The Battle of the Online Checking Accounts

Simon Zhen

By , Staff Writer
Posted on Wed Nov 21, 2012, Last Updated on Tue Sep 16, 2014

More Columns »

The Battle of the Online Checking Accounts

Checking accounts are becoming increasingly expensive for most Americans, especially at the major national banks. Online banks, without their brick-and-mortar presence, have become very attractive since they offer online checking accounts that usually offer great perks and rates without the high monthly maintenance fees.

As there is more demand for feature-packed, low-cost checking accounts, consumers may search for online checking accounts and become overwhelmed with the options that are available.

We’re taking a look at the checking accounts offered by some the largest, and most popular, online banks — ING Direct, Ally Bank, Bank of Internet and EverBank — to help you decide which one is right for you.

Here are the most important checking-account features from each of these online banks:

Features ING Direct Ally Bank Bank of Internet EverBank
APY (as of 11/21/12) Up to 0.85% APY Up to 0.75% APY Up to 1.25% APY Up to 0.75% APY (ongoing)
Free debit card Yes Yes Yes Yes
Free online bill pay Yes Yes Yes Yes, with $5,000 daily balance (otherwise, $8.95/month)
Paper checks Must pay to order Free (unlimited) First 50 checks free First 25 checks free
ATM access Free at 35,000 ATMs nationwide (Allpoint ATM network) Free at any ATM Free at any ATM Free at any ATM, with $5,000 daily balance
Debit card rewards program None Personalized offers Personalized offers None
Overdraft protection Line of credit Coverage by linking Ally savings/MMA Line of credit or link to savings/MMA Line of credit or link to MMA
Mobile banking apps Yes Yes Yes Yes
Remote check deposit Yes Yes Yes Yes (scanner)

Picking your online checking account

Right off the bat, you’ll notice that these checking accounts offer plenty of features that cannot be found with big banks — such as free ATM access or overdraft lines-of-credit.

Because these online checking accounts have similar traits, it can be daunting task to choose the one that is right for you. Fortunately, the small differences between these accounts can drive your decision.

Rate-chasers may be most interested in Bank of Internet’s online checking account because it has the potential to pay out 1.25% APY. Customer balances earn an additional 0.3125% APY for every one of four criteria that is fulfilled — you’ll earn less interest in the months that you cannot meet any of the criteria. The other three online banks offers interest rates that vary depending on the account balance — higher balances tend to earn a higher interest rate.

For a feature-filled checking account, Ally Bank’s Interest Checking account appears to be the popular choice. It offers free online bill pay, free paper checks, free ATM access and a debit-card rewards program. Ally recently launch mobile check deposit, bolstering its competitiveness against ING Direct and Bank of Internet, which have offered the feature for a while now.

On the mobile-banking front, ING Direct offers neat capabilities such as person-to-person (P2P) payments and Bump, feature that lets customers bump fists to conduct a transfer between them.

ING Direct, Bank of Internet and EverBank provide a line of credit to cover any transactions that result in an overdraft. It could mean lower fees for customers who’ve ever faced a hefty fee (usually around $35 per occurrence) when they overdrafted their accounts. With a line of credit, you are borrowing money to cover that overdraft — you’ll face an interest charge instead of a flat fee.

Of the four online checking accounts, EverBank’s checking account appears to be the least attractive. With requirements to gain no-fee access to ATMs and online bill pay, consumers who need these features will likely look elsewhere for better options.

If you are considering one of these online checking accounts, first take a look at your current relationship with your checking account. Make the switch if you find that you’ll be saving more money with an online bank. Don’t forget to check out the reviews for these online banks before finalizing your decision.

In the Article


Post a Comment

  • andrew w

    Don’t forget about Charles Schwab bank.

    • Simon Zhen

      I agree that Charles Schwab is an alternative to the big banks.

      We’ll be sure to compare brokerage-based checking accounts in another piece.

  • vaidy

    Beware, ING Direct has the worst, rudest customer service. I have personal experience.

  • sunk818

    Ally Bank is formerly known as GMAC. They did not pass their most recent “stress tests” by the Federal Reserve. Ally Bank still has not paid back TARP money. Attractive rates or not, you really want to do business with a bank that can’t pay back its loans nor pass “stress tests”?

    • misslady1980

      Thanks..good to know, that’s a deal breaker!