular activity and comes with free checks. Account holders also get free incoming wires and there are no fees for returned checks you deposit. The only big downside of this account is that the Discover branded debit card is not as widely accepted as Visa or MasterCard branded debit card. But if you can get past that, you will also enjoy the 60,000 fee-free ATMs nationwide.
You can also read through our full review of Discover Bank.
Florida based TIAA Bank may not be as well known as some other brands on this list, but it is worth a look for anyone who stores a large cash balance in their checking account. While the account has a steep $5,000 opening balance requirement, TIAA Bank guarantees to always remain in the top five percent of interest rates for checking accounts. The bank currently offers 1.21 percent APR for the first year, and 0.25 percent on balances below $10,000 from that point on.
Sure, you can move your money around chasing better interest rates after that year, but for checking accounts, 0.25 percent is a competitive rate. TIAA Bank offers ATM fee reimbursements at any bank as long as you maintain a $5,000 balance, but there is no fee if you dip below that point. There are no fees for most regular activity, and fees for less common needs are in-line with most other banks.
Budgeting is one of the toughest parts of managing money on a daily basis. Simple thinks it shouldn’t be that way, and built budgeting tools right into its bank account. The fee-free bank is mobile first and offers goal and “safe to spend” tracking features built in. The bank helps you track your spending so you spend less, which is a good thing.
They don’t charge fees for anything, though they do not reimburse other bank’s ATM fees. You can get cash for free from any AllPoint ATM, however, without any fees. Simple accounts don’t offer a checkbook, but they will print and mail checks for you using the bill pay feature.
If this sounds like what you're looking for, you can also read through our full review of Simple.
Chime and Simple are very similar, as they are both fee-free banks with a mobile-first online banking experience. Chime doesn’t call it a checking account, even though that is essentially what it is. Instead, they call it a “Spending Account,” which lives alongside an Automatic Savings Account. Once you enroll in Automatic Savings, chime automatically saves for you each time you use your Chime debit card.
The account offers most features you would expect from an online bank, but one standout is how they treat direct deposit. Rather than holding your direct deposit in “pending” limbo for up to two days, Chime customers get their paycheck up to two days earlier when it posts in the banking system. While you should not be living paycheck to paycheck either way, getting early access to your money is never a bad thing.
Want more information? Check out our full review of Chime.