An online checking account beats a traditional checking account for the same reason as email beats the postal system and online shopping beats brick-and-mortar stores. Online checking accounts are based on traditional checking accounts, but with more convenience, less cost, and less hassle.
Online checking accounts have been around since the early days of the internet, but at first were quite limited in terms of functionality. In recent years online checking accounts have become more sophisticated. In fact, many online checking accounts now include a free mobile app that lets people do their banking from their phone.
These days, consumers can do virtually all their banking online or on their mobile banking app, from bank-to-bank transfers, to depositing checks, to scheduling bill payments. Many online banks even offer add-ons like ID theft insurance, roadside assistance, and retail rewards programs.
|Savings Account||Checking Account||Money Market Account (MMA)|
|Earns interest||✓||✓ (varies by bank)||✓|
|ATM access||✓ (varies by bank)||✓||✓|
|Debit card & check writing access||✗||✓||✓ (with federal limits)|
|Higher yield potential||✓ (varies by bank)||✗||✗|
|Our Top Choice:|
No 2 checking accounts are equal, so it’s worth doing a comparison shop before settling on an online bank. The following is a checklist of things to focus on when comparing online checking accounts.
Customer service: Some online banks have physical branches, while others operate exclusively online. Some offer personalized customer service (usually for a monthly fee) while others make you wait on the phone with everyone else. Some offer live chat straight from your online or mobile bank account, others don’t. Many online banks offer round-the-clock customer service.
Savings accounts: Some banks only offer checking accounts. Others offer a selection of checking accounts, savings accounts, and certificates of deposit. Better yet, some banks offer hybrid checking-savings accounts that let the customer simultaneously have everyday access to their account and save money.
Credit or debit cards: Like regular checking accounts, online checking accounts usually come with the option of linking a credit or debit card to the account. Online banks are increasingly offering customers a choice of credit card plans, each with a different rate and different set of features and benefits.
Loans: Another benefit of opening an online checking account is it can give you easy access to loans. Depending on the bank, there may be personal loans, home loans, auto loans, and many other types of lending products. Online loans offer the same benefits as online checking accounts: greater convenience, lower fees, and quicker applications.
Online checking accounts offer all the same functions as traditional checking accounts—and more. Online checking accounts have revolutionized banking, allowing users to do everything they would have previously done in-branch from the comfort of their own home, or from on the go.
Here are some of the features usually offered with an online checking account:
Domestic and international wire transfers - Send and receive money between your account and another person’s account.
Transfer money between accounts - Transfer money between your own checking and savings accounts.
Multiple account integration - Keep your accounts organized and easy to access.
Bill payment - Stay on top of your bills and set reminders so you never miss a beat.
Digital check deposit - Instantly scan and deposit a check with your smartphone and get access to the funds straight away.
Digital/downloadable account statements - Great for managing your budget, and for instantly sending records to your accountant.
Mobile banking app - Manage your accounts from your mobile device.
Mobile payments - Make purchases straight from your account with Google Pay, Apple Pay, or Samsung Pay.
Sophisticated security and encryption - Keep your data safe with multi-factor authentication and extra-strong encryption.
FDIC Insurance - Deposits insured up to at least $250,000 (and sometimes as high as $1.5 million, depending on the bank).
SMS / email alerts - Notifications whenever any unusual or suspicious activity occurs in relation to your bank account.
ATMs - Withdraw money from thousands of ATMs in the US and around the world, and get reimbursements from third-party ATM withdrawals.
Credit card rewards - Get points for making purchases with your account-linked credit card
Chime is a financial app for individuals who want to enjoy fee free˜ services and ramp up their savings. Chime's checking account comes with a Chime Visa® Debit Card, and provides an easy to use and enjoyable mobile app and online experience.
Aspiration is a socially conscious online financial services firm best known for its cash management accounts, where users decide their own monthly fee and earn conscious cash back.
HSBC is a large financial institution with more than 200 branches across the country. HSBC Direct is its online banking option, which includes checking, savings, and CDs.
¹Annual Percentage Yield (APY) is accurate as of July 1, 2021. All Varo Savings Accounts earn 0.20% APY beginning on that date. APY is variable and is subject to change. No minimum balance required to open an account. Balance in Savings must be at least $0.01 to earn interest. To earn 3.00% APY, the Varo Savings Account must meet these requirements: Account Holder must 1) receive total qualifying direct deposits of $1,000 or more to a Varo Bank Account or Varo Savings Account in the same qualifying period. 2) The daily balance in the Varo Savings Account must not exceed $5,000. 3) Keep your Bank Account and Savings Account balances above or equal to $0.00 the entire calendar month. If these conditions are not met, you will earn 0.20% APY on the Savings Account balance for that period. The Qualifying Period is defined as the first day of the calendar month through the last business day of the calendar month.
Eligibility requirements apply. Free instant delivery is available for eligible Empower Checking Account customers with an activated debit card. Empower is a financial technology company, not a bank. Banking services provided by nbkc bank, Member FDIC.
Get up to $600 with a 3% Cash Bonus Checking Offer when you open a new HSBC Premier checking account and complete the following qualifying activities. Open your new HSBC Premier checking account online by January 7, 2021; and Set up Qualifying Direct Deposits into your new HSBC Premier checking account; and then Enjoy 3% Cash Bonus, up to $600, on Qualifying Direct Deposits up to $100 per month, during the first 6 calendar months after account opening. You will automatically receive the 3% Cash Bonus in your new HSBC Premier checking account approximately eight weeks after completing that month’s qualifying activities. Deposit products are offered in the U.S. by HSBC Bank USA, N.A. Member FDIC.
Chime is a financial technology company. Banking services provided by The Bancorp Bank or Stride Bank, N.A.; Members FDIC
˜ Out-of-Network cash withdrawal fees apply. Third-party and cash deposit fees may apply.
^ Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
* Chime SpotMe is an optional, no fee service that requires $500 in qualifying direct deposits to the Chime Spending Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases initially, but may be later eligible for a higher limit of up to $200 or more based on member's Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime's discretion. SpotMe won't cover non-debit card purchases, including ATM withdrawals, ACH transfers, Pay Friends transfers, or Chime Checkbook transactions. See terms and conditions
¹ APY—Annual Percentage Yield. Effective December 9, 2020 the interest rate will be 0.50%. These interest rates are variable and may change at our discretion at any time. No minimum balance required. Must have $0.01 in savings to earn interest.
⁴ Round Ups automatically round up debit card purchases to the nearest dollar and transfers the round up from your Chime Spending Account to into your savings account. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more into your savings account.
*CIT Bank's eChecking account offers 0.25% APY with $25,000 minimum balance
0.10% APY on balances under $25,000
The Annual Percentage Yields (APY) and interest rates are effective as of February 23, 2021. Fees may reduce earnings. Checking APYs and interest rates are variable and may change at any time without prior notice, including after account opening. The minimum opening deposit for eChecking is $100. See Fee Schedule and Agreement for Personal Accounts for details.
To obtain the interest rate and APY disclosed, the minimum balance for the applicable balance tier must be maintained.
The Annual Percentage Yield (APY) PenFed offers on all its products are variable rate accounts and subject to change. The rates stated are current as of June 2021 unless otherwise noted are subject to change. The fees on your PenFed account can reduce earnings. This credit union is federally insured by the National Credit Union Administration (NCUA). Premium Online Savings account holders must agree to electronic delivery of account opening disclosures and monthly statements.