Ben Todd | Jun 3, 2017 | 2
Best Online Checking Accounts (Updated 2017)
In our best online checking accounts review, we present three of the very best online checking accounts available in the year 2017. We also present two runners up that are good, but just not as good as the three we present below. We tested 77 online checking accounts available to people in the US, including a number of credit unions that offer accounts to people nationally. The three checking accounts listed below are the best of the best.
The Best Online Checking Accounts Winner For 2017
The Capital One 360 Checking account is this years winner as one of the best online checking accounts. They do have a physical presence with a few branches here and there, but most people in most states will only have the option of an online-only account with Capital One (unless they fancy visiting another state to find a Capital One branch). The Capital One 360 account checking account has plenty of positive points (as you will see below), and they accept people with imperfect credit ratings too.
- There are no maintenance fees
- People with shaky credit ratings can apply
- Pay bills and send cash online
- Over 40,000 free ATM machines
- Online and mobile banking options are available
- Earn interest on your everyday cash balance
- The mobile app has mobile check deposit options
- No minimum balance requirements
- Free MasterCard debit card
- Work your way up to arranged overdrafts
- No monthly fees or fees for using their branch services
- You do not need a minimum deposit to open an account
- Earn between 0.20% APY and 0.90% APY on your balance
- Bill Pay is free to use
- Make person-to-person (P2P) payments for free
- Any transaction is free on a Capital One network ATM
- Use AllPoint ATMs for free
- There is no direct charge from Capital One for using other ATM networks
- Link your account to another for overdrafts and only pay the interest
- None-Sufficient Funds charge is only $9 per transaction
- Statement copies from online banking are free
- Snapshot statements without checks are free
- Free domestic incoming wire transfers
- The first checkbook is free
- Sign up for email or text message alerts
- Account research is free
- Get free domestic collections if you call their customer service department
- Turn your debit card on and off when needed
- There are numerous overdraft options
- Lending options will become available according to creditworthiness
- Domestic outgoing wires to another bank account are $40 per transfer
- A paper statement copy costs $5 per statement
- Stop payments cost $25 per item
- An order of personal checks costs $5
- Cashier’s checks are $20 online with overnight shipping
- Cashier’s checks in branch cost $10
- Document copies are $5 each
- You may only deposit cash in branches or Capital One cafes
- There is a 5-day deposit time for new customers for 30 days
- Not Insured by the FDIC
A Few Factors To Consider About The Capital One 360 Checking Account
The pros and cons were a short and to the point, but some of them didn’t accurately explain what is truly good and bad about the Capital One 360 account, so I have clarified a few things below.
There is a 5-day deposit time for new customers for 30 days
If you look online, you will find numerous complaints about this policy. The truth is that many people do not know there is a 30 day trial period for new customers where deposits take a little longer to show up. If you deposit a larger amount, then the waiting period is even longer. In the image below, you will see the Capital One 360 checking account funds availability policy. Once your trial period of 30 days (sometimes longer) is over, then the funds availability policy below will take effect. Once again, do not be dissuaded by the many negative online reviews where people complain about deposit times because it is only a temporary issue for new account holders.
You may only deposit cash in branches or Capital One cafes
In the old days, this would have been a bit of a deal breaker. However, these days a lot of transactions are done digitally, which means the need for places to deposit cash is becoming less and less important. The interactive image below shows you all the places where you may find a place to deposit cash.
If you do not live in one of those states, then you will have to get your cash into your account via other means, such as by digitizing your money another way or by giving somebody your cash and having them write you a check that you deposit with the Capital One mobile app. There are probably other ways of getting your cash money into your account, but those are the two methods I can think of off the top of my head.
What Is The Variable Annual Percentage Yield (APY)?
For a balance of between $0 and $49,999.99, you get 0.20%. A balance between $50,000.00 and $99,999.99 gets you 0.75%. If you maintain a balance of $100,000 or more, then you get 0.90%.
The APY rate may not knock your socks off, but it is not bad for a checking account APY. It works by paying for the lowest balance you maintained over a month. For example, if you put in $1000, and only spend $600, then you are paid interest on $400, so long as your balance never dipped below $400 during the entire length of the month.
Not Insured By The FDIC
The FDIC is a government agency that insures bank balances up to $250,000. It means that if the bank goes under, then bank customers may claim up to $250,000 of their own money back. Capital One is not insured by any government agency, which is why they can afford to give customers interest payments on their balances. However, if the company goes bust, then you lose all your money. Yet, do remember that it is a big US money company that the US government is unlikely to allow to fail and so will probably bail out in the unlikely event that the company gets in trouble.
What Are Your Overdraft Options?
Many banks will auto-enroll you in their overdraft protection system, which means your account may be overdrawn to pay whatever is going out of it. I usually recommend that you opt out of overdraft protection so that your bank will not overdraw your account. However, if you explore your account settings and rules with your Capital One 360 checking account, then you will find a few overdraft options.
Overdraft Option One – Auto-Decline
The Auto-Decline feature is the same as opting out of overdraft protection. Capital One will decline transactions rather than overdraw your account.
Overdraft Option Two – Free Savings Transfer
If you are going to overdraw, then they transfer money from your 360 money market account or savings account.
Overdraft Option Three – Overdraft Line of Credit
This is where a small line of credit is used to cover any overdrafts. Be aware that opting for this option may require a hard credit check.
Overdraft Option Four – Next Day Grace
Bring your account back into a positive number and they will waive the $35 for each transaction. They will also consider paying your checks and your ACH payments if you get the money back before the end of the next day.
If you have any further questions about the specifics of the account, then try their help center FAQ.
The Best Online Checking Accounts Runner Up For The Year 2017
The Ally Bank Checking account may be your runner up, or it may be your winner depending upon the average amount you keep in your bank at any one time. If you keep an average balance of between $1 – $14,999, then the Capital One checking account is for you. Since most of our readers will keep a bank balance between those amounts, it is fair that we placed the Capital One account as number one. If you keep an average balance of between $15,000 and $49,999 each month, then the Ally Bank interest checking account is the one for you. If you keep $50,000+ in your account on a regular basis, then Capital One is again the account for you.
- For a balance of between $0 and $49,999.99, you get 0.20% with Capital One
- A balance between $50,000.00 and $99,999.99 gets you 0.75% with Capital One
- If you maintain a balance of $100,000 or more, then you get 0.90% with Capital One
- A daily balance of less than $15,000 earns you 0.10% APY interest with Ally
- A daily balance of $15,000 or more earns you 0.60% APY interest with Ally
- A daily balance of less than $15,000 earns you 0.10% APY interest
- A daily balance of $15,000 or more earns you 0.60% APY interest
- There are no monthly maintenance fees
- No monthly or annual fees besides the opt-outable paper statement fee
- They have 24/7 live customer support
- Use any Allpoint ATM for free with this account
- They reimburse your out-of-network ATM fees up to $10 per month
- Deposit checks remotely with their Ally eCheck deposit function
- Open up a trust with this as your base account
- Send money to other people using Popmoney
- Online and mobile banking options
- Use Bill Pay for free
- Get a debit MasterCard
- They offer postage-paid deposit envelopes
- Domestic incoming wire transfers are free
- International incoming wire transfers are also free
- Get standard or expedited ACH transfers for free
- A free overdraft transfer service
- Official and cashier’s checks are fee free
- Free Ally Bank standard checks
- Cross border currency conversions only have a 1% transaction fee
- Returned deposit items only cost $7.50
- Set up one-time or recurring payment instructions
- They have a foreign transaction fee that is only 1%
- The overdraft item returned or overdraft item paid fee is $25.00
- Their stop payment item fee is $15.00
- They charge you $15 to rush delivery of things such as debit cards
- Their overnight Bill Pay by mail will cost you $14.95
- Same-day Bill Pay with electronic delivery costs $9.95
- Domestic outgoing wires cost $20.00 each
- They do not offer international outgoing wires
- The account research fee is $25.00 per hour
- They offer no way in which you may deposit cash
- It takes ten business days to receive your debit cards or checks
- Transfers between Ally bank and non-Ally bank accounts take up to three days
- Imperfect customer support and procedures
- Long waiting times to get to speak to a customer support team member
A Few Factors To Consider About The Ally Interest Checking Account
The pros and cons were a short and to the point, but some of them didn’t accurately explain what is truly good and bad about the Ally Interest Checking Account, so I have clarified a few things below.
Transfers between Ally bank and non-Ally bank accounts take up to three days
It may not seem like much of a downside, but in my experience, it shouldn’t take this long. Maybe it did in the old days when this sort of thing was done manually, but these days they have networks that communicate this information immediately. Most ACH transfers only take one day, and transfers between two Ally accounts are immediate. Another reason I consider this to be a downside is because they offer an expedited service where transfers between Ally and non-Ally banks take just one day. It seems to me that they are purposefully slowing transfers down so that they may sell their expedited service.
They offer no way in which you may deposit cash
You cannot make cash deposits, but there are ways you may fund your account without using cash. You may use their remote check deposit feature, or you may set up direct deposits and/or online transfers. They also accept wire transfers and checks that you post to them. You may transfer money online from other accounts or from your other Ally bank accounts. If you are looking for ways to access your money, then check out the image below.
A daily balance of $15,000 or more earns you 0.60% APY interest
Giving you an APY interest rate of 0.60% for having more than $15,000 in your account is not bad at all. For example, the Capital One 360 checking account asks that you have a daily balance of $50,000+ before they ramp up their APY rate to 0.75%. If you are looking for a good APY rate, and you have a daily balance that runs between $15,000 and $50,000, then the Ally Interest Checking Account may be the one for you.
Imperfect customer support and procedures
Their imperfect customer support and procedures is probably one of the biggest reasons why the Ally interest checking account didn’t appear as number one in our Best Online Checking Accounts review. Mainstream and established banks have a series of set and well managed procedures and rules. Ally doesn’t seem to have evolved this type of administrative diligence at this stage in this lifetime. It is almost as if the customer service department are handed a bunch of scrappily written rules and are told to get on with it.
There are people online who say they have phoned three times with a problem and have received three different answers, and I absolutely believe them because that is the impression I got when I dealt with their customer service department. Even when our research team called about fees and rates, we had to double check what we were told because the people on the other end of the phone didn’t sound too sure. In addition, when we called their customer service department, we always had to wait between 15 to 25 minutes before we go through to somebody.
The Best Online Checking Accounts Worst Of The Best
The Bank Of Internet USA Rewards checking account is the last on our list of the best online checking accounts. It is far superior to every other online checking account we have reviewed, with the exception of the checking accounts listed above.
The Bank of Internet USA Rewards Checking Account is a great account, it has plenty of positive sides, and definitely deserves its place on our best online checking accounts review. However, it has found itself at the bottom of our list because the Bank Of USA Rewards checking account was not very forthcoming with regards to fees, and we have a few issues with their customer service.
When we called their customer service department and when we used Live chat, we asked about fees and the first thing they gave us was a list of fees we didn’t have to pay, such as no monthly maintenance fee, and things of that nature. We were told that there were no fees for having the account, which is technically true, but we wanted to know what fees “May” apply. We had to sign up and read their application agreement’s terms and conditions before we got a full view of their fees. I also found their customer service department to be highly unprofessional. On one occasion, one of our research team was transferred twice and then transferred to a voicemail box.
- Earn up to 1.25% APY on your balance
- There is a cash-back purchase rewards scheme
- They offer unlimited ATM fee reimbursements in the US
- There are no overdraft fees
- There is no application fee for an overdraft credit application
- No monthly minimum balance requirement
- No non-sufficient funds fees
- There are no service or monthly maintenance fees
- They offer online Bill Pay
- It is the only Bank Of Internet USA account that doesn’t charge Non-sufficient/uncollected funds fees
- Online and mobile banking options
- They have an app you may use
- Use their mobile-deposit system to photograph and deposit checks
- There is a tiered interest scheme that doesn’t fully rely on your balance
- You gain access to their FinanceWorks money-management software
- Use Popmoney to send cash to other people using their phone number or email address
- Online or automated telephone transfers are free
- Shop with your cash-back or have it deposited into your checking account
- Link your account to other Bank Of Internet USA accounts to stop you overdrawing
- Earn interest on a balance of up to $150,000
- Incoming wire transfers are free for both domestic and international transfers
- You have to log in and activate cash-back offers
- They made it difficult for us to find out what their fees are
- The customer service phone worker transferred us to a voicemail system
- Outgoing wire transfers cost a whopping $35.00 each
- International outgoing wire transfers cost $45.00 each
- They have a lot of fake user reviews on the Internet that their marketing team wrote
- It can easily take up to five days for your checks to appear in your account
- Clearing checks takes between three and nine working days
- Every time I talk to a customer support agent, he or she seems tired or moody
- There is a 2% foreign currency conversion fee
- It costs $35 for them to send a letter confirming your account and routing number
- Customer support waiting times are around 20 minutes on the phone
- Their website is still very outdated and poorly optimized
- Opening your account is difficult because of the verification process
- The customer support teams are no help when your account is put under review because they are given no details by the administrators
A Few Factors To Consider About The Bank of Internet USA Rewards Checking Account
The pros and cons were a short and to the point, but some of them didn’t accurately explain what is truly good and bad about the Bank of Internet USA Rewards checking account, so I have clarified a few things below.
There is a tiered interest scheme that doesn’t fully rely on your balance
Follow these three rules, and the APY rate you get will equal 1.25%. Firstly, you have to receive monthly direct deposits where the value equals $1000 or more. That is how you get your first 0.4166% APY.
Secondly, you have to use your Rewards Checking Visa Debit Card for purchases at least ten times within the space of a month. It has to be for what the Bank Of Internet USA call “Everyday purchases.” Plus, you need to spend at least $3 per transaction. That will get you your next 0.4166% APY that is added onto what you have already earned to equal an APY of 0.83%.
Thirdly, if you continue to use your Rewards Checking Visa Debit Card and make 15 or more purchases for “Everyday” things, then you get your final 0.4166% APY, which brings your total APY to 1.25%. Again, each purchase needs to be for a minimum of $3.
Having to spend money in order to earn interest may seem silly, but if you use your card for everyday things, such as things you are going to have to buy anyway, then it shouldn’t be a hardship.
You gain access to their FinanceWorks money-management software
It is simply software that allows you to gain access to your Bank Of Internet USA checking account, savings account and other financial accounts that you have with the Bank Of Internet USA. The software may be appealing to some people, but many online banks allow you to see all of these things with just one web browser page anyway. If you are used to having to switch from account to account (logging in and logging out) to see your various accounts, then this software will probably be a welcome perk.
Link your account to other Bank Of Internet USA accounts to stop you overdrawing
The Bank Of Internet USA offers overdraft protection, which actually means they are able to make your account overdrawn if you do not have enough funds to cover your direct debits or purchases. The Bank Of Internet USA does not charge you a fee if your account goes overdrawn, but it will be reported on your credit score.
They wouldn’t allow us to opt out of overdraft protection, but they did allow us to link our accounts to other Bank Of Internet USA accounts. You have to sign up for the scheme, and you also need to have an online savings account or an online money market account with the Bank Of Internet USA. If you overdraw on your checking account, they pull money from one of your savings accounts to cover the shortfall. They will cover your shortfall a maximum of six times per month, and that is if you have not withdrawn from your savings previously that month (since you are only allowed to withdraw from your savings account a maximum of six times per month).
They made it difficult for us to find out what their fees were
As mentioned at the beginning of the article, they didn’t make it easy for us to find their fees. It turns out that they do have their fees online, but they are hidden away under the “Disclosures” page and they are hosted on a PDF document. I don’t like using the word “Hidden” in this case because they are not, but it was very sneaky of them to make their fees so hard to find, especially since we never saw them until we signed up and read their application terms and conditions. They actually have a slew of fees you may have to pay under one circumstance or another, so here is a full list of them. I don’t normally do this sort of thing, but the Bank Of Internet USA should not have made me work so hard to find them.
$10.00 ATM visa card replacement with pin
$50.00 rushed ATM visa card replacement
$35.00 bank verification letter
$35.00 collection items on a per item basis + costs
$10.00 per item for check copies
$100.00 garnishments or tax levies
$100.00 for levies, garnishments, summons, writs, subpoenas, etc.,
$0.10/page for reproduction of documents
$0.20/page for reproduction of documents from microfilm
$24/hour per person for clerical costs
$35.00 per hour for research/reconciliation
$10.00 per statement for statement copy from archive with their assistance
$5.00 per statement for checking account paper statements
$5.00 per statement for savings account paper statements
$35.00 each for outgoing domestic wire transfers
$45.00 each for outgoing international wire transfers
$10.00 + postage for certified or overnight mail
$10.00 per item for chargeback items
$2.00 for escheatment notification
$10.00 + cost of checks for check orders with their assistance
$10.00 excess transaction or withdrawal fee
$7.00 external bank transfers with next day processing
$2.00 for intra-account transfer with their assistance
$10.00 per item for official checks
$7.00 per item for next-day Popmoney payments
$35.00 for stop payments
$10.00 per item for bank of internet USA on-US check cashing
2% foreign currency conversion rate when using debit card
Earn interest up to a balance of $150,000
The fact they allow you to earn interest up to such a high number is very good. It is based on your daily balance and is paid at the end of every statement cycle (month). It works the same way as all the other interest-earning accounts on this Best Online Checking Accounts review. The lowest amount you have in your account is the amount you are paid on.
For example, if you put in $3000, and your balance only dips as low as $1200 during the month, then you are paid interest on the $1200 because that amount has been present in your account all month.
They have a lot of fake user reviews on the Internet that their marketing team wrote
Our team have learned to spot fake reviews. After all, we spend our working week doing research into financial companies and testing financial products, so it is hardly a surprise that we have learned how to spot a fake review from a real one.
I should clarify that just because their marketing team are writing fake reviews, it doesn’t mean that all positive reviews are fake. There are plenty of people out there who are very happy with their online checking account. Companies tend to add fake reviews to online review websites to increase their overall rating on the website. It is true that this bank adds fake user reviews to review websites in order to bury some of its negative reviews, but despite this sneaky (and common) practice, they still offer a good online checking account.
Honorable Mention For A Good Online Checking Account
The Bank5 Connect High-Interest Checking Account didn’t knock our socks off, and it didn’t rank anywhere in our best online checking accounts list, but they do offer a good service and a reasonably high APY rate. We thought we would sneak it in at the end of the article. If they keep doing a good job, then they may appear in next year’s best online checking accounts review.
It is not a bad online free checking account as checking accounts go. You get up to 0.76% APY on your balance, and there are no maintenance or monthly fees. They have free online and mobile banking, you may use BillPay, and there is a UChoose debit rewards program that you may sign up for. Your first order of checks is free, and they allow you to use ATMs for free if you use ATMs in the network they are part of. If you use an ATM that is part of another network, then they will refund most of your charges up to $15 per statement cycle (per month). Payment and processing times are pretty good, and you will not be charged for using any ATMs in the SUM network.
You only need an opening deposit of $10, and you start earning interest if you maintain a balance of at least $100 for the entire month. The $100 minimum balance for earning interest is not bad at all, especially when you consider that you get 0.76% APY. There are other fees for things such as your second order of checks, stop payments, and things of that nature. Their fees are reasonable, but their web page on fees only tells half the story, so please read the terms and conditions prior to opening your account. Nevertheless, even if they are not fully open about their fees, they are not high and shouldn’t trouble you too much.
Conclusion – Which One Is For You?
Picking between the top two on our list is easy because it all depends on your average daily balance. If you keep an average of less than $15,000 in your account, or an average of more than $50,000 in your account, then Capital One is for you. If you keep between $15,000 and $50,000 in your account on a daily basis, and you can maintain that balance over the month, then Ally is the one for you.
The Bank of Internet USA is your alternative bank. Their customer service department is pretty bad, but if you can avoid needing their customer service department at all costs, then the Bank Of Internet USA is a good alternative to the top two. I would strongly recommend against instantly taking the Bank Of Internet USA up on any of their financial offers, such as their loans and mortgages. I am not saying they are bad, but I do suggest that you do a lot of research into their other financial products before buying into them. For example, seek out negative review about the bank to see what people say, and do your research into other potential lenders or financial product suppliers. Don’t jump straight into bed with the Bank of Internet USA just because you have a good-quality checking account with them.
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As for my honorable mention, they are not a bad bank and their 0.76% APY is reasonably impressive. As always, I suggest you do plenty of research into your choice of checking account prior to signing up. If you don’t have the time, then sign up for one or two and test them out to see which is the best before you start using it heavily. If you have a reasonably good credit rating, then getting an online checking account shouldn’t be difficult.