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PrintOnline Checking Accounts Compared: Three Smart Banks for Savvy Spenders
Personal Finance September 13th, 2008Online checking accounts are popping up like dandelions. Banks hope that promises to pay interest or waive fees on any balance will lure consumers away from brick and mortar checking accounts. Often, standard checking accounts at big banks are not cheap. You certainly can’t earn interest unless you have a hefty balance, and you get charged for everything from checks to using the ATM. Why not, then, switch to an online checking account?
For many, there is still some comfort knowing that you can walk downtown on a Saturday morning and see a teller about your checking account. Certainly, depositing cash into your account becomes trickier when you can’t physically go to the bank. Aside from this argument, however, online checking accounts offer everything the old banks do—they just cost less.
Both WaMu and E*Trade provide free checks and debit cards. (ING offers a free debit card, online bill pay, and the ability to mail paper checks online, but no physical checkbook). E*Trade and ING pay interest on any balance. While WaMu doesn’t pay interest, they let you link your account to their online savings account—currently offering the nation’s highest rate: 3.75% APY. Here is a rundown of the benefits of these top online checking accounts:
- APY: None
- Min. to Open: $1
- Min. Balance: None
- ATM Fee: None
- NSF Fee: One waived per year, then $29
- Notes: $0.03 back on all debit card purchases, free checks for life.
- APY: 1.75%
- Min. to Open: $1
- Min. Balance: None
- ATM Fee: None
- NSF Fee: None
- Notes: Must apply for ING Direct Savings first to get to checking
- APY: 0.50% or 2.90% on balances $5k+
- Min. to Open: $100
- Min. Balance: None with direct deposit
- ATM Fee: $1.5
- NSF Fee: $25
- Notes: Free initial checkbook order.
Which online checking account is best? I currently use ING’s Electric Orange, and have absolutely no complaint except that if I need a paper check, I have to submit a request through their site—I don’t have a checkbook. Next on the list is WaMu, which doesn’t pay interest, but has so many other perks, like no ATM fees, one waived overdraft per year, and three cents back on all check card purchases.
E*Trade would have to be last on my list because they require a direct deposit of at least $200 per month to waive a $15 maintenance fee. That said, if you keep more than $5,000 in your checking account, E*Trade offers a plump 2.90% APY on your account.
Do you use any of these online checking accounts? How has your experience been with using online checking?
September 14th, 2008 at 11:53 am
I really like the Schwab Investor Checking. You have to sign up for their brokerage account as well, but you don’t have to put any $$ in (I guess they are hoping that you will be tempted to invest some of your cash with them). There are no fees, and the best part, they refund ALL ATM fees and apparently currency exchange fees for foreign transactions. I think the interest is about 2% now. And their customer service is awesome! I love being able to use any ATM I want!