Tara Porter

When was the last time you were in a bank branch? For most of us, the answer is: not for a while. This is one of the primary reasons for why online checking accounts are popping up and becoming a popular choice for people. Since companies offering online checking accounts don’t have to pay for the operating of a bank building, they can offer more perks to customers. Some banks even offer incentives such as huge cash bonuses just for opening a new online account. It is common to be offered $100, $200 and even over $400 for new account sign-ups.

No Overdraft Fees

Several online banks, such as Chime and Simple, don’t charge customers overdraft fees. Does that mean you can run to your favorite store and make it rain with a stack of hundreds without a penalty? Unfortunately (or fortunately?) no.

These online banking accounts won’t let you charge beyond your account balance. Instead, the charge will be declined like a credit card.

No Monthly Fees & No Minimum Balances

When looking at in-person banks, you’ll find a wide range of monthly fees. Some charge a standard monthly fee, others waive the monthly fee if you have a certain amount in your account.

Several online checking accounts allow you to sign up with no monthly fee and no minimum deposit. This means that you wouldn’t have to worry about always having a certain amount in your account.

No Foreign Transaction Fees

Many banks add foreign transaction fees if you are making purchases through overseas accounts. These fees tend to be 1-3% of the purchase amount (usually closer to the 3% range).

Think you’re exempt from worrying about foreign transaction fees if you aren’t a world traveler? Think again. Foreign Transaction fees don’t just occur when you are traveling. You also get dinged with these fees if you are making online purchases through a foreign retailer.

Higher Interest Rates

Another perk of online checking accounts is that they often give you a higher interest rate. For instance, many in-person banks give you .01% APY on a checking account, but online checking accounts offer up to 2.00% APY.

Let’s do the math on this.

If you put $10,000 into your checking account, then with .01% APY you get about $1 at the end of the year. But if you have an online checking account with 2.0% APY, you get just over $200.

ATM Fee Reimbursements

One big concern people have with using online checking accounts is they don’t understand how to get cash if there is no physical building with an ATM for them. Luckily the majority of online banking companies provide ATM fee reimbursements so that you can withdraw your cash from any ATM without a fee.

Unique Perks

There are all kinds of unique perks offered by different online banks. For example, Aspiration provides cell phone insurance at no additional cost. If you use an Aspiration account to pay your cell phone, it covers up to $600 per device (with a $25 deductible).

Another unique perk is through the program Chime. Chime automatically rounds up all of your transaction and transfers that rounding over to a Chime Savings account. While the company isn’t giving you anything “free” here, it is giving you a simple way to help you increase your savings.

Which is the Best Choice?

When choosing an online checking account, there is no one size fits all “best” pick. Instead, choose the bank with the benefits that you prefer. Do you work a lot with foreign bank accounts? Then you’ll want to find a plan that has no foreign transaction fees. Work with cash a lot? Then you’ll want to find a plan with ATM reimbursement.

Luckily there is an increasing number of online checking accounts popping up, and you are sure to find one that best meets your specific needs.


1. https://www.nerdwallet.com/blog/banking/nerdwallets-top-online-checking-accounts/
2. https://www.crediful.com/no-overdraft-fee-checking/
3. https://www.nerdwallet.com/blog/banking/debit-card-foreign-transaction-international-atm-fees/
4. https://www.creditkarma.com/credit-cards/i/foreign-transaction-fees/
5. https://support.aspiration.com/hc/en-us/articles/360019915971-How-do-I-get-free-cell-mobile-phone-protection
6. https://www.chimebank.com/automatic-savings/

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