Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
The biggest banks generally aren’t known for competitive savings account yields. Even with interest rates higher than they’ve been in years, many big-bank savings accounts remain stuck in near-zero interest rate territory.
Citi® Accelerate Savings is a rare exception. While not quite at the top of the heap, its yield is well above the national average — competitive enough to qualify as a legitimate high-yield savings account. If you’re looking for a strong return on your money without leaving the stable, comforting embrace of an international financial powerhouse, it could be a perfect fit for you.
But before you run out to open an account, make sure Citi Accelerate Savings really is the best choice. Like every bank account, it has some notable shortcomings too.
What Is Citi Accelerate Savings?
Citi Accelerate Savings is a high-yield savings account from Citibank. It yields 4.05% APY on all balances and has no minimum balance to open or maintain. You do need to maintain a balance of at least $500 to avoid the $4.50 monthly maintenance fee.
Like most Citi deposit accounts, Citi Accelerate Savings is the savings part of a checking-savings account package. You must open an Accelerate Savings account alongside a corresponding Citi checking account. Citi Access Checking or Basic Checking are both no-frills checking account options with low, easy-to-waive monthly maintenance fees.
Eligibility is limited to residents of certain states — enter your ZIP code on the application page to see whether Accelerate Savings is available in your area.
What Sets Citi Accelerate Savings Apart?
Citi Accelerate Savings stands out for a few key reasons, not all positive:
Yield well above the national average. Citi Accelerate Savings yields 4.05% APY on all balances. That’s well above most other big-bank savings accounts and the national savings account average too.
No minimum balance to open. You can fund your new Citi Accelerate Savings account with any amount of cash.
Monthly maintenance fee applies on lower balances. Watch out for the $4.50 monthly maintenance fee assessed in any statement cycle your balance drops below $500.
Only available in certain states. Citi Accelerate Savings is available in most areas* but not all. Enter your ZIP code on the application page to find out if you’re eligible.
Key Features of Citi Accelerate Savings
Citi Accelerate Savings has all the hallmarks of your typical savings account, but the details vary a bit from what you might be used to. Familiarize yourself with its key features before moving ahead with your application.
Account Yield
Citi Accelerate Savings pays interest at a very competitive rate: 4.05% APY on all balances. There’s no minimum balance to earn interest, and every dollar in your account earns at the same rate.
Account Fees & Minimums
There’s no minimum balance to open this account. However, if your balance drops below $500 in a given statement cycle, you must pay a $4.50 maintenance fee for the period.
Savings Automation
Citi’s AutoSave feature makes it easy to automate deposits to your Accelerate Savings account. Choose weekly, biweekly, monthly, or some other frequency and take the human element out of building your nest egg.
Overdraft Protection
Citi’s optional overdraft protection plan is called Safety Check. If you enroll, you can use your Accelerate Savings account as a backup for an overdrawn Citi checking account (except Access Checking), pulling from the savings account as needed to cover overdrafts. Citi rounds each draw up to the nearest $100.
Mobile Features
Citi Accelerate Savings comes with a comprehensive mobile app with capabilities like:
Digital bill payments
Person-to-person transfers
Mobile check deposit
Rapid electronic transfers
Single-dashboard view of all active Citi accounts
Deposit Insurance
Citi Accelerate Savings comes with FDIC insurance on balances up to$250,000. In the unlikely event that Citibank fails, the federal government guarantees deposits up to this amount.
Pros & Cons
There’s a lot to like about Citi Accelerate Savings and a few things to dislike.
Excellent yield on all balances
No minimum balance to open
Excellent mobile app
Minimum balance to avoid the maintenance fee
Requires a linked Citi checking account
Not available in all markets
Pros
Citi Accelerate Savings’ advantages go beyond its competitive yield. It’s one of the more mobile-friendly accounts on the market and serves as a valuable backstop for checking overdrafts — a capability many online banks can’t match.
Excellent yield on all balances. Accelerate Savings doesn’t quite have the best yield of any savings account on the market, but it’s well above the national average and better than the vast majority of big-bank savings products.
No minimum balance to open. There’s no minimum balance to open an Accelerate Savings account, which makes it a realistic choice for savers just starting out.
Optional overdraft protection for your linked Citi checking account. Citi’s optional Safety Check feature enlists your Accelerate Savings account as a backup for overdrawn checking accounts. The only checking account excluded from the deal is Access Checking. If you anticipate overdrafting often, think twice about opening an Access Checking account as the checking portion of your package.
Robust mobile app. Citi’s mobile banking app is better than most. You can do just about anything with it that you can through the regular online dashboard (or in a Citi branch for that matter).
Deposit insurance up to $250,000. Rest assured that your money is safe in the very unlikely event that Citi goes under.
Cons
Citi Accelerate Savings has some inconvenient features and limitations.
Must keep at least $500 in the account to avoid the monthly fee. This is one of the few high-yield savings accounts that charges a monthly maintenance fee. Fortunately, it’s easy to avoid with a balance of $500 or more, but it’s not ideal for frugal savers.
Must open alongside a Citi checking account. You can’t open a Citi Accelerate Savings account by itself. You need to pair it with a Citi checking account, which may have its own monthly fee and waiver requirements.
Not available everywhere. Accelerate Savings is available in most areas* but not quite nationwide. Even if it seems like the perfect savings account for you, it might be out of reach unless and until you move.
How Citi Accelerate Savings Stacks Up
The Citi Accelerate Savings account compares favorably to most big-bank savings accounts. But before you apply, see how it compares to one of the best high-yield savings accounts around: the Marcus Online Savings account, backed by Citi competitor Goldman Sachs.
Citi Accelerate Savings
Marcus Online Savings
Yield
4.05% APY
4.15% APY
Minimum Balance
$0
$0
Maintenance Fee
$4.50 if your balance drops below $500, otherwise $0
$0
Linked Checking Account
Yes
No
Savings Automation
Yes
Yes
Overdraft Protection
Optional
No
Available Nationwide
Almost
Yes
Marcus Online Savings comes with fewer strings than Citi Accelerate Savings, which must be opened as part of a checking-savings package and has a monthly maintenance fee if your balance drops below $500. But Citi Accelerate Savings is a better fit if you want the security of overdraft protection.
Final Word
Citi Accelerate Savings is one of the best big-bank savings accounts on the market. Its yield is well above the national average (if not quite best in class) and it’s easy to waive the monthly maintenance fee with a $500 balance. Optional overdraft protection is a nice touch too, one missing from many online savings accounts.
This account does have some shortcomings though. First of all, it’s not available in all markets. The maintenance fee is a problem for people just starting out on their savings journeys. And you must open it as part of a checking-savings package.
All in all, there’s more to like than dislike about Citi Accelerate Savings. But it might not be right for you.
*The Citi® Accelerate Savings account is available to customers with a residential/home address (not mailing address) in AA, AE, AL, AK, AZ, AR, AS, CO, DE, GA, GU, HI, ID, IN, IA, KS, KY, LA, ME, MA, MI, MN, MP, MO, MS, MT, NE, NH, NM, NC, ND, OH, OK, OR, PA, PR, RI, SC, SD, TN, TX, UT, VI, VT, WA, WV, WI, WY, and select markets in Florida and Illinois.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Citi® Accelerate Savings
Citi Accelerate Savings stands head and shoulders above most other big-bank savings accounts. If you’re looking for a reliable savings account with a very competitive yield and full deposit insurance, it’s worth a close look. However, it has some important shortcomings and isn’t available in all areas, so it might not be the best option for you.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Banking
What Does ACH Stand For in Banking Terms?
The Automated Clearing House Network, or ACH, is how Americans send electronic funds transfers. Virtually every bank, credit union, and fintech company in the U.S. uses the ACH network. Find out how it works and how to use it to send and receive money.
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.
Hawaii is an exciting place to call home. It offers incredible weather, scenic views, friendly people, and a slow-paced lifestyle. If you’re lucky enough to live or work in Hawaii, you might be looking for the best banks in the state.
While the Aloha State has fewer banks than other states, there are still plenty of reputable, member FDIC options available to you.
12 Best Banks in Hawaii
To make your search for a bank a bit easier, we’ve done some research and compiled this list of the best banks in Hawaii.
1. First Hawaiian Bank
First Hawaiian Bank, the oldest bank in the state, holds the distinction of having the most branches in Hawaii. This makes it a convenient choice for many people looking to open a checking account, as it provides three different options.
Their first option, Pure Checking, offers a straightforward, fee-free experience, complete with a complimentary debit card. The second, Priority Banking Gold, expands on these features by offering free checks and online bill pay, as well as discounts on loans.
For those seeking the most benefits, the Priority Banking Platinum provides an extensive list of perks, including a credit card with unlimited rewards and cash back, travel points, and no restrictions on redemption dates.
Beyond checking accounts, First Hawaiian Bank also caters to various other personal banking needs. They offer savings accounts, mortgage services, and wealth management solutions, among other things.
2. SoFi
SoFi serves as a top-notch alternative to traditional banking, catering to individuals seeking the convenience and flexibility of online banking. The SoFi Checking & Savings account offers a unique combination of checking account accessibility and high-yield savings account returns in a single, streamlined account.
There is no minimum balance requirement, no monthly fees, and no overdraft fees, positioning SoFi as a cost-effective solution for a broad spectrum of users. There’s also an enticing offer of earning up to $250 with qualifying direct deposits.
One of the most compelling aspects of SoFi is the impressive interest rates it offers. The savings account yields a 4.30% APY, while checking account balances earn 1.20% APY, both rates far outpacing those offered by most traditional banks. What’s more, deposits are insured by the FDIC up to $2 million, providing an added layer of financial security.
With SoFi Checking & Savings, accessing your money is both straightforward and convenient. Over 55,000 Allpoint® Network ATMs across the globe offer fee-free withdrawals, ensuring you can easily access your money whenever you need it.
3. Ally Bank
Ally Bank is an online bank that serves residents in every state, including Hawaii. It’s worth considering if you’re seeking an interest bearing checking account or competitive rates on high yield savings accounts, CDs, and money market accounts.
While deposit accounts are Ally’s bread and butter, the bank also offers mortgages, auto refinancing, and investment products. As an Ally account holder, you won’t have to worry about any monthly fees or minimum opening deposits.
Since Ally is an online-only bank, there are no local branches in Hawaii. Fortunately, it’s part of the Allpoint ATM network that will give you free access to more than 43,000 Allpoint ATMs. If you do use an out-of-network ATM, the bank will reimburse you up to $10 per month.
4. First American Trust
First American Trust operates one branch in Honolulu. If you have a particular interest in wealth planning, it should definitely be on your radar. It provides several wealth planning services, such as financial planning, retirement planning, and estate planning for individuals and families.
Its advisors can also help you set up a trust and protect your greatest assets. Additionally, First American Trust is a great resource if you’d like to build a diversified investment portfolio.
5. Bank of Hawaii
Headquartered in Honolulu, Bank of Hawaii is a regional bank and the second-oldest bank in the state. It serves local communities with a comprehensive suite of products and services as well as sponsorships and volunteerism. The bank’s lineup of personal banking products includes checking accounts, savings accounts, certificates of deposit (CDs), credit cards, personal loans, and insurance.
In addition, it supports small business owners with business deposit accounts, business credit cards, merchant services, and small business loans. The bank also specializes in investment services and long-term financial planning to help you meet your personal finance goals. If you’re interested in Bank of Hawaii, you can chat with a banker online or in-person at a local branch.
6. Central Pacific Bank
Central Pacific Bank has been around since 1954 and has physical locations in Hawaii, Oahu, Maui, and Kauai as well as mobile banking services. It was originally founded to help immigrants build a safe life.
Today, the Hawaii bank offers a wide range of products and services to individuals and small businesses in the Aloha State. Central Pacific Bank stands out for its diverse savings account options, high rates on CDs, and low minimum balance requirements.
It also provides personalized, high quality wealth planning services from a team of wealth advisors. You can download the bank’s mobile app to pay bills, send money through Zelle, check your online statements, set notifications, track your budget, and keep tabs on your financial activity.
7. CIT Bank
CIT Bank is a digital bank with several attractive products for Hawaii residents. Savings Connect is a savings account that offers a competitive interest rate you might not be able to find elsewhere.
Another savings account you may want to consider at CIT Bank is the Savings Builder. While the Savings Builder has a lower annual percentage yield or APY than Savings Connect, it can encourage you to save as you must deposit at least $100 per month from your paycheck or elsewhere to secure the highest APY.
Unlike many brick-and-mortar financial institutions, CIT Bank doesn’t charge monthly maintenance fees, overdraft fees, ATM fees, or excessive transaction fees. You can open a new account and manage it via the online portal or mobile app. If you have any questions or concerns, you can contact phone support on weekdays and Saturdays during select hours.
8. Hawaii National Bank
Hawaii National Bank is a local bank that made its debut in 1960 and has branch locations in Oahu, Maui, and Hilo. It offers several checking accounts, including the Household Checking, Personal Checking, 55+ Checking, Super NOW, and VIP Money Market Deposit. Even though some checking accounts come with monthly fees, the bank may waive them if you maintain a certain balance.
Savings account options include the traditional Personal Savings account with a variable, competitive interest rate, Kids’ Savings account for kids ages 5 to 17, and Christmas Savings account that can help you save for the holiday season.
In addition to checking accounts and savings accounts, you may turn to Hawaii National Bank for personal loans, credit cards, home loans, CDs, and retirement accounts. The bank also serves small business owners with deposit accounts, business loans, and commercial mortgages.
9. American Savings Bank
Known as the third-largest bank in Hawaii, American Savings Bank serves the Aloha State with a wide range of offerings. You can choose from three checking accounts, six savings accounts, and several credit cards with cash back rewards or points. American Savings Bank also offers CDs, student loans, mortgages, and credit cards.
If you open a checking account, you’ll reap the benefits of Overdraft Courtesy, which protects you from overdrafts that may occur from checks and electronic payments. Additionally, the bank’s advisors can assist you with investments and insurance.
If you become an American Savings customer, you may take advantage of online banking, which allows for mobile check deposit, automatic bill pay, Zelle payments, eStatements, and more.
10. Synchrony Bank
Synchrony Bank is an online bank you might want to explore as a Hawaii resident. With Synchrony, you can expect high interest rates on savings accounts and CDs, no monthly fees, a variety of credit card options from popular retailers, and reimbursements for out-of-network ATM access.
If you join the Synchrony Bank Perks Rewards program, you can earn elite status if you meet certain criteria. You’ll reach Diamond status, which is the top level if you deposit more than $250,000 or stay with the bank for five years. This status comes with perks like three free wire transfers per statement cycle and unlimited reimbursements for domestic ATMs.
11. Territorial Savings Bank
Territorial Savings Bank has served Hawaii customers since its inception in 1921. If you open a checking account, you’ll be able to earn interest as long as you deposit $100.
The bank also offers numerous CDs with competitive interest rates, special mortgage rates for first time homeowners, and discounts from local merchants, like hotels, car rental companies, and restaurants.
If you’re a small business owner, you may select from a number of business deposit accounts, business credit cards, and business loans.
12. Finance Factors
Headquartered in Honolulu, Finance Factors has 13 branches throughout the Aloha State. The bank’s deposit products are savings accounts, CDs, and retirement accounts.
It also specializes in a wide range of home loans like conventional mortgages, government-backed mortgages, jumbo mortgages, and investor mortgages. You can stop into a local branch or log into the online portal to manage your account.
Bottom Line
As you can see, there are a variety of banks in the Aloha State. Before you move forward with one, it’s a good idea to weigh the pros and cons of all your options. Factors like your particular banking needs and whether you prefer an online or in-person banking experience will help you make the best choice for your unique situation. Good luck with your search for the best bank in Hawaii.
Frequently Asked Questions
What is the largest bank in Hawaii?
First Hawaiian Bank holds the title as the largest bank in Hawaii, establishing a significant presence with a total of 49 branches scattered across the state. Founded in 1858, it boasts a long history and deep roots in the local community.
Should I choose an online bank or a traditional bank in Hawaii?
An online bank is your best bet if your goal is to land the best interest rate and lowest fees. However, if personalized service is important to you, you’d likely be better off with a traditional bank. Fortunately, most traditional banks offer mobile apps and online portals.
Is a credit union a good option in Hawaii?
If you find a credit union with the ideal loan or the products and services you need and qualify for membership, you may want to join it. But you may find a wider range of offerings at a bank.
Why are there no national banks in Hawaii?
National banks aren’t in the Aloha State due to its small population and the high cost of real estate. Smaller banks are your only option if you live or work in Hawaii. The good news is you’ll find many local banks that offer just as many products and services as big banks.
The gig economy was just beginning to blossom pre-pandemic. Between 2010 and 2020, the number of gig workers or side hustlers increased by 15%. Unlike many aspects of life, which stagnated during the pandemic, freelancing only grew. Statista reported that 73.3 million people work as freelancers in the U.S. right now, an increase from 57.3 million pre-pandemic.
Freelancing has tremendous benefits for many people. Freelancing or gig work can provide:
Flexibility
A better work-life balance
Increased income potential
But it can come with some financial complications, too.
As a freelancer, you’ll need to manage cash flow so that you’ll have money in your account to pay your bills. You’ll be responsible for paying your own taxes. And, with that in mind, you’ll want to track expenses carefully so that you can deduct the costs of running your freelance business from your bottom line.
That’s where having a business bank account can come in handy.
Why You Need a Bank Account If You Have a Side Hustle
According to tax laws, you don’t have to have a business bank account to run a side hustle or a freelance business. You can file your taxes using your Social Security number and receive a 1099 form as a sole proprietor.
But as your business grows, you may want to incorporate under a tax ID number. You may choose to register as a corporation like an S-Corp or, more commonly, a limited liability corporation or LLC. This can get confusing, so it’s important to speak to a tax account before you take this step.
If you incorporate your business, you’ll need a business checking account to keep your personal finances separate from your business expenses. You would pay yourself a salary out of your business account and use your personal bank account to pay for your daily living expenses, entertainment, and anything that isn’t considered a business expense.
Benefits of Business Accounts
Most small business owners, freelancers and side hustlers prefer to open a business account even if they aren’t incorporated. Having a dedicated business checking account makes it easier to track your business income and expenses, which makes filing taxes – and making quarterly estimated tax payments – easier. If you ever get audited, you’ll have a clear record of your personal and business finances.
Plus, if you do any sales and marketing for your freelance business, your business debit card can often pique people’s interest. You’d be surprised how having a debit card with your business name on it can help you generate leads in odd places, whether you’re at your favorite bar or paying for groceries.
If you’re ready to open a separate business account, it’s important to find one that will meet your needs.
Freelancer vs. Side Hustler vs. Entrepreneur
Before you choose a business account, you may be wondering about the differences between entrepreneurs, freelancers, and side hustlers. Which category do you fit in?
These are all loose terms to describe anyone who owns their own business or is self-employed. Self-employed is a tax designation, which means you are a 1099 contractor for other companies. This term would apply to most freelancers and side hustlers.
On the other hand, if you start your own business, you might consider yourself an entrepreneur. The dictionary defines an entrepreneur as someone who starts a business and is willing to take a financial risk in hopes of great success.
A freelancer may also take financial risks, including leaving a steady paying job. In a lot of cases, whether you describe yourself as an entrepreneur, small business owner, freelancer or side hustler is up to you.
Compare the Best Freelancer Checking Accounts
In most cases, business owners, freelancers and side hustlers can all benefit from a good business bank account. Read on as we compare the best business checking accounts for freelancers, gig workers, and entrepreneurs.
1. Lili Bank: Overall Best Bank for Freelancers
Lili calls itself “the one-stop shop for all your small business financial needs.” An online financial services company that provides business banking, accounting for freelancers, invoicing, and tax support, Lili is backed by Choice Financial Group Inc.
As a US-based bank, Choice is a member FDIC, which means your funds deposited in Lili are protected by the federal government up to $250,000 per account.
What sets Lili apart as one of the best bank accounts for freelancers?
In addition to all the other services it offers to business owners, Lili has no minimum balance requirements, no monthly fees for basic checking, and a network of 38,000+ fee-free ATMs nationwide. You can also open a business savings account and earn 1.50% APY at Lili.
Lili’s basic business checking account has no monthly fee, expense categorization for your purchases, and the ability to generate quarterly expense reports.
Alternatively, for $9 per month, you can earn 1.5% on savings, get a Visa business debit card with cashback rewards, overdraft protection up to $200 and tax, invoicing software, and accounting support.
Lili integrates with third-party services that gig workers may use, including Etsy, Shopify, Venmo, QuickBooks, and your PayPal business account.
When you compare the prices of other invoicing and online accounting services, you may find that Lili offers tremendous value for the money as one of the overall best banks for gig workers you can find.
Bluevine: Best for Business Interest Checking Account
Like Lili, Bluevine is a financial technology company. It is backed by Coastal Community Bank, Member FDIC to protect your deposits. The Bluevine business checking account offers 2.0% interest, which sets it apart from competitors.
To take advantage of the interest, you’ll need to either spend $500 per month with your Bluevine Business Debit Mastercard or receive $2,500 per month in customer payments to your Bluevine business checking account.
There are no monthly fees or minimum balance requirements and you can make unlimited transactions with no fees. Like Lili, Bluevine also offers other services for business owners.
If you are looking for a business interest checking account with value-added services, consider Bluevine. Your account integrates easily with QuickBooks, with no fees involved. Plus, you can set up sub-accounts to easily manage your money, add authorized users, and pay bills via ACH or wire transfer from your Bluevine account.
While many credit providers offer business credit cards, Bluevine is one of only a few business checking accounts that offers a business line of credit. You may qualify for a credit line of up to $250,000, with a rate as low as 6.2% interest. This interest rate is much lower than the national average of 20.46% for business credit cards right now, as reported by The Balance. Plus, you could get approved in as fast as five minutes, according to the Bluevine website.
For entrepreneurs seeking to purchase tools or resources, or freelancers in need of business equipment, Bluevine’s line of credit could provide you with the financial security you need to grow. Take note that you’ll need a credit score of 625 or more to qualify and $40,000 in monthly revenue. This is probably not a service for a gig worker, but for a seasoned entrepreneur.
Even so, it’s never too early to get started with a business checking account, especially one with no monthly fees.
Amex: Best for Debit Card Rewards and Bonus Offer
American Express is a renowned name in business and consumer rewards credit cards. But you might not be aware that the company also offers a business checking account with 1.30% APY on balances up to $500,000.
American Express also has no monthly maintenance fees, no fees on domestic ACH payments, and no fees at MoneyPass ATMs. The American Express Business Blueprint app makes it easy to manage your account.
Amex stays true to its credit card rewards roots with a rewards business debit card. Earn 1 Membership Reward point for every $2 on eligible purchases. You can combine points earned with Membership Rewards points accrued with other Amex cards, and use those points for travel, gift cards, or cash back. You can also convert those points into cash deposits directly into your new business checking account.
Amex’s bonus offer stands out to us. Earn 30,000 Membership Rewards points after you deposit $5,000 or more within the first 30 days of account opening, maintain that balance for the next 60 days, and make five or more qualifying transactions within those first 60 days.
NBKC Business Checking: Best for No Fees
If finding a business bank account with no fees is most important to you, a nbkc Business Checking account might fit the bill. The bank offers unlimited transactions with no fee, no minimum balance requirements, no monthly fees, and no opening deposit requirements either. You can also have out-of-network atm fees reimbursed for up to $12 per month.
If you are a freelancer just getting started or just looking to supplement your full-time income with a side hustle, you’ll find nbkc bank a low-cost and convenient option among free business checking accounts.
NBKC lacks some of the bells and whistles of the top choices on our list. You won’t get integrations with common business software or invoicing and accounting support. But a nbkc business checking account is free with your personal account and provides an easy way to keep your business and personal funds separate.
Novo: Best for Payment and P2P Money Transfer App Integration
Novo is another choice with no monthly maintenance fee, no monthly fee, free ACH transfers, and no minimum balance needed. Like many of the business bank accounts on this list, Novo is a financial technology company. It’s backed by Middlesex Savings bank, a Member FDIC, which means your money is protected up to $250,000 per account.
Novo is the best for business owners looking for an easy way to process payments or transfer funds. You’ll get free ACH transfers from another checking or savings account and refunds on all out-of-network ATM fees.
Novo integrates with many P2P payment apps, including Square, Shopify, and Stripe, as well as Etsy, eBay, Amazon and more.
When you use Novo Boost, you can get paid 95% faster through Stripe, or two business days before the funds would ordinarily appear in your account.
Plus, it’s quick and easy to open an account online, with approval as fast as 10 minutes – rather than days with some other online bank accounts.
Axos Bank: Best for New or Scaling Businesses
Many freelancers don’t think about opening a business account until they have incorporated their company to make that transition from self-employed to entrepreneur. If this sounds like you, Axos Bank could have the best bank accounts for you. The online bank is offering business owners who incorporated after June 2020 an extra $200 in their new business bank account.
If you aren’t newly incorporated, you can earn a $100 bonus.
Like many of the best business accounts on this list, Axos has no monthly fee, no minimum monthly average balance to hold, ATM fee reimbursements for all domestic transactions, and no minimum opening deposit. The bank accepts cash deposits or you can transfer money from other checking accounts via ACH.
Unlike many online banks, Axos offers business owners a dedicated relationship manager to help point you to the products and services that are best for your growing business.
Chase Business Complete Banking: Best for Credit Card Processing
As the largest U.S. bank, with assets of $3.31 trillion, Chase is a traditional bank that offers all the convenience of online banks. This includes personalized service, stellar fraud protection, and a host of other features and benefits we’ve come to expect from any financial institution.
The Chase Business Complete Banking account is ideal for entrepreneurs, offering unlimited transactions and no monthly fee (if you meet certain requirements). These requirements are relatively easy to meet with a $2,000 minimum balance, $2,000 in purchases on your Chase Ink Business credit card, a link to a Chase Private Client Checking account, or $2,000 in deposits from QuickAccept or Chase eligible merchant services.
The best aspect of Chase Business Complete Banking is the ability to process credit card transactions and receive funds the same day through Chase QuickAccept. (Additional fees apply.)
You can open an account with no minimum deposit to get started.
Wave Money Business Banking: Best for Free Business Banking
Wave Money integrates a free checking account with easy bookkeeping for freelancers and solopreneurs. Wave is best for those who want to improve cash flow with instant pay and want bookkeeping tools to make tax prep easier.
Wave has no monthly fee or transaction fees, so you keep more of what you earn. You can use the mobile check deposit feature for convenience, and make ACH transfers easily. There are no transaction limits with Wave, and you can also connect third party payment processors.
Wave is another fintech company, with banking provided by Community Federal Savings Bank, Member FDIC. That means your funds are insured for up to $250,000 per account.
TIAA Bank: Best for Business Investments
Besides checking accounts, TIAA Bank offers a variety of banking products for entrepreneurs and gig workers that sets it apart.
If you’re considering business savings accounts, TIAA offers CDs and money market accounts to earn interest at a rate higher than you may get with another account. Currently, TIAA’s one-year business CD offers an APY of 3.75%.
TIAA’s checking accounts offer easy online banking and mobile check deposit, along with personalized service from a business solutions specialist.
LendingClub Bank Tailored Checking: Best for Earning Checking Account Rewards
The LendingClub Bank tailored checking account for freelancers is one of the few banks on our list where you can earn interest on your checking balance, plus 1% cash back rewards when you use your debit card.
Account holders earn 1.5% APY on balances up to $100,000 and 0.10% APY on the portion of your balance that exceeds $100,000.
LendingClub Bank reimburses fees if you use an out-of-network ATM. The bank also supports QuickBooks, Quicken and Mint for budgeting and bookkeeping. You can also send digital invoices and get paid directly to your LendingClub account, making LendingClub Bank Tailored Checking one of the more robust and affordable online banks for freelancers.
Just make sure to maintain an average daily balance of at least $500 to have the monthly fee waived.
How to Choose the Best Bank Account for Your Business
When you’re evaluating business bank accounts, you’ll want to consider your needs and the features that are most important to you.
It should go without saying that you want an account with no monthly fees or no monthly fees. Unless you’re an established business owner, you may also want no minimum balance requirements. You don’t want to get saddled with fees if your business runs into cash flow problems or you have a down month.
If you run a high-volume business, look for a bank account with no transaction limits, no in-network ATM fees, and unlimited ATM fee rebates.
Need a way to manage contracts, collect invoices, and help with taxes?
Your business bank can represent much more than just a place to deposit cash and a means to pay your bills. Many of the best bank accounts on this list also offer freelancer invoicing, tax assistance, and ways to manage contracts.
Budgeting and Savings Features to Look For
When you’re a freelancer, it’s convenient to have an easy way to track your expenses and budget for not just expected costs, but surprise opportunities or financial emergencies.
Just as you should have a personal bank account established with emergency savings, you want a business savings account. In fact, you may want multiple business savings accounts or the ability to divide money into various buckets for known costs – like taxes – and unexpected expenses, such as car repairs or a new phone.
Some budgeting and savings features are nice to have, such as an interest-earning checking account and cash back on debit card purchases.
Why We Chose Lili as the Best Business Bank Account
Lili graces the top of our list because the fintech company offers so many value-added services for entrepreneurs that it’s virtually a one-stop shop for freelancers. However, the other banks on our list for best business accounts have their own benefits you might want to consider.
Should You Use Different Banks for Personal and Business Finance?
If you already have a separate bank account for your personal finance, there is something to be said for opening a business account through the same bank. You may get extra perks and benefits or waived fees. Best of all, it’s easier to use one app to manage all your personal and business banking.
But if you opt for an online financial services company, instead, it is typically easy to transfer funds between accounts. Also, companies like Lili and Bluevine specialize exclusive in business accounts, which means they have services tailored specifically to your needs.
Bottom Line
A lot of factors go into choosing the best bank account for your business checking needs. Knowing your must-haves, nice-t0-haves, and those features that don’t really matter to you can help make the decision easier.
FAQs
What is a business bank account?
A business bank account is a dedicated account separate from your personal accounts that you use to deposit cash, checks, or other customer payments earned through your business. You should also use your business checking account to pay for business expenses.
Do You Need a Business Bank Account if You’re a Freelancer?
Freelancers are not required by law to have a separate business banking account. But if your business is incorporated as an S-corp, C-corp, or LLC, you are required to keep your business and personal accounts separate.
Should You Have a Separate Bank Account If You’re a Freelancer?
Even though it’s not required by law, it’s a good idea to have an account separate from your personal checking account to help you keep track of business income and expenses.
What Makes a Business Bank Account Ideal for Freelancers?
Business bank accounts often have many of the same features as some of the best personal bank accounts. That would include low or no minimum balance requirements, no monthly maintenance fee, no transaction fees, and no hidden fees.
You may also look for features like mobile check deposit, unlimited electronic deposits, and low wire transfer fees if you have a lot of customers, clients, or vendors outside the U.S.
Methodology: How We Select the Best Bank Accounts for Freelancers and Side Hustlers
We evaluated the best bank accounts for freelancers based on the ability to earn interest, monthly maintenance fees, minimum balance requirements, the ease of making cash deposits, customer service, and more.
Some banks are better for freelancers who don’t maintain a high balance or only have a few transactions per month. Entrepreneurs with fast-growing businesses looking to scale may prefer a business checking account with unlimited transactions and the ability to accept credit card payments through the same bank.
Some business owners may want to be able to integrate their Quickbooks accounting system through their bank.
We have banks on this list designed for small business owners, freelancers and side hustlers at every stage of business growth.
It may be nicknamed “the garden state,” but New Jersey isn’t just known for its agriculture. Multiple industries thrive in the state, drawing people looking for career opportunities. The best banks in New Jersey offer plenty of checking and savings account options to help you find the right fit.
9 Best Banks in New Jersey
If you’re in the market for a bank account, the options can feel overwhelming. But whether you’re looking for a local bank, a regional or national bank, or a credit union, there’s a financial institution to fit. Here are the nine best banks in New Jersey to help kick off your search.
1. Valley National Bank
Regional banks like Valley National Bank bring the benefits of a local bank while still offering expanded ATM and branch reach. Valley National Bank has locations throughout New Jersey, as well as in Alabama, Florida, and New York. If you travel outside those areas, though, you’ll pay a $2 fee for using an ATM outside the Valley National Bank network, and that’s in addition to fees charged by the ATM owner.
Currently, Valley National Bank is offering a $250 reward to new checking customers with its My Loyalty Checking. You’ll just need to set up bill pay or have at least one qualifying direct deposit. With My Loyalty Checking, you’ll also have up to $10 in out-of-network ATM fees refunded each month.
Fees:
No monthly maintenance fees
$36 overdraft fee
Balance requirements:
$100 minimum deposit to open
No minimum balance requirements
ATMs:
Fee-free at Valley National Bank ATMs
$2 for each non-Valley National Bank ATM transaction
Interest on balance:
0.85% APY on savings accounts
Up to 5.35% APY on CDs
Up to 1.75% APY on money market savings accounts
Additional perks:
Valley National Bank My Loyalty Checking account offers $250 reward
Teen, college, and business checking accounts
2. Chime
Online banking lets you manage your money from wherever you are. Chime is an online bank that offers banking solutions like mobile check deposit, bill pay, and easy transfers from checking to savings. Chime does work best if you have direct deposit activity each month, though, since its biggest perks require it.
If you’re working to build your credit, one of Chime’s best features is its secured credit card. No credit check is required to set up the card, and you may be able to increase your FICO score by 30 points, on average.
Fees:
No monthly maintenance fees
No overdraft fees
Balance requirements:
No minimum deposit required to open
No minimum balance required
ATMs:
Fee-free at 60,000+ ATMs nationwide
$2.50 out-of-network ATM fee
Interest on balance:
2.00% APY on savings account
Additional perks:
Access to paycheck up to two days early
SpotMe covers up to $200 in overdrafts
3. Capital One
If you’re looking for banking services that follow you wherever you go, national banks can be a great option. Capital One is one of the biggest banks in New Jersey, with 19 branches throughout the state. You’ll get fee-free access to cash at more than 70,000 locations, including MoneyPass and Allpoint ATMs.
One of the biggest benefits of banking with Capital One is that all overdraft fees are waived. You can set up your overdraft protection preferences to either automatically decline transactions or transfer funds from your savings or money market account.
Fees:
No monthly maintenance fees
No overdraft fees
Balance requirements:
No minimum opening deposit
No minimum balance required
ATMs:
Fee-free at Capital One ATMs
Fee-free at any Allpoint or MoneyPass ATM
$2 out-of-network ATM fee
Interest on balance:
Up to 4.10% APY on savings accounts
Up to 4.75% APY on CDs
Additional perks:
Cash deposit access at any CVS location
Some branches include cafés with Wi-Fi
4. Chase Bank
Small business owners in New Jersey should take a look at Chase, a national bank with 190 branches throughout the state. Business checking accounts can earn up to $500 in bonuses, and business credit cards currently get a $750 bonus cash back with qualifying activities. Chase also offers a variety of business loans, including lines of credit and commercial financing.
But bonuses aren’t limited to large and small business owners. Currently, new Chase Total Checking account customers can earn a $200 bonus with direct deposit. You’ll get access to personal service at branches across the country, including cafés, which offer free Wi-Fi and gourmet coffee.
Fees:
$12 monthly fee (waived with requirements)
$34 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum balance
ATMs:
Fee-free at 15,000+ Chase ATMs
$3-$5 out-of-network ATM fee
Interest on balance:
0.01% APY on savings accounts
Up to 3.75% APY on CDs
Additional perks:
$200 cash bonus for new checking account customers
Autosave feature helps you set money aside
5. PNC Bank
Another option if you prefer national banks is PNC Bank, which has 193 branches in New Jersey. You’ll have fee-free access not only to PNC ATMs, but you can also withdraw cash at more than 60,000 partner ATMs nationwide.
PNC’s basic checking account is Virtual Wallet, which comes with no monthly fees as long as you receive at least $500 in direct deposits or keep a balance of at least $500 across all your PNC checking or savings accounts. Currently, PNC is paying a $50 bonus for its lower-tier account, but if you go with Virtual Wallet with Performance Spend or Performance Select, your bonus increases to $200 or $400, respectively.
Fees:
$7 monthly fee (waived with requirements)
$36 overdraft fee
Balance requirements:
$25 minimum opening deposit
No minimum balance
ATMs:
Fee-free at PNC ATMs
Fee-free at 60,000 partner ATMs nationwide
$3 out-of-network ATM fee
Interest on balance:
Up to 0.03% APY on savings accounts
Up to 4.00% APY on CDs
Additional perks:
Up to $400 bonus for new Virtual Wallet checking accounts
Wealth management services built into app
6. Wells Fargo
Wells Fargo is another of many national banks in New Jersey. You’ll get fee-free cash access at more than 12,000 Wells Fargo ATMs nationwide. Currently, Wells Fargo is offering a $300 bonus for opening a new checking account and receiving $1,000 or more in qualifying direct deposits.
If you’re in the market for a new savings account, Wells Fargo has a deal there, too. You can earn a $525 bonus on a new savings account as long as you add $25,000 to the account in the first 30 days. You’ll need to maintain that minimum balance for at least 90 days to receive the bonus.
Fees:
$10 monthly fee (waived with requirements)
$35 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum balance
ATMs:
Fee-free at Wells Fargo ATMs nationwide
$2.50 out-of-network ATM fee
Interest on balance:
Up to 2.51% APY on savings accounts
Up to 4.75% APY on CDs
Additional perks:
$300 bonus on new checking accounts
Robust mobile banking features
7. TD Bank
With nearly 200 locations in New Jersey, plus branches and ATMs nationwide, TD Bank is one of the best banks in New Jersey for its mobile and online banking experience. TD offers a variety of deposit accounts, as well as personal loans and credit cards.
TD has multiple checking account options, including the Essential Bank Account, which comes with a $4.95 service fee and no minimum requirements. The fee is waived for those between the ages of 13 and 17, so this could be a great starter account for your high schooler. TD offers higher-than-average interest rates on savings accounts and CDs, so it’s worth checking out for that reason alone.
Fees:
$4.95 monthly service fee
No overdraft fees
Balance requirements:
No minimum deposit to open
No minimum balance
ATMs:
Fee-free at 2,600 TD Bank ATMs nationwide
$3 out-of-network ATM fee
Interest on balance:
Up to 3.51% APY on savings accounts
Up to 5.00% APY on CDs
Additional perks:
Live online customer service available 24 hours a day
$200 bonus for new checking accounts
8. GO2bank
Another online banking option is GO2bank, which offers all the features you need to manage your account online. The checking account is fee-free as long as you have an electronic deposit coming in each statement period. This qualifying deposit also gives you access to your paycheck a couple of days early.
GO2bank is one of many online bank accounts, but one differentiating feature is its high-yield savings account. You’ll earn 4.50% APY on your savings account balance, but that interest is limited to the first $5,000 in combined balances. Any funds above that amount won’t earn interest at all.
Fees:
$5 monthly service fee (waived with requirements)
$15 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance
ATMs:
No ATM fees at Allpoint ATMs nationwide
$3 out-of-network ATM fee
Interest on balance:
4.50% APY on savings accounts
Additional perks:
Cash deposit access at 90,000+ retailers nationwide
Secured credit card helps you build credit with no credit check required
9. American Heritage Credit Union
American Heritage Credit Union is a Pennsylvania credit union with a branch in Cherry Hill, New Jersey. Like many credit unions, American Heritage has membership requirements. In this case, you’ll need to live, work, worship, or go to school in one of the approved Philadelphia-area communities, work for one of the workplace partners, or be related to a qualifying member. However, anyone can join by simply becoming a member of the Kids-N-Hope Foundation.
There are some reasons to sign up for American Heritage even if you don’t have a branch nearby. American Heritage offers great deals on accounts for consumers and small business owners, and you’ll also get ATM access at more than 30,000 locations nationwide.
Fees:
No monthly fees
$10-$15 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance
ATMs:
Fee-free access at American Heritage ATMs
Fee-free access to 30,000+ ATMs nationwide
Up to 10 out-of-network ATM fees reimbursed monthly
Interest on balance:
Up to 3.55% APY on savings accounts
Up to 5.00% APY on CDs
Additional perks:
Competitive interest rates on auto and home loans
Wide range of business banking services
Frequently Asked Questions
Banking solutions come in a variety of formats, so it’s only natural you’ll have some questions. Here are some frequently asked questions about the best banks in New Jersey.
What should I expect from a bank in New Jersey?
From local New Jersey banks to national banks with branches in the state, there’s no shortage of options. But all these choices mean you can easily sort through the best banks to find the right one for you.
Customer service is an important feature of any New Jersey bank. Whether this means the in-person experience you get with local banks or around-the-clock service via online chat, it’s important that a bank offer a method to suit your preferences. If you’re comparing the same account terms across multiple banks and credit unions, this is one factor that can become a final decider.
What do you need to open a bank account with banks in NJ?
If you’re opening a new checking or savings account in New Jersey, there are a few things you’ll need. You’ll save time and trouble by gathering all your documentation before applying.
For online and mobile banking options, you may need to either scan and upload, snap a photo, or mail a photo ID. Some of the best checking accounts will also require you to deposit money to open them. This can be anywhere from $10 to $100. Make sure you have the funds to make this deposit at account opening.
Do banks in New Jersey have online accounts?
Some of the best financial institutions in New Jersey aren’t located in the state at all. You can find online checking accounts that pay more interest and require fewer fees than the same accounts from a national, regional, or local bank.
If saving money is your priority, don’t rule out online banking for those, either. Savings accounts, CDs, and money market accounts will often accrue interest at an interest rate that’s higher than what you’d earn with accounts at local Jersey banks or banks with branches in the state.
Where can you open a savings account in New Jersey?
Although you can find a high-yield checking account that pays interest on your balance, you’ll usually get a better deal on savings. There are plenty of local, national, and regional banks that pay a competitive interest rate, but some of the best deals come from mobile banking apps that have no local presence.
If you’d prefer a brick-and-mortar option, though, pay attention to interest rates. You can find savings rates in the 4% to 5% range online, so when you’re looking at a particular account, keep that in mind. It’s not unusual for consumers to have checking accounts locally but move their savings to an online-only bank for a better deal.
How much tax do you pay in New Jersey for interest you earned?
When you earn interest on your bank account balances, you’ll have to pay taxes. All your banking interest earned has to be reported on your federal taxes each year. This will be summarized on Form 1099-INT, which your bank will send at tax time.
New Jersey residents also pay state income tax. Your income interest is lumped in with your other income and taxed at the current rates. New Jersey uses a graduated tax rate. The higher your income, the more you’ll pay, with a maximum of 10.75%.
Whether you go with mobile banking or a bank with local branches, it’s important to find the bank that best fits your needs. Some banks make cash deposits easy while others give you everything you need to manage your money. Interest rates and fees can be the final decider when you’re choosing a partner for your New Jersey banking needs.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
Unless you have hundreds of thousands of dollars (or more) in cash to save or invest, big banks don’t want your money. They won’t tell you that directly, but they make it plain with paltry yields on standard savings accounts and high asset requirements to avoid common banking fees.
Fortunately, high-yield savings accounts abound, mainly at online and community banks that (still) seem to put regular customers first. The Upgrade Premier Savings account is among the best of the bunch, at least if your top priority is getting the most for your money.
Upgrade Premier Savings isn’t perfect, but it’s a big step up from many savings accounts. Get to know its features, capabilities, and pros and cons to decide if it’s right for you.
What Is the Upgrade Premier Savings Account?
The Upgrade Premier Savings account is a high-yield online savings account with no minimum balance to open and no monthly or annual maintenance fees. It has one of the highest savings yields on the market (currently 4.81% APY on balances above $1,000) and FDIC insurance up to $250,000 through Upgrade’s banking partner, Cross River Bank.
You can open and fund an Upgrade Premier Savings account without a corresponding checking account with Upgrade. In addition to its checking account, Upgrade also offers credit cards and personal loans.
What Sets the Upgrade Premier Savings Account Apart?
The Upgrade Premier Savings account stands out for a few reasons, not all of them good:
Very high yield on eligible balances. Upgrade Premier Savings has an industry-leading yield on eligible balances. As long as you can meet the minimum balance requirement, it’s difficult to do better.
No fees or minimums to open or maintain. You can fund your new Upgrade Premier Savings Account in any amount, and there’s no ongoing maintenance fee to worry about.
Minimum balance required to earn interest. You do need to keep at least $1,000 in your account to earn interest on the balance. Otherwise, your interest rate drops to zero on all balances.
Key Features of the Upgrade Premier Savings Account
The Upgrade Premier Savings Account is a basic (if generous) savings account, but it has some features and capabilities worth spelling out in detail.
Account Yield
Upgrade Premier Savings pays 4.81% APY in any statement cycle during which you maintain a balance of $1,000 or more. The interest rate applies to the whole balance, not just the portion above $1,000.
If your balance drops below $1,000 in a statement cycle, you earn no interest on the entire balance for the period. So it’s critical to keep at least $1,000 in your account at all times.
Account Fees & Minimums
This account has no monthly or annual maintenance fees. There’s no minimum to open and fund an account either. But because you earn no interest if your balance drops below $1,000, that’s the effective minimum balance.
Transfer Limits
Upgrade sets inbound and outbound transfer limits on all Premier Savings accounts. The actual limits vary by customer and may depend on your creditworthiness — Upgrade doesn’t explain how they’re set. But they always fall within these ranges:
Between two and seven inbound transfers during any seven-day period
Between $2,000 and $15,000 in total inbound transfer dollar value during any seven-day period, regardless of the number of transfers
Between $2,000 and $15,000 in total outbound transfer dollar value during any seven-day period
There’s no limit on the number of outbound transfers you can make as long as you don’t exceed your allotted dollar value during any seven-day period.
Ownership Type
Upgrade allows only individual account holders. You can’t open a Premier Savings account jointly with a spouse, domestic partner, or anyone else.
Mobile Features
Upgrade has a robust mobile app and mobile banking dashboard that can do anything the regular online dashboard can. However, the Premier Savings account lacks some mobile-friendly features common in other online bank accounts, such as mobile check deposit and person-to-person transfers.
Deposit Insurance
Upgrade Premier Savings offers FDIC insurance through its banking partner, Cross River Bank. Insurance covers balances up to $250,000.
Pros & Cons
Upgrade Premier Savings has some clear advantages and disadvantages. The upsides include no maintenance fees and an excellent yield, while the downsides include a minimum balance to earn interest and limited options to access your funds.
Excellent yield
No minimum balance to open
No maintenance fees
Minimum balance required to earn interest
No ATM card or mobile check deposit
Transfer limits may affect usability
Pros
Upgrade Premier Savings offers one of the best yields in the business and has no maintenance fees or minimums. It’s part of a much larger universe of Upgrade financial products too.
Industry-leading yield. This account’s yield (currently 4.81% APY when you keep a balance of $1,000 or more) is better than the vast majority of competing savings accounts.
No minimum balance to open. You can open this account with any amount of money, though keep the minimum interest-earning balance in mind.
No maintenance fees. Upgrade charges no monthly or annual maintenance fees on this account.
Easy to manage online. Upgrade Premier Savings is a straightforward savings account that’s easy to manage online with the Upgrade online dashboard or mobile app.
Links with a suite of other financial accounts and products from Upgrade. Premier Savings isn’t the main attraction at Upgrade. It got its start as a personal loan and credit line provider and now offers a slew of credit cards alongside those products. It has a generous rewards checking account as well.
Cons
Upgrade Premier Savings falls short on its minimum balance to earn interest, limited withdrawal and deposit options, and money transfer limits.
$1,000 minimum balance to earn interest. You need to keep at least $1,000 in your account to earn interest. If your balance falls below that threshold, you earn no interest for the entire statement period.
No ATM card or mobile check deposit. Electronic transfer is the only way to deposit or withdraw funds into or out of your Upgrade Premier Savings account. This might not be a deal-breaker, but it would be nice to have a mobile check deposit option at least.
Transfer limits could impact your ability to move money. Upgrade’s inbound and outbound transfer limits probably won’t affect your day-to-day money management, but they could come into play if you need to move a lot of money at once — for example, to make a down payment on a new house.
How the Upgrade Premier Savings Account Stacks Up
Before you apply for the Upgrade Premier Savings account, see how it compares to another popular option with a two-tiered interest rate: the Platinum Savings account from CIT Bank.
Upgrade Premier Savings
CIT Bank Platinum Savings
Maximum Yield
4.81% APY
Up to 4.75% APY
Minimum Yield
None
0.25% APY
Minimum Balance
$0
$100
Minimum Interest Balance
$1,000
$5,000
Maintenance Fee
$0
$0
Upgrade Premier Savings has a slightly better maximum yield and a lower balance threshold to earn that yield, so it’s a better fit for most users. CIT Bank Platinum Savings only makes sense if you want to earn at least some interest when your balance is below the high-yield threshold.
Final Word
The Upgrade Premier Savings account is one of the best high-yield savings accounts on the market right now. That’s because it does what you’d expect a high-yield savings account to do: pay an extremely competitive interest rate on eligible balances.
Otherwise, Upgrade Premier Savings isn’t especially notable. And its minimum balance to earn interest is a problem for savers with limited cash. But once you have at least $1,000 to put away, it’s difficult to do better.
The Annual Percentage Yield (“APY”) for the Premier Savings account is variable and may change at any time. There is no minimum balance to open your account, but you will only earn the APY on days when the closing balance of your Premiere Savings account is or exceeds $1,000. On days where the account closing balance drops below $1,000, the APY will be 0%.
There are no account fees, overdraft fees, or transfer fees associated with Premier Savings accounts.
Upgrade is a financial technology company, not a bank. Premier Savings accounts are provided by Cross River Bank, Member FDIC. Upgrade VISA® Debit Cards issued by Cross River Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Personal Loans made by Upgrade’s bank partners. Personal Credit Lines are issued by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. The Upgrade Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Upgrade Premier Savings Account
The Upgrade Premier Savings account has a higher yield than the vast majority of high-yield savings accounts. If you can clear the $1,000 minimum balance threshold to earn interest and don’t mind adding and withdrawing funds via electronic transfer, it’s a superior online savings account.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Even if you’ve never written a check, yes, you still need a checking account.
That’s because checking accounts give you the most flexibility in your banking. They’re generally easier and better for bill paying, ATM withdrawals, debit purchases, and, yes, writing and cashing checks. Unlike a savings account, which is meant for stashing your money and earning interest, checking accounts are for your day-to-day finances.
However, many banks require a substantial minimum deposit to open a checking account. Which means if you’re tight on funds, you’re out of luck.
That said, there are plenty of checking accounts out there that have no minimum deposit requirements (or, at the very least, low minimum requirements). To help you narrow down your search, we’ve rounded up the best checking accounts based on the following criteria:
No or low minimum deposit requirements
No or low fees
Rewards like cash back or the chance to earn bonus interest
What’s Ahead:
Best Checking Accounts with No Minimum Deposits
Chime® Checking Account: Best for Building Savings
APY: None
Minimum deposit requirement: None
Minimum balance requirement: None
Monthly fee: None2
There’s no minimum deposit required to sign up for the Chime Checking Account, and once you’ve opened your account, you won’t run into any monthly fees or future minimum balance requirements either.
Chime provides an impressive and comprehensive online banking experience.* With their highly rated mobile app, customers can securely transfer funds and set up early direct deposit to receive their paychecks up to two days early.3 Chime also offers fee-free overdraft coverage up to $200 (conditions apply)5, and customers can withdraw cash from Chime’s network of more than 60,000+ ATMs for free as well.6
However, perhaps the greatest features of this account are the automatic savings options. Whenever you use your Chime Visa® Debit Card, Chime will round up your transaction to the nearest dollar amount and transfer the difference into your Chime Savings Account.^ You can also set up an automatic transfer that moves as much as 10% of your paycheck into your savings with every direct deposit of $500 or more.1
Learn more about Chime or read our full review.
* 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. ^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account. 1 Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account. 2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account. 3 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. 5 Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions. 6 Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
Juno: Best for Those Interested in Cryptocurrency
APY: 1.20% bonus rate with Juno Basic; 2.15% bonus rate with Juno Metal
Minimum deposit requirement: None
Minimum balance requirement: None
Monthly fee: None
Juno is an online checking account that lets you get started with no opening deposit or minimum balance requirements.
Your checking is fee-free, which means no monthly maintenance fees, no overdraft fees, and free ATM access at 80,000+ locations (including Walgreens, CVS, and more).
Juno is also an excellent option for individuals interested in cryptocurrency. With Juno, users can earn, invest, and spend both cash and crypto. Start with a Juno Basic account, and you’ll receive a 1.20% bonus rate on checking account balances up to $5,000, after which it switches to 0.25%. If you ever want to upgrade to Juno Metal, all you need to do is set up a direct deposit of $250 or more. With Juno Metal, your bonus rate will be bumped up to 2.15% on balances up to $100,000. You’ll earn 5% cash back on popular brands like Amazon and Walmart (on up to $500 in purchases each year for Basic, and up to $6,000 in purchases for Metal).
As an added perk, right now Juno is offering a stellar sign-up bonus for their account holders: get $100 following your first direct deposit of $250 or more (conditions apply).
Learn more about Juno or read our full review.
FNBO Direct Checking Account: Best for Online Convenience
APY: None with the free FNBO Direct Checking Account; potential to earn interest with FNBO Premier Checking Account (varies and not available in some locations)
Minimum deposit requirement: None
Minimum balance requirement: None
Monthly fee: None
FNBO Direct, the online extension of the First National Bank of Omaha, offers a free checking account with no opening deposit required and no minimum balance.
FNBO is one of the more established banks mentioned in this list, with more than 160 years under its belt. This financial institution has worked hard to build a seamless online platform, and it shows. The mobile app and website are easy to navigate, offering a variety of personal, business, commercial, and wealth products.
When it comes to fees, FNBO continues to shine. FNBO waives many of the fees associated with a standard checking account, such as incoming wire transfer fees and monthly maintenance fees. Some FNBO customers can even earn interest through the bank’s Premier Checking Account option (varies and not available in some locations).
Learn more about FNBO or read our full review.
Capital One 360 Checking Account: Best for In-Person Banking
APY: 0.10%
Minimum deposit requirement: None
Minimum balance requirement: None
Monthly fee: None
The Capital One 360 Checking Account is another free checking account with no opening deposit required. However, you will need to make a deposit within 60 days of opening your account to keep it open.
Capital One differs from some competitors in this list for a couple of reasons. For one, it’s one of the few options that provides physical branches for those customers who want to work with a real person. That said, Capital One has also created a seamless digital experience for its customers. As a checking account holder, you can deposit checks, lock/unlock your debit card, and get real-time alerts about your account activity all on your phone. Additionally, the Capital One 360 Checking Account rewards its customers with a 0.10% APY interest rate, which is not offered by many checking accounts.
As extra icing on the cake, Capital One’s no minimum deposit checking account has surprisingly low fees for a traditional bank, including no monthly fees, no foreign transaction fees, no incoming wire transfer fees, and more. Not to mention, if you overdraw your account, Capital One provides three fee-free overdraft options to help you out.
Learn more about the Capital One 360 Checking Account.
Axos Essential Checking Account: Best for Multiple Accounts
APY: None (although you can earn interest with an alternative Axos checking account)
Minimum deposit requirement: None
Minimum balance requirement: None
Monthly fee: None
Axos is an online-only bank with multiple financial products available, including CDs, loans, and investment accounts. Among these options is the free Axos Essential Checking Account, which has no monthly service fee and no minimum deposit requirement. And, after you’ve opened the account, you won’t need to maintain any minimum balance either.
Since Axos operates entirely online, they offer a number of convenient features for their customers, such as automatic bill pay, early direct deposit, and even the ability to pay friends and family directly from your account. You won’t find any overdraft or non-sufficient funds (NSF) fees with this account, and you’ll also receive unlimited reimbursements on domestic ATM fees.
While you can’t earn interest or rewards with the Axos Essential Checking Account, the opportunity is available with some alternative Axos checking accounts, such as the Rewards Checking Account or their CashBack Checking Account.
Learn more about the Axos Essential Checking Account or read our full review.
Ally Interest Checking Account: Best for Earning Interest
APY: Up to 0.25%
Minimum deposit requirement: None
Minimum balance requirement: None
Monthly fee: None
With the Ally Interest Checking Account, you won’t pay a monthly service fee or deal with pesky minimum deposit and minimum balance requirements.
One of the many benefits of Ally’s free checking account is that this option makes it easy to save money. Thanks to convenient offerings like overdraft coverage and reimbursements for out-of network ATMs up to $10 per statement cycle, you won’t lose money through excessive fees. Not to mention, Ally — like Chime — has a round-up feature to help you save money without lifting a finger.
As another online-only banking solution, Ally excels in the web and mobile world, making it easy to complete a number of tasks, such as transferring funds, paying bills, and depositing checks. Unfortunately, this also means they can’t help if you want to deposit cash or visit a physical branch.
With all this said, the Ally Interest Checking Account option stands out among competitors for one reason in particular. Hint: it’s in the name. Ally offers a rare opportunity for checking account holders to earn an impressive rate of 0.25% APR. That means you’ll not only save money with no fees and automatic savings, you’ll also earn money along the way!
Learn more about the Ally Interest Checking Account or read our full review.
What Is a Checking Account with “No Opening Deposit”?
Accounts with “no opening deposit” mean exactly what they sound like: you don’t have to put down a single dollar to open the account.
Unfortunately, sometimes such accounts also come with hefty monthly fees, to make up for the $0 minimum deposit. That’s why we’ve picked the ones above — they’re all fee-free or have very low and reasonable fees.
Before you open any checking account, make sure to read the terms, so you know what fees you’ll be responsible for.
Pros & Cons of Checking Accounts with No Opening Deposit
Pros:
Low start-up costs — You won’t need to have too much cash on hand to get started.
Often low fees — Most accounts with minimal opening deposit requirements have low fees.
A safe place to store accessible cash — A checking account can help to keep your finances organized.
Cons:
Missing out on higher APYs — There are checking accounts with higher APYs available with higher minimum deposit requirements.
May not be able to work with brick-and-mortar banks — Many of these checking accounts are offered by online banks.
Missing out on potential rewards — Other checking accounts with higher balance requirements might have better rewards.
Is a Checking Account with No Opening Deposit Right for Me?
A checking account with no opening deposit might be right for you if you are just starting out. You might not have the extra funds on-hand to set up an account with a high opening deposit requirement. Plus, many of these accounts offer useful features for anyone who needs a checking account.
You might want to look at other options if you have ample funds to open a checking account elsewhere. With more funding available, you might be able to qualify for a high-yield checking account that will provide more long-term rewards.
Read more: Best High-Yield Checking Accounts
How to Choose a Checking Account with No Minimum Deposit
Here are some tips to consider when shopping around for a checking account with no minimum deposit.
Keep an Eye on Fees
Checking accounts may often try to bury their hidden fees deep into the terms. Before you move forward with an account, make sure you aren’t taking on any fees that don’t work for you.
Look past the monthly fee and consider other fees such as ATM fees or wire fees that could cut into your bottom line.
Beware of Transaction Limits
Transaction limits on a checking account can cramp your spending style throughout the month. Don’t open an account that restricts your transactions too much.
Read more: Does Your Debit Card Have a Daily Spending Limit?
Ensure the Checking Account Suits Your Lifestyle
There are checking accounts available at a variety of financial institutions. Consider whether you want an online experience or an in-person service. As you make your selection, find the account that suits your preferences.
Make Sure the Bank Is FDIC-Insured
You don’t want to work with a financial institution that is not insured by the FDIC. Otherwise, you could lose your savings if something went horribly wrong for the bank.
Research the Security Features Available
If you are working with an online checking account, it is important to make sure that the security features are top-notch. Without great security, the bank could be leaving your funds at risk.
Read more: How to Choose an Online Bank: 7 Features to Look For
How to Open a Checking Account with No Minimum Deposit
Opening a checking account with no minimum deposit required is easy. Depending on your bank or credit union, you can do it online, over the phone, or in person. The process is similar to opening a regular checking account, but you may need to provide additional information to open an account with no minimum deposit.
You’ll likely need to provide the bank with the following information:
Current address (and possibly your previous address(es) if you’ve moved recently)
Date of birth
Social Security number
A piece of government-issued ID, like a driver’s license, passport, or military ID
Contact information, including phone number and/or email address
You may also need to provide information about your employment, income, and assets. The bank will use this information to determine if you’re eligible for an account with no minimum deposit. Be sure to check if there are any fees associated with the account, such as monthly service charges, annual fees, or minimum balance requirements.
Even though no minimum deposit is required, you will need to deposit money into the account at some point. (After all, that’s the whole point of having a bank account!) The timing and amount varies with each bank, but within 30 days is a good rule of thumb.
You can do this a few different ways:
Deposit a check or cash. You can do this in-person at the bank, or at an ATM.
Set up direct deposit with your employer. Fill out your company’s paperwork to get the money moving.
Transfer money from another account. This could be your own account (if you have another one) or from a family member’s or friend’s account.
Once you’ve deposited money into your account, you can start using it just like any other checking account. This includes writing checks, using a debit card, and making online and mobile payments. Be sure to keep track of your account balance so you don’t overdraw and incur any penalties!
Summary
A checking account with no minimum deposit is a great option if you’re short on funds right now, but want to set up an account for your day-to-day spending.
Before you commit to one, do your research and compare your options. Check for hidden fees or limits, and don’t forget to add money into it as soon as you can!
New Hampshire is rich in culture and history, but it’s also packed with businesses and families. Finding the right bank can be essential to achieving your financial goals. Whether you’re setting up a new checking account or considering changing banks, there are a few things to consider.
10 Best Banks in New Hampshire
New Hampshire is packed with great banks, each with its own benefits. Your first priority should be verifying that a bank is insured by the Federal Deposit Insurance Corporation. Once you’ve checked that box, you can look for features like the minimum balance required for free checking or competitive rates on savings accounts and auto loans. Below are some of the top banks in New Hampshire.
1. TD Bank
TD Bank is one of the biggest national banks with branch locations in New Hampshire. You’ll find 1,100 branches and 2,600 ATMs spread across the East Coast, including 58 in New Hampshire. If in-person banking is your priority, TD can compete with even the best local bank, thanks to its extended hours.
One of the standout features of TD Bank is its debit card replacement program. If you lose your card, you can typically get a replacement card at a local branch the next day. Some locations even offer curbside service for picking up your new card.
Pros:
Plenty of branches and ATMs in the service area
$200 bonus for new checking accounts with qualifying direct deposit
Next-day replacement of lost debit card
Cons:
$100 daily balance to waive monthly maintenance fees on checking accounts
Not all states have TD Bank ATMs
Savings accounts have lower-than-average interest rates
2. Chime
Chime is an online banking option with competitive offerings. The checking account comes with no monthly fees or minimum balances, and you’ll get overdraft coverage of up to $200 if you have qualifying direct deposit set up. The savings account offers an interest rate of 2.00% APY, which is lower than some online bank competitors but higher than what you’ll find with many national and local banks.
Like many online-only bank accounts, though, you’ll need to think about access to your bank account while traveling. Chime gives you access to cash at more than 60,000 ATMs across the country, but if you occasionally need to deposit cash, Chime might not be the best bank for you.
Pros:
No minimum balance requirements or monthly fees
Fee-free ATM withdrawals at more than 60,000 ATMs nationwide
SpotMe covers up to $200 in overdrafts
Cons:
No cash deposit options
Lower interest rates on savings accounts than other online banking options
Direct deposit required for maximum benefits
3. GO2bank
Online banks have plenty to offer, particularly if mobile banking is your priority. Like other online banking solutions, GO2bank offers the best deal if you’re on direct deposit. You’ll need qualifying electronic deposits and activity to get the highest level of fee-free overdraft protection.
If you’re looking to build credit, GO2bank offers a secured credit card. There’s no credit check required. You’ll transfer a $100 deposit from your checking account to secure the card and cover your purchases.
Pros:
No monthly maintenance fee
Deposit cash at 90,000+ retailers nationwide
Secured credit card helps you build credit
Cons:
Direct deposit required to waive monthly service fee
Balances above $5,000 in savings accounts don’t earn interest
4. Citizens Bank
With more than 1,000 branch locations across the Northeast, as well as 3,000 ATMs, Citizens Bank is a great option if you’re looking for a New Hampshire bank with locations outside the state. Citizens offers free checking accounts to those who have at least one monthly deposit.
Citizens Bank customers have access to fee-free transactions at ATMs within its network, but if you travel outside the service area, it will cost you. Citizens charges a fee in addition to what you’ll pay the third-party ATM owner.
Pros:
Citizens Virtual Assistant provides access to live tellers at select ATMs
Early access to direct deposit
Free checking account as long as you set up direct deposit
Cons:
Fee-free ATM withdrawals limited to Citizens Bank locations
Rates on savings accounts and CDs are lower than some competitors
5. Holy Rosary Credit Union
While you’re considering local New Hampshire banks, don’t forget credit unions, which come with plenty of perks of their own. Holy Rosary Credit Union is open to anyone who lives, works, attends school, or worships in New Hampshire or York County, Maine.
Like many credit unions, Holy Rosary offers competitive rates on personal loans and mortgages, so having deposit accounts with the bank can help you save money as you make major purchases over the years.
Another feature typically found with membership-limited financial institutions is higher rates on your balance. Holy Rosary lives up to those expectations with its savings accounts and CDs, but money market accounts and IRAs aren’t quite as competitive as those rates.
Pros:
Competitive rates on loans
Access to cash at 30,000+ ATMs nationwide
Great rates on CDs and savings accounts
Cons:
Limited branches
Money market account rates lower than some competitors
6. Bank of America
National banks bring plenty of benefits, including access to cash and branches while traveling. If that’s a priority, Bank of America is one of the largest banks in the country. The impressive app makes activities like mobile check deposit, bill pay, and funds transfers easy.
Another impressive feature is Bank of America’s up to 4.75% annual percentage yield on CDs, which is higher than many traditional banks. Although Bank of America still has an overdraft fee, it dropped from $35 to $10 per transaction last year. You can sign up for Balance Connect overdraft protection, which moves money from your other accounts when you’re overdrawn.
Pros:
Competitive interest rates on CDs
Robust mobile banking services
Preferred Rewards members get rewards and perks
Cons:
Lower interest rates on savings accounts than many competitors
Requirements to waive monthly service fees on savings accounts
7. Bank of New Hampshire
For almost two centuries, the Bank of New Hampshire has served communities that include New Hampshire and Southern Maine. You’ll find 21 branches throughout the service area, along with fee-free access to cash at any Allpoint ATM nationwide.
If you’re looking for that personal banking service experience, you’ll find bank branches throughout the service area. There are several checking account options, including a fee-free option as long as you have at least one qualifying deposit monthly.
Pros:
Monthly maintenance fees on checking waived with direct deposit or at least one mobile check deposit
Fee-free cash access at 55,000 Allpoint ATMs nationwide
Competitive rates on CDs
Cons:
Low interest rates on savings accounts
Bank branches limited to New Hampshire and Southern Maine
Mobile app not as robust as competitors
8. Digital Federal Credit Union
Digital Federal Credit Union serves New Hampshire and Massachusetts, with fee-free access to cash at Co-Op ATMs nationwide. That same network also offers branch access while traveling outside the service area. You’ll just need to look at the branch locator to find one near you.
Membership is limited to those who work for employers and live in communities on the approved list. However, you may qualify if your employer has a presence there, or if you have a family member in the area. Since Digital Federal Credit Union has great financial products and full-featured mobile services, it can serve like online banks do in giving you the best bang for your banking buck.
Pros:
Fee-free checking offers 0.20% APY
Higher rates on savings than most financial institutions
Competitive rates on loans
Cons:
Strict membership requirements
Charges overdraft fees
9. Enterprise Bank
Enterprise Bank is a New Hampshire Bank that’s headquartered in Massachusetts. This local bank offers multiple accounts, including checking accounts with easily waived fees. Enterprise’s Rewards Checking lets you accrue points on your debit purchases.
One downside of Enterprise Bank is its limited ATM service area. If you regularly travel outside New Hampshire and Maine, you’ll want an account that reimburses third-party ATM fees each month. The basic account requires a minimum daily balance of $250 to have up to $5 in monthly ATM fees refunded.
Pros:
Multiple small business banking features
Wealth management services available
Monthly maintenance fee waived with one monthly deposit
Cons:
$50 minimum deposit required to open
Limited service area
10. M&T Bank
A well-known New Hampshire bank, People’s United Bank, joined the M&T Bank family in 2021, so you’ll find a heavy M&T Bank presence in the state. People’s United Bank migrated all its customer accounts to M&T, which now offers 30 branches in the state. You’ll find multiple checking accounts, including a fee-free option.
Small business owners may want to consider M&T Bank for its robust business offerings. Business credit cards come with rewards for purchases, and entrepreneurs will find a variety of loan options and cash management services.
Pros:
Competitive rates on CDs
Rewards-earning personal and business credit cards
Wide range of business banking services
Cons:
Limited ATM service area
Lower interest rates on savings accounts than other online banking options
Fee-free overdraft protection only available to higher-tier accounts
What to Look for in a New Hampshire Bank
When it comes to personal finance, individual needs vary. You might need conveniences like online bill pay and mobile check deposit, for instance, while someone else prefers access to physical locations for that personalized banking experience. It’s likely your ideal bank operates in New Hampshire, but first, you need to identify what matters most to you.
Access to Funds
Despite the conveniences of managing your account online, online-only banks can fall short. Your best local bank, for instance, may make it easy to withdraw and deposit cash while you’re in town.
But what about when you travel? No matter which bank you choose, it’s important to make sure you’ll be able to withdraw cash and get help when you’re away from home. Some local and online banks offer nationwide access through partnerships with ATM networks or co-ops.
Other Accounts Available
If you prefer a full-service banking solution, pay attention to other accounts the bank offers. Someday you might open a small business, for example, and having a bank that offers solutions for that can help.
But even more important are the savings vehicles a bank offers. A bank that offers competitive rates on money market accounts and retirement accounts could be a better option than one that cuts fees but has low rates.
Finding a great bank in New Hampshire doesn’t have to be challenging. Pay attention to the amenities and fees charged by each bank and narrow down the options to those that will best meet your needs.
Odds are you hold at least some, if not all, of your money in a checking or savings account (or both).
Odds are you have at least one credit card (if you don’t, you should remedy that ASAP).
Odds are you have, or have had at one time, some type of loan — be it a student loan, an auto loan, a mortgage, or perhaps all of the above.
While you most certainly recognize these as products offered by banking institutions, you may not have known that none of them are free. Banks have to stay afloat somehow, and they do so in subtle ways like monthly maintenance fees on your checking account or interest on your auto loan.
Below, we’ll cover the ways banks earn money so they can continue to help you manage yours.
What’s Ahead:
How do banks make money?
When you think of a bank, what comes to mind? Checking accounts? Credit cards? Loans? Banks provide a wide range of services, but the most prevalent (and the most relevant to me and you) fall under two categories: money held for customers and money loaned to customers.
Banks need to earn some sort of revenue from these services, and they do so in two primary ways.
Fees
Fees are the main way banks make money on the cash they hold for customers.
If your checking account has a monthly maintenance fee, for example, it’s part of that bank’s income. If you recently traveled overseas, you may have noticed a fee for using your credit card abroad. This is a foreign transaction fee, and it’s another means of money-making.
Here are some examples of bank fees, many of which you’ve probably paid:
Monthly maintenance fees
Credit card fees
ATM fees
Foreign transaction fees
Overdraft fees
Interchange fees
Origination fees
Late fees
And so on…
Read more: How to stop paying ATM fees
Interest
Interest is how banks make money back on the cash they loan to individuals and businesses.
When you borrow money from your local bank to buy a new car, for example, the bank isn’t doing you a favor; they’re providing a service, and you have to pay for that service. The primary way you repay the bank for loaning you money is through interest.
Some of the products banks charge interest on include the following:
Home loans
Auto loans
Personal loans
Business loans
Student loans
Payday loans
Credit card debt
And so on…
Other bank income streams
While banks make a significant chunk of their income through various fees and interest, their revenue is truthfully much more diverse.
Banks also provide capital markets services, which essentially means they work with investors and businesses who need help with a range of financial activities. Some clients may need help funding a project. Others may need assistance with underwriting and/or building equity. Another business may require the support of an advisor or team of advisors through a merger or an acquisition.
Capital markets services are diverse, but they’re also inconsistent. This is why many banks lean more heavily on revenue from fees and interest.
Do all banks make money in the same ways?
In short, no.
While many banks bring in the bulk of their income through interest and fees, the weight they place on different income streams varies. This is because banks offer two types of services: commercial and investment.
Some banks focus on commercial banking. Some focus on investment banking. Others, but not all, offer products that fall under both categories, and those that do may make more money through one type of banking than another.
Knowing what your bank offers will help you understand why they charge the interest and fees they do.
Commercial banking
Commercial banking is likely more familiar to you, because commercial products are available for individuals and small to mid-sized businesses. In fact, when you hear the term “bank,” more often than not it’s in reference to a commercial bank. The products offered by a commercial bank include deposit accounts (checking and savings accounts) and loans (auto loans, home loans, etc.).
Read more: Which are the best banks?
Investment banking
Investment banking refers to products and services for the “big boys.” We’re talking corporations, high-net-worth individuals, and even governments. These institutions offer financial advice and wealth management, engage in trading activities, and more.
What about credit unions?
At a glance, it may seem like credit unions and banks are virtually the same, and in many ways they are. For instance, both charge customers interest and fees. One notable difference, however, is that credit unions are nonprofit businesses that are owned by their customers, while traditional commercial banks are owned by shareholders.
Read more: Credit unions vs. banks: Think local, save money?
The reason this difference matters from a money-making standpoint is that credit unions are only making enough to cover their own expenses, while banks are actually trying to make a profit. Consequently, credit unions are typically able to offer lower fees and interest rates for their customers.
This said, one of the major drawbacks to working with a credit union is they’re generally smaller than commercial banks, which means they have fewer branches to work with and fewer products.
Read more: The best credit unions
How to reduce your banking costs
Now that you have a clearer idea of how banks make money, you’ll be able to identify opportunities to reduce those funds. Here are two simple suggestions to trim your banking costs:
Pay attention to bank fees
While every bank must charge some fees and interest to stay in business, there are plenty of “fee-free” services you can consider to cut costs.
For instance, online banks are able to maintain lower costs since they don’t have to pay for physical branches. As a result, they can reduce — and sometimes even eliminate — certain fees, like monthly maintenance fees.
Read more: Online banking vs. traditional banking
Another easy fee to avoid is the overdraft fee; all you need to do is opt out of your bank’s overdraft protection and make sure you monitor your account balance to avoid spending more money than you have available.
Read more: Understanding overdraft protection and fees
Shop around before you buy
Banks may sell similar products, but they don’t all charge the same rates and fees.
As mentioned previously, for instance, online banks are able to offer customers reduced fees, because they don’t have to pay for physical branches. With this in mind, before you open a new credit card or take out a personal loan, make sure you spend some time shopping around and comparing options.
Read more: How to choose a bank
Summary
Believe it or not, your bank isn’t free.
Banks have to make money to stay in business, and they do so in a number of ways. If you have a checking account, you’re paying the bank in fees to store your cash. If you have a personal loan, you’re paying the bank in interest to borrow money. But not all banks have identical income streams and understanding how your bank makes money can help you learn how to trim costs for yourself.
Why use credit cards? Other payment options, like debit cards and cash, may seem like an easier way to stay within budget. After all, credit cards have a reputation for encouraging you to spend money you don’t have — especially when enticing offers come in the mail.
But here at Money Under 30, we think a good credit card is a must-have. When used responsibly, credit cards can be great for your financial well-being. In fact, smart credit card holders can earn money just by using their card.
So, what are the benefits of credit cards over cash, and how can using one help you come out ahead?
What’s Ahead:
1. They build credit history
Perhaps the most important reason to have a credit card is to build credit history.
You can get a credit card no matter what your current credit score and then use it to build credit. Even if your credit score is low you can always start with a secured card. This makes credit cards a great place for anyone to start building credit.
A good credit score is essential if you plan to borrow money. These scores come partially from your credit card usage. Using credit cards responsibly can help in building credit.
When you pay at least your minimum payment by the due date the bank reports that to your credit file. When you want to borrow money in the future, creditors can see that you have a history of paying your debts on time. And the longer you use credit cards, the more you’ll build your credit history, improving your score even more.
Read more: How credit works
2. They offer rewards programs
One of the biggest credit card benefits are the rewards you can earn. There are almost as many rewards programs as there are credit cards. The trick is to find a rewards program that fits with spending habits you already have. This allows you to earn rewards on your everyday purchases without having to change your spending habits.
You’ll also want to find a rewards program that gives you rewards you’ll actually use. While everyone can benefit from a cash back credit card, you may get more value from a travel rewards credit card. However, a travel rewards credit card is not much use if you don’t travel very much.
Rewards programs can include, but aren’t limited to:
Cash back cards: These credit cards give you cash back on your everyday purchases. Often they have bonus rewards for certain kinds of transactions, such as extra cash back on gas or groceries. You can typically redeem your rewards for statement credits or a check.
Read more: Best cash back credit cards
Points and miles travel rewards cards: These credit cards let you earn points and miles on your everyday purchases. Like cash back cards, you can earn bonus rewards in certain categories. You can redeem your rewards for free or discounted travel. One popular program is the Chase Ultimate Rewards program.
Hotel or airline specific cards: These credit cards allow you to rack up rewards at specific hotels or airlines. While these credit cards can get you big discounts on travel, they are not as flexible as general travel rewards credit cards.
Many rewards credit cards have annual fees. Make sure that the rewards outweigh the annual fee before you sign up.
Read more: Best rewards credit cards
3. They may come with welcome bonuses
Many cards offer welcome bonuses for signing up. These could include perks like bonus miles/points that you can redeem for air travel or hotel stays, or bonus cash back that you can use as a statement credit.
Usually, you have to spend a certain amount on the card within a certain time period to get the one time bonus, so read the fine print. But it’s still an invaluable perk.
Read more: Best credit card sign-up offers
4. They protect against fraud
One of the biggest credit card benefits over debit cards is the level of fraud protection they offer.
Say your credit card is stolen or someone finds your card information online. If the thief starts making purchases, they aren’t spending your actual money. Unlike when someone steals your debit card.
Once you notify the card company of the theft, they’ll put a hold on your card and investigate. You aren’t liable for any fraudulent purchases made in the meantime. Federal law protections for credit card holders keep you from losing cash. Legally, the most you’ll potentially be liable for is $50, but I’ve never heard of a bank actually holding to that. Most, if not all, credit card issuers have a zero-liability fraud policy, you won’t lose anything.
Now say your debit card is stolen. Since debit card funds are instantly deducted from your checking account, any money spent on unauthorized charges will be gone. Automatic payments you’ve scheduled might overdraft as a result. If you report the theft within 60 days, the transactions can be reversed and the money restored. But this takes time and can be much more disruptive than a credit card theft.
Read more: The 5 biggest debit card dangers
5. Balance transfers let you move your debt to a lower rate
Often time, credit card welcome bonuses include a period of time with 0%, which typically includes balance transfers.
Balance transfers allow you to move your debt from one credit card to another. Other debts, like car loans and monthly installment payments, can also be moved to a balance transfer credit card. Keep in mind there is often a balance transfer fee when you do this – 5% is a common fee for balance transfers.
Now, this doesn’t mean you wipe out the debt. You’ll still have to pay what you owe, of course. However, the 0% APR for the first year will make it easier to pay off what you owe since all the money you’re putting towards it goes against the debt, which will save money on interest charges.
How much you can transfer to your new credit card will depend on your credit line. And if you keep adding more charges to the card, then you’re going to struggle to pay off the debt, even with 0% interest.
But if you do them responsibly, balance transfers can consolidate your debt, lower your interest payments, and make your life easier.
Read more: Best balance transfer credit cards
6. They may come with purchase protection
Consumer protection is a huge perk of many credit cards. If you buy an item with a credit card and later find out it’s damaged or the quality is poor, you can return the item and a statement credit for the amount of the purchase price. It may also cover you if the item is lost or stolen.
Credit cards may also offer extended warranties on electronics, furniture, and other items you hope to use for a long time. In many cases the card doubles the time on the manufacturer’s warranty. Make sure to keep your receipts!
Read more: Best credit cards with extended warranty protection
7. They have built-in grace periods
Essentially, credit cards offer a zero-interest loan for 30 days or less. Unlike debit cards, credit cards don’t require you to have the funds for a purchase immediately. There’s a grace period for you to make payment arrangements.
This grace period is the time between the end of a billing cycle and the day your payment is due (30 days). During this period, you will not receive interest charges to your balance. But you must pay the balance in full by the due date. If you don’t, then all the accrued interest will apply to your account.
Use this grace period wisely. Even if you pay the bill on time, but not in full, or if you pay it off in full, but not on time, then the interest-free grace period is over.
Read more: How grace periods work (and how to make them work for you)
8. They track your spending for you
Want to budget better? Credit card statements are a built-in expense tracker. Your purchases get recorded online with all the essential information — where, when, how much, and how often you’re spending. Some credit card companies keep your spending records around for years.
This benefit becomes especially useful come tax time. With one record of the past year’s spending already compiled, you’ll save time and effort on your taxes. Business expenses, rental property expenses, charity contributions, and more tricky tax return areas all show up on a credit card bill.
Read more: How to budget using credit cards
9. They tack on insurance
Check out the consumer protections offered with your credit card. Chances are you’ll find credit card benefits you didn’t even know you had.
In addition to extended warranties and purchase protection, many cards offer return protection, rental car insurance, and travel insurance.
Travel reward credit cards are known for providing some pretty sweet travel insurance perks. For example, several Chase credit cards offer primary rental car insurance. Meaning that you can decline the rental car insurance at the counter and use the insurance provided by your credit card instead – without having to involve your personal car insurance company if you need to make a claim.
Many credit cards also offer trip cancelation or interruption insurance. This means that if you have to cut your trip short, or cancel it completely, you’ll get reimbursed for your costs. Of course, the trip needs to be canceled or interrupted due to covered events, such as illness or injury.
Read more: Is it worth it to get a credit card just for the insurance benefits?
10. They’re universally accepted
Speaking of travel, your credit card is your best friend when you’re traveling. Accommodations and rental cars are much easier to book with credit than debit. Rental services generally place a hold of a few hundred dollars on your card. This hold can be inconvenient with a debit card.
Credit cards are also more readily accepted than debit cards worldwide. If you’re traveling to a foreign country, plan to use the lower exchange rates on your credit card instead of paying high exchange rates for cash at airports. Keep in mind that many credit cards charge foreign transaction fees – however not all do, so check before travel.
Read more: Best credit cards for international travel
Disadvantages of using a credit card
While credit cards come with a lot of convenience and flexibility, there are some cons of credit cards that you need to be aware of as well, particularly if you’ve had a rocky payment history in the past.
High interest rates
It’s not uncommon for credit cards to come with an interest rate of 20% or even higher. That’s much higher than other forms of debt, like mortgages or car loans. It can quickly add up and lead you into debt if you don’t pay off your balance each month.
When you carry a balance from one month to the next, you accrue interest charges on the unpaid balance. This leads to an accumulation of debt over time and makes it challenging for you to pay it off.
Potential for overspending
For some people, using a credit card doesn’t feel like “real” money. So it’s easier to lose track of your spending if you’re undisciplined, which can lead to a surprise balance at the end of the month.
Overspending is a common disadvantage of using a credit card. You aren’t limited by the amount of money you have available in your bank account, only by your credit limit. This can lead to the temptation to overspend and accumulate debt that might be hard to pay off in the future.
Credit card issuers often provide incentives, like cash back rewards or points, to encourage users to spend more with their credit cards. These credit card rewards can be enticing and might lead to impulsive purchases that aren’t necessary or within your budget.
Annual fees
Some credit cards charge an annual fee, which can be as much as several hundred dollars per year. These fees can add up quickly, especially if you’ve got multiple credit cards.
If the annual fees don’t outweigh the credit card benefits then you’ll want to start looking for another credit card. If you don’t travel very much then travel rewards can be difficult to redeem. Travel rewards credit cards also tend to have the highest annual fees.
If you find yourself in this situation then look for a rewards card with more straightforward rewards.
Read more: Is an annual fee credit card ever worth it?
Incentives and rewards can have conditions
Credit card issuers offer incentives and rewards to entice people to apply. But sometimes there are caveats that make it difficult to take full advantage of the rewards.
For example, a credit card may advertise up to 5% cash back, but if you read the fine print it’s only on certain rewards categories or up to certain spending limits.
Another common condition is to have rotating rewards categories. Each quarter the categories you can earn rewards in changes and you need to register each quarter to qualify for the extra cash back or bonus points. It’s easy to forget to register or the bonus categories aren’t always going to fit into your spending habits.
Irresponsible use can damage your credit score
Irresponsible use of a credit card can damage your credit score. Late payments, high balances, and maxing out cards are all reported on your credit file and can all negatively impact your credit report. This can have long-term consequences.
A low credit score can make it hard to get credit in the future, especially for large items like buying a house or a new car.
How to find the best credit card for you
There’s no one-size-fits-all solution when it comes to credit cards. Finding the card that’s right for you will depend on various factors such as your credit history, if you want travel perks or cash back, if you are looking to consolidate your debt with balance transfers, or a variety of other factors.
For example, you might prioritize a card that has no annual fee. Or you might be after a card with a good welcome bonus.
It’s a good idea to carefully examine how, and how much, you spend to figure out the rewards card that makes the most sense for you.
MoneyUnder30’s credit card comparison tool can help you quickly narrow down the cards that meet your criteria. Check it out today! Then you can read our reviews to see the pros and cons of each card and make an informed decision.
Summary
Credit card benefits include rewards, protection, and convenience, as well as regular reporting to the credit bureaus, which builds your credit.
The key is to be smart with your card and pay it off each month. Doing that can actually save money and keep you protected from unauthorized purchases. And, depending on which card you choose, you’ll have some nice perks thrown in as well. Just watch those annual fees.