(UPDATE: Here’s a more updated comparison of online checking accounts, click here.)

In an era of disappearing free checking accounts, it’s more important than ever to evaluate your banking habits and compare accounts before opening a checking account.

In the past, the downside to opening a checking account at an online bank was the fact that you would not have a brick-and-mortar bank branch at which you could do your banking. The landscape of the banking industry has changed as large institutions such as Bank of America have started charging extra for the use of in-branch services. If you’re going to pay $8.95 to use standard banking features, you might as well open an online account, meet the account requirements and reap the benefits (higher interest rates).

Plenty of FDIC-insured online banks are available choose from, and with internet banks you can be more picky about the account features you want because you don’t need to worry about picking a bank with branches near you (most offer ATM fee refunds, opening up your withdrawal options).

Here’s a sampling of online checking accounts:


Ally is one of the most popular online banks in the nation. It offers two checking accounts meant for customers in different phases of their financial life.

The first account, meant for those looking to store less money, offers a 0.40% APY and no minimum balance. This account is about as good as it gets in the current low-interest, high-fee world of checking accounts. Ally’s no-minimum-balance checking includes no non-bank ATM fees, monthly minimum balances, and a relatively healthy interest rate. The account, despite having no minimum balance requirement, beats the national average interest rate.

Ally’s other internet checking account includes a substantive 0.75% APY but requires a $15,000 balance to earn interest. You can still open the account without the $15,000 balance but you won’t earn the high interest rate. If you do want to store $15,000 or more, this account is a solid choice.

ING Direct

ING Direct is another of the most established internet banks, with “ING Direct Cafes” around the nation that offer customers in-person service. The bank is also known for its solid interest rates, which apply to its checking offerings.

The most basic ING Direct checking account comes with 0.20% APY and requires no minimum balance. The account doesn’t carry an above-average APY or a rate better than Ally’s basic checking, but it does come with ING Direct’s consumer-friendly take on overdraft fees and no extra fees aside from a $25 stop payment fee, which is standard on most checking accounts.

ING Direct’s other checking accounts, which carry 0.80% and 0.85% APYs, are meant for customers with a substantial collection of money. The two high-yield accounts come with the same appealing fee schedule as the bank’s basic checking account, but you must maintain balances of $50,000 and $100,000, respectively, to maintain your high interest. If you have the money, ING Direct’s high-level checking accounts could be good options considering they account for two of the four highest-interest accounts on MyBankTracker.com’s checking rates page.

First Internet Bank

Looking for a good middle-of-the-road online checking account? Try First Internet Bank.

The bank’s standard — and only — checking account offers solid interest without the restrictive minimum balance requirement found on Ally’s and ING Direct’s high-yield accounts. First Internet Bank offers a 0.55% APY on its checking account, which comes with a $500 monthly minimum balance. You need to start the account with a deposit of $100 or more. The one catch to First Internet’s online checking is the $10 monthly fee if you drop below $500 in any given month. The bank offers to refund up to $6 of non-network ATM fees per month, perhaps limiting the number of deposits you can make. Despite the less-than-ideal fee structure, the account carries some benefits: 0.55% APY is twice the national average.

PerkStreet Financial

PerkStreet Financial is an online bank that offers free checking with rewards. PerkStreet’s basic checking account is free and requires just a $25 initial deposit. The most attractive part of PerkStreet’s basic checking account is the 2% standard cash back reward on debit card purchases (the bank also offers 5% on holiday purchases through the end of the year). PerkStreet’s account does not pay interest. The bank justified this move in its online FAQ, saying, “While many people choose a checking account based on interest rate, the truth is, without a ridiculously high balance it’s nearly impossible to earn anything meaningful.”

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  • JayJay

    what about barclays? anyone currently use barclays online banking?

  • Vicar Nagra

    “…includes a substantive 0.75% APY”

    I cannot believe substantive and 0.75% are in the same sentence.
    It should be anorexic 0.75%. That is so pathetic.

    Boy, do I yearn for the days of 7.00%+ CDs.

    There are some local small banks that get 2.00% to 3.00% for checking accounts
    since they still have to have collateral and cannot get that from the government.