First Internet Bank Interest Checking Account Review

Nov 09, 2017 | Be First to Comment!

First Internet Bank App
First Internet Bank App

Checking accounts are a way to pay bills or make purchases with your debit card. Savings accounts pay interest on money you don’t need to spend right away. Interest checking accounts give you a little of both.

Interest checking accounts aren't as common as regular checking accounts but there are still banks that offer them. You can often find them at online banks.

But why is that? It’s simple. Online banks typically lack the higher costs that traditional banks have. They don’t need as much money to operate and can afford to pay more interest to their customers.

First Internet Bank is an Indiana-based online bank that serves customers in all 50 states. The bank offers a free checking account and an interest-bearing checking account. Besides earning interest, this account offers a few other perks you might appreciate. If you’re searching for a new checking account, learn how this one compares to the competition.

First Internet Bank Interest Checking Account Pros & Cons

Pros Cons
  • Up to $10/month in ATM fee refunds
  • Mobile apps available
  • Monthly fee
  • Not the highest checking rate

Earn Interest Only With a Balance of $500 or More

Interest checking accounts all pay interest on balances but they don’t all have the same annual percentage yield. At some banks, it’s lower; at others, it’s higher.

First Internet Bank’s Interest Checking account features a competitive APY. It’s not quite as high as what you could earn with an online high-yield savings or money market account, or a certificate of deposit. But, it’s still significantly more than what you’d earn with an interest checking account at a brick-and-mortar bank.

Minimum balance required to earn interest

But, there’s a catch. To earn that APY, you’ll need to maintain an average daily balance of $500 or more. If you don’t normally keep that much in your checking account then you miss out on that rate.

You’ll need at least $100 to open your account. That’s not a huge stretch but you should think about your overall banking habits. At some banks, there’s no minimum daily balance required to earn interest in a checking account. Or, you may just need to set up a monthly direct deposit to earn interest.

If you’re not sure you can maintain a $500 daily average, you may want to look at some of the other interest checking accounts further down in our review.

Free Checks and Free Online and Mobile Banking Access

First Internet Bank has zero branches but they make up for it with online and mobile banking access. Both are free to use. With these tools, you are able to manage your account and perform transactions including:

  • Pay bills
  • Schedule wire transfers
  • Make a deposit through a credit card
  • Stop payments

If you need help from an actual person, you can call First Internet Bank customer service Monday through Friday, from 7 a.m. to 9 p.m. ET, or Saturdays from 9 a.m. to 3 p.m. ET.

You do get a debit card with your account. This card can be used anywhere Visa is accepted. Your card can be linked to Apple Pay through the Wallet app so you can use it securely anywhere Apple Pay is accepted.

You also get unlimited check writing. Your first order of checks is free. After that, the cost to reorder checks varies based on the design and style you choose.

Manage All Your Financial Accounts With FinanceWorks

If you’ve got more than one checking, savings, credit card or investment account, keeping track of them all can be a headache. When you open a First Internet Bank Interest Checking account, you get free access to FinanceWorks, which can make managing your financials easier.

FinanceWorks connects to more than 5,000 financial institutions. You can track your spending across different accounts, check your balances at a glance and see when all of your bills are due. You’ll still need to log in to your First Internet Bank checking account to pay bills but having things all in one place can make budgeting much easier.

Use Any ATM and Get ATM Fee Refunds

Besides making purchases, you can also use your Visa debit card to make cash withdrawals at ATMs that have the PLUS® symbol. That’s over 1.1 million ATMs worldwide.

First Internet Bank doesn’t charge a fee when you make ATM withdrawals. That doesn’t mean, however, that the machine’s owner won’t charge you a fee. First Internet Bank does offer ATM surcharge reimbursement but it’s capped at $10 per month.

If you’d prefer, you have the option of getting an ATM-only card. This card lets you make withdrawals or check your balance at an ATM but it couldn’t be used for purchases.

Rare Monthly Fee on an Online Checking Account

High fees can be a pain, especially when you’re trying to earn interest on your checking. Online banks often have an edge over traditional banks, since many of them don’t charge a monthly maintenance fee.

With a First Internet Bank Interest Checking account, you don’t get a break on the fee. There’s a $10 monthly maintenance fee to contend with. You can avoid the fee by maintaining a $500 average daily balance. That’s the same requirement to earn interest. That may be no problem for some people but more challenging for others.

What Other Fees Does This Account Charge?

The monthly maintenance fee may be your biggest concern but there are a few other fees associated with this account. For example, you’ll pay one fee for overdrafts and another fee for non-sufficient funds. There are also fees for check and statement copies.

Compared to other banks, the fees are about what you’d expect.

Ways to avoid expensive overdraft fees

If you want to avoid high overdraft fees, you can sign up for optional overdraft protection. This requires you to have a First Internet Bank Savings or Money Market account.

There’s no annual fee and no transfer fee for this service. Transfers are made in $50 increments. Just remember that if you have more than 6 transfers from a savings or money market account per month, you may be charged an excess withdrawal fee.

If you don’t have a savings or money market account with First Internet Bank, you can get an overdraft line of credit instead. There’s no annual fee or transfer fee but you will pay interest because this is essentially an open-ended loan. The APR is fairly high so be sure to read over the details so you know what a line of credit may cost you.

First Internet Bank Interest Checking Account Fees

Type Fee amount
Monthly Maintenance Fee $10
Out-of-Network ATM Fee $0
Overdraft Fee $30
Returned Item $20
Stop Payment $30
Incoming Domestic Wire Transfer $0
Incoming International Wire Transfer $0
Cashiers Check $5

First Internet Bank vs. Other Interest Checking Accounts

First Internet Bank isn’t your only choice for interest checking. But how do you know which bank you should choose? Comparing interest checking accounts means taking a closer look at their features and the banks that offer them.

For example, are you comfortable doing all of your banking online? Or, would you rather have a bank that has branches you can visit? If you regularly deposit cash into checking, an online bank could make that more difficult.

If you’re okay with an online bank, you can start making comparisons between different interest checking options. That means looking at factors such as:

  • The APY on the checking account and the rules to earn that rate
  • How wide the bank’s ATM network is
  • Whether the bank charges a fee for out-of-network ATM withdrawals
  • Whether the bank reimburses any foreign ATM surcharges

It’s easy to get stuck on the APY or the fees but you need to look at all the account’s features before making a final decision. You don’t want to end up choosing an account just for the APY, then find out that it doesn't really fit your banking needs.

Final Verdict: Is a First Internet Bank Interest Checking Account for You?

The First Internet Bank Interest Checking account is a fairly straightforward interest checking option. There are other online banks that may offer a higher APY for interest checking, or charge less in the way of monthly maintenance fees.

This one is better suited to someone who regularly keeps at least $500 in their checking account on a daily basis and isn’t looking for a lot of extra bells and whistles. If you’d like to get a little more from an interest checking account, however, we’d suggest exploring some different online bank competitors.

More: Best Online Checking Accounts of the Year
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