In need of cash? Some apps can help — but they want to be your bank account, too.
Apps at banking fintech firms Dave and MoneyLion offer small, short-term cash advances to eligible consumers. If you open a bank account or set up direct deposit, the apps sweeten the deal with lower fees or larger borrowing amounts. Apps at other firms, such as Chime, Current and Albert, offer a similar perk for those with accounts: No-fee overdraft services that cover an expense when your account has nonsufficient funds.
But a single feature like extra cash between paychecks is likely not a good reason to wed yourself to a new bank account, says Adam Rust, director of financial services with the Consumer Federation of America, a nonprofit that represents consumer advocacy organizations.
Between banks and credit unions, consumers can choose from more than 8,000 federally insured banking institutions, he says. The flexibility to overspend may be one of many qualities you look for in a new bank.
Here’s how to think through these two separate financial decisions: Getting extra cash and choosing a bank account.
Extra cash: An enticing offer, but with strings
When you urgently need extra money, a hurdle like setting up a bank account — and potentially adding direct deposit — may seem easy to clear if it means getting the cash you need.
Dave’s fee for immediate funding is 5% of the advance amount for users with an external bank account, but just 3% for users with a Dave checking account. MoneyLion offers cash advances of up to $500 to users with external bank accounts, but increases the eligible advance amount to $1,000 if they set up direct deposit to a MoneyLion checking account.
The fee-free overdraft feature from Chime, Current and Albert will pay for certain customers’ transactions when they don’t have enough funds in their account, but only if they have a bank account that receives direct deposits. Chime requires at least $200 a month in direct deposits, and Current requires at least $500 a month. Albert requires direct deposits plus a subscription.
Apps with cash advances or overdraft coverage seem like helpful tools to bridge an income gap. They don’t check credit or charge late fees, and you can usually get a small amount of money — up to $250 covered for overdrafts and up to $500 from a cash advance app — on short notice. Your next paycheck or bank account deposit typically repays what you borrowed. And none of these apps have overdraft fees, which can be around $35 at banks.
But opening a new bank account just for a cash advance or overdraft feature might lead to unexpected inconveniences or worse. Switching banks is hard for a reason: You set up a relationship with a bank or firm, including using your bank account to pay your ongoing bills and subscriptions.
“That’s such a significant part of your financial life — it’s the foundation of your financial life — and to pick that because of a once-every-direct-deposit transaction seems, to me, like a risk of making a mistake,” Rust says.
Compare bank accounts based on low fees and available features
Choosing where to bank involves assessing available features and their associated costs. A good checking account typically has low or no monthly fees, low or no minimum balance requirements, a free ATM network and cheap ways to move money around.
Banking fintech firms — or neobanks — tend to check many of the boxes for a desirable checking account: low costs and some perks not often available at traditional banks. Dave and MoneyLion have $1 monthly fees, either as part of membership or for bank account usage. Chime and Current have no monthly fees. These four offer free ATM withdrawals nationwide through third-party networks, direct deposits up to two days early and cash-back rewards. Albert has all of these features but charges a nearly $15 monthly fee.
Consider features they lack, too
Banking fintech firms often focus on a narrow set of accounts and features. None of the five mentioned offer joint accounts or business bank accounts, in case you manage money with a partner or run a small business. These firms don’t have branch networks for in-person services as an alternative to online or phone support. They’re also not part of the Zelle network, which enables nearly instant transfers across different banks. Other features, such as paper checkbooks, foreign currency and cashier’s checks, aren’t available either.
Most banking fintech firms have federally insured accounts through partner banks instead of being banks themselves. If the firms fail, there can be risks that bank failures don’t have. The Federal Deposit Insurance Corp. (FDIC) sweeps in to protect customers at failed banks to prevent any loss or delay to money access, but that doesn’t happen for bankrupt companies that partner with banks. Neobank failures can result in delays to accessing your money or bank accounts.
Even credit-related perks have limits. Dave and MoneyLion set caps on the amount users can borrow between paychecks. Overdraft features at Chime, Current and Albert have maximum coverage amounts — starting as low as $20 — and some transactions, like online bill payments or transfers, aren’t covered.
Bear in mind, too, that setting up direct deposit with a cash advance app’s bank account just to meet the criteria for a larger advance could disrupt your finances. Funneling your paycheck to two different banks may mean you’ll need another set of login credentials to access your account online, you may need another debit card — and things get even more complex if transfers take days to move from your new account to your primary one.
“It can obviously be a loss of convenience for the consumer to have multiple accounts or to have to only use their MoneyLion account because it could get them greater advances,” says Andrew Kushner, senior policy counsel with the Center for Responsible Lending.
Find alternatives for extra cash
Cash advances and overdraft coverage can be helpful if they’re used occasionally, but if you’re struggling to cover everyday expenses like gas and groceries, consider alternatives that require less commitment to an app and low or no fees.
Some national banks offer small, affordable loans to existing customers, and federal credit unions may provide low-cost payday alternative loans. Financial assistance programs from local nonprofits can help with necessities like food and clothing. Or consider taking out a low- or no-interest loan from a family member.
If you haven’t started your children or teens off with a kids checking account optimized for their needs, you’ll want to help your college student open a checking account before they begin school.
Opening a checking account for your child can teach them about money management and financial responsibility, along with providing them an easy way to make debit card purchases. It’s never too late to get started.
One advantage to helping your young adult open their first student checking account is they have more options than they might have when they were 16 or younger. Students over 18 can open a bank account with few restrictions.
But choosing a student checking account may give them access to higher interest rates and added features and benefits, along with fee-free checking, no monthly maintenance fees, and no minimum deposit to open an account.
12 Best Student Checking Accounts
Not surprisingly, many of the best student checking accounts come from banks that also offer some of the best checking accounts for any age. However, the products below – in most cases – are tailored for young adults from the ages of 18 to 24, with the features this age group desires most, including an intuitive mobile app and low or non-existent minimum deposit requirements.
1. Best for Students under 18: Capital One MONEY Teen
Most of the student bank accounts on our list exclude children under the age of 17 or 18. Capital One MONEY Teen checking is available to children ages 8 and up. It comes with all the benefits and security of a big bank, providing peace-of-mind. This includes access to Capital One branches and Capital One Cafes for in-person service. This account also serves as a great tool to teach your young adult the basics of banking.
Capital One MONEY Teen checking is a joint account with no monthly fee, no overdraft fees, and access to 70,000 ATMs with no fees. Plus, earn 0.10% on all balances, including those in checking.
You can link Capital One MONEY Teen checking to any other bank account through any bank or neobank, making it easy to transfer money to your teen while they are away at college. Plus, you can keep tabs on their spending with their linked account in the Capital One mobile app.
When they graduate, your teen can hold onto their MONEY account or transfer the funds into a top-rated Capital One 360 Checking account of their own.
2. Best for Working Students: Chime
Chime is not a bank. It’s a financial technology company and mobile app backed by Stride Bank, NA, and The Bancorp Bank. Many features make it perfect for working students. First, you can receive your paycheck up to two days earlier than you might at other banks with ACH deposit.
Plus, you can set up automatic transfers to your linked Chime Savings account, helping you to establish good financial habits early on. Simply set up Chime to transfer a percentage of your paycheck into your Savings Account every time you receive a direct deposit.
When you use your debit card for purchases, the “Save When You Spend” program rounds up your purchase and transfers the difference directly into savings. That small change can really add up, whether you’re saving for your first apartment after college, a new car, or your next tuition bill.
For working students looking to build their credit, Chime gives account holders access to a Credit Builder Secured Visa, with no annual fee, no credit check, and no security deposit required. Instead, the credit account is secured by your Chime checking account with monthly direct deposits.
Like many of the best student bank accounts on this list, Chime has no overdraft fee, no monthly service fee, no ATM fee for in-network ATMs, and no minimum balance requirements.
3. Best Account Opening Bonus: Chase College Checking
Chase Bank has been handing out student account opening bonuses like they hand out lollipops at their branches lately. College students ages 17 to 24 can snag a $100 bonus when they open an account online or at a local branch (students age 17 will need to visit a branch). You’ll just need to make 10 qualifying transactions within the first 60 days of opening the student bank account.
What’s a qualifying transaction? Virtually anything, according to the Chase website, including debit card purchases, online bill payments, Chase QuickDeposits, Zelle transfers, and ACH credits. Bank as you normally would, and you should easily earn that $100.
In addition to the generous sign-up bonus, Chase College Checking has no monthly fees for college students for up to five years, access to 16,000 ATMs and 4,700 branches across the U.S., and zero liability protection for unauthorized debit card purchases.
Chase Overdraft Assist covers purchases that exceed your account balance. You’ll pay no overdraft fee if you’re overdrawn by $50 or less at the end of the next business day.
4. Best for Yield: Ally Interest Checking
Ally Bank is the first bank on our list not designed specifically for students, but the vast array of features in this interest bearing checking account makes it ideal for young adults.
Ally Bank offers an APY of 0.25% on checking account balances and 4.00% APY on balances in a linked Ally Bank savings account. Neither account has any monthly fees.
Ally offers several features to help those on a tight budget manage their money. You can organize your money into spending and saving buckets, which can help you see exactly where your money goes each month. Ally will also review your bank accounts and help you find opportunities to save, and shuttle that extra money into your high yield Ally savings account.
Customers who have deposited $100 or more into their Ally checking account, or $250 via direct deposit, gain access to Ally’s CoverDraft service after 30 days. This protection covers up to $100 or $250 in charges that would overwise overdraft your account. Some purchases, including Zelle transfers, or ATM withdrawals, may be declined if they would put your account into overdraft.
Ally has no monthly maintenance fee, no overdraft fees, no ATM fee for in-network ATM transactions and no minimum balance requirement.
5. Best for Referrals to Earn Extra Cash: GO2bank
GO2bank, the digital bank associated with the top financial technology company Green Dot, offers an easy, straightforward money account with overdraft protection up to $200 with eligible direct deposits. The linked savings account pays a high 4.5% APY, with no fees for qualifying customers and no minimum balance requirement.
You can get regular ACH deposits from your job or side gigs up to two days earlier than most traditional banks. If you receive government benefits, such as Social Security, you can receive those deposits up to four days early.
Your GO2bank account will have a monthly service fee that costs $5 per month, unless you have a qualifying direct deposit that month. You will also pay fees for transfers from a linked debit card from another bank or fintech, mobile check deposits, and cash deposits.
If you are the type of person with friends who come to you for advice, you can earn $50 for each friend you refer to GO2bank who signs up with direct deposit. Your friend will also earn $50. You can use this offer for up to 30 friends, yielding $1,500 annually. This makes a GO2bank account great for social media influencers or college students with a large friend group.
6. Best for Full-Service Banking: Bank of America Advantage SafeBalance Banking
Bank of America Advantage checking accounts offer options for people in various stages of their financial life. College students might be best to start out with Bank of America Advantage SafeBalance banking, a straightforward money account with no overdraft fee and no checks.
The account has no monthly fee for students under the age of 25 or customers under the age of 18. Preferred Rewards customers also receive free checking. There is a $25 minimum deposit to open an account.
New Bank of America customers can earn a $100 account opening bonus when they open an account and set up direct deposits of $1,000 or more within 90 days.
7. Best for Comprehensive Money Management: PNC Virtual Wallet Student
Money Magazine named the PNC Virtual Wallet on its best banks for students list three years running. PNC Bank divides this mobile account into three separate accounts for everyday spending, “reserve,” or short-term savings, and “growth” for long-term savings.
The account has no monthly service fee for students for up to six years, along with all the benefits of a regular PNC Virtual Wallet. Additionally, students receive a courtesy refund of your first overdraft fee on your Spend account, one free incoming domestic or international wire transfer per statement period, and free paper statements if you opt in to receive them.
Once six years have passed or you are no longer a student, your account converts into a regular PNC Virtual Wallet, which may have associated monthly fees. Check the PNC website at that time to determine the fees and how you can waive them.
Your PNC Virtual Student Wallet pays a 0.01% APY on money in your Reserve account, and .02% on account balances up to $2,499 in your Growth account, with .03% APY on balances over $2,500. These may not be the best rates available, but the reputation of PNC Bank, along with the money management features in a Virtual Wallet Student account, make this an account worth considering for students just learning to budget.
8. Best for Establishing Savings Habits.: Wells Fargo Clear Access Banking
As one of the Big Four banks in the U.S., Wells Fargo offers a reliable and safe place to store your money, plus access to thousands of branches nationwide.
The Wells Fargo Clear Access banking account is great for teens and college students, since it’s available for account holders ages 13 to 24. Anyone under the age of 18 will need to open their account in a branch and anyone younger than 17 must have an adult aged 18+ as a joint account holder. The account has no monthly maintenance fee for anyone 24 or younger. A $25 minimum opening deposit is required.
Wells Fargo Clear Access banking is a simple, straightforward money account with no checks and personalized service at Wells Fargo branches. There are no overdraft fees with the account, but also no overdraft protection. Transactions that exceed the account or minimum balance amount will be declined, which helps put teens and young adults in charge of their money.
You can link your Clear Access bank account to a Way2Save Savings account and earn a 0.15% APY. You can establish good money habits by setting up automatic savings. Wells Fargo will transfer $1 from your Clear Access account into your checking account each time you use online bill pay or use your debit card for a one-time purchase. You can also transfer as little as $25 per month or $1 per day into your account to see your savings grow even faster.
9. Best for Cash Back: Discover Cashback Debit
The Discover Cashback Debit account may not be marketed to teens and students, by name. But, it’s enticing to anyone looking for a standard checking account with no monthly service fees and 1% cashback on debit card purchases, up to $3,000 per month. It’s highly unlikely for most college students to max out that free money (unless they are putting housing, tuition, and car expenses on their card).
Discover Cashback! debit card offers many of the benefits you’d expect from these top-rated money accounts, including early direct deposit, 60,000+ no-fee ATMs, and overdraft protection from your linked Discover Savings with no fees. Discover charges no fees for insufficient funds, bank checks, regular checks, or expedited delivery of a replacement debit card.
These features make it one of the most convenient accounts you can hold. Plus, you don’t have to worry about “aging out” of the account and facing fees for a non-student bank account. Your Discover Cashback Debit account will be free no matter your age. Link it to a Discover Savings Account to earn 4.0% APY with no minimum deposit required.
10. Best for Unlimited Out-of-Network ATM Fee Reimbursement – Axos Bank Rewards Checking
Another bank account not marketed to students but meeting all their needs is the Axos Bank Rewards Checking account. This account has no monthly fees. It also reimburses ATM fees for out-of-network ATMs nationwide, which is great for students who travel domestically or who don’t have ATMs in their network on campus.
Pay no overdraft fee or non-sufficient funds fees with this account. Best of all, earn an APY of 0.40% on your checking balance if you receive monthly direct deposits of $1,500-plus. Young investors can ramp up their interest rate by 1% with an average daily balance of $2,500 in an Axos Invest Managed Portfolio Account, plus another 1% by holding $2,500 in a self-directed trading account. If you take out a loan through Axos, you can add another 0.60% to your APY.
College students likely won’t regret opening an Axos Bank account to take them through adulthood, especially with options for investing, low mortgage rates, car loans, and more.
Plus, earn a welcome bonus when you open an account and have direct deposits of at least $1,500 within a single calendar month during the first three months of account opening.
11. Best Credit Union: Alliant Credit Union Teen Checking
Alliant Credit Union offers a teen checking account for minors ages 13 to 17. The account is insured up to $250,000 per account holder by the National Credit Union Administration (NCUA). The adult account holder must be an Alliant Credit Union member. But it’s easy to join by depositing $5 into an Alliant Credit Union saving account. Alliant Savings earns an APY of 0.25%.
The teen checking account has no overdraft fees or non-sufficient funds fee. It also has no monthly fees or minimum balance requirements. Account holders gain access to 80,000+ fee free ATMs nationwide plus $20 per month in ATM fee reimbursement for out-of-network ATM use. This is an interest earning checking account which also pays 0.25% APY on all balances as long as you have at least one deposit, via ACH direct deposit, mobile check deposit, or transfer from another bank or credit union, each month.
12. Best for Young Shoppers: Varo Bank
Varo Bank is another account not necessarily marketed to college students but definitely optimized for their needs. The Varo Bank debit card delivers up to 6% cash back, with money deposited into your Varo account as soon as you accrue $5 in rewards.
Like many of the best student accounts on this list, Varo has no monthly fee, no minimum balance requirements, and no overdraft fee. If you need money before payday, you can use Varo Advance, an interest-fee program that allows you to borrow up to $250 and pay it back within 30 days. You will not pay fees to borrow less than $20. Borrowing up to $250 comes with fees that can be as high as $15, depending on the amount of cash advance you need.
Varo Bank uses the Allpoint network of ATMs, with fee free access to 55,000+ ATMs nationwide. Using other bank ATMs could result in charges up to $3 from Varo and fees charged by the other banks, as well.
It pays to open a linked Varo Bank savings to take advantage of a high 3% APY. Account holders with direct deposits equal to $1,000 per month and a positive balance in their Varo checking and savings can earn up to 4% APY.
One of the best things about a Varo account is it can grow with you. You won’t pay additional fees as an adult out of college, so you can keep the same bank account you started with for your entire life if you want.
Methodology: How We Select the Best Student Checking Accounts
To find the best student checking accounts, we evaluated the monthly maintenance fees, ATM fees, minimum deposit requirements, features, benefits, banking services provided, along with customer service and mobile app access at several of the biggest and most well-known banks and credit unions.
ATM Network
Most banks have ATM networks or partner ATM networks of 20,000 or more ATMs nationwide where you can use your debit card with no ATM fees. You might be surprised to learn that even online banks and financial technology companies that are not a bank provide access to thousands of ATMs nationwide through partner programs.
Nationwide availability (physical locations or mobile access)
College students often split time between their college campus and the home where they grew up. Finding a bank with physical locations in the areas they live or an online bank that provides a mobile banking app with fee free mobile banking from anywhere is important.
Fees and minimum requirements
Bank fees no longer have to be a way of life for today’s young adults. We chose financial institutions with no monthly maintenance fees or easy ways to waive maintenance fees.
Benefits such as high APY, cash-back rewards, or other additional perks
Student checking accounts today are more than just “bare bones” places to store your cash. Many student bank accounts offer perks, benefits, and high-yield savings or an interest bearing checking account to provide added value.
Overdraft fees
Cash management mistakes happen, especially when young adults first start learning to budget and manage their finances. Many banks have no overdraft fees and some offer overdraft protection to help out in a pinch.
How to Choose the Best Bank for College Students
We’ve offered 12 solid options to help you choose the best student checking account. Before you open a student bank account, it’s a good idea to think about what you need in your primary checking account and a linked savings.
The list below makes it easy to review your must-haves and nice-to-haves when you choose your first bank account as a college student.
Best student checking account interest rates
If you’re looking to earn interest on your standard checking account, many banks offer this feature. Review annual percentage yield (APY) figures for your top choices.
Remember, a higher savings interest rate might benefit you more, since money in your checking account tends to fluctuate based on paychecks, bills, and expenses. The best checking account may not pay interest, but can save you money in other ways.
Annual Percentage Yield (APY)
Likewise, you can put money in your pocket with an account with linked savings offering a high annual percentage yield (APY).
Mobile Check Deposit
If you get paid via paper checks, you’ll want to find an account with a mobile app that offers mobile check deposit. Find out how fast deposits clear, and if mobile banking services are fee free.
No Monthly Maintenance Fees
Many banks today make it easy to find a free checking account with no maintenance fees. If you have to pay a monthly maintenance fee, find out exactly what you’re getting for your money. Find out if the perks and benefits, such as a cash back debit card or reimbursement of ATM fees make the maintenance fees worthwhile.
Minimum Deposit and Minimum Balance Requirements
When you’re just getting started, cash may be tight. It’s important to find an account with no minimum deposit to open.
Banking Services Provided
Accounts should have customer service online, by phone or in branches, plus an easy-to-use mobile app and a debit card with no ATM fees.
FAQs About Student Checking Accounts
Read what people are asking about the best student checking accounts, including minimum deposit requirements and benefits of a student checking account.
What are the benefits of a student bank account?
A bank account tailored for students gives young adults a head start on their financial future and learning how to manage money. For students who work, they can receive direct deposits in their student account, pay bills online, and send money to friends and family using Zelle.
How to get a student checking account bonus?
Several student checking accounts, including Chase, provide sign-up bonuses. Make sure to read the fine print and complete the requirements, which may include setting up direct deposit or making a minimum opening deposit, to collect the bonus.
Can I open a student checking account without a deposit?
To open a student checking account without a minimum deposit amount, simply look for a bank account, like Varo, that has no minimum opening deposit.
Are there any downsides to opening a student checking account?
When you open a student checking account, you’ll want to make sure you won’t pay monthly maintenance fees. Some student checking accounts convert to a regular account once the student graduates, and there may be fees associated with the regular account.
Is there an age limit on a student checking account?
Most student checking accounts are open to students from the age of 18 to 24 without a joint account holder. Customers under the age of 18 may be able to open an account with a joint owner.
Can minors open student checking accounts?
Accounts like Capital One Money Teen are available to children ages 8 and up with a joint account holder. Some other accounts require students to be 18 or older.
What happens to your student checking account when you graduate?
Many of the student bank accounts on this list won’t change when you graduate college. Others offer the option to convert your account to one of the bank’s regular checking products. A Chase College Checking Account has no monthly fees for your first five years in college, but if you graduate or exceed that time frame, you might pay a $6 monthly maintenance fee unless you meet other requirements.
Online banks, often referred to as neobanks (we’ll use both terms in this article), have increased in popularity over the last decade. To keep up, most traditional banks have improved their online presence and introduced comparable digital-friendly services.
But with all these new banking options available to consumers, it can be overwhelming to figure out if a traditional or neobank is best for your own financial goals.
Let’s break down the similarities and differences between neobanks and traditional banks, so you can make an informed decision.
What’s Ahead:
There is a difference between a neobank and a traditional bank with a digital presence
As neobanks increase in popularity and traditional banks try to compete by establishing a stronger digital presence, it can seem, at a quick glance, like they’re now all pretty much the same.
And while they may offer some of the same services, neobanks and traditional banks remain fairly different in their features and capabilities. Here are some of those differences at a glance:
Neobanks (online banks)
No physical locations – Neobanks don’t have physical locations you can visit, so you’ll do all your banking via the web or a mobile app.
Speedy account opening process – Opening an account with a neobank can be quick and easy. You’ll need to provide some personal info and identification documents, but once you identify yourself, your new account can be up and running in a matter of minutes.
A user-friendly interface – Neobanks focus on the user experience, making banking as easy as possible via online platforms.
Some ATM fees – Online banks may offer ATM access, but you’re likely to encounter in-network fees.
Few to no fees – Neobanks are the clear winner regarding fees. They don’t always have the expenses that traditional banks do — no buildings mean fewer overhead costs — so they can pass some of those savings on to the customer.
Better interest rates – Neobanks usually offer better interest rates thanks to the low overhead.
Phone or online customer service – While neobanks do have customer support teams, more often than not you’ll find yourself scrolling for answers in support forums or chatting with an online bot to get the help you need.
Traditional banks
Local branches are available – Banks have actual buildings, called branches, that you can visit on foot or via drive-through. The branch staff usually consists of bank tellers and other employees who can take care of all your banking needs IRL.
Opening an account can take a while – At a traditional bank, you’ll likely have to bring documentation and visit a branch during regular business hours. You could find yourself waiting anywhere from five minutes to an hour to open an account.
Some online banking options – Traditional banks frequently offer a banking website or mobile app to conduct some of your transactions, although they may not be as robust as a neobank.
Large ATM network – Since traditional banks have bank branches, they’ll also offer ATM access in their network of ATMs.
Typically come with fees – A traditional bank might charge $10 or even $15 per month to have a checking account, plus other fees.
Lower interest rates – You might get 0.10% APY (or even 0.01% APY) on savings accounts at a traditional bank.
In-person customer service – Here’s where traditional banks certainly have the edge. After all, part of all that overhead that keeps them charging more is staffing bank branches with friendly faces.
Read more: The history of the biggest banks in America
Benefits of neobanks
A neobank is a new concept to many, which can create some distrust, especially among older consumers. But neobanks are typically as safe as traditional banks, and their funds are FDIC-insured.
Not only that, but we’ve all become far more digital savvy over the past several years, and so a digital-only approach is far more suited to today’s market than it was in previous generations.
Let’s break down some of the other benefits:
Better rates
One of the most significant benefits of most neobanks is that they typically offer much better interest rates on your savings accounts. Since neobanks have lower overhead, they can pass those savings on to the customer.
The interest rates with neobanks can be as much as 10x higher than at standard banks. Granted, it might not be as much as you’re hoping for — say, 1.0% APY — but that still beats the 0.10% APY of typical traditional banks.
Read more: Best online savings accounts
Low (or no) fees
In addition to competitive interest rates, most neobanks offer their customers significantly lower fees than traditional banks.
Some neobanks offer fee-free checking or savings accounts with no minimum balance requirement. This perk alone can save you about $10 or $15 a month, depending on the bank.
You might even find a bank that doesn’t charge ATM, transfer, or other fees.
Read more: Best online checking accounts
Who should use neobanks?
People who are living their best online life — Neobanks will require you to be comfortable using an app or website to use your account. You can do it all from your laptop or phone: check your balance, order a new card, deposit a check, transfer money, and so much more, and often with little to no fees. If you can confidently open an app and follow on-screen directions, then using neobanks will be extremely easy.
People who are tired of paying for their money — One of the best things about neobanks is that most accounts are free to open and maintain. And most accounts boast no minimum balance requirements, making them attractive to young, tech-savvy consumers like us, with little money but big financial goals.
People who are short on time — Neobanks use streamlined operations to create a faster experience. Services like opening accounts, depositing checks, and sending money to friends are quick and easy. And with 24/7 online customer support, someone with an overnight work schedule and account issues won’t need to call out of work to fix their problems.
Benefits of traditional banks
Though neobanks sound extremely attractive, there are some benefits to using traditional banks. Neobanks are a newer concept, and someone who is comfortable with traditional banking (especially older consumers) may not want to step out of that routine.
Here are some other perks, as well:
Personal service
A considerable benefit is that traditional banks can offer you more personalized services. Depending on the bank you choose and the tellers who staff your local branch, you might wind up banking at a place where everybody knows your name.
These employees can offer a more customized approach when setting up your banking products, such as loans and credit cards, based on your personally identified financial goals.
Traditional banks are definitely in your favor if you prefer a personal touch to your banking experience.
Range of service
There are services that traditional banks can offer that neobanks don’t. Think services like currency exchange and safe deposit box rentals, thanks to having brick-and-mortar locations.
Most traditional banks offer a wider range of financial products as well. You can use one bank to do it all: buy a house, refinance a car, set up emergency savings, invest for retirement, and manage your monthly expenses in a checking account. With neobanks, you may need to use different banks for different financial features.
Read more: How to choose a bank: 6 features to look for
Who should use traditional banks?
People who value a personal customer experience — Traditional banks are a better option for those looking for a personal touch to their banking. You’ll be able to pop over to your local branch and see a smiling face (instead of spiraling through the multiple-choice labyrinth of a customer service call).
People who deal with large amounts of cash — The branches that traditional banks have allow you to deposit and withdraw larger amounts of money, as opposed to the daily limit fees placed on neobanks that strictly use ATMs.
People who want to invest and bank together — A considerable amount of traditional banks offer investment services or partner with brokerage firms to offer this service to their clients. This benefit is attractive to those focused on wealth building.
The bottom line
Whether you go with a neobank or a traditional bank depends a lot on your banking needs, not to mention your preferences and budget. For the low-cost, tech-savvy route, neobanks might fit the bill, while traditional banks may be more your speed for the high-budget and high-features path.
Remember, no law says you can have only one account — you might prefer to keep your money at a traditional bank but use an online savings account for the great interest rates. It’s up to you. No matter your decision, you’ll be stashing your cash in a safe, dependable place so it can grow — which is the whole point of a bank account, no matter where you put it.
In today’s highly competitive financial climate, with thousands of banks and neobanks nationwide, rewards checking accounts are growing more common.
If you have to keep your money someplace, you may as well earn cash back rewards on debit card purchases or a high interest rate.
Best of all, most rewards checking accounts have no overdraft or monthly service fees. After all, if you have to pay any monthly fees or maintenance fees, it will reduce the overall amount you can earn in cash back.
Rewards checking accounts come in two forms: Those that offer cash back rewards and those that let you earn interest on your money, even if it’s in your checking rather than savings.
Regardless of what you’re looking for in a financial institution, you can find it in one of these rewards checking accounts.
11 Best Rewards Checking Accounts
We’ve read consumer reviews, evaluated bonus offers, and read all the fine print to find 11 of the best rewards checking accounts available online or at local branches today.
1. LendingClub Rewards Checking: Best for High Balances
LendingClub offers an online Rewards Checking account with a straightforward 1% cash back on all signature-based debit card purchases. Ranked on Newsweek’s America’s Best Banks list in 2022, the checking account has many desirable features.
First, earn an unlimited 1% cash back on all signature-based debit card purchases and on transactions processed online as a credit purchase once you meet requirements.
You also earn 0.10% interest on your checking account balance of $2,500 to $99,999.99 and 0.15% annual percentage yield APY on balances of $100,000 or more.
LendingClub provides account holders with access to fee-free ATMs within the MoneyPass or SUM networks and unlimited reimbursement for out-of-network ATMs fees. LendingClub says that account holders save more than $180 annually thanks to ATM fee reimbursement.
Like many of the best rewards checking accounts on this list, LendingClub has no monthly fees, no overdraft fees, and no fees for incoming wire transfers.
You will need a $25 minimum deposit to open an account. There are no minimum balance requirements after that. However, to earn interest, you need to deposit cash to maintain at least $2,500 in your account.
To qualify for cash rewards, you must keep your account open for at least 30 days and receive at least $2,500 in recurring monthly direct deposits or maintain a $2,500 or more average monthly balance.
You may also receive direct deposits from your employer as soon as two days earlier than with many other banks.
2. Axos Bank Rewards Checking: Best for High APY and Cash Back Rewards
Axos Bank is a nationally chartered online bank in business since 2000. The bank offers three checking accounts, all with no monthly maintenance fees, unlimited ATM fee reimbursements domestically, and no overdraft fees.
Axos Bank Rewards Checking is the financial institution’s most popular checking account. It pays up to 3.30% APY when you meet certain requirements.
If you receive monthly direct deposits of $1,500 or more, you’ll earn 0.40% APY to start.
You can increase that interest rate with other activities, such as:
Using your Axos Bank debit card 10X a month or sign up for Axos Bank’s free Personal Finance Manager “Account Aggregation” in online banking
Maintaining minimum average daily balances of $2,500 or more in an Axos Invest Managed Portfolios account or an Axos Invest Self Directed Trading Account
Making Axos Bank loan payments (such as mortgage, auto loans, or personal loans)
Plus, you can earn a $100 cash bonus when you open your Axos Bank Rewards checking before June 30, 2023, and have qualifying direct deposits of at least $1,500 each month in the first three months of opening your account.
If you’re willing to sacrifice the $100 cash bonus – or you don’t meet the requirements to earn the maximum APY with an Axos Bank Rewards checking account– you might consider the Axos Bank Cashback Checking account.
This cash back account gives you a straight 1% cash back on all signature-based eligible debit card purchases up to $2,000 per month.
You’ll need to maintain a $1,500 average daily balance to earn this amount. Otherwise, you’ll earn 0.50% of the average daily balance for that month.
You will need a $50 minimum opening deposit to open your Axos Bank Rewards Checking or Axos Bank Cashback checking account.
3. Consumers Credit Union: Best High Interest Checking Account
Consumers Credit Union is one of two excellent credit unions on our list offering checking accounts with rewards or high yield interest rates.
Of the two, Consumers Credit Union is free for virtually anyone to join. As such, it also earned a place on our list of best free checking accounts.
New members will need to pay a one-time $5 membership fee to the Consumers Cooperative Association. But you’ll get that cash back when you fund your account.
The main attraction to a Consumers Credit Union checking account is the 5% annual percentage yield APY on balances up to $10,000 when you meet minimum deposit requirements and make a minimum number of debit card purchases.
To earn the maximum 5% APY, you must have qualifying direct deposits, mobile check deposits or ACH deposits of at least $500 monthly and make $1000 or more in purchases with your Consumers Credit Union Visa credit card each month.
In addition to the high annual percentage yield APY, CCU also offers early direct deposit up to two days before many other banks, and out-of-network ATM fee reimbursement with no limits each month.
CCU works with a network of 30,000 ATMs and more than 5,000 shared branches that are part of the CU Service Center Network co-op.
Convenient, affordable, and profitable with checking account interest rates ranging from 3% to 5% APY, Consumers Credit Union could be an excellent choice.
If you are considering banking with a credit union instead of a traditional or online bank, this may be the best rewards checking account for you.
4. Discover Cashback Checking Account: Best for No Fee Checking
Discover Bank has a cashback debit account with no monthly fees and a host of other benefits. The program is straightforward and there are no minimum deposit requirements or other qualification requirements to earn cash back.
Simply earn 1% cash back on up to $3,000 in debit card purchases each month for up to $360 in extra cash back each year.
Your Discover Cashback Debit account has no fees of any kind, except $30 for an outgoing wire transfer. You will receive free overdraft protection with automatic transfers from your linked Discover Savings. You will not pay a fee at any of 60,000+ ATMs in the network.
You don’t even have to pay fees for bank checks, check reorders, or expedited shipping of a replacement debit card if you lose yours. If you do lose your card, you can easily “lock” it in the app to prevent unauthorized charges.
Like many online checking accounts, Discover offers early direct deposit, mobile check deposit, and an intuitive and user-friendly mobile app.
5. Schwab Bank Investor Checking: Best for Investors
It’s not always easy to find a rewards checking account with no fees and a high yield on your checking account balance. The Schwab Bank Investor Checking account was rated highest in customer satisfaction from J.D. Power and Associates for four years running.
This account is ideal for those who already have a brokerage account with Charles Schwab or who are thinking of opening one. When you open your High Yield Investor Checking account, you will also receive a brokerage account if you don’t already have one.
You can access both accounts online or in the mobile app with a single log in, and transfer money between both accounts with no fees. There is also no monthly maintenance fee.
Schwab pays interest at the rate of 0.45% APY. You must have a minimum deposit of just one penny in your account to earn interest.
When you fund your account with an opening deposit of $100 within 7 to 10 business days, you will receive free checks, deposit slips, mailing labels, and pre-addressed, postage-paid envelopes for depositing checks through the mail into your Investor checking account. You can also use the app for mobile check deposits or deposit money at an ATM.
When you open your high yield checking account, you will receive a Schwab Bank Visa Platinum Debit Card. The debit card provides unlimited ATM fee reimbursements, even in foreign countries, and no fees when you use a Schwab Bank ATM.
There are also no foreign transaction fees when you use your debit card for purchases outside the U.S.
6. Quontic Bank: Best for Fee Free ATM Access
Quontic offers three choices of the best rewards checking accounts, all with no monthly maintenance fees:
High Interest checking with an interest rate of 1.10% APY
Cash Rewards checking
Bitcoin Rewards checking
Plus, you can earn a 4.25% APY with linked Quontic savings accounts. You won’t pay any ATM fees when you use your Quontic debit card at any of 90,000+ ATMs in the AllPoint, MoneyPass, SUM Program, or Citibank networks nationwide.
Quontic’s High Interest checking delivers up to 1.10% APY when you make at least 10 qualifying debit card purchases of $10 or more per statement cycle. Otherwise, you’ll earn 0.01% APY for that month.
The High Interest checking account has no monthly maintenance fees and no overdraft fees. You will need a $100 minimum deposit to open your account.
Quontic’s Cash Rewards Checking has the same features, including no monthly maintenance fees and no overdraft charges. It is a cash back checking account that delivers 1% on all debit card purchases.
Quontic’s Bitcoin Rewards checking offers 1.5% back in Bitcoin on all qualifying debit card purchases. Like the other Quontic rewards checking accounts, the Bitcoin Rewards checking account has no monthly service fees or maintenance fees and no overdraft fees.
You will need a minimum opening deposit of $500 to open your account. This account is not available to residents of North Carolina or Hawaii.
7. SoFi Plus: Best for Perks
SoFi is an online only bank offering cash management accounts providing you with easy access to your money and generous rewards.
One area where SoFi stands out is the additional perks and the variety of services it offers to account holders. It is also one of the few banks offering both cash back and high yield checking and savings.
Your basic SoFi bank account is a free account with no monthly fee, no minimum balance requirements, no ATMs fees when you bank through any of the 55,000+ ATMs in the Allpoint Network nationwide.
Through a partnership with SoFi Stadium in Los Angeles, California, members also get 25% cash back on stadium purchases with their SoFi debit card, express entry and VIP access to concerts, Rams, and Chargers games.
SoFi also gives members access to savings “Vaults,” where you can set aside money for specific purposes – from emergency savings to a family vacation.
Your deposit account is insured for up to $2 million through SoFi’s partner banks. Each bank offers FDIC coverage up to the $250,000 federal limit, but deposits may be split between financial institutions to increase coverage limits.
If you want to upgrade to SoFi Plus, you’ll unlock a host of other benefits. SoFi Plus is the online bank’s premium offering, but there’s no monthly fee when you establish direct deposit of any amount, with no other minimum balance requirement or deposit requirements.
Your SoFi Plus rewards checking account offers 15% cash back when you use your SoFi debit card at select local retailers. Plus, earn 1.20% on checking and 4.20% on savings and Vault balances.
You’ll also get a personal loan rate discount of 0.25%. SoFi Plus members also get 2X rewards points, which you can redeem for cash, special member events, and experiences within the SoFi mobile app.
SoFi has a referral program, allowing you to earn cash or Rewards points when friends and family sign up for SoFi cash management accounts using your link.
Plus, right now, new SoFi customers receive up to $250 in cash when they open an account and set up a qualifying direct deposit. If your direct deposit is $1000 to $4,999.99, you’ll get $50 in cash. If you deposit $5,000 or more, you’ll earn $250.
Few banks offer so many perks or financial services under one umbrella, which is why SoFi consistently earns “Best Online Bank” accolades from top personal finance sites.
8. Connexus Credit Union: Best Credit Union
Connexus is one of two credit unions on our list of best rewards checking accounts. The Connexus Xtraordinary account offers a 1.75% APY when you meet certain requirements, which include signing up for e-statements and making 15 qualifying debit card purchases or spending $400 in debit card transactions monthly.
Connexus has a vast network of more than 67,000 fee free ATMs, partnered with co-op and MoneyPass networks.
You will also receive $25 in ATM fee rebates monthly. When you link your Connexus savings account to your Xtraordinary checking, you can also take advantage of free overdraft protection.
Connexus also has a similar rewards checking account for teens. With no direct deposit requirements or debit card purchase requirements, teens can earn 2% APY on the funds in their Connexus rewards checking account.
To qualify for membership in Connexus credit union, you must reside in certain cities in Illinois, Wisconsin, Ohio, or Minnesota.
You can also qualify if you work at one of dozens of Midwest companies, institutions, or organizations, or simply pay a $5 one-time donation to join the Connexus Association.
Connexus Teen and Connexus Xtraordinary checking accounts have no monthly service fees and no minimum account balances required to earn interest.
You must make a minimum opening deposit of $5 into your linked Connexus savings account to become a member.
9. TD Bank Beyond Checking: Best for Sign-up Bonus
If you are looking for the convenience of a traditional bank and the money-saving benefits of online banking, a TD Bank Beyond Checking account could be the best rewards checking account for you.
The TD Bank Beyond Checking account pays an interest rate of 0.01% APY on all balances. This is lower than the national average, but you’ll also get other perks with your account. First, let’s discuss the generous sign-on bonus of $300 and how you can earn it.
When you open your account and make $2,500 in qualifying direct deposits within 60 days, you’ll earn $300 cash back.
Keep in mind, there is a $25 monthly maintenance fee associated with the account, but it’s fairly easy to waive, especially if you have other TD deposit accounts.
You can waive the monthly maintenance fee by:
Receiving monthly direct deposits of $5,000 or more or
Maintaining a $2,500 minimum daily balance or
Having $25,000 or more in combined balances across eligible TD accounts, which includes deposit accounts, mortgages, home equity loans, and home equity lines of credit.
In addition to the sign-on bonus and interest on your checking balance, TD offers a free linked Simple Savings account, overdraft protection, easy mobile and online bill pay, and 24/7 fraud monitoring on your TD accounts.
The bank also reimburses numerous common fees, including fees for non-TD ATM transactions, outgoing wire transfer fees, rush bill payments, and up to two overdraft fees waived per year.
The TD Overdraft Relief service allows you more time to get your account out of the negative and also allows you to link your TD Savings account for overdraft protection through automatic transfers.
10. Aspiration Plus: Best for Helping the Planet
Crediful’s rating
Aspiration is a neobank with a straightforward cash management account called Aspiration Spend Save and a premium account called Aspiration Plus.
Aspiration Spend Save account holders can choose to pay monthly fees as low as zero. Each month, you can pay whatever amount you feel is fair for your bank account.
If you want to upgrade to Aspiration Plus, you will pay $7.99 per month. If you pay upfront, annually, you’ll save $2 each month for a total of $71.88 for the year.
Your Aspiration Spend Save account offers 3% to 5% in cash back rewards when you shop with a network of preferred, eco-friendly and socially conscious companies known as the Conscience Coalition.
Some of the retailers in the Conscience Coalition include Warby Parker, Blue Apron, Imperfect Foods, Toms, Brightly, Got Bag, and more.
Aspiration Plus members earn 10% back at Conscience Coalition retailers. Aspiration Plus members also receive one out-of-network ATM fee reimbursement each month and Purchase Assurance on items bought with their Aspiration debit card if they are lost or stolen within 90 days.
Aspiration Plus members also help to fund carbon offsets with each fuel purchase. For every gallon of fuel purchased with your card, Aspiration buys carbon offsets equal to the CO2 emissions generated by that gasoline.
Your Aspiration Plus account also pays 3% interest on money in the Save portion of your account. Regular Aspiration members only earn 1% interest on savings. In both cases, you’ll need at least $500 worth of qualifying debit card purchases in a month to earn interest.
There is a $10 minimum deposit to open an account. There are no ATM fees with Aspiration when you use one of the 55,000+ ATMs in the AllPoint network, plus you get one ATM fee reimbursement each month.
In addition to unlimited cash-back and high yield savings, your Aspiration account also has many other perks and benefits.
When you use the “Plant the Change” program, you can round up your debit card transactions to be deposited into your Save account and Aspiration plants a tree each time you do.
You can read our full Aspiration review here.
11. Truist Bank: Best for Younger Savers
Crediful’s rating
In May 2022, Truist Bank acquired Long Game, an award-winning gamification savings app. The partnership gives Truist bank account holders access to one of the most unique rewards programs in personal finance.
Long Game makes setting savings goals – and reaching them – fun by allowing you to play phone games similar to Fruit Ninja and Candy Crush based on cash deposits you make into your Truist Savings Account.
You can earn extra cash each time you play, as well as earning interest of 0.01% APY on your savings balance. You can also earn coins to play games by answering trivia questions.
Your Truist One checking account delivers rewards of its own when you open select Truist credit cards. Your bonus rewards, which can be 10% to 50% more cash back or miles than you’d normally receive, depend on your Truist One checking account monthly average balance.
Your Truist One checking account comes with a debit card, but you can upgrade to a Delta SkyMiles Debit Card if you pay the $95 annual fee. Truist One checking accounts also include linked Truist One savings accounts with no monthly maintenance fee and a $100 negative balance buffer.
To qualify for overdraft forgiveness, you’ll need to have your account open for at least 35 days with a positive balance, and have a qualifying direct deposit of at least $100 for two consecutive months. Truist Bank never charges overdraft fees, but without negative balance protection, transactions may be declined.
Your Truist One checking account has a $12 monthly service fee, but there are five easy ways to waive that monthly service fee.
To waive the monthly fee, you must meet one of the following requirements:
Make $500 or more in qualifying direct deposits monthly
Maintain a combined balance of at least $500 in Truist deposit accounts
Have a Truist credit card, mortgage or consumer loan
Have a linked Small Business checking account
Be a student under the age of 25
Methodology: How We Select the Best Rewards Checking Accounts
When we evaluated the best rewards checking accounts, we took many features, benefits, and costs into consideration. We also recognized that people’s needs vary. Some may want an online only bank, while others prefer a credit union or even a traditional, brick-and-mortar financial institution.
Rewards on Debit Card Purchases
When most people think of a rewards checking account, they imagine receiving cash back on debit card purchases. Banks that offer cash back on everyday purchases gained favor and a spot on our list.
Account Yield
Some rewards come in the form of a high interest rate on money held in a checking account. Several interest bearing checking accounts with an interest rate of 1% or higher made our list. It is even better if you don’t have to maintain a minimum account balance to receive the highest interest rate.
Fees
On our list of the best rewards checking accounts, we gave preference to accounts with no monthly fees. We also considered other fees, such as overdraft fees, transfer fees, and ATM fees. Banks that offer unlimited ATM fee rebates or even some ATM fee reimbursements each statement cycle were considered favorably.
Minimum Requirements
You should be rewarded by your bank whether you have a large balance or small. For that reason, we gave preference to banks with no minimum deposit requirements and no minimum balance requirements to earn rewards. In some cases, you may need to receive a direct deposit each statement cycle to earn rewards or to receive the highest annual percentage yield APY.
Account Opening Bonus
Some banks offer a generous account opening bonus or even referral rewards when you share your referral link with friends who open an account. It’s nice to start your new bank account with a cash back from a sign-up bonus.
Overdraft Protection
Bank accounts that offer overdraft protection, either through linked savings accounts or by providing a grace period to bring your account back into the positive, earned points on our list.
ATM Network
One way to avoid fees is to find a bank with a large ATM network. Many of the banks on this list use the Allpoint or MoneyPass ATM network with more than 60,000 machines nationwide. We also looked for banks that provide ATM fee reimbursements for using teller machines out of the bank’s ATM network.
Nationwide Availability
We made sure that consumers nationwide could open an account online or in person. We didn’t choose regional banks or credit unions with limited availability, although a small, local bank might meet your needs.
One credit union that made our list, Consumers Credit Union, is available to anyone over the age of 18 willing to pay a $5 membership fee to join the Consumers Cooperative Association. The other credit union we chose also has similarly broad membership requirements. Anyone can join if they make a $5 donation to the Connexus Association or meet certain membership requirements based on city of residence or occupation.
Customer Service
Whether you choose an online only bank or one of the traditional financial institutions on this list, you want to make sure you have access to the best customer service. We chose banks that generally received high marks for customer service on consumer review websites and offered multiple ways to reach customer service reps by phone, email, or online chat.
Tips for Finding the Best Rewards Checking Account
Before you open a rewards account, ask about minimum deposit requirements. Also find out if you need to maintain a minimum balance or set up direct deposits to avoid fees. Look for a bank with a large ATM network and ATM fee reimbursements for using machines outside the network.
Rewards Checking FAQs
Find out what people are asking about the best rewards checking accounts.
How does a rewards checking account work?
Rewards checking accounts pay you money for banking with them. In some cases, you will receive cash back on debit card purchases. Other rewards checking accounts pay interest on your balance. Some also offer additional perks, such as loan rate discounts, access to special events, ATM fee reimbursements and money management tools.
Should you apply for a rewards checking account?
If you are looking to put extra cash in your pocket, a rewards bank account is one way to do so. Most rewards checking accounts do not require a credit check or an application fee to apply. If you are opening a new bank account or considering switching banks, it’s worth considering how you can earn checking account rewards for things you do daily, such as using your debit card or depositing money.
How much does rewards checking cost?
Most of the top rewards checking accounts have no monthly fee, fee-free ATMs, and at least some ATM fee refunds each statement cycle.
Since its debut in 2013, Chime has become quite popular. This financial technology company partners with Bancorp Bank, N.A. and Stride Bank, N.A. to provide a number of FDIC-insured bank accounts. Just like most online banks, Chime offers higher annual percentage yields than brick-and-mortar banks.
Chime offers a credit builder account7, which acts like a secured credit card to help customers establish credit. However, its flagship products are the Chime® Savings Account and Chime® Checking Account8.
Chime has one of the most robust apps in the world of mobile banking. It also has a phenomenal rating in both the Apple App Store and Google Play Store.
Despite the fact that Chime comes with many benefits, it’s not right for everyone. After all, there are no physical branch locations and its customer service could be improved. Plus, you might be able to find higher APYs elsewhere.
18 Best Chime Alternatives
If you’re looking for alternatives to Chime, you’ve come to the right place. We’ve done the heavy lifting for you to create this comprehensive list of the best Chime alternatives.
1. GO2bank
GO2bank is the digital banking platform backed by Green Dot Corporation, a financial technology company known for its prepaid debit cards. GO2bank is designed to help people better manage their money through its user-friendly mobile app and competitive features.
The mobile banking app allows you to open an FDIC-insured account with no monthly maintenance fees if you have qualifying direct deposits. You also have access to a network of over 19,000 fee-free ATMs across the nation. With the ability to receive direct deposits up to four days early and a high-yield savings account that pays up to 4.50% APY on savings up to $5,000, GO2bank offers a complete banking solution.
GO2bank also provides a secured credit card that can help you build credit over time. With this card, you can establish or improve your credit score by making on-time payments and keeping your balance low. There are no annual fees, no credit checks, and no interest charges if you pay your balance in full every month.
In addition to these features, GO2bank offers various ways to deposit cash, including the option to deposit cash at participating retailers. You can also use the app to pay bills, send money to friends or family, and set up custom savings goals.
Read our full GO2bank review.
2. Current
Current is a neobank that partners with Choice Financial Group and Metropolitan Commercial Bank to offer banking services. It only offers one bank account that serves as an online checking and online savings account.
Current doesn’t charge monthly maintenance fees, monthly account fees, or overdraft fees. In addition, you can reap the benefits of automated savings pods and early direct deposit. Unlimited domestic ATM access is also free as Current is part of the Allpoint ATM network. You also get access to early direct deposits.
If you have kids, you can open a linked Teen Banking Account and help them build healthy financial habits. We can’t forget the Current Visa debit card, which lets you earn cash back on debit card purchases at more than 14,000 participating retailers.
Read our full Current review.
See also: Chime vs. Current: Which Is Better?
3. Axos Bank
Axos Bank is an online only bank that first opened in 2000. Its checking account options include the Essential checking account, Rewards checking account, and Cashback checking account. While Essential is a basic checking account with no fees or minimums, the Rewards checking account earns up to 1.00% interest if you meet certain requirements.
With the Cashback checking account, you can earn up to 1.00% cash back on qualifying debit card purchases. Rest assured there’s also a high yield savings account and money market account with a competitive APY. Like Chime, Axos also offers a highly rated mobile app.
Read our full Axos Bank review.
4. Quontic Bank
Headquartered in New York, Quontic Bank has been around since 2008. It has one brick-and-mortar branch in Astoria, New York but serves customers online in all 50 states.
Quontic’s lineup of products includes checking accounts, savings accounts, money market accounts, and certificate of deposit (CD) accounts. It also offers real estate products.
You can choose from three checking accounts: Cash Rewards Checking, High Interest Checking and Bitcoin Rewards Checking. There’s also a high-yield savings account, which pays an impressive APY.
No matter which accounts you decide on, you’ll be pleased to learn there are is no monthly service fee. Plus, you’ll benefit from an extensive ATM network and mobile app.
Check out our full review of Quontic Bank.
5. Cash App
Created by Square and based in San Francisco, Cash App is a peer-to-peer payment app. Cash App lets you send and receive money, do your banking, and open investment accounts, such as retirement accounts. The banking feature requires you to order a Cash App card and accept that FDIC coverage is not available.
Keep in mind that there is no way to build your credit or save money with Cash App. But you can use it to buy stock and Bitcoin for as little as $1. Plus, Cash App lets you prepare and file your federal and state taxes for free.
Learn more about how Cash App works.
6. Brigit
Brigit is a personal finance app that offers paycheck advances to help you out when you need fast cash. It might be a great option if you can’t wait until payday but want to avoid insufficient fund fees and overdraft fees. Brigit also allows you to keep track of your credit score and protect yourself from identity theft.
Additionally, you can use Brigit to find side gigs or borrow money with a credit builder loan. You will have to pay $9.99 per month to unlock all of these features. The good news, however, is you won’t be charged any interest or tips.
7. Dave
Launched in 2017, the Dave App can give you the chance to advance your paycheck to cover small emergencies. It also offers a spending account, which is essentially a checking account with no low balance or overdraft fees. To take advantage of the Dave app, you’ll be on the hook for a $1 monthly subscription fee as well as an optional express fee and tip.
There’s also a budget feature that tracks your income and spending so you can pay your bill. It will notify you any time you’re at risk of overdrafting. In addition, Dave can help you find a side hustle and earn extra income.
8. Revolut
When it initially launched in 2015, Revolut was a challenger bank with a travel card and cheap exchange rates. Now, it describes itself as a digital banking platform and uses Barclays and Lloyds to store your money. Just keep in mind that since it’s not a bank, it doesn’t offer any deposit protection.
Revolut’s long list of perks include surcharge-free ATMs, travel perks, and spending alerts. Plus you can earn cash back on Revolut card purchases and even open an investment account to invest in popular cryptocurrencies. If you travel abroad often and are looking for benefits you may not be able to find from most banks, Revolut should be on your radar.
Read our full Revolut review.
9. Varo
Varo is a digital bank with impressive technology as well as a lineup of checking and savings accounts with unique features like Chime. Since it prides itself on minimal fees, you won’t have to worry about monthly maintenance fees, transfer fees, or foreign transaction fees.
Furthermore, since it’s part of the Allpoint ATM network, you can enjoy free domestic ATM withdrawals at more than 55,000 ATMs. In addition to a competitive APY for its savings accounts, you can enjoy the Save Your Pay and Save Your Change features.
While Save Your Pay automatically transfers a percentage of your paycheck to your savings. Save Your Change rounds up online checking account transactions and lets you transfer money to your savings. These features are different from what you’d find with other online checking accounts.
Read our full Varo review.
10. Capital One
Capital One is one of the largest banks in the U.S. Its online checking and savings accounts come with no minimum balance fees.
Capital One’s 360 Performance Savings account offers an impressive APY on all account balances. This makes it worth considering regardless of what your savings goals entail. It lets you set savings goals and automatic savings plans so you can transfer funds from your Capital One 360 bank account.
With a Capital One bank account, you may access over 70,000 fee free ATMs. If you prefer in-person banking, you’re in luck because there are more than 300 branch locations in select states. You can also enjoy free overdraft protection and download the Capital One app to send and receive funds through Zelle.
Read our full Capital One review.
11. Discover Bank
When most people think of Discover Bank, credit cards come to mind first. But like Chime, Discover also offers checking accounts, savings accounts, money market accounts, CDs, and even personal loans.
It doesn’t impose minimum monthly balance requirements or charge any monthly fees or overdraft fees. Discover’s savings accounts and CDs are known for impressive APYs and its highly rated mobile app with a Quick View feature makes it a breeze to bank while you’re on the go.
Additionally, Discover offers more than 60,000 fee-free ATMs and you can earn 1% cash back on up to $3,000 in debit card purchases each month. If you need assistance, you can always reach out to its 24/7 U.S. customer service representatives.
12. Ally Bank
Headquartered in Utah and a division of Ally Financial, Inc. Ally is a full service online bank with an extensive product line up. Its deposit accounts, like checking accounts and savings accounts as well as CDs, come with competitive interest rates.
In addition to 24/7 customer service, Ally offers a robust mobile app you can use to check balances, transfer funds, deposit checks, pay bills, and send money via Zelle.
With Ally, there are no minimum balance requirements or fees for account maintenance, overdrafts, ACH payments, incoming wire transfers, or cashier’s checks. Aside from bank accounts, Ally also services customers with a wide range of mortgages, loans, and investing products. The main drawback is that you can’t deposit cash. Despite this, Ally is considered one of the best online banks.
Read our full Ally Bank review.
13. One Finance
One Finance is an online bank that lets you do all your banking from one bank account. With One, you can open one account that acts as a savings and interest checking account with no fees and the chances to earn a high APY. Your account will feature pockets that let you manage your money in numerous ways so you can budget and set savings goals.
You can think of a spend pocket as a checking account that doesn’t pay interest but helps you visualize the money you can spend each month. If you budget for various categories, like rent, groceries, and entertainment, it makes sense to have multiple spend pockets to keep track of your spending money. If you prefer, however, you can stick to one and have all your spending come from the same place.
14. Aspiration
Aspiration offers a Spend and Save account that offers checking and savings features. You can choose a basic account with a “pay what is fair” monthly fee, which can be $0 or an Aspiration Plus account, with a monthly fee but additional benefits like a higher APY on savings. If you pay annually, you can enjoy a lower fee.
Aspiration supports the environment through features like cash back if you spend at socially conscious businesses. You also have the chance to plant a tree every time you use your debit card. Additionally, your personal impact score tells you the environmental and social effects of your shopping habits. It also promises that your cash deposits won’t pay for the exploration or production of fossil fuels.
Read our full Aspiration review.
15. Bank5 Connect
Based in Massachusetts, BankFive has been around since 1855. With Bank5 Connect, the online division of BankFive, you can open a checking account, a savings account, or a CD with a low minimum balance requirements. Its accounts are available to everyone in the U.S., except those in Massachusetts and Rhode Island.
As a Bank5 Connect customer, you can enjoy access to thousands of surcharge free ATMs. You may get reimbursed up to $15 per statement cycle for any fees that are charged by out-of-network ATMs. There’s also a mobile app with features like mobile deposit, bill pay, money transfer, and an ATM locator.
16. MoneyLion
Founded in 2013, MoneyLion is a financial services company that works to help customers improve their finances. RoarMoney is its FDIC-insured checking account that comes with no account fees and several unique perks.
As long as you enroll in automatic monthly direct deposits, you can receive each paycheck up to two days early. Price Match will also refund you the difference if you find something you purchased at a lower price. Plus you may use RoarMoney to design a budget and track your spending. In addition to RoarMoney, MoneyLion offers Instcash in which you can get cash advances of up to $250 through the app.
17. Juno
Formerly OnJuno, Juno is an FDIC-backed online banking platform known for its high-yield checking account with zero monthly maintenance fees or minimum opening deposit. You can also earn cash back if you make crypto purchases or cash purchases at certain companies.
It’s ideal if you’re an immigrant or international professional because all you need to open an account is a passport and Social Security number. With Juno, you get free atm withdrawals at more than 85,000 Allpoint or MoneyPoint ATMs.
18. Wise
Headquartered in London, Wise is a financial technology company that prides itself on innovation. You can open a Wise personal account for free and won’t have to meet a minimum balance requirement or pay a monthly fee. Wise is unique in that you can hold 54 currencies and send international transfers to over 80 countries.
There are also international business accounts, which can be helpful if you send, spend, or withdraw money while you travel abroad for business purposes. While you can sign up for a Wise debit card, it does come with fees and may only be used in select countries.
What to Look for When Choosing a Bank
When you shop around Chime alternatives, you’ll notice there are no shortage of options. Here are some things to consider as you look for the ideal solution.
Fees
Fees can add up quickly. Ideally, you’d go with a bank that charges low fees or basically no fees. Fortunately, most online banks are known for their fee-free bank accounts.
With many of these checking accounts, you won’t be charged monthly maintenance fees, ATM fees, wire transfer fees, and early account closing fees. Just be on the lookout for hidden fees.
High Interest and Rewards
The higher the interest rate, the more money you’ll be able to save with minimal effort. Sometimes, you can even earn rewards like cash-back and travel points for making transactions on your debit cards.
Large ATM Network
If you’re an avid cash user, you don’t want to pay an arm and a leg every time you use an ATM. For this reason, it’s important to choose a bank with a fee-free ATM network or one that reimburses you when you use an out-of-network ATM.
Customer Service
You want to ensure that you can easily receive answers to your questions or address your concerns. For this reason, choose a bank or company that has positive customer service reviews.
Bottom Line
While Chime offers many perks, it’s not perfect. If you’re willing to do some research and compare your options, you can find several online banks like Chime. Before you make a decision, look at the banking services provided. Then, weigh the pros and cons. Don’t be afraid to test a Chime alternative for a few months or so to make sure it’s a good fit.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
7. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
8. A Chime Checking Account is required to be eligible for a Savings Account.
If you’re looking for a free checking account, you have multiple options in both traditional and online banks. With more than 4,100 banks in the U.S., according to the FDIC, the choices can be downright overwhelming.
It can help if you get clear on what you want in a checking account, narrow down your options, and then read reviews like the one below to find the best free checking account to meet all your needs.
12 Best Free Checking Accounts
When you’re ready to open a new checking account, consider the no fee checking accounts on this list. We’ve evaluated the fees, minimum deposit requirements, annual percentage yield APY on those that earn interest, and more.
Most of the best checking accounts offer features like overdraft protection, mobile banking and the ability to get paid up to two days early with your direct deposit. But financial institutions that let you earn interest on your checking balance or deliver cash back also gained our favor.
1. Chime Checking
Chime boasts truly fee-free checking and a host of advantages for those seeking an online-only banking solution. The bank has no monthly service fees, no overdraft fees, no transaction fees, and no minimum daily balance fees. If you lose your debit card, you don’t even have to pay to replace it!
Chime has a few features that can help you manage cash flow. First, if you sign up for direct deposit you can receive your paycheck up to two days earlier than you might with a conventional bank.
Second, Chime’s SpotMe program covers overdrafts up to $200 (depending on your qualifications). To take advantage, you must have a monthly direct deposit of at least $200. If your debit card purchase exceeds your overdraft limit, it will be declined, so you won’t ever pay overdraft fees.
Your Chime debit card is linked to a nationwide network of 60,000+ fee-free ATMs. The only fee you might pay is if you withdraw money from an out-of-network ATM or use your debit card to withdraw funds from your account during an over-the-counter debit card purchase.
Chime is an online financial services company, not a bank. It provides $250,000 worth of FDIC insurance per account holder, per account, through Stride Bank and The Bancorp Bank, both members FDIC.
Unlike some neobanks, Chime offers multiple means to reach their customer service representatives. You can reach out on live chat through the app or website 24/7/365.
Best for: Free Overdraft Coverage
Minimum Deposit: None
Monthly Fee: None
2. Bank of America Advantage Plus Banking®
Bank of America offers three Advantage checking accounts:
SafeBalance
Advantage Plus
Advantage Relationship
All three allow you to waive the monthly maintenance fee in a few different ways. Preferred Rewards members, who hold at least $20,000 in a Bank of America account or Merrill investment account enjoy free checking from Bank of America.
Otherwise, to waive the fee for your Advantage Plus checking account, you’ll need a qualifying direct deposit of $250 or more per month, or maintain a $1,500 minimum daily balance.
If you don’t qualify to have fees waived, your Bank of America Advantage Plus account will cost a reasonable $12 per month.
As the “middle-of-the-road” account which would fit the needs of the average customer, we chose Advantage Plus as the best free checking account from the big bank. It is also the most popular of the three.
You’ll want to be aware that your BOA account may have additional fees, including an overdraft fee of $10 for each item paid. You can avoid this fee by linking another eligible Bank of America account to your Advantage Plus checking account to cover overdraft transactions with no transfer fees.
Other Bank of America fees include a $15 replacement fee for a lost debit card, an international transaction fee equal to 3% of the transaction in U.S. dollars, and ATM fees of $2.50 for using an out-of-network ATM. With roughly 16,000 ATMs, nationwide, however, it should be easy to avoid out-of-network ATM fees.
Bank of America offers some features you won’t find at other banks. For instance, you’ll gain access to “Erica,” Bank of America’s virtual financial assistant to easily manage your accounts.
You can also enroll in Bank of America’s Keep The Change program, which allows you to round up debit card purchases and have the extra money deposited into your BOA savings account or your child’s linked BOA account.
Keep the Change is an easy way to sneak some extra savings into your budget. Preferred Rewards members can earn more than 5% interest on money in their linked Bank of American Advantage Savings account.
Best for: Preferred Rewards members
Minimum Deposit to Open: $100
Monthly Fee: $0 or $12
3. Quontic High Interest Checking
While it doesn’t compare to Wealthfront’s 4.55% APY for a Cash Account, Quontic offers what qualifies as a high interest checking account with a 1.10% APY.
Be aware that to earn that rate, you’ll need to make at least 10 qualifying debit card purchases of $10 or more in each statement cycle. Otherwise, your money will earn just 0.01% APY.
Quontic’s free checking account with no monthly maintenance fees, no overdraft fees, and no minimum account balance is straightforward, FDIC insured, and socially responsible. The online bank is one of fewer than 3% of all banks designated as a Community Development Financial Institution.
That means Quontic uses your money with fiscal responsibility for social good, depositing it into accounts to help serve lower income families, under-served demographics and small business owners obtain affordable mortgages.
But opening an account with Quontic doesn’t just help others. Account holders enjoy a host of benefits. You’ll gain access to online bill pay and a “roundup program” to shuffle extra “change” from your debit card purchases into your linked high yield Quontic savings account with a 4.25% APY.
You’ll also get a Quontic Pay Ring, a wearable that replaces your debit card for point-of-sale purchases.
Enjoy access to 90,000+ fee free ATMs through the AllPoint, MoneyPass, or SUM program ATMs, as well as Citibank ATMs nationwide. You’ll find these ATMs at popular stores like Target, Speedway, Walgreens, CVS, Kroger, Safeway, Winn Dixie, and Circle K.
In addition to its High Interest Checking Account, Quontic offers a Bitcoin Rewards checking, which rewards you in cryptocurrency for debit card purchases, and a Cash Rewards checking account, which pays 1% cash back on all eligible debit card purchases.
Both accounts offer the same features as the High Interest checking account, except you’ll receive rewards instead of interest on your checking balance.
For a higher APY, you can open a Quontic Savings account with no monthly service fee and a high 4.25% APY.
Best for: Socially conscious banking
Minimum Balance to Open: $100
Monthly Fee: None
4. Wealthfront Cash Account
Like Chime, Wealthfront is not a bank. But some would argue that, with no monthly maintenance fee, FDIC insurance of up to $5 million through partner banks, and a high 4.55% annual percentage yield APY on the Wealthfront Cash Account, it’s even better.
Your Wealthfront Cash Account offers many of the same features as a traditional or an online bank. You’ll receive a free debit card and can withdraw cash with no ATM fees at a network of 19,000 ATMs nationwide.
Most consumers will choose the Individual Cash Account, with features such as early direct deposit, online bill pay, mobile check deposit through the app, and fraud protection. Wealthfront also offers a joint account, with up to $10 million FDIC insurance, and a Trust Cash account.
Best of all, Wealthfront charges no overdraft fees, no transfer fees from external accounts, and no fees if your account dips below a minimum balance. It requires just $1 to open an account.
If you are interested in retail investing, Wealthfront makes it easy with virtually instant transfers between your Wealthfront Cash Account and linked Wealthfront Investment accounts.
As you build your portfolio, you can take advantage of Wealthfront’s vast array of financial services, including automated investing, stock investments with zero commissions, and tax loss harvesting services.
As your Wealthfront investment portfolio grows, you can borrow up to 30% of your portfolio’s value at an interest rate as low as 7.40% APR.
For consumers looking for a one-stop shop for investments, fee-free checking, and savings with a high annual percentage yield, Wealthfront represents a solid choice in online financial service companies or neobanks.
Best for: High Annual Percentage Yield APY
Minimum Deposit to Open: $1
Monthly Fee: None
5. Capital One 360
A Capital One 360 checking account combines the security and convenience of one of the nation’s largest banks with no monthly maintenance fees and no minimum opening deposits.
Account holders also earn 0.10% APY on all checking account balances in their Capital One 360 account.
You can open your account online or in a branch. If you want in-person assistance, you can visit a Capital One branch or Capital One Café for help.
Capital One 360 gives you access to your money through more than 70,000 fee free ATMs in the Allpoint, MoneyPass or Capital One networks.
Capital One 360 has no overdraft fees, but you can decide how you want the bank to handle transactions that exceed your account balance.
You can set it up so that a transaction that would cause an overdraft is declined. Or you can transfer funds from a linked savings or money market account to cover an overdraft.
Alternatively, Capital One may accept certain transactions that put your account into overdraft. You’ll need to deposit money to cover the overdraft or additional transactions will be declined.
Capital One offers direct deposit up to two days sooner than many banks.
Capital One’s robust mobile app allows for bill payments online, mobile check deposits, and Zelle person-to-person transfers. If you want to add cash to your account, you can do it in person at a CVS store. If you have other Capital One accounts or credit cards, you can manage them all through one login.
Your Capital One 360 account has no foreign transaction fees, but keep in mind there may be fees for using out-of-network ATMs, cashier’s checks, outgoing wire transfers, or paper checkbooks.
Best for: Capital One Credit Card customers
Minimum Balance to Open: None
Monthly Fee: None
6. Consumers Credit Union
The only credit union on our list of the best free checking accounts, this checking account is open to virtually all U.S. residents over the age of 18.
You’ll just need to pay a one-time, $5 membership fee to the Consumers Cooperative Association. Consumers Credit Union even reimburses this fee after you open your free checking account. Children as young as age 12 can join as the second member on a joint account.
Your Consumers Credit Union Rewards checking account offers many of the same benefits as top rated online banks with no monthly fees and no fees of any kind.
You will even be reimbursed for fees incurred while using out-of-network ATMs. CCU has a network of 30,000+ ATMs nationwide.
Enjoy early direct deposit, mobile banking, and even the ability to write unlimited checks with no fees. Plus, you’ll earn up to 5% APY on your balance, depending on certain actions you take. Here’s how the tiered checking account interest works for balances up to $10,000:
Earn 3% APY if you make at least 12 debit card purchases a month and have direct deposits, mobile check deposits, or ACH credits of at least $500 each month
Earn 4% APY if you meet the above requirements plus spend $500 or more on your CCU Visa credit card each month
Earn 5% APY if you meet the requirements to earn 3% plus make $1,000 or more in purchases on your CCU Visa card monthly
Balances of $10,000.01 to $25,000 earn 0.20% APY and balances over $25,000 earn 0.10% APY.
If you don’t meet the requirements in a given month, you will still have free checking and free online bill payments and you will receive a 0.01% APY on all checking account balances. You also won’t qualify for ATM fee reimbursement.
You can reach Consumers Credit Union customer service online, by phone, or at CCU branches across Illinois. You can also bank at shared branches across the U.S. that are part of the CU Service Center Network, a co-op of credit unions.
Best for: Those who prefer to bank at a credit union
Minimum Balance to Open: $5
Monthly Fees: None
7. Ally Bank Interest Checking
Ally is not just a robust fin-tech; it is a nationally chartered bank with $196 billion in assets and 11 million customers. The bank offers an interest earning checking account with no monthly fee and no overdraft fees, high-yield savings, money market account and CDs. Plus, it provides investment services, loans, and credit cards.
The Ally Bank free checking account lets you earn interest of 0.25% annual percentage yield APY on all balances.
You’ll pay no monthly service fees, no overdraft fees, and no ATM fees at more than 43,000 Allpoint ATMs nationwide. Ally also reimburses you up to $10 on out-of-network fees charged at other ATMs.
Your Ally checking account makes money management easy. You can put money in specific “spending” buckets allocated for different purchases. This can help you track your spending and stick to your budget. You can also get paid up to two days early with direct deposit.
Many of the best free checking accounts offer overdraft protection. Ally offers two choices to help you avoid overdraft fees. With the Overdraft Transfer Service, you can link your Ally Bank online savings or money market account to your Interest Checking account.
Ally will automatically transfer funds to your checking account to cover your purchase. If you make more than six withdrawals in a statement period, you may be charged “excessive transaction fees,” but Ally Bank reimburses those fees.
The CoverDraft service will cover purchases up to $100 as long as you have deposited at least $100 into your Interest checking account in the past 30 days. You can extend that coverage up to $250 if you receive a qualifying direct deposit of at least $250 for two months in a row.
You’ll need a direct deposit every 45 days to maintain your expanded coverage. You will have 14 days to bring your balance out of the negative.
Best for: Online only banking
Minimum Balance to Open: None
Monthly Fee: None
8. Axos Bank Rewards Checking
Axos Bank offers three different checking accounts with no monthly maintenance fee.
The Essential Checking online account has no overdraft fees, no monthly account fees, and unlimited reimbursement for out-of-network ATM use within the U.S.
The Rewards Checking has all the benefits of the Essential checking account and adds up to 3.30% APY in interest on qualifying balances.
Now until June 30, 2023, you can earn a sign-up bonus of $100 when you open an Axos Bank Rewards checking account and receive direct deposits totaling $1,500 or more each month for the first three months your account is open.
The Axos Bank Rewards checking account has complicated requirements to qualify for the highest annual percentage yield. Here’s how it works:
Direct deposits of $1,500 per month or more earn 0.40% APY
Once you fulfill that requirement, you’ll need 10 point-of-sale signature transactions with your debit card (minimum $3 purchase) or enrollment in account aggregation/personal finance manager account to earn an additional 0.30% APY.
Maintain an average daily balance of $2,500 in an Axos self-directed trading invest account to earn 1%
Maintain an average daily balance of $2500 in an Axos Managed Portfolio Invest account to earn another 1%
Make a monthly payment to an open Axos Bank consumer loan from your Rewards checking account to earn up to 0.60%
Together, this results in a 3.30% APY.
A Cashback Checking account offers the same benefits as the other checking accounts, except instead of earning interest you will receive 1% cash back on eligible debit card purchases.
Keep in mind that to earn the full 1% cash back, you’ll need to maintain an average daily balance of $1,500 in your checking account. If the balance falls below $1,500, you’ll earn .50% for that month.
Best for: Sign-up bonus
Minimum opening balance: $50
Monthly fee: None
9. SoFi Checking and Savings
Another excellent option in online banking, SoFi offers a wide range of financial services, including investments and loans. The bank provides a combination Checking and Savings account with a high yield APY of 4.20% for balances in your savings or Vault, and 1.20% APY on checking balances.
You will need to set up direct deposit to qualify for the high interest rates and other benefits, such as 2-Day Early Paycheck and no-fee overdraft coverage. But there is no minimum balance required.
Right now, the bank is offering new customers who open a free account up to $250 in cash. To receive your bonus, simply open your account and set up direct deposit. Deposits of $1,000 to $4,999.99 qualify for $50 cash back, while a deposit greater than $5,000 will net you $250.
There are no account fees when you bank with SoFi. Account holders with qualifying direct deposits receive fee-free overdraft protection for up to $50 per purchase.
You can even keep the money in your SoFi online savings to collect the high annual percentage yield APY of 4.20% and the bank will automatically transfer funds to checking to cover certain purchases. It will not, however, transfer money from Vaults, which are designed to help you reach specific savings goals.
Your SoFi debit card gives you access to your money for free at more than 55,000 ATMs in the AllPoint network. Plus, when you use your debit card for point-of-sale transactions at many local businesses, you can earn 15% cash back.
SoFi is a nationally chartered back with FDIC coverage. Thanks to a partnership with other banks, SoFi’s FDIC insurance exceeds the $250,000 maximum.
Your deposits are insured up to $2 million per account holder, per account, with SoFi. That makes SoFi an excellent choice in online banking for those with high savings, money market, or CD balances.
Best for: Money management and saving
Minimum Opening Balance: None
Monthly Service Fees: None
10. Varo Bank
Varo Bank has the distinction of being the first financial technology company to become a nationally chartered, online only bank. While most of the banks on our list of best free checking accounts have important features in common, Varo has a few perks that are harder to find in a free account.
First, your Varo debit card offers up to 6% cash back at select online retailers and brick-and-mortar stores. Each time your cashback balance reaches $5, you’ll see the funds deposited directly into your Varo bank account.
When you open a Varo checking account, it pays to open Varo savings at the same time. You’ll gain access to features like “Save Your Change,” which allows you to round up debit card purchases and put the difference in savings.
You can also use Save Your Pay, which deposits a portion of every paycheck you receive via ACH transfer directly into savings. You can set up these features in the mobile app.
Varo also offers a cash advance feature called “Varo Advance,” which allows you to borrow up to $250 and pay it back within 30 days.
You’ll pay nothing for advances less than $20, but there are fees up to $15 associated with borrowing larger amounts. As with many other banks, Varo also lets you get paid via direct deposit up to two days early.
Varo makes it easy to deposit cash into your account by purchasing a Green Dot MoneyPak at stores like Walmart, CVS, Rite Aid, Walgreens, 7-11, Dollar General, and others. You can also deposit cash at the register in any of these stores. You might pay a fee of up to $4.95 for this service.
Varo has no minimum balance requirements, no overdraft fee, no monthly fee, no foreign transaction fees, and fee-free access to 55,000+ ATMs in the Allpoint network.
If you use an out-of-network ATM, you will be charged a $3 fee by Varo, plus any charges incurred from the other bank. If you withdraw money using your Varo debit card at the point-of-sale in a store, you’ll pay $2.50 for the convenience.
You can reach Varo customer support via chat on the app every day from 8 AM to 4:30 PM, Mountain Time, except on Thanksgiving, Christmas, and New Year’s Day.
Varo phone support is also available Monday through Friday during the same hours for help logging into your account, filing a dispute if you suspect fraudulent charges, or to receive help adding your Varo card to a digital wallet.
Best for: Cashback debit
Minimum Opening Balance: None
Monthly Fee: None
11. Discover Cashback Debit
In the world of finance, Discover is best known for offering a straightforward cashback rewards credit card. Discover’s free online checking account also offers cash back rewards of 1% for up to $3,000 worth of debit card purchases monthly.
That could equal up to $30 in free money every month. You can even choose to have that Cashback Bonus deposited directly into your Discover Online savings account, where it can earn up to 3.90% APY.
Discover has no fees for anything. This includes overdraft protection through your linked Discover savings, no insufficient funds fee, no fee for official bank checks, no fee to receive expedited delivery of a new debit card, and no fees for paper checks. The only service that incurs a fee is an outgoing wire transfer. That will cost $30.
You can use your Discover debit with no fees at any of 60,000+ ATMs nationwide. Like many other financial institutions on this list, Discover allows you to receive ACH deposits from your employer up to two days early through the Discover “Early Pay” program.
Unlike many other online only banks, Discover offers 24/7 U.S.-based customer service by phone at 800-347-7000. If you prefer the convenience and cost savings of an online only bank account but want access to 24/7 phone service, Discover Bank could be the best choice for you.
Best for: 24/7 customer service by phone
Minimum Opening Balance: None
Monthly Fee: None
12. Chase Total Checking®
JPMorgan Chase & Co. is not just one of the “big four” banks in the U.S. It is the biggest bank in the U.S. and the world’s largest financial institution based on market cap. For that reason, many people choose Chase Bank for its convenience and 4,700 branches nationwide.
Chase Total Checking is the bank’s most popular checking account, requiring no minimum opening deposit, and a low monthly fee of $12 that’s fairly easy to waive. To waive the fee, you’ll need to do one of the following each month:
Have at least $500 in direct deposits
Maintain a beginning daily balance of $1,500 or more
Maintain an average beginning day balance of $5,000 or more in any combination of your Chase checking account plus other qualifying accounts
Chase offers overdraft protection in the form of its Overdraft Assist program. You won’t pay an overdraft fee if you’re overdrawn by $50 or less at the end of the business day.
If you are overdrawn by more than $50 but bring the account current or bring your overdraft to $50 or less by the next business day, you also won’t pay any fees.
Chase offers access to Zelle for person-to-person payments and has an intuitive and user-friendly app for online and mobile banking.
You can also take advantage of Chase Autosave features to automatically have a portion of deposits transferred into your Chase savings account, or set up automatic transfers on a schedule, such as weekly or monthly.
Set savings goals and have money deposited into specific buckets or transfer funds into your general savings account to build your emergency savings. You can even pause automatic savings if your checking account drops below an amount you set.
Chase Premier Plus Checking offers even more benefits, including free money orders and cashier’s checks, ATM fee reimbursement for out-of-network ATMs four times per statement cycle, and free checks.
Your Chase Premier Plus Checking account earns a 0.01% APY on all account balances, which is the same as a Chase Savings account.
You can avoid the fees on your Chase Premier Plus Checking account if you have an average beginning day balance of $15,000 in any combination of Chase checking, savings, and other deposit accounts.
Another option is if you have a linked qualifying Chase mortgage enrolled in automatic payments, or if you are a member of the U.S. military or a veteran.
When you are a Chase checking customer, you can refer friends to open a Chase account and receive a $50 bonus, up to $500 per year. Like most financial institutions on this list, Chase has a robust and easy to use mobile app.
Best for: 4,700 branches nationwide
Minimum Opening Balance: None
Monthly Fee: $12.95 (for Chase Total Checking) or free if you meet requirements
Methodology: How We Select the Best Free Checking Accounts
We evaluated multiple factors to find the best free checking accounts for consumers across the U.S. Whether you have large monthly direct deposits or have been “unbanked” until now, you’ll find the best free checking accounts for any need or any budget here.
ATM network or generous ATM-fee reimbursement program
You shouldn’t have to pay extra money to access your money. After all, that’s the opposite of a “free checking account,” isn’t it? You want to find a bank with a large, fee-free ATM network to conveniently withdraw cash or make deposits. If the bank reimburses out of network ATM fees, that’s a bonus.
Nationwide availability (Physical locations or mobile access)
If you’re looking for a traditional bank, you want to make sure it has branches near you. Otherwise, an online bank might be the best choice. For this list of free checking accounts, we eliminated credit unions that don’t serve customers nationwide or have strict membership requirements.
Credit unions are often a solid choice for banking, and often have low fees and high interest rates. For instance, Navy Federal Credit Union is a highly ranked financial institution backed by the National Credit Union Administration. But it’s only open to members of any branch of the U.S. Armed Forces, U.S. veterans, their families, and Department of Defense personnel.
We tailored this list around banks with national appeal, with means they serve customers nationwide, with no residency requirements or specific occupational requirements. The one outstanding credit union on the list, Consumers Credit Union, is open to virtually anyone in the U.S. over the age of 18.
No Monthly Maintenance Fee
When most people think of a free checking account, they think of one with no monthly maintenance fees. You’ll see a few banks with monthly maintenance fees on this list because the benefits outweigh the fees. But any monthly service fees are easy to waive by meeting direct deposit or minimum balance requirements.
Low Minimum Deposit and Balance Requirements
Truly free checking accounts should be accessible to most consumers. That means having low or no minimum deposit or minimum balance requirements.
No or Low Foreign Transaction Fees
If you travel abroad or make international transactions, you don’t want to pay fees. This may not be important to everyone, but foreign transaction fees may be a point to consider.
No Account Closure Fee
This was a deal-breaker for us. If you choose to close your account, you should be allowed to do so with no account closure fee. All the banks on this list make it as easy to close your checking account as it is to open it.
No Overdraft Fees
Likewise, if you accidentally spend more money than you have in your account, you shouldn’t be punished. Sometimes we forget that an automatic payment cleared or sometimes, you just need a helping hand to make it to your next paycheck. We gave preference to account with no overdraft fees, overdraft protection, or generous overdraft forgiveness.
Benefits such as high APY, cash-back rewards, or other additional perks
From cash back debit cards to interest bearing checking accounts, generous perks can make it easy to choose one fee-free checking account over another. Other nice-to-have features include:
The ability to pay bills online
Early direct deposit
Mobile check deposit
These account features make it easy to manage your money. We evaluated all these aspects when compiling our list of the best free checking accounts.
Customer Service
Whether you opt for a neobank or a traditional bank with brick-and-mortar branches, you want fast and responsive customer service. We took branch hours or phone hours into consideration, as well as a responsive chat or email for those who prefer automated service without speaking directly to a person.
Other Products and Services
Many people want to use the bank that holds their primary checking account as a one-stop shop for all their financial needs. They don’t want to download another mobile app, remember another password, or keep their money in different places.
For this reason, we considered the availability of high yield savings or money market accounts, CDs and other financial services when choosing the top free checking accounts. Chase, Capital One, and a few others got bonus points from us for the ability to link a child’s account to teach money management at a young age.
How to Choose the Best Free Checking Account
Before you choose a free account, decide what features are most important to you. Do you want a bank with brick-and-mortar branches or are you comfortable banking online only? If you choose an online financial institution, find out if there is a way to deposit cash, since some only allow mobile deposits and ACH transfers from other accounts.
Most of the checking accounts on this list offer similar features, including an easy to use mobile app, no monthly fees, direct deposit capabilities, and overdraft protection. Some have no minimum deposit to open the account, which is convenient since you can set up the account and then fund it within a few days or when you receive your next paycheck.
If you’re looking for interest bearing checking accounts, you’ll find a few on this list. Others provide debit rewards, which isn’t a common feature in a free deposit account. These benefits can help put extra cash in your pocket to help you reach your financial goals.
Determine if you want a linked savings. If so, do you want the capability to transfer funds into multiple savings buckets to help with budgeting?
All the banks on this list are FDIC insured for up to $250,000 per account holder for each type of deposit account. CCU is insured for the same amount by the National Credit Union Administration. That means your money is safe, which is important in today’s climate of economic uncertainty.
Ultimately, your checking account becomes a hub for your financial life. Whether you’re opening your first account or thinking about switching banks to get free checking and more perks, this list provides a good place to start your search.
Free Checking Account FAQs
See what people are asking about the best free checking accounts.
What are monthly maintenance fees?
Monthly maintenance fees are service charges imposed by a bank simply for holding an account. The free checking accounts on this list have fee free checking or it is easy to waive the monthly maintenance fee by having monthly direct deposits or meeting minimum balance requirements.
Do free checking accounts have any fees?
When people think of fee-free checking, they often think of an account with no monthly maintenance fees. However, some free checking accounts may have a monthly fee that can be easily waived with a monthly direct deposit or by meeting minimum balance requirements within a statement cycle.
So-called free checking accounts may have over fees besides the monthly fee. Read the fine print closely to find truly free checking accounts.
What fees do I need to watch out for?
Some banks who advertise free checking accounts may forego a monthly maintenance fee, but charge overdraft fees, ATM fees, withdrawal fees (typically only for savings or money market accounts), fees for paper checks, fees for paper statements, foreign transaction fees, and wire transfer fees. If you lose your debit card, you might have to pay a fee to have it replaced, as well as covering mailing costs.
Can I open a free checking account without a deposit?
Some banks allow you to open a checking account with no minimum deposit required. Of course, if there are any perks, benefits, or sign-up bonuses, you’ll want to fund the account to earn interest or take advantage of special offers.
How do banks make money on free checking accounts?
Banks might make some money from monthly maintenance fees and other customer service charges. But the bulk of their revenue comes from the interest rate they earn on your money when they invest it in other securities, as well as interest collected on loans they make.
Banks don’t necessarily keep the money you deposit in your account. They hold cash withdraws to allow customers to withdraw their money. But they also invest the money and earn revenue on those funds.
They may also earn money on loan services, financial advisory services, investment services with fees, and other services they provide to customers.
These other revenue streams allow banks to offer free checking accounts without losing money.
What’s the difference between a checking and a savings account?
A checking account is where you keep cash for everyday spending. Typically, you can make debit card purchases and withdraw funds from an ATM easily, without fees. Most checking accounts don’t pay interest on your deposits, but some do.
A savings account, on the other hand, holds money you are saving either for a specific events – such as vacation or large purchase – or for an emergency. Financial experts recommend keeping as much as three to six months of living expenses in an easy-to-access savings account.
Savings accounts pay interest ranging from .01% annual percentage yield APY up to 4% or 5% APY. Be aware that some savings accounts charge fees for monthly withdrawals exceeding a limit of six per month.
Would you like to open a checking account, but you’re worried that your bad credit and past banking history might get in the way? With these issues, it can be difficult to open a new bank account.
20 Best Bank Accounts for Bad Credit
Regardless of your banking history, there are numerous banks and credit unions that offer bad credit checking accounts, all with unique features and benefits.
1. Chime
Our Top Pick
No minimum opening deposit or monthly service fee
Over 60,000 fee-free1 ATMs
Get paid up to 2 days early with direct deposit2
No credit check or ChexSystems
With Chime®, a bad credit score is no longer a deal-breaker. They offer an award-winning financial app and debit card with no credit check.
You can open a Chime Checking Account online with no monthly fees. And by that, we mean no overdraft fees, no monthly maintenance fees, no foreign transaction fees, and no minimum balance fees—ever.
Chime also offers a new way to build your credit with the Chime Credit Builder Secured Visa® Credit Card7. It’s a secured credit card with no annual fees, no credit checks, and no interest1 charges.
They offer access to over 60,000 MoneyPass® and Visa® Plus Alliance ATMs. Plus, you can get your paycheck up to 2 days earlier with direct deposit. You can also deposit cash for free at over 8,500 Walgreens.
Chime is definitely the best option on this list.
2. U.S. Bank
$400 sign-up bonus
Monthly service fee can be waived
Over 40,000 fee-free ATMs
$25 minimum opening deposit
U.S. Bank is now offering the Bank Smartly® Checking account, a popular choice that can be applied for online in 26 states throughout the U.S.
If you’re based in any of the following states – AR, AZ, CA, CO, IA, ID, IL, IN, KS, KY, MN, MO, MT, NC, ND, NE, NM, NV, OH, OR, SD, TN, UT, WA, WI, or WY – you’re eligible to apply.
By opening a Bank Smartly® Checking account and a Standard Savings account, and completing qualifying activities, you have the potential to earn up to $400. Subject to certain terms and limitations. Offer valid through June 20, 2023. Member FDIC.
The account itself provides a variety of benefits, including a complimentary debit card that can be locked or unlocked if ever misplaced or stolen. U.S. Bank ATMs offer free transactions, as do over 40,000 MoneyPass Network ATMs.
Although U.S. Bank uses ChexSystems, it’s typically known to be more accommodating with its regulations than many other banks. Unless there’s a history of fraud or any money owed to U.S. Bank, opening a checking account is a possibility.
The checking account requires just a $25 minimum opening deposit, with a monthly service fee of $6.95. The monthly fee can be waived by maintaining a minimum balance of $1,500, or by having a minimum monthly Direct Deposit of $1,000.
3. GO2bank
4.50% APY on savings up to $5,000
No minimum opening deposit
Build credit with no annual fees
Overdraft protection up to $200
GO2bank is a neobank developed by Green Dot, is a neobank developed by Green Dot, a well-established fintech known for its prepaid debit cards and banking services.
The bank offers a checking account with savings subaccounts known as vaults, and the best part is that there is no minimum balance required to open an account online.
The savings account offers an attractive 4.50% APY on savings up to $5,000. Additionally, you can deposit cash at any of the 90,000 retail locations or withdraw funds from any of the 19,000 fee-free ATMs.
You can also use the mobile app’s check deposit feature to deposit checks directly into your checking account.
With direct deposit, you can even receive your pay up to 2 days early or your government benefits up to 4 days early. Opt-in for overdraft protection and be eligible for up to $200 in coverage with eligible direct deposits.
Responsible use of the GO2bank Secured Visa Credit Card can also help you build your credit over time.
If you receive a payroll or government benefits direct deposit in the previous monthly statement period, your monthly fee is waived. Otherwise, it is only $5 per month.
4. Chase
$100 bonus after 10 purchases in 60 days
No credit check or ChexSystems
Over 16,000 fee-free ATMs
$4.95 monthly fee
Chase is one of the most popular banks in the U.S. And now, they offer an account called Chase Secure Banking that doesn’t require a credit check, doesn’t use ChexSystems, and doesn’t charge overdraft fees.
Account holders also get access to over 16,000 ATMs, free online bill pay, and free money orders and cashier’s checks.
With 4,700 locations across the country, this is an excellent option for anyone who prefers having access to physical branches.
Opening a Chase Secure Banking account comes with a $100 cash bonus when you use the card for 10 purchases within 60 days.
Account approval is immediate and you’ll receive your debit card within days. There is a small monthly service fee of $4.95; however, there is no minimum deposit to get started.
5. mph.bank
Earn 4.70% APY on unlimited savings
No minimum balance to open
Get paid up to two days early
Free withdrawals at over 55,000 ATMs
mph.bank, created by Liberty Savings Bank, F.S.B. and a Member FDIC, is a banking option that truly stands out for its unique approach. MPH, which stands for ‘Makes People Happy’, is not just a slogan – it’s a philosophy that permeates every aspect of their banking services.
They offer five different bank accounts, but the standout offering is their Future Account. This account lets you earn an impressive 4.70% APY on your savings, with no minimum balance to open and no maximum balance for the rate.
Alongside this, mph.bank offers a Spend account that allows you to receive your paycheck two days earlier.
Accessing your money is easy with mph.bank, as they are part of the Allpoint network, offering you free access to over 55,000 ATMs.
In addition to these features, mph.bank has a host of financial tools available. From planning for your future to managing your finances on one page, mph.bank ensures that you have the necessary resources at your fingertips.
6. Current
No credit check or ChexSystems
No minimum deposit or maintenance fees
Get paid up to two days faster
Overdraft up to $200 without any overdraft fees
Current is one of the fastest-growing mobile banking solutions in the U.S., with over one million members. However, Current is a financial technology company, not a bank. Most importantly, Current does not use ChexSystems or pull your credit.
Some features of the Current mobile app and debit card include fee-free overdraft protection of up to $100, 40,000 fee-free Allpoint ATMs, and no minimum balance or hidden fees.
You can also get paid up to two days sooner with direct deposit and earn up to 15x points, and get cashback.
7. Walmart MoneyCard
No monthly fee with direct deposits of $500 or more
Earn up to 3% cash back on purchases
Overdraft protection covering up to $200 with eligible direct deposits
2% APY on savings
The Walmart MoneyCard is a prepaid debit card that offers a robust alternative to traditional checking accounts.
This card stands out with its cash back rewards program, offering up to 3% cash back when shopping at Walmart.com, 2% at Walmart fuel stations, and 1% at Walmart stores, up to a total of $75 each year.
Users can also enjoy the peace of mind offered by the overdraft protection feature, covering up to $200 for purchase transactions with opt-in and eligible direct deposits.
The ASAP Direct Deposit feature is another great perk, allowing users to receive their pay up to two days earlier and benefits up to four days earlier.
Additionally, with the Walmart MoneyCard, you can earn a 2% APY on savings and have chances to win cash prizes each month. The monthly fee of $5.94 can be waived with a direct deposit of $500 or more in the previous monthly period.
8. Revolut
No monthly fee
Earn up to 4.25% APY on savings
Cash withdrawals at more than 55,000 ATMs
Commission-free stock trading
Revolut is a financial app that comes with a prepaid debit card from Visa or Mastercard. However, you don’t need to wait for the physical card to get started. You can use the digital card right away on Apple Pay or Google Pay.
The Revolut debit card gets you fee-free access to over 55,000 ATMs, and no cost out-of-network ATM withdrawals up to $1,200 per month. You’ll also get 10 zero-fee international transfers per month.
This account offers cashback, discounts from top brands, a savings account, and more. Plus, your funds are insured by the FDIC for up to $250,000.
* Please note that Revolut is frequently updating its products and features, see the Revolut Terms and Conditions for the latest offerings.
* Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, (Member FDIC).
9. TD Ameritrade
No monthly fee
Unlimited fee refunds for U.S. ATMs
Free TD Bank debit card
Free checks and unlimited check-writing capabilities
TD Ameritrade offers a brokerage account with a comprehensive cash management checking account. As a client, you get unlimited checks. Once you open the brokerage account, you can complete the checking account application online.
A Cash Management account also gives you access to free online bill pay, as well as a free debit card with nationwide rebates on all ATM fees.
In addition, there is no monthly fee if you maintain a $100 minimum daily balance. However, it’s important to note that a TD Ameritrade checking account is not FDIC-insured or bank guaranteed.
10. Albert
No minimum balance
Cash advances up to $250
No maintenance fees
Free ATMs at over 55,000 locations
Albert is an innovative fintech banking platform that presents a powerful alternative to traditional bank accounts.
It sets itself apart with its attractive cashback rewards program attached to its free Mastercard debit card, making it your perfect shopping companion.
Moreover, it offers an around-the-clock personal finance help feature, “Ask a Genius”, ensuring you’re never in the dark about your money matters.
In addition, with Albert, you can have your paycheck up to 2 days early thanks to the direct deposit feature. This takes financial planning to a whole new level by ensuring you’re always ahead.
Albert is also a cost-saving alternative. There are no minimum balance requirements, no monthly maintenance fees, and you enjoy access to more than 55,000 ATMs, fee-free if you’re a Genius subscriber.
Finally, Albert ensures your money’s safety with FDIC protection up to $250,000. This adds an extra layer of security to your funds, allowing you to bank with confidence.
11. SoFi
With the SoFi Checking and Savings account, you won’t have to worry about being charged any overdraft fees, minimum balance fees, or monthly fees.
Plus, it offers free access to ATMs at over 55,000 locations within the Allpoint® Network. Similar to Chime and Current, you can get your paycheck up to two days sooner when you set up direct deposit.
You’ll also get a 1% APY on your checking and savings accounts and up to 15% cash back at local establishments with your SoFi debit card.
12. Navy Federal Credit Union
If you are an active-duty or retired member of the military, including the Armed Forces, National Guard, Coast Guard, or Department of Defense, you may be eligible for Navy Federal Credit Union membership.
NFCU doesn’t utilize ChexSystems or EWS. They also offer a free checking account alternative with no monthly service fees for those with qualifying direct deposits.
Additionally, NFCU offers its members convenient access to over 30,000 ATMs situated at both credit unions and retail locations across the United States and Canada through the CO-OP Network.
13. Aspiration
With the Aspiration Spend & Save account, you get an online checking account and savings account that has the potential to earn up to 5% APY.
Aspiration also offers unlimited cash withdrawals at over 55,000 ATMs. The minimum initial deposit is $10. Deposits are FDIC insured and you can get paid up to two days sooner.
The Aspiration debit card is made from recycled plastic. Deposits are 100% fossil fuel-free. And this online bank even gives you the option to plant a tree with every card swipe.
14. Southwest Financial Federal Credit Union
Southwest Financial presents a reliable banking option that prioritizes the financial wellbeing of its members. With no monthly service fees, it offers a cost-effective solution to managing your everyday finances.
Opening an account is easy and requires no minimum deposit. As a member of Southwest Financial Federal Credit Union, you enjoy the convenience of accessing your funds through a shared network of ATMs.
15. FSNB
FSNB (formerly Fort Sill National Bank) offers a hassle-free Basic Checking account to its customers, with a $5 minimum deposit requirement.
With the Basic Checking account, you need to maintain a minimum daily balance of $75. Otherwise, you’ll be charged a monthly fee of $5.50.
This account comes with a host of convenient features, including a Visa CheckCard that allows you to make purchases and withdraw cash at ATMs worldwide. Additionally, FSNB offers free online banking services, giving you access to your account from the comfort of your home or office.
16. Wells Fargo
Wells Fargo’s Clear Access Banking offers a practical, accessible checking account designed to suit various banking needs. While there is a $5 monthly service fee, this fee is waived for primary account owners aged 13 to 24.
With a minimal opening deposit of just $25, setting up Clear Access Banking is straightforward and affordable. As an account holder, you’ll have the convenience of accessing your funds through Wells Fargo’s extensive network of 13,000 ATMs and 5,300 branches across the country.
17. United Bank
United Bank has locations in Maryland, Ohio, Pennsylvania, Virginia, West Virginia, and Washington, DC. You can open a bank account with a $50 minimum initial deposit. You do not have to maintain a minimum balance and they don’t charge monthly fees.
You can also upgrade to rewards checking, where you earn cashback rewards on debit card purchases. You also get discounts on movies, theme parks, and prescriptions. The monthly service charge is $10, but you can have it waived if you reach 15 purchase transactions monthly or have a minimum of $500 in regular deposits.
18. Huntington National Bank
Huntington has locations in Arizona, Colorado, Illinois, Indiana, Michigan, Minnesota, Ohio, South Dakota, and Wisconsin.
Huntington Bank uses ChexSystems, but you can still qualify for a checking account as long as you don’t owe the bank any money. However, applicants with an EWS record may not qualify.
For Huntington’s basic account, there is no minimum opening deposit and no minimum balance requirement.
19. Varo
Varo is an online-only bank that offers a hassle-free banking experience with no monthly fees. As a Varo customer, you’ll gain access to early direct deposit payments, which means that your funds will typically be available on the same day they’re received.
Varo Bank knows that just because you need second chance banking doesn’t mean you want sub-standard service. The checking account comes with a free Visa debit card, access to over 55,000 Allpoint ATMs, and free paper check mailing.
20. Regions Bank
You’ll need a minimum opening deposit of $50 to open a Simple Checking Account at Regions Bank. This account doesn’t come with too many bells and whistles. However, it’s a suitable option for anyone with bad credit who wants a basic checking account.
Regions Bank will lower your monthly maintenance fee from $8 to $5 if you sign up for online statements. And you’ll have the option to open a savings account through Regions Bank as well.
What is a bank account for bad credit?
A bank account for bad credit is a type of account designed for people with negative banking records. These people are usually turned away from traditional banks and credit unions because of past instances of bounced checks, overdrawn accounts, or unpaid non-sufficient fund fees.
Fortunately, some financial institutions provide bad credit bank accounts that offer basic banking services such as a debit card, online banking access, and check writing privileges. Direct deposit is also available with some of these bank accounts, which makes it easy to access your income sources.
Bad credit checking accounts are typically easy to open, with minimal fees and most importantly, no credit checks or ChexSystems reports.
How do banks evaluate new account applications?
Opening a bank account can be a straightforward process, but it’s not uncommon for applicants to be turned down or offered limited options. That’s because financial institutions have criteria they use to determine who qualifies for a bank account and what type of account they can offer.
One of the most important factors that banks consider when you apply for a new account is your banking history. To assess this, most banks will check your ChexSystems report, which is a database of your past banking transactions. This report includes information such as any unpaid fees or overdrafts, closed accounts due to fraudulent activity, and other negative marks.
If you have a negative history in ChexSystems, such as unpaid fees or a history of overdrafts, it can be more challenging to open a bank account. In some cases, the bank may decline your application altogether or offer you a limited account that doesn’t allow you to write checks or use a debit card.
Another factor that banks make consider is your credit history. Some banks may pull your credit report from the three major credit bureaus Equifax, Experian, and TransUnion, but most don’t.
Your credit report is typically accessed by credit card issuers and lenders to assess your creditworthiness when you apply for loans or credit cards. But for bank accounts, your ChexSystems record is generally more important.
What is ChexSystems?
ChexSystems is a consumer reporting agency that collects user data from banks and credit unions. One of the things this data is used for is to create consumer reports that financial institutions can use to screen customers.
When attempting to open a new bank account, most financial institutions will pull your ChexSystems report. This report will show your past banking history including overdrafts, bad checks, check fraud, negative balances, or excessive withdrawals.
If you’ve had any of these issues in the past five years, it will likely be on your ChexSystems record. Fortunately, there are several reputable banks that don’t use ChexSystems or check credit to qualify customers. There are also numerous banks that offer second chance checking accounts for people with bad credit.
Can you open a bank account with no credit check?
Opening a no-credit-check bank account is easier than ever, with plenty of reliable banking services to choose from. There are two types of bank accounts for bad credit: banks that don’t use ChexSystems and second chance checking accounts.
Banks that Don’t Use ChexSystems
Some banks simply do not use ChexSystems to evaluate new accounts. These banks offer no-credit-check bank accounts for people with bad credit or a negative banking history.
The good news is that these accounts come with the same features as regular bank accounts offered to everyone else. You can expect to have access to online banking, direct deposit, and a debit card.
Second Chance Checking Account
With a second chance bank account, financial institutions may conduct a credit check or refer to ChexSystems, but they’re willing to give you a second chance regardless of your banking history. Second chance bank accounts usually come with a monthly maintenance fee.
The best second chance checking accounts still have some of the same features as ChexSystems banks and credit unions, such as overdraft protection, online banking, and bill pay. Additionally, it should be possible to upgrade to a standard checking account after demonstrating responsible banking habits.
What to Look for in a Bad Credit Checking Account
If you’re struggling with poor credit history, you might be wondering how to find a checking account that meets your needs while also helping you rebuild your financial reputation. Fortunately, there are several banks that offer checking accounts for bad credit. Here are some key factors to consider:
No Credit Checks
The first thing to look for is a bank or credit union that doesn’t look at your credit report or ChexSystems record when opening a checking account.
Many institutions also offer “second chance” or “fresh start” checking accounts designed specifically for individuals with poor credit or past banking issues. These checking accounts provide an opportunity to rebuild your financial standing, and often offer the option to upgrade to a traditional checking account after a certain period of time.
Low or No Minimum Balance Requirement
When you’re trying to rebuild your credit, every dollar counts. Look for a checking account that doesn’t require you to maintain a specified balance. This way, you won’t be charged fees for falling below a certain balance threshold. This will help you keep more money in your pocket and avoid unnecessary expenses.
Reasonable Account Fees
It’s important to be aware of the fees associated with checking accounts, especially if you have bad credit. Be sure to compare the monthly maintenance fees, overdraft fees, and any other charges associated with the account.
Many online banks offer checking accounts with no monthly fees or waive them if certain conditions are met, such as maintaining a minimum account balance or setting up direct deposit.
Online and Mobile Banking Features
In today’s digital age, having access to online and mobile banking is essential. Look for a checking account that offers a user-friendly mobile app and website, enabling you to manage your money on-the-go. These features should include the ability to check your balance, transfer money, pay bills, and deposit checks remotely.
Account Alerts and Notifications
Opt for a checking account that offers customizable account alerts and notifications. These can help you stay on top of your account activity, track your spending habits, and avoid a potential overdraft fee. You can typically set up alerts for low balance, large transactions, or unusual activity.
Overdraft Protection
Overdraft fees can be a significant burden, especially for people with bad credit. Look for a checking account that offers overdraft protection, which can help you avoid costly overdraft fees. Some banks may offer linked accounts, lines of credit, or small-dollar loans to cover overdrafts.
FDIC or NCUA insurance
Ensure that your checking account is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). This insurance protects your cash deposits up to $250,000 per account holder in case the bank or credit union fails.
Opportunities for Financial Education
Finally, look for a financial institution that offers resources and tools to help you improve your financial literacy. This might include budgeting tools, educational articles, or workshops. The more you understand about managing your money, the better your chances of rebuilding your credit and maintaining a healthy financial future.
Bottom Line
Having poor credit doesn’t mean you can’t get a bank account. But, it does mean that your selection will be somewhat limited. We also show you how to clear your name and remove yourself from ChexSystems so that you can get a bank account anywhere.
It may take some time to get your name removed. Meanwhile, some of the banks we’ve listed above are just as good, if not better, than any account on the market right now. So, it’s a good idea to start with one of those.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
2. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. Chime 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.
7. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
In the past, you had to drive to your bank and work with a teller to manage your deposit accounts. These days, however, you have the option to complete virtually any banking need with any device that has internet access. You can pull out your smartphone and deposit a check. Or you may use your laptop to check your account balance.
That’s where banks called neobanks come in. It’s no surprise that neobanks are more popular than ever before. Let’s take a closer look at what they are and how they work so you can decide whether a neobank makes sense for your particular situation.
20 Best Neobanks
While traditional banks take up more market share than neobanks, you can still find a good amount of them if you do your research and shop around. The right neobank for you will depend on your unique lifestyle, needs, and preferences. To help you hone in on the ideal option, here’s our list of the top neobanks of 2023.
1. Chime
Founded in 2012, Chime is a financial technology company that offers banking services from The Bancorp Bank, N.A. and Stride Bank N.A. The Chime Checking Account is free of monthly maintenance fees and no minimum balance requirements.
Its perks include early direct deposit, automated savings features, access to over 60,000 or more fee-free ATMs, and free debit card replacement. In addition, you can take advantage of SpotMe and get up to $200 in fee-free overdrafts.
There’s also a Chime’s Savings Account, which offers a competitive interest rate with no cap on the amount of interest you can earn. Other services include Secured Chime Credit Builder Visa® Credit Card that doesn’t require a credit check, making it a suitable option if you have limited credit. Chime should be on your radar if you prefer a one-stop-shop for all of your banking needs.
You can read our full Chime review to learn more.
2. GO2bank
For more than a decade, Green Dot Corporation has specialized in alternative banking products. In 2013, GoBank made its debut as the first digital bank offering digital financial services. Then, in 2021, the company launched GO2bank, its second online bank.
GO2bank stands out from other neobanks which require you to sign up online because you can pick up their debit cards in person at Walmart and other popular retailers. GO2bank’s bank account tends to be a popular product in addition to its secured credit card that can help you build credit.
For a comprehensive overview, read our full GO2bank review.
3. Current
Since its inception in 2015, Current, which is not a bank, but a fintech company based in New York City, has partnered with Choice Financial Group and Metropolitan Commercial Bank to offer banking services. Its flagship products are a personal checking and debit card you can access via a mobile app on any iOS or Android device.
Even though Current’s product line is limited, the neobank prides itself on no shortage of perks and benefits. You can get your deposit up to two days early and earn cash back for debit card spending from more than 14,000 merchants. Additionally, Current doesn’t charge minimum balance fees or bank transfer fees and offers fee-free ATM withdrawals from ATMs in the Allpoint network.
If you would like to learn more, take a look at our Current review.
4. Revolut
Founded in 2015, Revolut is one of the largest European neobanks, serving more than 16 million customers. It has expanded its footprint to the U.S. market and has plans to become one of the most reputable neobanks in the world.
Revolut is unique in that it offers a wide array of financial services, such as bank accounts, debit cards, peer-to-peer payments, cryptocurrency, and currency exchange. It supports both individual consumers and businesses with more than 30 currencies. For a neobank with a diverse lineup of offerings, Revolut has you covered.
To learn more, read our full Revolut review.
5. Quontic Bank
Quontic Bank is a full-service, FDIC-insured online bank that was founded in 2002. It offers a range of banking products and services, including checking and savings accounts, credit cards, mortgages, and business banking solutions.
They offer some of the best annual percentage yields (APYs) in the industry. Quontic accounts come equipped with no overdraft fees, no incoming wire transfer fees, no monthly service fees, and access to over 90,000 surcharge-free ATMs.
Quontic also has a savings accounts feature called “Roundup”, which makes saving money simple and easy. In addition, they have a responsive U.S. based customer service team available to assist with any questions or concerns.
Read our full Quontic review for more information.
6. Dave
When Dave began in 2017, its sole focus was paycheck advances. Over time, it evolved to offer a checking account with no minimum balance requirements. If you become a Dave customer, you can receive early access to your paycheck, without a credit check or interest charges.
Dave also offers handy built-in budgeting features and doesn’t charge overdraft fees or ATM fees, as long as you use an ATM from the MoneyPass network. Dave may make sense if you’d like the option for small cash advances to get you through a financial hiccup from time to time.
See also: Free Online Checking Accounts: No Opening Deposit Required
7. Albert
Albert began as a money management app in 2016, but is now a personalized banking service that has attracted over 6 million customers. This digital banking account offers cash back and a range of benefits.
These including no-interest cash advances of up to $250, integrated budgeting and savings tools, and annual savings bonuses of up to 0.10%. There are no minimum balance requirements or overdraft fees. However, there is a minimum monthly fee of $4. Keep in mind that you’ll need to have an external bank account to open an account with Albert.
8. Varo
Varo Bank began in 2015 as a fintech company that partnered with The Bancorp Bank. In 2020, it acquired its own national banking charter, making it different from other neobanks you might come across. Even though Varo operates as an actual bank, it focuses on online banking via its website and mobile app.
Its checking account is free of monthly fees and there’s no minimum balance requirement. Plus it comes with a debit card. In addition, Varo partners with more than 55,000 ATMs through the Allpoint ATM network.
We can’t forget its other perks, such as contactless payments, credit cards with reporting to the major credit bureaus, early direct deposits, and no foreign transaction fee or transfer fees. Varo might be worthwhile if you’re looking for a checking account with all the bells and whistles.
Read our Varo Bank review to learn more.
9. Aspiration
Aspiration was founded in 2013 under the motto “Do Well. Do Good.” It partners with financial institutions like Coastal Community Bank and Beneficial State Bank to offer cash accounts, savings accounts, and a few investment accounts.
Aspiration’s most popular product is the Aspiration Spend & Save Account, which is a hybrid of a checking account and savings account. There’s also the Zero credit card, which offers cash back and plants a tree every time you make a transaction. Aspiration can be a good fit if you’d like to get rewarded for your spending and like the idea of one account for your checking and savings goals.
Read our full review of Aspiration to learn more.
10. Bluevine
Bluevine made its debut in 2013 as a fintech company with a mission to improve banking for small and mid-sized business owners. Its flagship product is the Bluevine Business Checking. It’s completely free and comes with a competitive annual percentage yield and unlimited transactions. This is rarely seen in the world of business checking.
In addition to the business checking account, Bluevine offers financing products, such as lines of credit of up to $250,000. Bluevine should be on your radar if you’re a business owner in search of fast, convenient startup banking and financing.
11. SoFi
Social Finance or SoFi entered the market as a student loan refinance company. Recently, however, the fintech company received its own bank charter to offer digital banking services. You can use the SoFi Checking and Savings combo account to manage your spending and saving needs in one place.
Fortunately, SoFi doesn’t charge monthly maintenance fees, overdraft fees, and ATM fees. Additional perks and extras include no-fee overdraft coverage, sub accounts for various savings goals, and additional products like credit cards, cryptocurrency trading, and retirement accounts, like an individual retirement account.
Read our full review of SoFi to learn more.
12. Acorns
Acorns has a reputation as an easy-to-use micro investing app. Since 2012, many people have downloaded it on their iOS or Android devices to invest their spare change. Over time, Acorns has expanded to offer a checking account.
You can open Acorns Checking for free and enjoy perks such as no monthly or overdraft fees, early direct deposit, mobile check deposit, and access to a network of 55,000 ATMs.
The checking account seamlessly integrates into the Acorns micro investing feature. Plus when you use your Acorns debit card, you can earn cash back at participating retailers and use it to invest, along with your spare change. If you’d like to get started with investing, Acorns is worth considering.
13. One
One is a neobank owned by Walmart. It offers a budget-friendly overdraft program with customized budgeting and savings options for its customers. One’s banking account allows users to organize their money into subaccounts called Pockets.
Pockets offer saving rates of 1% on up to $5,000 for any customer and 1% on up to $25,000 for customers with direct deposit. Additionally, One provides fee-free overdraft coverage of up to $200 for customers with direct deposits of at least $500 per month.
14. Cheese
Cheese is a digital banking platform that was launched in March 2021 and caters specifically to the immigrant and Asian American communities. It offers up to 10% cash back at 10,000 businesses, including Asian-owned businesses and restaurants.
Cheese’s customer support is available in English and Chinese, with more languages to be added in the future. One of the benefits of opening an account with Cheese is that accounts earn interest and do not have monthly fees or ATM fees when using the national MoneyPass ATM network.
15. Unifimoney
Unifimoney is a money management and investment app that helps you manage your banking, investing, and borrowing needs all in one place. It caters to account holders who earn at least $100,000 per year but have significant amounts of student debt. You can download Unifimoney to pay bills, deposit checks, and write checks.
It’s unique in that it also allows you to refinance student loan debt and can create a diverse investment portfolio with particular stocks, cryptocurrencies, precious metals, stocks, and exchange-traded funds (ETFs).
In addition, you can turn to Unifimoney for insurance products, like car insurance and health savings accounts (HSAs). If you’d like to get started with Unifimoney, open the Unifimoney high-yield checking account with as little as $100.
16. NorthOne
Headquartered in New York and founded in 2016, NorthOne offers digital business banking services. If you’re a startup, entrepreneur, or small business owner, NorthOne can be a good fit. It differs from other banks that serve businesses in that there are no transaction limits that require premium upgrades.
You can open a business bank account for a flat $10 monthly fee and won’t have to worry about additional fees for deposits, transfers, ACH payments, or app integrations. In addition, you’ll get to create as many “Envelopes” or sub accounts as you want so you can save for payroll, taxes, and other business needs.
17. Oxygen
San-Francisco based Oxygen focuses on two accounts: the free thinker account for individuals and the pioneer account for business users. Even though it doesn’t charge fees, like monthly fees, ACH fees, and overdraft fees, you will have to pay an annual fee that can go up to a few hundred dollars.
While most neobanks don’t allow for cash deposits, Oxygen does. As long as you have an Oxygen bank account, you can make deposits at GreenDot locations, which are usually located inside popular retailers, like Walmart, Walgreens, and CVS. If you don’t mind paying an annual fee and like the convenience of being able to deposit cash, Oxygen is worth exploring.
18. Bella
Bella is a fairly new player in the neobanking space. Its partner bank is nbkc bank, which allows it to provide banking services. With Bella’s checking account rewards program, you can receive a random percentage of cash back on randomly selected purchases.
The cash back amount may be anywhere from 5% to 200%. Like most neobanks, Bella doesn’t charge monthly fees, ATM fees, and overdraft fees. You can also opt for a no-fee savings account. Bella accounts are FDIC insured for up to $5,000,000.
19. Lili
Lilli services small business owners and believes that managing two accounts is a hassle. That’s why this neobank offers a single account you can use for both your business and personal transactions.
Come tax time, Lili will eliminate financial stress and let you automatically save a certain percentage of your income into a “tax bucket.” Plus, it produces quarterly and yearly reports instantly, reducing your tax prep costs. While the Lili Standard account is free, Lili Pro will run you a couple dollars per month.
If you upgrade to Lili Pro, you’ll get cashback rewards on all your debit purchases and 1% interest on your savings accounts. Lili could be a solid pick if you’re a freelancer or solopreneur hoping to simplify your finances.
20. Monzo
Monzo is a UK-based neobank that just opened up to the U.S. market in late 2022. All accounts are insured by the FDIC for up to $250,000. Plus fee-free withdrawals are available at more than 38,000 ATMs.
Furthermore, Monzo is similar to Aspiration as it strives to protect the planet. Additionally, this neobank offers budgeting tools that can help you meet various savings goals.
What is a neobank?
Often called challenger banks, neobanks have recently entered the financial services industry and challenged banking norms. Most neobanks are financial technology or fintech companies that offer the same banking services you may find at traditional banks, like Bank of America or PNC.
But they promote innovation and act like digital only banks or online banks as they don’t have any physical branches and operate via apps. Most of these apps are user-friendly and loaded with a variety of handy features, such as early deposit and savings tools to simplify the banking experience. They are specifically designed to give you greater control of how you manage and spend your money.
Also since neobanks don’t have any physical branches, their overhead costs and customer acquisition costs are low and enable them to offer more affordable banking products and services. Many neobanks let you choose from a number of free and paid premium subscription services.
Are neobanks safe?
Since neobanks are fairly new and different from many traditional banks, you might wonder whether they’re safe. Fortunately, most of them are very safe because they operate within a regulated market.
These financial institutions typically work with U.S. banks to offer FDIC-insured accounts, which protect your money from potential bank failures and the losses that come with them. To help determine if a neobank is safe, check out their ratings and reviews on reputable websites like the Better Business Bureau (BBB).
Neobanks vs. Traditional Banks
To further explain neobanks and their modern spin on traditional banking, let’s take a closer look at how they differ from traditional banks.
Neobanks
Neobanks operate without physical branches. To take advantage of their offerings, you’ll likely need to download an app and provide some personal information.
While you can expect fewer banking and credit products than you’d find at traditional banks, you’ll reap the benefits of lower fees and extras that improve the overall banking experience.
Some neobanks have decided to expand their lineup of products and services to create more of a one-stop-shop you’d get from a traditional bank. Since most neobanks don’t earn money from lending, like incumbent banks, their business model depends on interchange fees or transaction fees, which usually come from debit cards. They might also charge for premium accounts and extra features.
Traditional Banks
Traditional banks often have brick-and-mortar locations across the country or in a specific geographic region or area. But many of them also have digital banking divisions in which you can perform banking services online.
Most banks focus on strong customer relationships and earning interest through loans as well as account fees from banking, lending, and investing. They typically target customers who appreciate customer engagement and a traditional in-person banking experience.
See also: Best Alternatives to Traditional Banks
Pros & Cons of Neobanks
Just like all types of financial institutions, neobanks have benefits and drawbacks you should consider, including:
Pros
Lower fees: Compared to traditional banks, neobanks offer lower fees. That’s because they don’t have the high overhead costs associated with the upkeep of physical branches.
Higher rates: Neobanks often pride themselves on higher interest rates on their checking and savings accounts. This can make it easier and faster for you to save money.
Convenience: Perhaps the greatest benefit of neobanks is the convenience they bring. You can perform a variety of banking tasks, like depositing checks or making payments from your smartphone device, round-the-clock.
Easy access: You can manage your banking 24/7 without ever having to leave your home and visit a local branch. All you have to do is download an app from the app store.
Simple setup: It’s usually fast and easy to open an account with neobanks. Many of them will approve you, regardless of your credit score or credit history.
Focused services: While most neobanks don’t offer all the services you might find at traditional banks, the few services they do provide focus on service quality and are typically loaded with perks and benefits. For example, you can get a no fee checking account with cash back rewards.
Cons
No bank charters: Neobanks don’t have bank charters. Instead, they often partner with traditional banks to insure their products. Before you move forward with a neobank, ensure they partner with a Federal Deposit Insurance Corp or FDIC-insured bank and offer their own FDIC insurance.
Customer service restrictions: Since neobanks operate on app instead of through physical branches, customer service can be a downside. You may have to turn to chatbots or social media for basic banking questions and support. If you notice fraud in your account, it may be more difficult to resolve the issue.
Fewer services: Traditional banks usually pride themselves on a long list of services, including loans, wealth management, and brokerage services. Neobanks, however, tend to limit their offerings to checking accounts and savings accounts.
Unproven track record: Neobanks are still in the startup phase as many made their debut within the last few years. This means that they may fail and force you to look elsewhere for your banking needs.
Require knowledge of technology: While most neobank apps are intuitive and designed for the average person to use with ease, they may still be inconvenient for some people. If you don’t consider yourself tech literate, a neobank might not make sense.
Bottom Line
There’s no denying that neobanks have revolutionized the banking industry and financial industry. If your primary goal is convenience and you prefer mobile or online banking, a neobank can be a great alternative to a traditional bank or legacy bank. Just make sure you explore all your options and read the fine print before you choose one.
Editor’s Note: This story was written byLauren Toms from partner site MoneyCrashers.
If you’ve been following the news this year, you might have heard about bank runs: Silicon Valley Bank, Signature Bank and First Republic in the U.S. and Credit Suisse internationally. And it’s understandable if you’re spooked.
A bank run happens when many — if not most — of a bank’s customers try to withdraw their money all at once, either because they’re worried the bank might go out of business or they’ve heard rumors about the bank’s financial health. Bank runs can be very stressful for both the bank and its customers and can have big effects on the economy as a whole.
Fortunately, there are things you can do to protect your money now so a bank run doesn’t ruin your day or your net worth.
Keep your money in a federally insured bank
One of the best ways to protect your money during uncertain times is to keep it in a federally insured bank. That means your deposits are insured up to $250,000 per depositor by the Federal Deposit Insurance Corporation (aka FDIC) or National Credit Union Administration (for credit unions).
If the bank fails, you won’t lose your money so long as you don’t have more than the insured amount in all your accounts with that bank.
To find out if your bank is federally insured, you can look for the FDIC or NCUA sign at your bank or credit union or ask a representative. You can also check the FDIC’s online database, BankFind, to verify if your bank is insured.
Don’t make assumptions. Some banks are uninsured, so it’s important to do your research and ensure your money is protected. Some banks or credit unions may also have private insurance. But it’s not backed by the U.S. government and is subject to the rules of the bank’s underwriter.
In addition to providing insurance for your deposits, using a federally insured bank also comes with other benefits. For example, federally insured banks must comply with certain regulations that protect consumers and promote stability in the financial system. Theoretically, that means that your money is more secure and less likely to be at risk in the event of a bank failure.
Diversify your wealth
Diversifying across different banks and credit unions is an important step to protect your money during uncertain times. That means spreading your money across different FDIC- and NCUA-insured institutions, with no more than $250,000 in each account.
That serves two purposes. One, the more banks you have, the more likely you are to have at least one unaffected by bank runs. They tend to spread, meaning that if one bank starts to fail people start worrying about others, which results in a run on others.
Two, it ensures that if the worst does happen and the bank becomes insolvent, you have a better shot of having at least one bank remain unscathed — meaning you still have money in at least one account to keep paying bills and living life.
And diversification doesn’t just apply to the rich and powerful. Even if you only have a few thousand dollars in the bank, keep it in at least two different institutions. Otherwise, you could temporarily lose access to all your cash between the moment the bank stops processing withdrawals and the moment the FDIC steps in — which can take a few days.
For example, maybe keep half in a longstanding bank like Chase and the other in a neobank like Chime (which importantly has no connection to Chase). By diversifying across different banks, you reduce the risk of losing access to all your money at once.
Stay informed and be prepared
Staying informed about your bank’s financial health is a key part of protecting your money during uncertain times. Regularly check your bank’s financial statements and reports, which are usually available online or in-branch. These reports can give you insight into your bank’s financial performance and stability.
Another way to stay informed is to pay attention to the news and any announcements your bank makes. That can help you stay up to date on any changes or developments that may affect your bank’s stability. But if you hear any rumors or concerns about your bank’s financial health, it’s important to verify them before taking any action.
In addition to staying informed, it’s important to be prepared in case of a bank run. That means creating a plan to protect your money and ensure you have access to funds when you need them.
One way to do that is to keep a small amount of emergency cash on hand at all times. How much you keep depends on what you think you might need, how big an emergency you’re planning for, and whether you have a safe place to keep it.
Some people, especially those with several banks, may just want a few hundred dollars on hand in case there’s an immediate issue. Others may want an entire month’s worth of money in case the worst happens.
But neither of those is a good idea if you don’t have a safe place to store it. Technically, you could use a safe deposit box. But bank branches might close if the bank goes under, severing your access to those funds.
In lieu of that, think of a safe place in your home where you can keep it away from the prying eyes of houseguests and burglars alike. Ideally, it would be inside a fireproof, waterproof safe in case of natural disaster.
Keep calm and don’t panic
During a bank run, it’s natural to feel scared and uncertain. However, panicking can actually make the situation worse and put you at greater financial risk.
One danger of panicking is that you may withdraw too much money too quickly, leaving you without enough funds to cover your expenses and causing any automatic payments to bounce. Additionally, withdrawing large amounts of money can contribute to the bank’s instability and potentially make the situation worse for everyone involved.
To stay calm and make rational decisions during uncertain times, go back to your plan — and maybe even have a backup plan in case it’s worse than you thought or happens faster than you predicted.
One way to stay calm is to focus on the things you can control, such as your own finances and your own actions. That means avoiding rumors and speculation, and instead relying on verifiable facts and information.
Another way to stay calm is to remember the importance of having a long-term financial plan. By focusing on your goals and priorities, you can avoid making hasty decisions.
Final word
Bank runs can be a scary and uncertain time for both banks and their customers. However, by taking proactive steps to protect your money, you can minimize your risk and safeguard your finances.
By taking action now, you can protect yourself and ensure you have access to funds when you need them. Remember, it’s always better to be safe than sorry when it comes to your money.
If you’ve been following the banking industry lately, you know the big news around recent bank failures, which has spurred concerns for consumers about whether their money is covered by insurance from the Federal Deposit Insurance Corp. You may also have seen in the news that interest rates on accounts are high right now and that banks are offering more features and services — such as ATM fee reimbursement and two-day early direct deposit — to attract new customers.
The good news is that if you have $250,000 or less, then you’re covered by insurance — through the FDIC or the credit union equivalent, the National Credit Union Administration, or NCUA — without having to spread your cash around to multiple financial institutions. This insurance might come from your bank itself or, if you’re a customer at a neobank, your FDIC insurance may come from the bank that your institution partners with.
If you have more than $250,000, or if you just want to take advantage of high interest rates or other perks, you may want to consider opening accounts with multiple banks. Here are some of the pros, cons and considerations that come with that strategy.
What are the benefits of having accounts at multiple banks?
Besides the advantage of spreading out your accounts so you can have more FDIC insurance, which we’ll get to in a moment, there are other perks to having accounts open at multiple banks, namely that you can mix and match the best features of different institutions.
“I suggest using one bank for your checking and bill paying and then linking to one or more high-yield online savings accounts,” said Jeremy Keil, a Milwaukee-based financial advisor with Keil Financial Partners, via email. “That way you can shop around and get the highest interest [rate] but keep that link between banks for when you need to move from savings to checking or vice versa.”
For example, maybe you want a checking account at a bank that has ATM fee reimbursements or two-day early direct deposit, and you want to keep other cash at your locally owned credit union that has branches near you and high yields on its savings accounts or certificates of deposit. You could spread your money around and enjoy the best features that each institution has to offer. Another benefit to keeping savings and checking separate is that you may feel less tempted to dip into cash that is set aside for specific purposes, such as your emergency or vacation funds.
Is it bad to have multiple bank accounts at different banks?
The primary reason that it may be difficult to keep accounts open at multiple banks is that the more accounts you have, the harder it can be to keep track of their details and requirements.
“It can be tough to keep your beneficiaries and usernames straight, which are especially important if you die or become incapacitated,” Keil said.
There can be more costly downsides of juggling multiple accounts as well. Some banks have minimum balance, spending or direct deposit requirements on their accounts, and you could trigger a fee if you don’t meet those conditions.
Another consideration is that if you open a new account at a bank because you’re chasing high interest rates, that bank might not have those high rates forever.
“These rates are designed to drive new dollars into the bank that would typically not be there if there was not a special rate,” said Keith Dragisich, a community banking expert, via email. “It’s important for consumers to read the fine print of how these specials work.”
Essentially, if you’re planning to move your money around to different financial institutions regulary, you’ll need to make sure you’re on top of all the fine print.
Does FDIC insurance cover multiple accounts at the same bank?
Insurance from the FDIC and the NCUA typically covers up to $250,000 per depositor per ownership category, such as a single account, retirement account or trust account. Joint accounts are insured up to $250,000 per person, so if an account is co-owned by two people, the full amount could be covered up to $500,000.
What should I do if I want to insure more than $250,000?
There are several ways to insure more than the FDIC insurance limit of $250,000. Some ways you might consider are adding a joint account owner, opening an account that’s a different ownership category, opening a cash management account with a higher insurance limit or splitting your money among different banks.
Whether you want to better insure your money or simply want to cherry-pick the best features of different banks, opening accounts at multiple banks is a solution that could benefit you as long as you’re willing to manage the account upkeep.