Online Checking Accounts Compared: Smart Banks for Savvy Spenders

Online 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.

E*Trade provides 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. Here is a rundown of the benefits of these two top online checking accounts:

Electric Orange from ING DIRECT

• APY: 0.50%
• Min. to Open: $1
• Min. Balance: None
• ATM Fee: None
• NSF Fee: None
• Open an account now »

E*Trade Max-Rate Checking

• APY: 0.75%
• Min. to Open: $100
• Min. Balance: None with direct deposit
• ATM Fee: $1.5
• NSF Fee: $25
• Notes: Free initial checkbook order.
• Open an account now »

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.

E*Trade would have to be second on my list because they require a direct deposit of at least $200 per month to waive a $15 maintenance fee.

Do you use any of these online checking accounts? How has your experience been with using online checking?