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Visiting a branch remains the most common way for bank-account users to interact with their financial institution. More than 8 in 10 have done so in the past 12 months, according to the Federal Reserve. But the times are still a-changin’, as the next three most popular options are much less personal: ATM use (75%), online banking (71%) and mobile banking (38%). Convenience and technological advancement are two of the major reasons for the evolution of everyday banking. But they aren’t alone.
Many people have discovered they can do without physical branches, especially if the price is right. And online-only bank accounts are priced quite generously. For example, the average online checking account costs 35% less than its branch-based counterpart, according to WalletHub’s latest Banking Landscape Report. And the average online savings account pays 425% more interest than the branch alternative.
To help consumers find the right home for their cash in this new-age banking landscape, WalletHub compared nearly 50 of the most popular online-only checking accounts. Based on their rates, fees and features, we then selected the best offers for the most common consumer needs. You can check them out below.
Best Online Checking Accounts – Editors’ Picks
|Best For…||Online Checking Account||Best Feature|
|Overall||Consumers Credit Union Free Rewards Checking||APY up to 4.59%|
|Highest APY||Northpointe Bank UltimateAccount||APY up to 5%|
|Debit-Card Rewards||Bank5 Connect High-Interest Checking Account||1 point per $2 spent|
|No Monthly Fee||BofI X Checking||No ATM fees|
|No Monthly Fee||Capital One 360 Checking Account||No ATM fees|
|International Travel||Charles Schwab High Yield Investor Checking||No foreign fee|
|Money Management Tools||PNC Bank Virtual Wallet||Spending analysis.|
You will earn 3.09% on up to $10,000 in balances as long as you make at least 12 debit cards purchases per month and sign for them at the point of sale each year. You also have to sign up for paperless statements and online bill pay. That rate will apply to an additional $5,000 in balances if you spend at least $500 per month. And if you spend at least $1,000, you’ll earn 4.59% on balances of $15,000 to $20,000.
This account is available nationwide to anyone who pays the Consumers Cooperative Association’s one-time $5 membership fee.
Best Overall – Low Maintenance
Best Overall – Low Maintenance
During months that you don’t meet those criteria, your balance will accrue interest at an annual rate of 0.05%.
The minimum deposit required to open an account is $10, but you’ll need a balance of at least $100 to accrue interest. ATM surcharge fees will be reimbursed up to $15 per month.
It’s worth noting that a number of other “checking accounts” have similar fee structures. But WalletHub did not consider them because they are basically prepaid cards going by a different name. Customers don’t get a physical checkbook, so these accounts did not qualify.
What makes this account truly unique is the fact that Schwab does not charge a foreign-transaction fee and will reimburse ALL ATM surcharges worldwide. In other words, you can use any ATM around the world for free.
This account pays an APY of only 0.15%, but it still shines when paired with a high-yield savings account and used for basic cash management by international travelers.
The Virtual Wallet account has a $7 monthly fee, but you can avoid that by maintaining a $500+ balance or not using branch services.
Market Snapshot: Average Rates, Fees & More
Below, you can find a brief snapshot of the current online checking account market. This includes a comparison of the average online checking account and the average branch-based account as well as key stats about market trends.
Online Checking Accounts vs. Traditional Checking Accounts
|Category||Online Checking Account||Traditional Checking Account|
|Average Monthly Fee||$4.17||$6.65|
|Average ATM Fee||$0.93||$1.41|
|Average Minimum-Balance Requirement||$2,490||$4,096|
- 60% of online-only checking accounts do not charge a monthly fee (down from 63% last year).
- 57% of the accounts that charge a monthly fee enable users to avoid it by maintaining a certain minimum balance:
- Average minimum balance requirement: $2,490.
- Average avoidable monthly fee: $11.80.
- Banks with a national footprint are more than twice as expensive as banks in general, charging an average monthly fee of $14.42
- 37% of online checking accounts are interest-bearing, compared to just 25% of traditional checking accounts.
For additional information, including historical market data, please see our quarterly Banking Landscape Report.
How to Get the Best Online Checking Account – 4 Tips
- Know Yourself:Understanding your own banking habits can help you choose the account that best fits your individual needs. There’s a variety of offers out there, each with its own special feature (low fees, high APY, etc.). Pay attention to your own banking habits and shop accordingly.
- Consider All Options: Don’t limit your search to online-only banks. Even traditional banks with online accounts can be competitive. And they may offer a wider array of services for those interested in more of a “hybrid” banking experience.
- Create A Central Fund: You don't need both a checking account and a savings account, unless having both helps you manage your money better. When one type of deposit account offers the best rates by far, as is the case with online checking accounts, you can get away with just that. Creating a one-stop shop for your banking needs could make life easier, after all.
Be careful, though. While it’s common for the APY on a savings account to rise along you’re your balance, checking account rates sometimes drop if your balance goes too high. Thankfully, most accounts won’t drop the rate until your balance exceeds $25,000 or so, depending on the institution. .
- Understand The Terms: Most online checking accounts don’t charge many fees for online services. But things like face-to-face teller assistance and paper checks may cost you, if available. So try to review an account’s terms – focus on every place a dollar sign is listed – in order to avoid costly surprises..