College is an exciting time: You’re surrounded by new people, new opportunities, and a chance to dive into the next chapter of your academic career. But this transition also comes with different financial realities—and the need to develop new skills around spending and saving money.
Along with navigating your new campus and sharpening your study skills, there’s another key lesson to learn: how to create a college student budget. When done right, a budget can help you limit debt, build some savings, and accomplish your goals. Need to make sure you have enough for textbooks, rent, food—and some left over for a little fun? Want to spend a semester abroad? Creating a college student budget can help with these goals and more.
Whatever financial issue is giving you trouble, Katie Waters, CFP®, founder of a financial planning firm, has tips for how to set yourself up for success. Here’s how to get started.
Assess your income and expenses
As you begin building your college student budget, you first need to figure out how much money you have coming in and how much you have going out. You can use anything from a simple spreadsheet to a budgeting app to track your income and expenses.
How should students pay for monthly expenses? Start by writing down all the sources of after-tax money you get each month, Waters says. That includes money from a part-time job, financial aid, stipends, grants, loans, or a monthly allowance from your parents.
Next, figure out how much you’re spending each month. Waters recommends looking back at three months’ worth of your expenses. To do that, refer to your debit and/or credit card statements, plus any record of money sent through payment apps.
You should account for every dollar you’ve spent, Waters says, separating expenses into common categories such as:
Cell phone
Food
Entertainment (movies, fun with friends, streaming services)
Clothing
Internet
Transportation (airfare, bus tickets, car insurance, gas)
Tuition
Room and board or rent
Textbooks and school supplies
The point is to add up everything, Waters says. “We want a line item for it all.”
If you’ve gotten this far and you already realize that your expenses weigh in heavier than your income, consider ways you could start giving your income a leg up. Check out these tips to help you make money as a college student.
Create your college student budget
Making and following a college student budget is the best way to ensure you have enough money to pay for the things you need while still having some money left over for the things you want. Here’s how to budget as a college student:
1. Create your spending categories.
Your budget should contain categories for all your major spending groups. (Refer to the list of expenses you created when assessing your expenses.) Then decide how much you must spend for each and assign a dollar amount or percentage to that category.
2. Choose a type of budget.
There are different budgeting styles, and Waters notes that one might fit your specific situation better than another. You could try the 50/30/20 rule, which allocates 50% of your money toward needs (food, textbooks, tuition); 30% toward wants (entertainment, clothing); and 20% toward savings.
You can also go with the envelope system, which involves setting aside a limited amount of money for each spending category. Once you hit the limit in a given category by running through money in its envelope—whether literal or digital—you can’t spend any more in that category until the next budget period begins.
3. Optimize your budget regularly.
Once you’ve set a budget, keep track of it. If you’re consistently under or over, see if there are areas where you can save more or spend less. As your needs change, so should your budget.
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Prioritize essential expenses
Whichever kind of college student budget you choose, make sure necessities such as your tuition payment (if you’re paying for school yourself) or things like bus fare to get to your part-time job are covered. To make that easier, Waters says you can find ways to reduce your expenses, such as:
Renting, borrowing, or buying used textbooks
Buying snacks in bulk or cooking meals that are large enough that you’ll have leftovers
Asking for student discounts when shopping in person or looking for online discounts
Opening a cash back checking account or using a cash back rewards credit card to earn rewards1 for purchases you already make.
Focusing on what you must pay for first can help to lessen the debt you acquire, Waters says. Bonus: If you can do that, you’ll also reduce the amount of interest you’ll have to pay while in school or after you graduate.
Manage your fixed and variable expenses
Certain expenses, such as your cell phone or car insurance bill, typically stay the same every month. Those are fixed expenses. Variable expenses include costs that can change from month to month, like food, gas, or entertainment, depending on your behavior. Variable expenses can be tougher to budget for, but they can also provide more flexibility to your budget.
The envelope budget method can help you learn to budget more accurately for variable expenses when making a college student budget. For example, let’s say you spent $140 dining out in month one, $175 in month two, and $120 in month three. Take the average of the three—$145—and set that as your “dining out” monthly line item that you shouldn’t exceed.
“The biggest ‘don’t’ for college students is saying yes to everything,” according to Waters. Instead, it’s important to set limits. “Get to know your town and find ways to hang out that are free or low cost.”
Save for emergencies
College might not seem like a natural time to save money, especially if you’re not making much to begin with—but it can be done. And saving money will be a critical skill you can continue to use throughout your life.
Often, the easiest way to save is to make it automatic, Waters says. You can automate your savings by opening a savings account and setting up regular transfers from your checking to your savings account. You can choose how much is socked away based on a percentage of your income, as with the 50/30/20 rule, or you can set aside a chunk of your remaining balance at the end of each month.
It’s also important to try and build an emergency fund, even if it’s small, Waters says. An emergency fund is money you use for unexpected expenses—think paying to fix a flat tire, covering medical bills, or repairing a malfunctioning laptop. A good goal for the amount to save in an emergency fund is three to six months of your expenses. That might sound like a lot, but you can build your savings slowly over time.
Waters notes that a savings account or emergency fund is also a great place to stash cash you weren’t expecting to receive—like birthday money from Grandma. Think of it this way: If you save $25 a week, in just six months, you’ll have saved $600. This is also a great chance to learn how to invest as a college student. By keeping your savings or emergency fund money in a high-yield savings account, you can watch how your savings grows over time with interest.
Start building your financial foundation today
Once you’ve set a budget that you feel comfortable with, make sure to regularly check in with yourself about your spending. One trick that’s great for budgeting for college students is a financial checklist, which helps you look closely at your spending habits and whether your needs have changed. Earning more or less money, a change in your rent, or a tuition hike can make it necessary to reassess your budget and tweak as needed, Waters says.
College can be the perfect time to start your financial future off on the right foot. Things like building credit, saving for retirement, and creating a thriving savings account all come from making the right choices early—and regularly. Getting a handle on your finances in college with a college student budget is one of the best first steps you can take.
Creating a budget and learning to manage your finances as a college student can put you in a stronger financial position when you graduate. Here are some of the first steps you can take to ensure your long-term financial wellness.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay® is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.
When you deposit money into a bank account, you expect that money to stay there until you withdraw it. But how can you be certain your money will be safe if the bank runs into trouble? That’s where FDIC insurance comes in.
“FDIC insurance ensures the safety of depositor funds up to a certain amount and promotes stability in the United States banking system,” explains Jason Koontz, an independent consultant with decades of experience in the banking sector.
FDIC-insured accounts, like those offered by FDIC member Discover Bank®, are protected up to $250,000 per depositor, per account ownership category, in the unlikely event of a bank failure. You probably have a lot more questions about FDIC insurance, so let’s dive into some answers.
What is FDIC insurance?
First, let’s start with what FDIC stands for: Federal Deposit Insurance Corporation. Managed by this independent government agency, FDIC insurance is a program designed to protect deposits against the possibility of bank failures.
Banks can apply for FDIC deposit insurance and, assuming they meet the standard for approval, pay premiums to the FDIC for coverage. FDIC protection is backed by the full faith and credit of the United States government and assures that even if a bank fails, depositors won’t lose their protected funds.
Why was FDIC insurance created?
The first deposit insurance programs in the United States were initiated and deployed at the state level. Starting with New York in 1829 until 1917, 14 states implemented plans to protect bank deposits and similar accounts. These programs were intended to protect depositors from bank failures and guarantee communities’ financial stability.
These efforts fell short, however, and by 1933, thousands of banks had closed and the entire U.S. financial system was faltering. Because past efforts to establish some sort of federal deposit insurance program had been unsuccessful, bank customers were left unprotected. Depositors lost $1.3 billion as a result of the thousands of bank failures stemming from the financial crash that led to the Great Depression. Considering inflation, that amount would currently equate to about $27.4 billion, according to the Pew Research Center.1
In response, Congress passed the Banking Act of 1933, and President Franklin D. Roosevelt signed it into law. The act officially established the FDIC to restore confidence in the banking system and prevent further financial collapse. Since then, “no depositor has lost a penny of insured funds as a result of a failure,” according to the agency.
How does FDIC insurance help consumers?
While the FDIC insures banks, individual consumers benefit too.
“FDIC insurance benefits U.S. banking customers (citizens and foreigners) by providing peace of mind and confidence that their deposits are protected up to $250,000 per depositor, [per account category], per insured bank,” Koontz says. “In the event of a bank failure, the FDIC steps in to ensure depositors’ funds are reimbursed promptly, maintaining stability and helping to prevent panic in the banking system.”
Koontz explains that this protection applies to the accounts of individuals, families, and businesses and that it promotes trust and participation in the U.S. banking system. Bank customers don’t need to apply for FDIC insurance; they only need to make sure their bank is FDIC-insured.
You can usually find out if a bank is FDIC-insured by checking its website. Or you can search the FDIC database to find certified institutions in your area.
How does FDIC insurance work?
So, what does the FDIC do when an insured bank fails? Koontz explains that after a bank failure, the FDIC will take over as the custodian and manage the bank to minimize disruption.
“While this can happen on any day of the week, the FDIC often takes over a troubled bank on a Friday near the close of business,” Koontz says. He notes that the FDIC will have been doing plenty of work behind the scenes leading up to this day. “A Friday takeover allows the FDIC the weekend to work on the failed bank,” he continues. “The FDIC has several options for resolving a failed bank, including selling its assets and deposits to another institution, arranging a merger with a healthier bank, or creating a bridge bank to maintain banking operations until a suitable buyer is found.”
Of course, as mentioned above, the FDIC also protects the failed bank’s customers—up to $250,000 per depositor, per insured bank, for each account ownership category—if needed.
It’s also important to note that bank failures are very rare. Most of the time, banks are able to stay solvent. And if they’re FDIC-insured, the agency will examine and monitor them to ensure they comply with consumer protection laws.
How are consumers affected by bank failures?
If a bank fails, customers are at risk of losing unprotected funds. Funds may be unprotected if they’re held in a non-FDIC-insured institution, if they’re held in accounts that do not qualify for protection, or if the funds exceed the $250,000 limit.
In the rare occurrence that an insured bank fails, the impact on customers will depend on the steps the FDIC takes in response.
“If a bank is acquired by another institution, customers’ accounts and services generally continue without interruption, and they become customers of the acquiring bank,” explains Koontz.
In the case of a bridge bank, Koontz adds, customers can typically access their accounts and continue banking operations without significant disruption. “However, in some cases there may be temporary limitations on certain transactions or services until the resolution process is complete.”
How much does the FDIC insure?
The standard FDIC deposit insurance amount is up to $250,000 per depositor, per bank, for each account ownership category. That maximum applies to all the banks you have an account with, as long as the bank is an FDIC member. (Discover Bank is an FDIC member.)
You can use the FDIC’s Electronic Deposit Insurance Estimator, or EDIE, to determine your total coverage across all of your accounts and banks.
Koontz says it’s possible the FDIC may organize an arrangement to reimburse funds beyond the $250,000 guarantee, but you should not expect funds above that number to be protected. There are steps you can take, however, to maximize your FDIC protection.
How can you maximize your FDIC protection?
If you’re looking to deposit more than $250,000—whether as an individual, a family, or a business—then the FDIC insurance limits may be a concern. Fortunately, there are some strategies you can use to increase the protection you receive.
One option is to open multiple accounts with different ownership categories at the same bank. “The FDIC provides separate coverage for different ownership categories, such as individual accounts, joint accounts, retirement accounts, and certain trust accounts,” Koontz explains. “By utilizing these categories effectively, you can increase your overall coverage.”
Another tactic is to open accounts at different banks, Koontz says. While it could be a little more inconvenient to manage accounts at different institutions, he notes that it’s wise to avoid keeping all your eggs in one basket.
“By distributing your deposits among different [insured] banks, you can ensure that each account remains within the coverage limit,” advises Koontz.
It’s also possible to increase your coverage by opening a revocable trust account and designating multiple beneficiaries. A revocable trust is an account that pays out to beneficiaries upon the death of the account holder. Consider consulting a tax advisor to discuss your specific situation.
As of April 1, 2024, the FDIC will insure covered trusts up to $250,000 for each of up to five beneficiaries. That means a trust could be insured up to $1,250,000 for a single account holder. The covered amount for a joint trust, meanwhile, could be up to $2,500,000 for five beneficiaries.
Are you staying informed?
FDIC rules have changed multiple times since the program’s creation nearly a century ago. Koontz advises that you remain aware of any developments to be certain your deposits remain protected.
“It’s important to stay updated on any changes to FDIC coverage limits or regulations,” Koontz says. “Periodically review your deposit accounts and assess whether any adjustments are needed.” Again, that could include opening several different account types within one FDIC-insured institution or spreading out your accounts across several different FDIC-secured banks.
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Feeling confident about FDIC insurance?
Koontz’s insights into what the FDIC does and how it can assist you as a bank customer should help you gain confidence about opening an FDIC-insured bank account. That could include an online savings account, a cashback debit account, a certificate of deposit (CD), a money market account, an IRA savings account, or an IRA CD.
While FDIC rules apply to every insured account, everyone’s financial situation will differ. “It is always important to talk to your banker, financial advisor, or even the FDIC directly for more personal guidance,” explains Koontz.
The FDIC is there for your benefit. When you appreciate how it works, you can build up your financial foundation with peace of mind. Ready to get started? Open an FDIC-insured online savings account today.
1 “Most U.S. bank failures have come in a few big waves.” Pew Research Center, Washington, D.C. (April 11, 2023) https://www.pewresearch.org/short-reads/2023/04/11/most-u-s-bank-failures-have-come-in-a-few-big-waves/
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
When it comes to your money, safety first. Understand what bank accounts are FDIC-insured to ensure your deposits are protected.*
August 16, 2023
Bank failures aren’t common—but they can happen, typically when a bank is no longer able to cover its liabilities. If depositors get nervous about the viability of their bank, they might withdraw money en masse, known as a bank run. Bank runs can accelerate a bank’s failure, and ultimately the Federal Deposit Insurance Corporation (FDIC) will take control of the bank.
But depositors can rest easy if their bank is FDIC-insured. FDIC insurance is a program managed by an independent agency of the United States government designed to protect customers in the event of bank failure. The standard FDIC insurance amount is $250,000 per depositor, per insured bank, per account ownership category. That maximum amount of $250,000 applies for each bank you have a qualified account with, as long as the bank is an FDIC member. (Discover Bank is an FDIC member.)
So, what bank accounts are FDIC-insured? If you’re opening a bank account, it’s important to understand what FDIC insurance is and what it covers.
What is the history of FDIC insurance?
The Banking Act of 1933 was passed in response to the bank failures of the Great Depression. In addition to other reforms, the act created the Federal Deposit Insurance Corporation. In 1935, the government made the FDIC permanent and tightened its standards.
Banks must be able to prove that they meet certain eligibility requirements to qualify for FDIC insurance, which is funded by payments from covered banks. In the rare event of a bank failure, those funds are used to reimburse the insured accounts of customers at that bank, with certain limits and restrictions.
What are FDIC insurance limits?
Today, FDIC deposit insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. Coverage wasn’t always that high, however.
When the FDIC was established, accounts were only insured up to $2,500. Over the course of the century, the covered amount was gradually raised in an attempt to keep pace with inflation. According to the FDIC, the most recent coverage increase occurred in response to the 2008 financial crisis, when the covered amount went from $100,000 to the current $250,000.
How do account ownership categories affect FDIC insurance limits?
You can increase your FDIC coverage by opening multiple account ownership categories at the same bank. For example, if you open a business account and a personal checking account at the same bank, each would be covered up to the maximum per law.
A joint bank account, meanwhile, will also be insured separately from a single-ownership account and for each owner of the account. That means if you open an individual checking account and a joint checking with your partner, those two accounts would qualify for $750,000 of total insurance.
Note, however, that this applies to different ownership categories but not to all different types of accounts. That means an individual savings account and an individual checking account belonging to the same owner at the same bank will qualify for a total of $250,000 in FDIC insurance.
Are checking accounts FDIC-insured?
Checking accounts at FDIC-insured institutions are among the deposit products covered by FDIC deposit insurance, according to the FDIC. For your checking account to be eligible, there’s nothing you need to do. The funds you deposit into a checking account at an FDIC-insured bank are automatically protected up to the maximum per law.
Is an online savings account FDIC-insured?
All savings accounts offered by FDIC-insured institutions, including online savings accounts, are covered up to the maximum per law. For all FDIC-covered accounts, both the original deposit amount and the accrued interest within the limit will be protected.
When opening an online account, it’s especially important to double-check that the type of account you’re opening is FDIC-insured. For example, according to the FDIC, crypto savings accounts are not protected by FDIC insurance, even if offered by an institution that is otherwise FDIC-eligible.
Legitimate financial institutions should make clear which accounts are FDIC-insured on their websites. To be certain, always contact the financial institution directly.
Are high-yield savings accounts FDIC-insured?
High-yield savings accounts at FDIC-insured institutions are protected up to the maximum per law, according to the FDIC. If the interest on a savings account causes it to grow beyond $250,000, only the funds up to the limit will be guaranteed protection.
As with checking accounts, if you want to protect more than $250,000 in savings, you’ll need to open accounts under different ownership categories or have accounts at multiple banks.
Is a money market account FDIC-insured?
According to the FDIC, funds deposited into money market accounts offered by FDIC-insured institutions are protected up to the maximum per law, just like FDIC-insured savings accounts.
Money market mutual funds, however, are not protected by the FDIC. Why not? Money market accounts are a type of savings account, while money market mutual funds are a type of investment account. Investments are generally not eligible for FDIC protection.
Is a certificate of deposit (CD) FDIC-insured?
Certificates of deposit at insured institutions are covered by the FDIC up to the maximum per law.
A CD can offer better rates than a high-yield savings account, but CDs work a little differently than savings accounts. With a CD, your money is earning interest at a fixed, guaranteed rate, but if you withdraw the money before the end of its term, you may pay a penalty.
Are Individual Retirement Accounts (IRAs) FDIC-insured?
IRAs, or Individual Retirement Accounts, are also covered up to the maximum per law at FDIC-insured institutions.
For an account to be covered, it generally needs to be “self-directed,” meaning the account holder chooses how their contributions are applied. This could include 401(k)s offered through a job or IRA saving accounts that you choose to open on your own.
IRAs can also include CDs and money market accounts. Retirement CDs, money market accounts, and similar financial products are eligible for coverage.
While stock and bond investments are a common feature of many retirement plans, they are not eligible for FDIC coverage. That means it’s possible that only a portion of your 401(k) or IRA will be covered.
If you’re uncertain if a retirement account or asset is covered, check with the institution providing it.
Can you increase your coverage by adding beneficiaries?
It’s possible to increase your coverage by creating a revocable trust account with multiple beneficiaries.
Trusts are accounts that pay out to a designated beneficiary or beneficiaries after the account holder passes. FDIC coverage applies to each beneficiary for up to five beneficiaries. In other words, a trust account with one owner and five beneficiaries could be covered up to $1,250,000.
If the trust is jointly held between two owners, the FDIC will provide up to $250,000 in coverage per beneficiary per account holder. That means if you want to maximize your coverage to the absolute limit, it would be possible to create a jointly held trust with five beneficiaries insured up to $2,500,000 in total.
It’s important to note that this information is all according to FDIC rules taking effect on April 1, 2024. Under current rules, irrevocable trusts, which cannot be altered after they’re created, can only be insured up to $250,000 regardless of the number of beneficiaries. The new rules treat both types of trusts identically and add the five beneficiary cap for calculating coverage.
Because we’re talking about potentially millions of dollars, it’s all the more essential to consult a financial planning professional about your personal situation.
Will the FDIC insurance limits ever change?
While FDIC insurance limits have been set at $250,000 since 2008, it’s always possible that the insurance limit could be increased in 2023 or down the road, according to Bankrate.
Whether or not that happens in the near future will likely depend on how the current economic and political situation unfolds. If the past decades are any indication, Congress will probably need to raise the limit eventually to account for inflation and other factors. But it’s unclear when that might happen, and savers shouldn’t assume it will be any time soon.
You can contact the FDIC if you have any questions or use their coverage calculator to determine how much of your funds are insured.
What else can you do to protect your money?
Opening an account with an FDIC-insured institution is a wise decision. But bank failures are just one risk to manage. You might also worry about scammers and fraudsters who want access to your hard-earned cash. Learn how to protect your bank account from fraud in 6 steps.
Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
* The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. Please consult your financial advisor with respect to information contained in this article and how it relates to you.
It’s a common (and frustrating) experience to have to pay a fee when you access your cash at an out-of-network ATM.
Currently, this kind of transaction will cost you $4.66 on average. When you are just trying to get $20 to buy an old book at a flea market or to buy some street food, that can be a lot!
To better understand ATM fees and avoid paying them, read on. You’ll learn typical costs and smart ways to dodge those extra charges and keep more of your hard-earned cash.
Common ATM Fees
Bank account holders typically pay no fees for using in-network ATMs, whether you’re dipping your card or doing a cardless withdrawal. However, these machines may not always be conveniently located.
Indeed, more than half of ATMs today are owned and serviced by independent operators and their affiliates — not banks. If you use an out-of-network ATM, you could end up paying a fee to your bank, as well as a fee to the ATM operator.
So how much are ATM fees? Here are some typical charges for using an ATM:
Non-Network Fee
This fee can be charged by your bank for using a non-branded or non-partner ATM. It’s kind of like going to a doctor that’s not on your insurance plan — you might be able to do it, but it could be more expensive.
On average, this charge accounts for about $1.52 of the total fee, according to Bankrate. The fee can apply to any type of transaction performed at an ATM, including withdrawals, transfers, and even balance inquiries. Typically, you won’t be told about such fees at any time during your ATM transaction.
ATM Surcharge
This one comes from the ATM owner, and is often labeled as a “convenience charge.” The average U.S. surcharge currently runs $3.14. However, surcharges can vary by state and venue, and you may encounter higher amounts in places where ATMs are in greater demand.
If you’re at an entertainment venue or theme park in a popular tourist destination, for instance, you could pay considerably more.
When using an ATM that isn’t part of your bank’s network of machines, the machine usually notifies you about a fee charged by the bank or company that operates the ATM.
Foreign ATM Fees
Traveling overseas can come with even more watch-outs, such as foreign transaction fees on both purchases and ATM withdrawals.
When using an ATM in a foreign country, you can incur a fee of around 1% to 3% of the transaction amount. Some financial institutions, however, have no foreign transaction fees, and can be worth looking at if you frequently travel overseas.
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What Are Average ATM Fees?
As mentioned above, ATM fees can take a bite out of your money. Here are specifics on how much ATMs charge, as of the end of 2022:
• The average out-of-network fee that a bank charges its customers is $1.52.
• The average surcharge by the ATM’s owner/operator when you use an out-of-network terminal is $3.14.
• The total average out-of-network fee is the sum of these two numbers, or $4.66 per transaction.
💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.
5 Tips to Avoid ATM Fees
If having to pay money to access your money grinds your gears, there’s some good news — it is possible to avoid ATM fees or at least encounter them less frequently.
Here are some strategies:
1. Scouting out ATMs in Advance
Finding out where your financial institution’s in-network ATMs are located in your area, or where you are traveling to, can save you money and hassle. These may be ATMs branded with the institution’s name and logo, or in a network of partner ATMs, such as Allpoint or Star. You can research this on your bank’s website or app.
2. Getting Extra Cash When You Use an ATM
Fees are typically charged per transaction, so one way to avoid charges is to withdraw more cash than you need whenever you go to the ATM, and then keep it in a safe place. This can yield significant savings when you are traveling overseas, where surcharges can be significantly higher than domestic ATM fees. You may want to keep in mind, however, that there are usually some ATM withdrawal limits.
3. Asking for Cash Back at the Register
Many retailers and convenience stores offer cash back when you make a purchase using your debit card. This can be a convenient way to get cash without paying an ATM fee. It can be a good idea, however, to make sure that neither the retailer, nor your bank charges a cash-back fee.
4. Switching to a Different Bank
Not all banks charge out-of-network ATM fees. If you’re getting hit with fees, especially double fees, you may want to consider switching to an institution that has a larger ATM network, doesn’t charge ATM fees, and/or refunds ATM fees charged by machine providers.
Online vs. traditional banks often have generous policies regarding ATM fees. They typically don’t have their own ATM networks, but will partner with large networks and may refund some fees charged by out-of-network ATM providers.
5. Using a Peer-to-Peer Payment App
With a peer-to-peer (P2P) payment app, like Venmo, or a similar service offered by your financial institution, you can easily pay your friends without cash with just a few taps on your phone -– and avoid a trip to the ATM entirely. And mobile payment can be safe, instead of carrying cash.
💡 Quick Tip: The myth about online accounts is that it’s hard to access your cash. Not so! When you open the right online checking account, you’ll have ATM access at thousands of locations.
Banking With SoFi
One way to avoid ATM fees is to bank with a financial institution that has a robust network of cash machines, like SoFi.
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FAQ
How can you avoid ATM fees?
There are a few ways to avoid ATM fees: You could bank at a financial institution with a large network of cash machines; you could use a P2P app; you could get cash back at the register; or you might take out more cash in advance, among other strategies.
Are ATM fees worth it?
Whether ATM fees are worth it will depend on the circumstances. If you need cash badly, you might not mind paying a few dollars. But often, people don’t want to spend money to access their money.
Are ATM fees higher at airports?
ATMs may be more expensive at airports. For instance, not all banks or ATM networks are represented at airports. You may have a hard time finding yours and therefore have to use an out-of-network cash machine. In addition, some popular locations, from airports to theme parks to casinos, have been known to have higher than usual fees.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit can earn up to 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.50% APY for savings. Members without direct deposit will earn up to 1.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 8/2/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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Want to get paid sooner? Your checking account might be able to help.
August 9, 2023
Watching for a direct deposit to hit your bank account can be a stressful waiting game, especially if you have everyday expenses to cover and bills that need to be paid. If this is an all-too-familiar challenge, you aren’t alone. Many Americans live paycheck to paycheck, without much of a financial buffer between paydays. And even after your paycheck is sent to your bank, it can still take a few days before that money is in your checking account and available to spend.
Whatever the reason, being able to get your paycheck early can make a huge difference. And your checking account can actually help you do this, depending on your bank. So, how can you get your paycheck early using an online checking account? It just takes a few simple steps and a little know-how.
Can you get your paycheck early using your online checking account?
Yes! You may be able to get your paycheck early and access your cash even sooner than expected, depending on the checking account you pick. Early access to these funds could help you cover immediate expenses or pay bills without having to rely on credit cards or incur late fees.
Not all online checking accounts allow you to get paid early, but some do. For example, Early Pay is one of the many benefits of a Discover® Cashback Debit checking account, and this feature allows you to tap into qualifying deposits days earlier than scheduled.1
What is Early Pay?
Early Pay is a no-fee service offered to Discover checking account customers, giving you access to qualified Automated Clearing House (ACH) funds up to two days early. (ACH is an electronic fund transfer network across which banks and credit unions transfer money.) Eligible funds can include a direct deposit paycheck from your employer or an ACH transfer from a government entity, just to name two.
With the Early Pay feature, your direct deposits are made available to you soon after Discover is notified that the pending transfer is on the way. This means you can pay bills, make purchases, and prevent overdrafts on your Discover checking account up to two days earlier than expected.
How do I set up direct deposit?
The process for setting up direct deposit will vary by the payor (your employer, in most cases). Payors often have their own direct deposit form for you to fill out, or you may be able to provide an ACH form that your bank generates on your behalf.
In order to set up direct deposit, you’ll need to provide the payor with information such as your:
Name on your account
Bank name
Bank account and routing numbers
Bank address
Also, you’ll likely need to tell the payor how you want the money deposited. Suppose you want half of your paycheck to go into savings, for example, or a set dollar amount to be redirected into another checking account. You may be able to specify those details when you set up direct deposit.
Checking with cash back and no monthly fees
Discover Bank, Member FDIC
What types of accounts are eligible for Early Pay?
Early Pay is available to Discover customers with online checking accounts, online savings accounts, or money market accounts. Early Pay isn’t available for Individual Retirement Account (IRA) savings accounts or IRA CDs because those are retirement accounts that aren’t typically used for short-term expenses.
What kinds of ACH deposits qualify for Early Pay?
If you have an online checking account, online savings account, or money market account with Discover, your ACH deposits may be eligible for Early Pay.
How early will direct deposit funds be available?
Discover Cashback Debit customers may be able to access their eligible direct deposit funds up to two days early. The timeline depends on when the ACH transfer is initiated by the payor and when Discover is notified that funds are on their way.
Will funds from my qualifying direct deposit always be available early?
Early Pay is available to eligible banking customers with qualifying direct deposits, but does direct deposit come early for all Discover customers, all the time? Not necessarily. Discover can’t guarantee that the funds will always be available early because of actions the payor may take. Timing can also depend on when Discover is notified of the pending payment.
How do I enroll in Early Pay?
If you’re wondering how to get your direct deposit funds early with Early Pay, it’s easier than you might think. Once you get set up with direct deposit, which is usually done with an employer or benefits provider like Social Security, Discover takes care of the rest. Or, if you’re already receiving qualifying ACH direct deposits into your checking, savings (excluding IRA savings), or money market account, you’re already automatically enrolled in the Early Pay feature. Once Discover is notified that a qualifying ACH payment is en route, you can have access to your money up to two days early.
Is there a fee for using Early Pay?
For Discover Cashback Debit customers, there’s no fee for the Early Pay feature. This means you can access your ACH deposits sooner at no additional cost.
Can I be informed when my direct deposit posts with Early Pay?
You sure can. With Discover Cashback Debit, you’ll automatically be set up with Early Pay email alerts, so you’ll always know when your paycheck or other qualified deposit hits your account. If you want to turn off email alerts, you can unsubscribe anytime. And if you prefer text or push notifications, you can turn those on in the Discover App.
Start using your checking account to get your paycheck early
When choosing a bank, you’ll want to look for important benefits such as no fees, expansive ATM networks, mobile check deposit, and even rewards on checking accounts. Being able to get your paycheck early might be one of the most beneficial perks, though, whether you need it to pay some bills or if you’re ready to make a big purchase.
Discover Cashback Debit customers enjoy more than 60,000 no-fee ATMs in their network, receive 1% cash back on up to $3,000 in monthly debit card purchases,2 and can even get paid up to two days sooner with Early Pay—all with no fees. Take a closer look at Discover Cashback Debit and see if it’s right for you.
1 Early Pay is automatically available to checking, savings (excluding IRA savings) and money market customers who receive qualifying ACH direct deposits. At our discretion, and dependent on the timing of our receipt of the direct deposit instructions, we may make funds from these qualifying direct deposits available to you up to 2 days early. See our Deposit Account Agreement for more information.
2ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay® is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.
Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
When it comes to making ends meet, many people are falling a bit short every month. A big part of that has to do with the fact that minimum wage hasn’t kept up with the rate of inflation – in the slightest bit. And because of that, a huge chunk of Americans are finding it harder and harder to bridge the gap.
Due to this fairly wide financial discrepancy, the market for cash advances has soared. In fact, an average of one out of every 50 Americans uses cash advances at least once a year. That’s huge! Especially so when you consider how many fees are normally tacked onto these payday advances.
Because of this ongoing financial crisis, I wanted to find some of the best cash advance apps with minimal to no fees to help you make it to your next payday a bit easier.
What’s Ahead:
Overview of the best cash advance apps
App
Amount you can withdraw
When you can withdraw
Fees
Earnin
$100
Once per pay cycle
Free
Empower
$25 to $250
Once per pay cycle
Subscriptions start at $8 per month
Dave
$100
Once until account is paid in full
$1 per month
Brigit
$250
Once per pay cycle
$10 per month
Chime
Full paycheck
2 days before normal payday with direct deposit
Free
MoneyLion
$250
Once per pay cycle
Free
Varo
Full paycheck
2 days before normal payday
Free
Earnin
Amount you can withdraw – $100.
When can you withdraw – Once per pay cycle.
Fees – Free.
Earnin was the first payroll advance app on the market, so it’s safe to say that it has been around awhile. Which means it has had time to grow and tweak its platform to serve people more effectively.
They are similar to Dave in that they will only allow you to take up to $100 cash advance per pay cycle. And, like Dave, they don’t charge you any fees or interest on this advance. Even though there is no fee for the service, they do have an option for you to add a tip to help keep the app running.
They also offer a few other great features on top of the standard cash advance option. Three of these include:
BalanceShield operates the same way that Dave does in that it will send you an alert when your account balance drops below a certain amount. When this happens they automatically deposit a $100 cash advance into your account to keep your account in the green.
Health Aid is a service to help get your medical bills reduced. You just have to submit a photo of the medical bill within the app and then Earnin will begin negotiating with the company to get your medical bill reduced. You can tip them whatever you feel inclined to once they finish the negotiation. Pretty cool!
Tip Jar is an in-app savings platform so that you can begin saving small amounts at a time towards larger goals.
As if these weren’t already three helpful bonuses, there is one more great addition to the Earnin platform. The Earnin app can be used as a shopping app to help you earn cash back. If you do your shopping within the app and pay with your Earnin account, you can get anywhere from 1% – 10% back on your purchases.
Empower
Amount you can withdraw –$25 to $250^.
When can you withdraw –Once per pay cycle. Eligibility to Cash Advance is updated automatically in the app.
Fees – Free for the first 14 days, and then $8 per month which gives access to all money management features in the app (including saving and budgeting to help you get out of the cycle of needing Cash Advance).
Empower is another extremely diverse app with Cash Advance options. You can sign up for the Empower Card which is interest bearing. Plus, there’s no overdraft fees and no minimums and you can get your paycheck up to two days early.*
Additionally, Empower has one of the most robust budgeting apps out there, akin to how Personal Capital works. When you set up the budgeting portion of the app, you have a plethora of options to help customize the budget for maximum effectiveness. These options can include:
Tracking spending in multiple categories.
Setting spending limits within specific categories.
Setting the frequency within specific categories as to how much you can spend at certain times.
Setting a weekly savings goal and using the AutoSave function to reach your savings target faster.
Once you have all of your budgeting categories, limits, spending, and AutoSave set up you are ready to go. And if you find yourself in a jam between paychecks, there is the option to get up to $250¹ in a Cash Advance with no late fees or interest. This will then be taken out of your next deposited paycheck and your budget reconfigured to help you get back on track.
Empower is a financial technology company, not a bank. Banking services provided by nbkc bank, Member FDIC.
Empower Disclosure – ^ Eligibility requirements apply. * Early access to paycheck deposit funds depends on the timing of the employer’s submission of deposits. Empower generally posts such deposits on the day they are received which may be up to 2 days earlier than the employer’s scheduled payment date. Cashback deals on Empower Card purchases, including categories, merchants, and percentages, will vary and must be selected in the app. Cashback will be applied automatically when the final transaction posts, which may be up to a week after the qualifying purchase.
Dave
Amount you can withdraw – $100.
When can you withdraw – Once until the account is paid in full.
Fees – $1 per month.
Dave is an app that creates an online checking account for you with the option of cash advances. Once the app sees that you might be close to overdrafting your account, they will send a notification to warn you.
At this point, you will have the option to take up to $100 cash advance against your next paycheck. If you decide to take the payday advance, they won’t charge you interest on anything you take. They also don’t require a credit check to implement the cash advance either.
While just that option alone is great, Dave has quite a few other perks to sweeten the pot. These include:
Building your credit history by automatically reporting rent payments to the credit bureaus.
No ATM fees at over 32,000 ATMs.
Automatic budgeting feature to help you get back on track and stay there.
Find a side hustle feature to help you earn extra cash.
And if those extra added bonuses don’t win you over, you can also earn credits to offset the monthly fee just by connecting your debit card.
Brigit
Amount you can withdraw – $250.
When can you withdraw – Once per pay cycle.
Fees – $10 per month.
Brigit is a payday advance app that has the most flexibility with their cash advances. You have the option to get a cash advance up to $250 per pay cycle.
Not only could you get a larger payday advance, but you can also file an extension on your advance up to three times. There are no penalties or fees to do this either.
However, Brigit doesn’t just allow everyone to apply for a cash advance. They have some fairly stringent barometers for determining whether you qualify for a payday advance. If you meet the following criteria, then you can apply for the cash advance option within the app:
Have an individual checking account that is at least 60 days old.
Must have a balance in your checking account at least two days after getting paid.
Must continually have an account balance of over $0.
Use your checking account almost daily.
Have at least three paychecks deposited from the same employer.
Have an average paycheck of at least $400.
Show at least $1,500 per month deposited from the same employer.
If you don’t meet the aforementioned criteria though, you can still use their varied budgeting tools to help you get your finances back on track.
Chime®
Amount you can withdraw – Full paycheck.
When can you withdraw – Two days before normal payday with direct deposit.3
Fees – Free.2
Chime is a little bit different than all of the other cash advance apps. This is due to the fact that it’s not actually geared towards cash advances. In fact, payday advances are a new product offering for them. Their area of focus has been more along the lines of creating a dynamic online mobile financial app product instead.
In addition to being free, their mobile financial app product has myriad additional options.2 When you have a Chime account, you will be able to:
Access over 60,000 ATMs.6
Receive banking alerts anytime there is a deposit or charge.
Select an automatic savings option out of every paycheck.1
Round up charges to put money into a savings account automatically.^
Turn off your debit card with one swipe if you notice suspicious activity.
These are perks that most brick-and-mortar banks don’t even think about offering. * Which makes Chime’s mobile platform one of the most robust out there. But, as an additional bonus, Chime will give you the option to take a cash advance. Sort of. Chime will deposit your paycheck as soon as your employer deposits it into your account. This is usually around two days earlier than you would normally get it.3 So instead of holding the funds, Chime is basically giving you a cash advance with your own money, for free. Gotta love this!
* Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. ^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account. 1 Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account. 2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account. 3 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. 6 Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
MoneyLion
Amount you can withdraw – $250.
When can you withdraw – Once per pay cycle.
Fees – Free.
MoneyLion has the option to get one of the larger cash advances on the market, of up to $250. Should you need a payday advance, MoneyLion makes it very easy to get one through their app. When you log into their Instacash feature, you can choose how much money you need until your next payday.
But, MoneyLion doesn’t stop there. They have quite a few extra perks that most of the other cash advance app companies don’t have. Some of their most prominent features include:
Free credit monitoring.
Free checking account.
Access to over 55,000 ATMs for free.
Fraud protection with debit card lock.
Credit building loans.
They also have a cash back rewards program in the works to give you up to 12% back on purchases with your debit card. And, if you choose to go with their paid membership, then you get an additional option to help you invest. This investment fund has no management or trading fees and is fully managed, to help you begin planning for retirement.
Varo
Amount you can withdraw – Full paycheck.
When can you withdraw – Two days before normal pay day.
Fees – Free.
Varo is known for their live customer service. They want to ensure that you have all of your questions answered and their expert assistance at your fingertips.
Varo is another mobile banking platform with the capability to get you your paycheck deposited up to two days earlier. Which is similar to a cash advance, without the fees or having to pay anything back.
As an addition to an easy-to-use platform, they offer quite a few other features that make their app enticing. Some of these include:
Debit card with automatic locking capability.
No fee transfers between your Varo account and anyone else who has a Varo account.
Instant notifications when money goes in or out of your account.
Access to over 55,000 ATMs for free.
Capability to overdraw your account by $50 with no fees when using your debit card.
Deposit checks remotely using the Varo app.
Save Your Pay option lets you automatically put a certain amount of each paycheck into a Varo Savings Account.
Save Your Change options lets you round up every transaction from your checking account to the nearest dollar and deposits it into your Varo Savings Account.
Even if you don’t choose to use all of the options available to you, Varo has so many choices that it can be difficult to even know where to begin. And that is where their live customer service can really shine.
How I came up with this list
This list of cash advance apps was a bit more difficult to create than I originally thought. The primary reason is that there are so many companies adding this feature recently. A lot of the apps mentioned have been around for a while and have been focusing on other areas of personal finance.
But, with the realization that so many of us are barely making ends meet on a monthly basis, adding a payday advance option to their platform only increases their diversity. So, I wanted to find apps that had a wide variety of other options besides just the ability to take out a cash advance. The hope here is that any of these options will create a more robust app to help you along your financial journey and not charge any excess fees along the way.
What to watch out for with cash advances
Even if a cash advance sounds like it might be a good solution to your temporary financial cash flow issue, there are some things to watch out for.
Expensive fees
Many cash advances come with hefty fees attached to them. The companies mentioned in this article do not, but reading the fine print is extremely important before taking out any kind of loan. Some of these fees can range between $10 to 5% of the loan, depending on the cash advance and the servicer.
High APR’s
High APR’s are another thing to really be careful with. While none of these companies charge an APR to take a payday advance, most others on the market do. And sometimes they can charge an APR of up to 400%. That is just crazy!
Continual use
If the fees and the ridiculously high APR weren’t enough to make you stop in your tracks, there is one other thing to seriously consider. When you take a cash advance, your next paycheck is reduced by that amount. Plus any fees or APR that may be tacked on. When you do this, you are shorting your future self money you might need to make ends meet during the next pay period.
Therefore, once you take one cash advance, it can easily create a downward spiral in which you will have to continue to do so. When this happens, it makes it so much harder to ever get back on the right side of the ship.
Most important features of a cash advance
If you are considering a cash advance to help you bridge the gap until your next paycheck, there are a few very important features to consider before pulling the trigger.
The amount you can withdraw
The amount you are allowed to withdraw will not be the same across the board. The amount you have available as an option for a payday advance may be based on a multitude of differing criteria. The most common numbers are between $100 – $250 per pay period.
When you can take a cash advance
When you will be allowed to take a cash advance can also vary. Some companies will allow you to qualify for one per month, whereas others are okay with one per pay period.
Associated fees
The fees and APR can also vary by company. None of the companies mentioned in this article have any fees or APR’s associated with their cash advances. But, if you choose to go with another company for a cash advance, make sure to read all the fine print regarding potential fees before signing on the dotted line.
Repayment terms
Not all repayment terms are created equally either. Some companies, like Brigit, will let you extend your repayment deadline. But, most companies have a specific time period designated for the cash advance repayment. So you will need to ensure you will have the money in your account by that date in order to repay the loan in full.
Cash advance alternatives
While taking out a cash advance can really help you make it through to the next payday, it still might not be enough. When this happens, it might be time to consider taking out a personal loan.
There are many different options to consider when it comes to taking out a personal loan. However, two of the best options are Credible and LendingTree.
Fiona
Fiona is a loan provider marketplace that offers many of your loan options all in one place. Fiona makes the loan finding process as easy as possible. All you need to fill out is a simple form that takes a matter of seconds, and you’ll see a list of some of the most reputable lenders with their offers perfectly tailored to your needs.
You can enter any amount you’re looking for and let Fiona know what your credit score is (they won’t run a hard pull on your score), and they’ll eliminated any lenders you may not qualify for.
Credible
Credible is another online marketplace for loan servicers to connect with consumers needing a wide variety of loans. These loans can include personal loans also. It is a quick and easy process to begin looking at the marketplace. And once you find a lender, or two, who have a personal loan with terms you can manage financially, then you will be connected to them through the Credible platform to complete the loan process.
Credible Credit Disclosure – Requesting prequalified rates on Credible is free and doesn’t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.
LendingTree
LendingTree is one of the largest online marketplaces out there, so they have a ton of product offerings in any category. Currently, they have quite a few different loan offerings ranging from $1,000 – $50,000 and 5.95% – 34.98%. This is a pretty widespread, so chances are they will have a personal loan product that will work for you.
The biggest thing to remember when considering a personal loan on top of a cash advance is that you will only be perpetuating the cycle and can keep yourself in debt longer. So, if there is any other way, such as side hustles, to bridge the gap, then check into those options first.
If you’re on the lookout for a full service online bank, you might come across CIT Bank. Founded in 2009, CIT Bank is now a division of First-Citizens Bank & Trust Company, which is a leading financial institution with more than $218 billion in assets.
The bank offers a variety of products, including savings and checking accounts, CDs, custodial accounts, and home loans. It stands out for its competitive interest rates that you may not find at traditional banks as well as no monthly maintenance fees or monthly service fees.
While there are no physical branches, live chat support on CIT’s website and mobile app as well as automated phone assistance is available 24/7. If you prefer to speak to a CIT representative directly, you can reach them during regular business hours: Monday through Friday, 9 a.m. to 9 p.m. ET, or Saturday from 10 a.m. to 6 p.m. ET.
CIT Bank doesn’t have an ATM network but it will reimburse you up to $30 per month if you incur out-of-network ATM fees. Rest assured that it’s insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 for an individual account or $500,000 for joint accounts, meaning your money will be safe, no matter what happens to the bank. Let’s take a closer look at CIT Bank so you can decide whether it makes sense for your unique situation.
CIT Bank Pros and Cons
Before you move forward and open an account with CIT Bank, it’s a good idea to consider the benefits and drawbacks.
Pros
Competitive rates: Since CIT Bank has less overhead costs than brick and mortar financial institutions, its yields on deposit accounts and several CIT Bank CDs are competitive. It can allow you to make the most out of your hard earned money.
No fees: Unlike other bank accounts, CIT deposit accounts do not have any monthly maintenance fees, or other common fees. You can use the money you save on fees to meet your financial goals faster.
ATM fee reimbursement: CIT Bank reimburses you up to $30 per month for out-of-network ATM fees. This means you can withdraw cash from any ATM without worrying about high costs.
Small minimum deposit requirements: You don’t need a lot of cash to open up CIT Bank accounts. Many. of the accounts only require $100 to start.
24/7 customer service: CIT’s live chat and automated phone support is available round-the-clock. If you have a question or concern, you’ll be able to receive assistance right away.
Cons
No physical branch locations: CIT is an online only bank, meaning there are no branches for an in-person banking experience. If you decide to bank with CIT, you should feel comfortable with online banking and mobile banking.
Limited product selection: Compared to other financial institutions, CIT’s product line is slim as there are no credit cards, car loans, or IRAs. Fortunately, its lineup of checking accounts, savings accounts, custodial accounts, CDs, and mortgages is still impressive.
Low rates on select CD accounts: Some CDs have lower rates than you may be able to find elsewhere. The good news is you can calculate your returns in advance and won’t have to worry about fluctuations in the market.
No checkbooks: CIT’s eChecking accounts do not include checkbooks. However, you can use CIT to pay other individuals and businesses electronically via Zelle, Apple Pay, and Samsung Pay.
CIT Bank Products
CIT Bank offers a variety of products to help you meet different financial goals. Here’s an overview of each of its current offerings.
Checking Accounts
You can open the CIT Bank eChecking account with as little as $100. It’s unique in that it offers interest on your balance. To earn as much interest as possible, you’ll need to keep at least $25,000 in your account.
As an online checking account holder, you’ll get a debit card with chip technology and 24/7 account access. Plus, you’ll be able to deposit checks and make unlimited withdrawals with the CIT Bank mobile app. In addition, you’ll have access to Zelle, Apple Pay, and Samsung Pay. Unfortunately, the eChecking account doesn’t come with paper checks.
Savings Accounts
CIT Bank offers a few CIT Bank savings accounts you might want to explore., including the CIT Bank Savings Connect, the Savings Builder account, and Platinum Savings account. The CIT Bank Platinum Savings account provides an interest rate of up to 12 times the national average.
There are no fees and interest compounds daily so that you can earn as much as possible. All you need is $100 to open this account. This account is ideal if you’d like to meet your savings goals quickly without a lot of effort.
With the CIT Savings Connect account, you can reap the benefits of a great interest rate and enjoy easy access to your funds. Several noteworthy perks of the Savings Connect include an interest rate of up to 11 times the national average, online banking and mobile banking, remote check deposit, and no monthly service fees.
The CIT Savings Builder is a two-tiered CIT savings account with an interest rate that’s twice the national average. As long as you make at least one $100 deposit per month or maintain a balance of $25,000 or more, you can earn a competitive rate on it. Since the Saving Builder account earns daily compounding interest, you’ll be able to maximize your earning potential. Just like the other CIT saving accounts, the Savings Builder doesn’t have any account opening or maintenance fees.
CIT Money Market Account
The CIT Bank money market account is the way to go if your ultimate goal is to grow your savings and stash your emergency fund. With a minimum opening deposit of $100, you can earn more than two times the national average.
In addition, there is no monthly service fee and you can deposit checks and transfer money using the CIT Bank mobile app. In addition, you’ll be able to earn twice the national average. Just like with the other accounts, you may only make six transactions per statement cycle and can deposit checks and make transfers with the CIT mobile banking app.
CDs
Certificates of Deposit (CDs) might be worth exploring if you like the idea of guaranteed returns. CIT offers several types of CDs, including:
Term CDs: Term CDs are traditional CDs that are widely seen at other banks and range from six months to 60 months. With a term CD, you can lock in an interest rate for a certain time period, regardless of what happens to the market. The longer term you choose, the more interest you’ll earn. You’ll need at least $1,000 to open a term CD.
No-Penalty CDs: Most CDs require you to lock up your money for a set period of time. If you’d like to access it before, you’ll have to pay a penalty. A no-penalty CD is exactly what it sounds like: a CD that doesn’t charge a penalty if you withdraw funds before your term is up. It requires a $1,000 minimum opening deposit and you may be able to access your money after seven days.
Jumbo CDs: If you have a lot of cash saved up, a jumbo CD might make sense. It requires $100,000 to open and doesn’t come with any account opening or monthly maintenance fees. Its terms range from two to five years and the longer you keep your money in one, the higher rate you can lock in.
RampUp CDs: RampUp CDs are for current CIT Bank customers with CDs. With a RampUp CD, you can increase your rate one time during your term if CIT Bank raises rates after you have already opened your account. You’ll need to reach out to CIT Bank directly to learn more about what type of rate you might qualify for.
Custodial Accounts
Custodial accounts are opened under the Uniform Transfers to Minors Act (UTMA). If you have a child under 18, a CIT custodial account can help you save money for their future. You’ll serve as the custodian and have complete control of the account until your child turns 18 or a later age that you designate.
You can contribute as much money as you’d like and may not have to pay federal taxes on part of the earnings. With a custodial account, your child may enjoy money for college, a vehicle, home down payment, and other expenses that can steer them toward a bright future.
Home Loans
CIT Loans does offer mortgages but you have to submit your contact information on its website to start the process and learn more about your options. You’ll need to state the value of the home you’re interested in, your desired loan amount, your zip code, and your credit score range. If you already bank with CIT, you may be eligible for two relationship discounts that lead to a lower rate.
Ten percent of your balance in a CIT bank account may give you 0.1% off your rate. If you keep 25% of your balance in a qualifying cit bank savings account, you might lock in a 0.2% discount. Since the CIT website has limited information about its mortgages online, it’s a good idea to fill out the form and request further details.
CIT Bank Fees
As we mentioned above, CIT Bank doesn’t charge any opening fees or monthly maintenance fees. Also, you can open most accounts with only $100. The bank won’t charge any domestic ATM fees and will reimburse you up to $30 per month for any fees you incur for using other ATMs. If you use an international ATM, however, CIT Bank will charge a monthly fee of 1% plus the fee imposed by the ATM provider. Other fees you should be aware of include:
Debit card replacement fee: 100
Overdraft fee: $30
Returned deposit fee: $10
Bill stop payment fee: $30
Outgoing wire transfer fee: $10
CIT Mobile App
With the CIT mobile banking app, you can bank on the go from just about anywhere. The mobile app is versatile so you can use it to log into our accounts via a password or fingerprint. You can also transfer funds between CIT accounts and an external bank account and take a photo to deposit checks.
Plus, the app allows you to check your balances and transaction history, send and receive money via Zelle, and make secure payments with Samsung Pay and Apple Pay. If you’d like, you can sign up for text banking, which will give you the chance to check your account balances and transactions through text. Many reviewers state that the CIT mobile app is very intuitive so you shouldn’t have any trouble using it, even if you don’t consider yourself tech savvy.
CIT Bank Reputation
Before you go ahead and open a CIT Bank account, you might want to know about its reputation. It has an A- rating on the Better Business Bureau (BBB). On TrustPilot, CIT earned 2.3 out of 5 stars due to negative customer reviews.
Most of the negative reviews have to do with poor customer service and difficulty opening deposit accounts. The majority of the five-star reviews praise CIT for a convenient banking experience and fast response times from the customer service team. You can always try out CIT Bank and move on to another financial institution if you’re unsatisfied for any reason.
How to Access Your Money
Even though there are no physical branches, CIT Bank makes it easy to fund your account and withdraw money.
Deposits
You can fund your account through these methods.
Mobile app: With the mobile app, you can deposit checks and make transfers quickly and conveniently.
ACH transfer: The simplest way to fund your account is to transfer funds electronically from your external bank accounts. Note that it may take up to two business days for the money to show up.
Check: You can mail a physical check to CIT Bank.
Wire transfer: CIT Bank accepts funds via wire transfer.
Withdrawals
Here’s how you can make withdrawals:
CIT Savings Connect: The CIT Savings Connect allows you to make up to six withdrawals or transfers per statement cycle. Keep in mind that any withdrawal and transfer requests you submit via mail don’t count toward this limit. The same goes for telephone requested withdrawals and transfers.
ACH transfer: Free ACH transfers between your account and an external bank account are available.
Check: You can call CIT and ask them to mail you a check without paying a fee.
How to Get Started
To open an account with CIT Bank, visit their website and click the green “Open Account” button on the home page. You can complete the application in 5 minutes or less. Be prepared to provide the following information:
Your home address
Your phone number
Your email address
Your Social Security number
You’ll also need to fund your new account. You can transfer funds from an external checking or savings account, wire funds to your new account, or mail a check to the following address: CIT Bank, N.A. Attn: Deposit Services, P.O. Box 7056, Pasadena, CA 91109.
Lastly, CIT will make two test micro-deposit to your account. You’ll receive an email within three business days that asks you to verify them. The bank will process your transaction as soon as you do.
CIT Bank Alternatives
While CIT Bank offers a lot of benefits, it’s not right for everyone. If you decide CIT isn’t the best choice for your unique needs and preferences, consider these alternative options. Some are online banks while others are traditional financial institutions with brick and mortar locations.
Ally Bank
Like CIT Bank, Ally Bank is an online only bank that offers low fees and high rates. Its product lineup includes checking accounts, savings accounts, CDs, credit cards, mortgages, car loans, personal loans, and retirement accounts. Perhaps the greatest benefit of Ally Bank is that it doesn’t charge any fees.
Capital One
Capital One has approximately 300 branches in select states and more than 50 Capital One Cafes that allow customers to open accounts, deposit cash and checks, and hang out. It also offers no-fee access to more than 70,000 ATMs and attractive rates on savings accounts and CDs. This bank might make sense if you want competitive rates but prefer the option of an in-person banking experience that is not available with CIT.
Chime
Chime isn’t a traditional bank or online bank like CIT. It’s a mobile banking app that provides banking services through Bancorp Bank, N.A. and Stride Bank. The Chime checking account comes with exciting perks like automated savings tools, early direct deposits and free access to over 60,000 fee free ATMs across the country. The Chime high yield savings account is also a solid choice thanks to its competitive interest rate and lack of monthly fees as well as minimum balance requirements.
Citibank
Citibank sounds like CIT Bank but is one of the largest banks in the world. It has hundreds of locations in the U.S. and thousands overseas. If you frequently travel abroad for business or pleasure and want access to branches and ATMs, it should be on your radar. It offers a plethora of accounts but they do come with fees. The good news is many of the fees can be waived if you meet certain balance or direct deposit requirements.
Discover Bank
When most people think of Discover, credit cards come to mind first. But Discover is actually an online bank that’s similar to CIT Bank. Its plethora of products include checking and savings accounts, personal loans, student loans, home equity loans, and mortgage refinancing. Discover also offers cash back on debit card purchases and, of course, credit cards with various rewards.
PNC Bank
PNC Bank is a traditional bank with brick and mortar locations. Some of its most popular products are the PNC Standard Savings account and Virtual Wallet, which combines a traditional checking and savings account. PNC also offers numerous CDs and free budgeting tools. It offers online banking, like CIT Bank, plus a robust mobile app.
Huntington Bank
Huntington Bank is a leading bank in the Midwest with branches in states like Ohio, Michigan, and Indiana. It provides checking and savings accounts, personal loans, auto loans, mortgages, credit cards, insurance, and investment options. Other perks include a 24-hour grace period, all day deposits, and online bill pay. You can download the Huntington app and bank on the go, like you’d be able to with CIT.
Bank of America
Known as one of the largest banks in the country, Bank of America has more than 6,000 locations throughout the U.S. Just like CIT Bank, it has a highly rated mobile banking app. In addition to checking and savings accounts, it has a Preferred Rewards program, which comes with perks like higher interest rates, waived fees, and cash back for certain transactions.
TD Bank
TD Bank has a strong presence in the Eastern part of the U.S. It offers many of the same products as CIT, such as personal checking accounts, personal savings accounts, and mortgages accounts. TD stands out for its generous bonuses and minimal fees. We can’t forget its intuitive mobile app, which makes it a breeze to bank on the go.
Citizens Bank
Citizens Bank is a national bank with locations in the New England, Mid-Atlantic and Midwest regions. Just like CIT Bank, it doesn’t charge monthly maintenance fees as long as you meet specific criteria, like making one deposit per month.
Additionally, many accounts are free of minimum balance requirements. In addition, Citizen offers the Peace of Mind overdraft protection program which will send you an alert if you overdraft your account. Other perks include an overdraft fee grace period and early paycheck deposit and early paycheck deposit.
Bottom Line
If you feel comfortable with online banking and would like to take advantage of the best annual percentage yield APY available, CIT Bank is a great choice. You’ll enjoy access to a plethora of products and watch your money work for you. While you won’t get to bank in-person, you can perform pretty much any banking task online or on your mobile phone via the CIT banking app.
CIT Bank FAQs
What types of products does CIT Bank offer?
CIT Bank offers deposit accounts, like checking accounts, high yield savings accounts, and money market accounts. It also provides CDs and home loans.
Who is CIT Bank for?
CIT Bank is a good fit if you’re looking for an online bank with high interest rates and low fees. You’ll be able to open and manage CIT Bank’s savings accounts and checking accounts from the comfort of your own home. If you prefer a traditional bank with physical locations, you might want to explore other options, like Bank of America, PNC Bank, and Huntington Bank.
Is CIT Bank FDIC insured?
Yes, CIT Bank is insured by the Federal Deposit Insurance Corporation. This means that if the bank fails for any reason, the federal government will protect your money up to $250,000 per depositor. The FDIC insurance can give you the peace of mind of knowing your money will be safe and sound, regardless of what happens to CIT.
Do I need a lot of money to open a CIT Bank account?
Each CIT account has its own requirements. However, many of its deposit accounts can be opened with as little as $100. This is great news if you’d like to start your savings journey but don’t have a lot of cash at your disposal.
Is it safe to bank with CIT?
CIT makes security a top priority. If you open an account with the bank, it will be protected with safety measures like antivirus protection, SSL encryption, firewalls, and account monitoring. With CIT, you don’t have to be skeptical about entering your personal information.
Is CIT Bank legitimate?
CIT Bank is a division of First Citizens Bank, which dates back to the 1800s. Plus it’s FDIC-insured.
Where can I go to find CIT Bank’s routing number?
Log into your online account to find your CIT Bank routing number. For online-only accounts, this number is 124084834.
Does CIT Bank have physical branches?
CIT Bank is a digital bank. This means there are no branches and you must do all your banking on your laptop, computer, or mobile device. Many reviewers state that the CIT website and mobile app are very easy to use so you don’t have to worry about a learning curve.
Is CIT Bank compatible with Zelle?
Yes. You can use Zelle to quickly send and receive money through the CIT Bank mobile app. Fortunately, you won’t have to pay any fees to do so as Zelle is free to use.
Should I open an account with CIT Bank?
You might benefit from a CIT Bank account if you’re looking for a financial institution that offers high interest rates and low fees. However, you should feel comfortable with online and mobile banking as you won’t be able to step into a local branch to deposit a check or ask a question.
In the past, we’ve discussed the best online high-yield savings account, covered the basics of certificates of deposit, and even explored the beauty of Roth IRAs. But we’ve never talked about checking accounts.
Many people believe checking accounts are the dinosaurs of the banking world. They’re not extinct yet. In the past few weeks, I’ve received two questions about them:
“Where can I get the best rate on a checking account?”
“How much should I keep in a checking account?”
Under certain circumstances a checking account can offer a better return than a savings account! In fact, there are a couple of ways to do it.
Online Checking Accounts
Though they’re not as common as online savings accounts, I was able to find a few high-yield online checking accounts.
Mutual of Omaha Bank, for example, offers a high-yield checking account that is much higher than the average national savings account interest rate. Currently, the Mutual of Omaha Bank online advantage checking yields 0.50% per year.
This account comes with free Bill Pay and free ATM access to 22,000 ATMs.
Rewards Checking Accounts
Believe it or not, there’s a way to earn even higher rates of return with a checking account. Many small community banks and credit unions around the United States offer a special “rewards” checking account, a product administered by a company called Kasasa.
Different banks have different names for this product.
Obviously, these rates are fantastic. There aren’t many places you can earn a guaranteed 6% return on your money right now. Unfortunately, there are a few catches. These rewards checking accounts usually come with some combination of the following limitations:
You must receive your monthly statement electronically — not via snail mail.
You must log into your account at least once per month.
You must make a certain number (generally around 12) debit card purchases. (ATM withdrawals do not count toward this number.)
You must make at least one electronic transaction each month. These include automatic payments to your utilities, for example, or a direct deposit.
The rate only applies to the first $30,000 (or so) in your account. (The cap at some banks is $10,000; at others, it’s $100,000.) The portion in your account above the cap only earns a tiny return.
If you use your debit card often, a rewards checking account makes a lot of sense. If you’re clever (and have a lot of money), you could actually use both types of accounts I’ve described. Put your first $25,000 or so into the local credit union to earn five or six percent, and then put the rest into an online checking account at three percent. (On the other hand, if you have that much cash, you’re probably doing something far more clever with it than parking it in rewards checking accounts!)
How Much Should You Keep in Checking?
This brings us, at last, to the second question about checking accounts. Chris wrote to seek advice on how much to keep on hand:
What is a good rule of thumb for a minimal balance in one’s checking account? I already have a healthy emergency savings account, so my question is, how low should I go? I carry no revolving debt, and I am currently paying off installment debt (student loans), so I could get a guaranteed return on any extra money I put towards debt taken from my no-interest brick-and-mortal checking account.
The answer to this question depends entirely on the rates of return for the savings and the checking accounts, and how the accounts are used.
Though I have an Electric Orange checking account at ING, I don’t actually use it for anything yet. I haven’t fit it into my financial workflow. Instead, I use a normal no-interest checking account at my local credit union. Every month, I transfer a fixed amount there to pay the expected bills. The rest of my money earns interest in savings.
If I were to get my act together, I could transfer some money to Advantis to test their rewards checking account. I’m hesitant to put my entire emergency fund there because I don’t know if I’ll meet the “12 transactions a month” clause to earn the 5% interest. But if I transfered a small amount there and tested it for a couple months, I’d know for certain.
Now I’d like to hear from you folks. What sort of checking account do you use? Does it earn interest? How much? Have you tried one of these rewards checking accounts? How did you like it? Have you tried an online savings account? Or have you given up checking account altogether?
Debit cards can unlock many of the benefits of your checking account.
July 7, 2023
If you’re taking your first steps toward financial independence, it’s the perfect time to get acquainted with the debit card. So let’s dive into what a debit card is, how to use a debit card, and how to get a debit card for yourself.
What is a debit card?
A debit card is a physical form of payment—meaning it’s a card you can actually hold in your hand—typically connected to a checking account. It’s possible to link a debit card to a money market account, a savings account, or another cash account, but linking it to a checking account is the most common. You can use a debit card to pay for things in person and online or to withdraw cash directly from your account via an ATM. Whether you’re making a purchase or withdrawing cash with your debit card, the money is immediately drawn (that is, debited) from your account.
What’s the difference between a debit card and a credit card?
Debit cards and credit cards look similar, but there are some important differences between debit cards and credit cards that you should keep in mind:
Where the money comes from
A debit card pays for transactions with money you already have in an account, while a credit card effectively picks up the tab and sends you a bill later. After buying something with your debit card, your account balance will decrease by the amount you just paid almost immediately. With a credit card, your credit balance is how much you’ll eventually need to pay back to the credit card company, while your available credit is how much you have left to spend before you reach your credit limit. When you purchase something with your credit card, your credit balance will increase by that amount, and your remaining available credit will decrease in tandem.
Spending limits
With a debit card, you can only spend as much as you have in your account. Credit cards, by contrast, are effectively lending you money to spend. Credit card companies don’t want you to spend more than you can eventually pay back, so they cap how much money you can spend. This is known as your credit limit.
Costs and fees
The most common fees associated with a debit card are minimum balance fees (when your balance falls below a required amount) and overdraft fees (when you don’t have enough money in your account to pay for your debit card transactions). Credit cards don’t have those fees, but you can incur other fees if you don’t pay your total monthly credit balance on time each month. That’s because you’ll start accumulating interest on any balances not paid in full by the end of the billing cycle. The longer it takes to pay off your balance, the more you’ll end up owing in interest.
Do money market accounts have debit cards?
Some, but not all, money market accounts offer debit cards. Money market accounts typically earn interest and are Federal Deposit Insurance Corporation (FDIC)-insured, but they can also offer some of the features of a checking account. Money market accounts like the Discover Money Market Account provide customers with debit cards to use for purchases or at ATMs.
How does a debit card work?
Debit cards are versatile. When you know how to use a debit card, you can get the most out of:
ATM withdrawals
Debit cards can be used at ATMs to withdraw cash from your account. Simply insert or tap the card, type in your PIN, and select how much money you want to withdraw. Some banks and ATMs may charge fees if you use your card with an unaffiliated financial institution, so make sure you know which ATMs are free for you to use.
In-person transactions
Similar to a credit card, you can use your debit card in person at a cash register. Depending on your card type, you will either swipe, insert, or tap your debit card and enter your PIN to make your purchase. You’re probably used to seeing debit cards used this way at stores, restaurants, and even in taxis.
Online purchases
Debit cards can also be used for buying things online. However, when you place an order online, you typically need to enter more information since you can’t swipe your card. That information can include your card number, expiration date, security code, billing address, and possibly other verification information.
What are the benefits of a debit card?
There’s a reason that a debit card is a staple in so many people’s wallets. Debit cards come with a number of benefits:
Convenience. It’s a lot easier to use a debit card to buy things and withdraw money than it is to write checks.
Security. Your money is typically protected by FDIC insurance. (Check with your bank.) And many banks will send you a fraud alert if any suspicious activity is detected.
Rewards. In the past, credit cards have been known for having better rewards than debit cards. However, in recent years, some debit cards have stepped up their game, offering cash back in exchange for using the card.
What are typical debit card fees?
You won’t pay interest on the transactions you make with your debit card, but you need to be aware of common debit card fees and how to avoid them:
Overdraft fees. If your bank doesn’t offer overdraft protection, this is a fee to keep an eye on. That’s because if you accidentally spend more money than you have in your linked account, your bank may charge you an overdraft fee.
ATM fees. Using ATMs outside of your bank’s ATM network may result in transaction fees that will be deducted from your linked account.
Maintenance fees. Some banks charge account maintenance fees if your minimum balance falls below a certain amount. According to a 2022 Bankrate study, the average monthly maintenance fee for noninterest-earning checking accounts that charge this fee was $5.44.
While the above fees can dwindle your account balance, they can often be avoided by checking your balance, keeping an eye on your spending, and using the right ATMs.
How to get a debit card
To get a debit card for yourself, follow these steps:
Research financial institutions There are a lot of banks with different fees, ATM networks, and rewards, so be sure to assess your options. Some banks may offer certain perks for opening a new account or using your debit card regularly, while others may have more flexible options that allow you to avoid fees.
Open an account with your financial institution of choice Regardless of where you open it, you can’t have a debit card without some sort of bank account—such as a checking or a money market account—tied to your debit card. Once you’ve chosen a bank, open a checking account or money market account with them.
Activate your debit card When you receive your card, it should come with instructions on how to activate it. This typically involves calling a phone number or going online.
Earn cash back with your debit card
Discover Bank, Member FDIC
More and more people are using debit cards and other digital forms of payment to make purchases. According to a 2022 study by the Pew Research Center, roughly 40% of Americans say that in a typical week, none of their purchases are made with cash. This number has increased by 12% since 2018. Now that you know how to get a debit card, you can more easily make digital payments, too.
How old do you have to be to get a debit card?
You can usually be any age to have and use a debit card, but if you’re under 18, you’ll need a legal guardian to open the linked account for you.
A debit card is a first step toward financial freedom
Getting your first debit card may seem intimidating, but once you find the card that’s right for you, it’s a breeze. In fact, there are many perks to having a debit card—especially if you know how to use a debit card to your benefit.
If you’re looking for a card that gives you free access to over 60,000 ATMs, no fees, and awesome rewards like 1% cash back, then Discover Cashback Debit could be for you.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
Most checking accounts don’t pay interest, but a growing number of high-interest checking accounts do. Some offer yields on par with the best high-yield savings accounts, though often with extra hoops to jump through.
Nationwide Advantage Checkingcan’t match the best savings account yields, but it nevertheless provides a reasonable return on your cash when you meet two qualification requirements. If you regularly use your debit card and receive recurring direct deposits each month, you should qualify for the full yield.
That said, Nationwide Advantage Checking has some important downsides to consider before opening an account. Weigh the pros and cons carefully.
What Is Nationwide Advantage Checking?
Nationwide Advantage Checking is a high-yield online checking account that earns up to 0.90% APY in any statement period where you meet the two qualifying criteria:
Receive direct deposits totaling $1,000 or higher each month (good for 0.45% APY)
Make at least 10 in-person debit card transactions, each totaling $3 or more (good for another 0.45% APY)
If you complete one qualifying activity but not the other in a given statement cycle, you earn the posted interest rate for that activity but not the maximum possible yield.
Nationwide Advantage Checking is backed by Axos Bank, one of the biggest online banks in the United States. In addition to potentially paying interest on balances, it has customer-friendly features like no monthly maintenance fee and no ongoing minimum balance.
What Sets Nationwide Advantage Checking Apart?
Nationwide Advantage Checking stands out for several reasons:
Pays interest with qualifying activities. You can earn up to 0.45% APY when you receive qualifying direct deposits and complete at least 10 in-person debit card transactions of $3 or more each.
No maintenance fees. Unlike some high-yield and rewards checking accounts, Nationwide Advantage Checking charges no monthly or annual maintenance fees.
Big ATM network. Nationwide Advantage Checking has more than 80,000 machines in its ATM network, which spans the entire United States. You pay no fees to withdraw cash from these ATMs.
Above-and-beyond security features. On top of standard security features like automatic timeouts and SSL encryption, Nationwide Advantage Checking goes above and beyond with protections like two-factor authentication and complimentary antivirus and malware protection.
Key Features of Nationwide Advantage Checking
Don’t open a Nationwide Advantage Checking without understanding its core features and capabilities, from its fees and minimums to the conditions it places on interest payments.
Account Yield & Requirements
Nationwide Advantage Checking’s maximum yield is 0.90% APY. You must complete both of the following qualification requirements to earn it in any given statement cycle:
Make 10 or more debit card transactions in person, each totaling at least $3
Receive at least $1,000 in qualifying direct deposits, not including transfers between bank accounts
The debit card transaction requirement qualifies you to earn 0.45% APY on your account balance. The direct deposit requirement qualifies you to earn another 0.45% APY.
If you complete only one or the other in a given statement cycle, you earn only the corresponding interest rate. If you complete neither in a given statement cycle, you earn no interest for the period.
Account Fees & Minimums
This account has no monthly or annual maintenance fee and no ongoing minimum balance. There is a $50 minimum required opening deposit.
ATM Access
Nationwide Advantage Checking has more than 80,000 ATMs in its fee-free network. Cash withdrawals are free at all machines in the network, but you may face surcharges if you venture outside it.
Security Features
All bank accounts come with certain standard security features, such as encryption and password protection. Nationwide Advantage Checking goes a bit beyond the typical security lineup with two notable nonstandard features:
Complimentary malware and virus protection for customers
Two-factor authentication, which means your password alone isn’t enough for intruders to gain access to your account
Mobile Features
Nationwide Advantage Checking has a user-friendly mobile app with all the main features of the regular online account dashboard. You can deposit paper checks on your phone, set up recurring and one-time bill payments, and transfer funds to external accounts or other individuals with a few taps.
Deposit Insurance
Nationwide Advantage Checking comes with FDIC insurance on balances up to $250,000. Should Axos Bank (Nationwide’s banking partner) go under, your deposits are guaranteed by the federal government up to this amount.
Pros & Cons
Nationwide Advantage Checking has some clear advantages and a few notable downsides as well.
No maintenance fees or ongoing minimum balance
Better potential yield than most checking accounts
Large ATM network
Must complete qualifying activities to earn interest
Lower yield than the best high-yield checking accounts
No debit card rewards
Pros
Nationwide Advantage Checking is a low-cost, low-balance checking account that has the potential to be at least somewhat rewarding.
No maintenance fees. Nationwide Advantage Checking charges no monthly or annual maintenance fees, so you won’t pay anything out of pocket to keep your account open.
No ongoing minimum balance. Once your account is open, you’re not required to maintain a minimum balance. Some interest checking accounts make you keep hundreds or thousands of dollars in the bank at all times.
Better potential yield than most checking accounts. Nationwide Advantage Checking has a higher yield than most checking accounts. After all, traditional checking accounts pay no interest at all.
Large ATM network. Nationwide (through Axos Bank) has more than 80,000 fee-free ATMs, more than many competing banks.
Above-average security features. Nationwide Advantage Checking has a few nonstandard but welcome security features, such as antivirus protection and two-factor authentication.
Cons
Nationwide Advantage Checking attaches important conditions to interest payments and isn’t among the highest-interest checking accounts on the market in any case.
Must complete two qualifying activities each statement cycle to earn interest. You need to make at least 10 qualifying debit card transactions and receive at least $1,000 in qualifying direct deposits to earn the maximum interest rate in any given statement cycle. While not totally outrageous, these requirements aren’t easy for every user to fulfill.
Maximum yield can’t match the best high-interest checking accounts. It’s nice that Nationwide Advantage Checking yields anything at all. But it’s a far cry from the top high-yield checking accounts, whose yields compete with the top high-yield savings accounts.
No rewards on debit card spending. Nationwide Advantage Checking has no debit card rewards program. If you want to earn rewards on spending, consider a rewards checking account or app like Go2Bank.
How Nationwide Advantage Checking Stacks Up
Nationwide Advantage Checking shares the spotlight with several other interest-bearing checking accounts. Before you apply, see how it compares to another popular option: Quontic Bank High-Interest Checking.
Nationwide Advantage
Quontic High-Interest
Maintenance Fee
$0
$0
Minimum to Open
$50
$100
Minimum Ongoing
$0
$50
Maximum Yield
0.90% APY
1.10% APY
Qualifying Activities?
Yes
Yes
Both Nationwide Advantage Checking and Quontic High-Interest Checking have no maintenance fees and low minimums. Both also require qualifying activities to earn interest, though Quontic is a bit more manageable with just one requirement. Quontic’s maximum interest rate also noses ahead of Nationwide’s, if not by much.
Final Word
Nationwide Advantage Checking uses a two-tiered interest rate to encourage you to make it your main checking account. Neither qualifying activity is a heavy lift if you have a steady, decent-paying job and regularly use your debit card in person. While the maximum interest rate (currently 0.90% APY) can’t match the top interest-bearing checking accounts, it’s way better than nothing.
That’s not to say Nationwide Advantage Checking is the best checking account on the market. For example, you can earn interest at a much higher rate in a Wealthfront Cash Account — without jumping through any hoops — and you can earn rewards on debit card purchases with Go2Bank (among many other rewards checking accounts and apps). Nationwide deserves to be in the conversation, but don’t open an account before seeing what else is out there.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Nationwide Advantage Checking Review
Nationwide Advantage Checking has a higher yield than most checking accounts, but you have to meet two qualification requirements to earn it. It’s also not as rewarding as some checking accounts with more relaxed qualification requirements (or none at all). But it’s still worth investigating if you’re in the market for a new checking account and appreciate the opportunity to earn a return on your cash.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.