What characteristics does the best bank for checking accounts have? A checking account is a deposit account that allows the holder to make deposits and withdrawals. For more information on the best bank for checking accounts, continue reading.
A checking account is a financial tool that allows you to access your money on a daily basis. Personal checks and a debit card are usually included with these accounts. Banks have added online and mobile banking to their checking account offerings in recent years. You can access your money as often as you want with checking accounts. Unlike savings accounts, you can make as many withdrawals, transfers, checks, and debit card transactions as you like. Checking accounts are available at almost all banks and credit unions.
Banks use the Automated Clearing House, or ACH, a countrywide network maintained by the Reserve Banks and the Electronic Payments Network, to clear checks and transmit cash. With a bit of deposit, checking accounts are usually simple to open. They typically generate less interest than savings and money market accounts, if any at all.
On the other hand, checking accounts provide the same level of security. Like savings and money market accounts, checking accounts are guaranteed up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund, depending on whether you have a bank or credit union account.
Continue reading as we delve deeper into checking accounts and inquire about the best bank for checking accounts.
Table of Contents
- 1 Why should you open a checking account?
- 2 What to look for in a checking account?
- 3 Potential obstacles to opening a checking account:
- 4 What do you need to know about minimums and fees?
- 5 Banks with the best checking account for February 2022
- 5.1 Best checking account for the overall rate: Heritage Bank eCentive checking account
- 5.2 Best checking accounts for members of the military and veterans: Navy Federal Credit Union Flagship Checking
- 5.3 Best checking account for mobile app and high-yield rate: Ally Interest Checking account
- 5.4 Best checking account for no/low fees: NBKC Bank Everything Account
- 5.5 Best checking account for unlimited ATM fee rebates: LendingClub Bank Rewards Checking
- 5.6 Best checking account for no balance requirements: Capital One 360 Checking
- 5.7 Best checking account for APY guarantee: TIAA Bank Yield Pledge Checking
- 5.8 Best checking account for sign-up bonuses: Chase Total Checking
- 5.9 Best checking account for cashback: Discover Cashback Debit
- 6 Best online checking accounts
- 6.1 Best online checking overall: Ally Bank
- 6.2 Best online checking for beginners: Chime
- 6.3 Best online checking for travel: Charles Schwab
- 6.4 Best online checking for teens: Navy Federal Credit Union
- 6.5 Best online checking for cashback: LendingClub Bank
- 6.6 Best online cashback checking/savings combo: Discover Bank
- 7 Pros and cons of online checking accounts
- 8 Being denied a checking account
- 9 Conclusion
Why should you open a checking account?
Checking accounts are a fantastic financial center because of their accessibility and security. They’re a versatile account that may be used to pay bills, make purchases, and receive payments. Checking accounts can make your life easier financially. Set up your checking account to accept automatic deposits from your employment and make automatic withdrawals to pay your bills. You may use mobile apps to make payments, send money, and see your transaction history while on the road.
What to look for in a checking account?
Some banks will give you hundreds of dollars to open a checking account, but these incentives are usually conditional. For example, new Chase Total Checking account holders will receive $225 if they create an account by April 20, 2022, but they must set up a direct deposit of a wage, pension, or Social Security payment and keep the account active for at least six months. Bankrate can assist you in locating the most advantageous bank account sign-up incentives.
Some banks offer cash-back rewards, but these can come with a hefty minimum balance requirement. Discover Bank is one notable exception, as it has no minimum balance restriction and offers 1% cashback on up to $3,000 in debit card transactions each month.
According to Bankrate’s 2021 checking account and ATM fee survey, 48% of non-interest-bearing accounts charge no monthly service fees and have no minimum balance requirements. Under certain circumstances, such as a direct deposit, most non-interest accounts will waive fees. No-fee accounts are also available from challenger banks, such as Chime and Current.
Potential obstacles to opening a checking account:
The majority of checking accounts have some basic requirements. It can be difficult to open an account if you don’t meet these requirements.
- Age: Getting a checking account when you’re under the age of 18 is usually tough. However, children may be able to open a joint account or a custodial account. To open an account, most banks and credit unions demand two types of identification: a Social Security card, passport, state identification card, or driver’s license.
- Minimum deposit: The minimum deposit for opening a checking account is usually $25 or more, while certain accounts allow for less.
- Address: When opening an account, you’ll need to give address evidence. Utility bills, lease agreements, and insurance cards can all be used in this situation.
What do you need to know about minimums and fees?
When creating a checking account, it’s crucial to be aware of the minimums and costs. Here’s a rundown of the various types of minimum requirements and fees you can encounter:
- Minimum balance to open: The starting deposit, often known as the minimum balance to open a checking account, is the amount of money necessary to open a checking account. Typically, the minimum is $25 or more. There are, however, some accounts that don’t require a minimum deposit to open.
- Minimum amount to avoid fees: Many checking accounts require you to maintain a certain level to avoid paying a monthly maintenance fee. This minimum requirement can range from $250 to over $1,500. The bank will generally waive the cost if you meet the monthly minimum.
- Monthly fees: Monthly fees for “maintenance” are common with checking accounts. These fees might cost upwards of $100 every year. You may need to meet the bank’s minimum balance requirement, engage in direct deposit, or even open a savings account to avoid paying the fee.
- ATM fees: Fees for using your checking account debit card to withdraw money from non-network ATMs are usually charged by banks. Typically, these costs vary from $2 to $5. (or more at international ATMs). However, some banks don’t charge you for using an ATM that isn’t on their network, and some may even reimburse you for those fees.
Banks with the best checking account for February 2022
Best checking account for the overall rate: Heritage Bank eCentive checking account
APY: 1.02% (on qualifying balances of $0.01-$25,000), Balance to open: $100
The inCentive checking account pays 1.02 percent APY on qualified balances up to $25,000. Spend at least $500 in debit card purchases every month (excluding ATM transactions) to qualify for the APY, as well as have at least one direct deposit or automated payment per month and receive monthly e-statements. There are no monthly service fees or requirements for a minimum balance.
Customers can use the bank’s app, mobile browser, or text inquiries and alerts to get information. Popmoney allows online banking consumers to send money to friends and family. The bank reimburses up to $25 in ATM fees every month. Customers can engage with live video tellers at the bank’s “hybrid” ATMs during specified hours.
If you don’t make at least ten debit card transactions each month, you’ll only get 0.05 percent APY. In addition, you’ll be charged $4 per month to receive paper statements in the mail. However, you can avoid this by enrolling in eStatements. Heritage Bank serves only seven cities in Minnesota, Iowa, and South Dakota.
Overdrafts and insufficient funds charges are $33 per item paid. You’ll have to pay a $30 exit charge if you close the account within six months of opening it. Only 0.14 percent APY is spent on qualifying balances of $25,000.01 and up.
APY: 0.35% to 0.45%, Free Active Duty Checking APY: 0.05%, and Balance to open: $0 (for both checking accounts)
This account pays up to 0.45 percent annual percentage yield. Even the bank’s lowest APY rate, which pays 0.35 percent on balances between $1,500 and $9,999, is competitive. If you have a direct deposit to this account, you’ll get reimbursed for out-of-network ATM fees up to $10 every statement cycle.
For active-duty military personnel, the Free Active Duty Checking account may be an excellent option. This account is also open to retired military or reservists. Out-of-network ATM fees will be reimbursed up to $20 every statement cycle if you open this account. Customers who open this account will earn 0.05 percent APY and receive free conventional checks. With this account, you’ll be able to receive your direct deposit one business day earlier than usual.
You’ll need to keep at least $1,500 on hand to earn interest. You’ll need at least $25,000 in this account to earn the highest APY. To receive ATM surcharge rebates, you’ll need to set up a direct deposit. Free Active Duty Checking: To qualify for this account, you must have a qualifying direct deposit from the military. If not, the account will be converted to a Free everyday account.
If the direct military deposit is stopped for more than 90 days, the account will be converted to a checking account. Customers who have this account are entitled to free checks solely personalized with their names. When the average daily balance falls below $1,500, a $10 monthly service fee is charged.
Best checking account for mobile app and high-yield rate: Ally Interest Checking account
APY: 0.10% to 0.25%, Balance to open: $0
The Interest Checking account has no monthly maintenance fees. Interest is compounded daily and is tiered based on your account balance. The Ally mobile app gives you access to your account 24 hours a day, seven days a week, to check balances, locate ATMs, pay bills, and conduct other banking transactions. You may also set up card controls on the app and use Zelle to send money to people you know.
Ally has a large number of ATMs. You can use 43,000+ ATMs countrywide for free, thanks to its collaboration with the Allpoint ATM network. Ally also reimburses out-of-network ATM costs charged by other banks up to $10 per statement cycle.
To receive the greatest APY, you must keep a balance of $15,000 in your account. Customers must fill their accounts within 30 days of opening them, or the account will be canceled. Enrolling in overdraft protection and linking to Ally savings or money market accounts can help you prevent overdrafts. Some fees, such as $20 for outbound domestic wires and $25 per hour for account investigation, should be avoided.
Best checking account for no/low fees: NBKC Bank Everything Account
APY: 0.15%, Balance to open: $0
Overdrafts returned merchandise, stop payments, cashier’s checks, and other free services. Although an initial deposit is not required, you must deposit at least $5 in the account within the first 60 days to keep it open. However, you’ll only need a cent in the account to earn interest.
You may set up recurring bill payments online, and you can deposit checks using your smartphone. Customers can use any of the 37,000 MoneyPass ATMs located across the country for free. The bank reimburses up to $12 per month in ATM fees charged by other banks. Domestic wires cost $5 to send out.
International wires, whether sending or receiving them, cost $45.
Best checking account for unlimited ATM fee rebates: LendingClub Bank Rewards Checking
APY: 0.10% to 0.15%, Balance to open: $100
Every month, Rewards Checking users receive 1% cashback on signature-based transactions. There are no monthly maintenance costs with the Rewards Checking account, which requires only a $100 starting deposit. Customers who have a Rewards Checking account are entitled to an unlimited number of ATM charge refunds.
Users can manage their accounts, make payments and transfers, build budgets, view spending, and follow trends with the LendingClub mobile app. You can use Apple Pay, Google Pay, or Samsung Pay to enroll your LendingClub debit card. The Essential Checking account is also available through LendingClub. Customers who want to reconstruct their banking records should use this account.
To earn interest on Rewards Checking and receive 1% cashback on signature-based transactions, you must keep an average daily amount of $2,500. Customers can avoid the balance requirement by making a monthly direct deposit of at least $2,500. Nonsufficient funds costs are $25, a returned item (such as a check) is $25, a stop payment is $25, an outgoing domestic wire is $20, an incoming wire is $10, and international outgoing wires are $40. If your account is overdrawn for more than five days, you will be charged a $5 daily fee for up to 30 days.
Best checking account for no balance requirements: Capital One 360 Checking
0.10% APY, Balance to open: $0
The checking account is incredibly convenient to use. While there is no requirement for a minimum amount, an account is not deemed open until it has been financed with at least a penny. The first 50 checks are free with 360 Checking, and there are no monthly maintenance fees. The Capital One mobile app allows you to manage your accounts, make deposits, and receive account alerts all from your smartphone. Branches and cafe-style venues are also supported by the online bank.
Cashier’s checks ($10-$20), stop payment on a paper check ($25), and outgoing domestic wire transfers ($30) all come with fees. Unless you link your checking account to a savings or money market account, Capital One will charge you for nonsufficient funds ($9) and overdraft fees (up to $35 per transaction).
Capital One had a large data breach in 2019, exposing the accounts and applications of over 100 million consumers in the United States and Canada, mostly credit card applications. The bank stated it has corrected the problem and given affected customers free credit monitoring and identity theft protection. Customers with checking accounts must agree to become paperless and accept all messages via email.
Best checking account for APY guarantee: TIAA Bank Yield Pledge Checking
APY: 0.10% , Balance to open: $100
TIAA promises that its yields will be among the top 5% of its competitors. Regardless of balance, there is no monthly cost. Customers who use the debit card receive benefits such as up to one year of extended warranty protection on eligible purchases; up to $250 in buyer’s remorse or dissatisfaction reimbursement within 90 days of purchase if the merchant refuses to accept the return; and up to $250 in buyer’s remorse or dissatisfaction reimbursement within 60 days of purchase if the merchant refuses to accept the return.
Through Zelle, you may track and manage your accounts, pay bills, transfer money, and send money to individuals you know with TIAA Bank’s digital services. Its 80,000 ATMs around the country are all fee-free. If you maintain an average daily balance of $5,000 and use an out-of-network ATM, you will be fully refunded for ATM fees. If not, the bank will reimburse you up to $15 each month.
Nonsufficient funds ($30), returned deposited items ($10), stop payments ($25), expedited overnight bill payments ($14.95), cashier’s checks ($10), and additional fees are charged.
Best checking account for sign-up bonuses: Chase Total Checking
APY: 0.01%, Balance to open: Varies according to location
Chase has a number of different sign-up bonuses. For new Chase checking customers who join up for Chase Total Checking with direct deposit from an employer or the government for at least six months, a $225 cash promotion is available through April 20, 2022. To claim the incentive, you must set up a direct deposit within 90 days after creating the account.
Through April 20, 2022, new customers who are college students ages 17-24 can obtain a $100 bonus by creating a Chase College Checking account. Chase checking customers, as well as those who opened an account during the last 90 days or closed an account with a negative balance within the last three years, are not eligible for the incentive.
Within the first 60 days of opening the Chase College Checking account, you must make at least ten qualifying transactions.
Existing Chase customers can now receive a $50 incentive for each friend who opens a qualifying checking account. The referral bonus is capped at $500. Chase customers have access to more than 4,700 locations, 16,000 ATMs, and top-rated digital banking tools around the country.
On most accounts, customers get a pitiful 0.01 percent annual percentage yield. Customers who link their Chase Premier Savings account to a Premier Plus or Sapphire checking account and complete certain transaction conditions are eligible for “relationship rates.” The connection rates are minimal, with all balance categories earning 0.02 percent APY.
To avoid a $25 monthly fee, premium checking accounts require large minimum balances. For example, Chase Premier Plus Checking requires an average daily balance of $15,000 across all connected Chase accounts or an automated payment on a Chase first mortgage.
Among other Chase accounts, you’ll need a daily amount of $5,000, a daily balance of $1,500 at the start of the day, a monthly direct deposit of at least $500, or a monthly direct deposit of at least $500 for Total Checking. Customers using Total Checking must pay fees for out-of-network ATM transactions and incur a $34 penalty for overdrafts.
Best checking account for cashback: Discover Cashback Debit
APY: earns no APY, Balance to open: $0
Discover, which is best known for its cash-back credit cards, now offers rewards on its online checking accounts. Discover’s Cashback Debit account gives you 1% cashback on up to $3,000 in debit card transactions every month, which could save you $30 per month. These monies can be transferred automatically into a Discover Online Savings account, which pays a competitive APY right now. The checking account does not require a minimum balance to open, but it must be funded within 45 days, or the bank may close it.
According to Discover Financial Services, “There are no fees.” Return checks, overdrafts, stop payment orders, nonsufficient funds, new checks, and expedited delivery for debit card replacements are all free to customers. Customer service representatives are available 24 hours a day, seven days a week. In the United States, customers have access to over 60,000 no-fee ATMs. You can download a mobile app that allows you to make deposits or freeze your debit card if you lose it from the App Store or Google Play.
Discover only has one full-service physical location, and it’s in Delaware. To bank and get your questions answered, you’ll need to use the website, mobile app, or customer support phone line.
Best online checking accounts
According to consumers seeking a new checking account, online banks may offer services that aren’t accessible at the bank down the street. The best online checking accounts pay interest, repay at least a portion of ATM fees, have a wide ATM network, and offer free checks. They also have a well-reviewed mobile app, convenient customer service hours, and user-friendly websites.
These checking account services may be available at brick-and-mortar banks as well, but they may come at a cost: maintaining a high minimum balance. In contrast, most online checking accounts have no or minimal minimum balance requirements.
Here are some of our top suggestions for the finest online checking accounts if you’re seeking a better offer.
Best online checking overall: Ally Bank
Ally Bank’s Interest Checking Account pays a little amount of interest, has a well-rated app, and includes free standard and official checks, as well as free domestic and international wire transfers, which are things that some banks charge a price for.
Customers with Interest Checking have access to over 43,000 Allpoint ATMs. However, if you cannot use one of those ATMs, Ally Bank will pay you up to $10 in out-of-network ATM costs per statement cycle. You can also chat with customer support online and call a toll-free number 24 hours a day, seven days a week, at Ally Bank.
To get the top-tier APY, you’ll need at least $15,000 in your account. High-yield savings and money market accounts are good options for savers looking for a better return on their money, especially if it’s set aside for saving.
Best online checking for beginners: Chime
Chime’s main draw for new bank customers is that it waives overdraft fees up to $200, which might save you money if you overdraw your checking account by accident. The average overdraft fee in 2021, according to Bankrate’s checking account and ATM fee analysis, was $33.58.
Chime subscribers can also obtain direct deposits up to two days early, assisting novices with restricted budgets to meet their monthly obligations more efficiently. In addition, Chime maintains a network of over 60,000 fee-free ATMs.
Chime is a challenger bank, which refers to technology firms that function like banks. The Bancorp Bank or Stride Bank provides financial services to Chime. The Federal Deposit Insurance Corporation backs both institutions (FDIC).
Best online checking for travel: Charles Schwab
The High Yield Investor Checking account from Charles Schwab Bank reimburses you for ATM fees everywhere in the world. There is no monthly fee on this account, and there is no minimum balance requirement. When making international purchases, Schwab does not charge a foreign transaction fee.
Schwab Bank’s fee-waiver policy, like many other banking policies, is subject to change or discontinuation at any time. As a result, monitor your banking disclosures on a regular basis and check the Schwab website to ensure the policy is still in effect. New account holders for the Schwab High Yield Investor Checking account must also create a Schwab One brokerage account.
The Free Campus Checking account from Navy Federal Credit Union provides full-time students with a checking account that they can use throughout high school and college. Members between the ages of 14 and 24 pay no monthly service fees, and there is no minimum balance requirement with this account. Students can get up to $10 in ATM fees repaid each statement cycle, allowing them to use any ATM for free (as long as they don’t go over the reimbursement threshold). The Free Campus Checking account earns some interest as well.
To open this account, you must be a member of the Navy Federal Credit Union. All active duty, civilian, contract, and veteran members of the Department of Defense and Coast Guard, as well as their families, are welcome to join.
Although the account pays interest, a savings account will still provide you with a better return. Even though they aren’t named student savings accounts, checking accounts with competitive annual percentage yields (APY) and no minimum balance restriction can be found elsewhere.
Best online checking for cashback: LendingClub Bank
The Rewards checking account from LendingClub Bank allows you to earn 1% cashback on daily transactions without paying a monthly fee. In addition, the account receives a small amount of interest. The account also includes free ATM access all over the world.
To be eligible for the 1% cashback program, you must have an average balance of at least $2,500 or have at least $2,500 in direct deposits each month.
Despite the fact that this checking account pays interest, online banks typically offer higher APYs on high-yield savings or money market accounts, regardless of account amount.
Best online cashback checking/savings combo: Discover Bank
You may earn 1% cashback on up to $3,000 in debit-card transactions each month with the Discover Bank Checking Account. Bank checks, both standard, and official are free. Discover Bank was named the top free checking account in 2022 by Bankrate. A Discover Bank Online Savings Account offers a competitive annual percentage yield (APY). There is no monthly fee for either account.
Pros and cons of online checking accounts
- Account access is usually available 24 hours a day, seven days a week.
- Almost all banks allow you to deposit checks using your phone.
- Some banks offer transaction notifications, which include a warning if your account is going to be overdrawn.
- You can access bank statements and search transactions online with many online checking accounts.
- You won’t be able to do in-person banking, including withdrawals, with an online bank that doesn’t have any branches.
- Select amenities that are offered at some branches, including safe-deposit boxes, are not available online.
- Online banks are less convenient if you need cash right away because they don’t have any branches or onsite ATMs.
Being denied a checking account
You can be essentially barred from opening a checking account if you haven’t been a model account keeper. The best course of action is to prevent problems from occurring in the first place. To avoid overdraft fines and fees, keep an eye on your checking account and make sure you check the balance on a frequent basis. When they happen, make sure you have the money to pay them as soon as possible.
If you’re turned down, ask the bank or credit union to rethink your application. Sometimes all it takes is a chance to speak with a bank officer to persuade the institution to reconsider its mind. To establish a relationship with the financial institution, you might create a savings account.
Once you have a checking account, you can link it to this savings account for overdraft protection on your own. Even if you have actual blemishes on your record, it’s crucial to understand how your information is tracked and what you can do to correct a mistake or a negative history.
In conclusion, A checking account is a bank account that allows you to access your funds quickly. Unlike other types of bank accounts, checking accounts, such as savings accounts, usually enable free withdrawals and deposits, making them an excellent choice for everyday expenditures.
Checking accounts, in comparison to savings accounts, certificates of deposit (CDs), and other accounts that allow you to grow your money tend to pay modest interest rates (if they pay interest at all). As a result, it’s a brilliant idea to save your checking account for the money you’ll need for everyday shopping and paying bills. Everything else should be invested in funds with greater earning potential.