As one of the nation’s largest banks, Chase often comes to mind for people who are looking for a new checking account. However, other banks have become such attractive alternatives that it is hard to leave them out of the conversation. Online banks, in particular, are worth noting. Because online banks don’t have to pay costs associated with operating branches, those savings are transferred to customers in the form of low fees and great perks.

Whether you’re thinking of joining Chase or you’re already Chase checking customer, you owe it to yourself to take a look at online banks as well. To help you with that, we examined how Chase’s checking accounts stack up to some of the more popular online checking accounts currently available.

chase vs online bank checking accounts image

Most recently, my sister began her hunt for a new checking account since her Citibank student checking account is converting to a regular checking account. Her first choice was to go with Chase, a bank that is commonly found on the streets of New York City.

She decided to shop for another bank because her employer doesn’t pay her using direct deposit, plus she would not be able to keep an average daily balance of $1,500. These are two things Chase requires her to do (also known as fee waivers), in order to avoid the $12 monthly fee on Chase’s basic checking account.

Needless to say, I reminded her that she might want to look into online checking accounts because many of them have no monthly fees and ATM usages is also free. Her response: “What?! Then why doesn’t everyone have one?”

My sister, like many other millennials, may be just fine with online checking accounts, but they just don’t know about them. There are plenty of online checking accounts available and many of them can outclass the checking accounts from big banks.

See how some of the most popular online checking accounts compare to Chase’s basic checking account:

Account featureMonthly feeMonthly fee waiverEarns interestOut-of-network ATM access
Chase Total Checking$12 ($10 in CA, OR and WA)$500 in combined monthly direct deposits OR a $1,500 average daily balance OR $5,000 in combined Chase deposits/investmentsNo$2 fee per transaction (surcharge by ATM operator also applies)
Nationwide Bank E-Checking$88 debit card transactions + 1 direct deposit per month OR $10,000 combined Nationwide depositsYesNo Nationwide fee for the first 6 per month (surcharge by ATM operator still applies), surcharge-free ATM access through Allpoint, PNC Bank, Alliance One and MoneyPass ATM networks
EverBank Yield Pledge Checking$0-YesNo EverBank fee, plus unlimited ATM fee reimbursements with a $5,000 balance
Capital One 360 Checking$0-YesNo Capital One 360 fee (surcharge by ATM operator still applies) , surcharge-free ATM access to the Allpoint ATM network
Ally Bank Interest Checking$0-YesNo Ally fee, plus unlimited ATM fee reimbursements
Bank of Internet Rewards Checking$0-YesNo Bank of Internet fee, plus unlimited ATM fee reimbursements

Chase’s Total Checking account provides basic checking needs. But when it comes to monthly fees and perks, all of the above online checking accounts fare better than Chase Total Checking.

For instance, Ally’s Interest Checking account has no monthly fee, pays you interest and offers unlimited free access to any ATM in the country.

Remember, there’s a good reason that online banks can provide such a great perks at a great price. Online banks don’t have to deal with the cost of paying for things like property, utilities and personnel. The difference in the cost is reflected in the lower fees and better account features.

On the other hand, there are four notable ways that online banks cannot do what traditional banks like Chase can do:

– You cannot deposit cash. Since most online banks don’t partner with ATM networks that provide cash deposits, you’ll have to find another way to put a large amount of cash into your checking account. This may change as ATM networks begin to experiment with cash-depositing capabilities.

– You don’t have a safe deposit box. Safe deposit boxes are available through many physical bank branches. No branches means no safe deposit boxes to store your valuables.

– You cannot speak to tellers in person. Some people still like to talk to actual humans when they conduct their banking. Again, no branches means no speaking with tellers. However, you can visit the online banks’ website and chat with a live customer service rep, or even use social media. If typing isn’t your thing, you can reach a live person on the phone 24/7.

– You cannot get a medallion signature guarantee. This guarantee is similar to a notarized signature, but from a banker, that confirms your signature on a financial document (usually for a transfer of investments like stocks). Online banks don’t offer this service.

For young adults like my sister, however, these shortcomings of online banks don’t really matter. I asked her if she had went to a branch for any of these services in the past year. She didn’t. In fact, she hasn’t had to go to branch for the past four years. Furthermore, she doesn’t anticipate a branch visit any time soon.

It didn’t take long for my sister to decide that she was going with an online bank — and she’s not alone. According a 2014 Accenture consumer banking study, 39 percent of millennials would consider using a branchless digital bank, compared to the 16 percent for those over the age of 55. Just like that, my sister has become another millennial who’ve realized that they don’t need a physical branch.

Her final choice was Ally’s Interest Checking account. She was attracted to the account’s $0 monthly fee, unlimited free ATM access and a mobile check deposit limit of $10,000 per day. She has always complained about how she cannot use her iPhone to deposit large checks and big banks have low mobile deposit limits that force her to take a trip to the ATM. Ally was just a great fit for her — and probably for many other millennials like her. Chase Total Checking was definitely among the top considerations, but the monthly fee waiver wasn’t compatible with her financial circumstances.

Is online checking right for you too?

Listen, no one can ever be sure that they’ll be fine with just an online checking account. Fortunately for you, online checking accounts don’t have monthly fees. So, why not open one and try it out for a few months? You don’t have to shut down your current checking account just yet, but try to use your online checking account as much as possible.

If you notice that you haven’t been using your traditional checking account and that you haven’t found a need for a physical bank branch, it means that it’s time to stick with that online checking account for good.

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  • x4zta9q4AEsJ5gP

    If you really need to get cash into your checking account and you have a walmart near you just get a bluebird card and deposit your cash and walmart then transfer it to your checking account or you could just use the birdbird account as your checking account itself..

    You also forgot to mention a MAJOR free online checking service, Discover’s Cash Back checking and their savings accounts:

    • While the Amex Bluebird account certain has its own share of unique benefits, I don’t feel that the cash-deposit feature will outweigh the interest-bearing and ATM accessibility of online checking accounts.

      Discover’s Cashback Checking account was left out because, at this point, the account is still only available to existing Discover credit card or Discover Bank customers.

      • x4zta9q4AEsJ5gP

        Yeah, I agree if you don’t have a checking account yet a online only checking account like Capital One or Ally is the best way to go currently.

  • whitney

    it’s interesting you mention only chase and citi but nothing of bofa or Wells Fargo or, community banks/credit unions

    I think it’s funny that you say Chase is “struggling” but you’re using your sister as an example and forget that Chase holds the largest deposits currently, previously second to Bank of America.

    I also think it’s funny you mention online banking and all the great features it gives because of the lower overhead costs of not having a brick and mortar location but fail to address what would happen if they actually get a huge chunk of the pie (re: make it so that Chase is not the #1 depositer), how would their systems be able to handle it and, you did bring up their lack of having atms to deposit cash and checks into (because let’s face it, some people get six figure checks)

    also would like to point out that most employers pay via direct deposit because business checks are expensive; they’re not like consumer checks where a box of 120 could cost 20 bucks. they’re more like 120 dollars for 300 checks.

    employers can have just one employee and pay via direct deposit

    chase system, much like other banks you fail to mention, doesn’t recognize direct deposit as direct deposit but ACH; note, a transfer from paypal would be ACH and chase doesn’t require you, like the others you’ve failed to mention, to keep the balance. so you can have a flow of money go in and out, as long as the ACHs are x amount, in case of chase, 500 (adds up to) in a monthly cycle they don’t care what your balance is, it is free of service fee as long as it’s not negative

    and besides all of this I think the more important question is, are you encouraging people to have multiple bank accounts or just one? and if it’s just one, wouldn’t you want to have X amount set aside as emergency money? that people cannot put aside x amount of money and not touch it, is scary. even if you want to keep majority in investments as savings account doesn’t pay much, you would want to have it liquid.

    I wouldn’t want to derail too far, but there are a lot of holes in your article and the title is obviously suppose to be catchy but the content and amount of work placed into it, probably took you all of ten minutes

    • – From a feature-set angle, I continue to stand by the statement that Chase checking accounts struggle when compared to online checking accounts.

      – Chase and Citibank are used in particular because of the anecdotal reference to my sister’s circumstances.

      – On the trick to “fake a direct deposit”: Thanks for noting this. Yes, it would be an option to help dodge Chase’s monthly fee. I’ve mentioned this to many people. However, scheduled transfers to cycle the $500 between Chase and another account, even if they’re automatic, seem tedious to many (at least in my experience).

      – The story is speaking only about checking accounts in particular. I suggested that someone can use an online checking account alongside their regular checking account to determine if they can switch, and end up avoiding the monthly fee of their regular checking account.

      I don’t advise against people having more than one bank account.

      As for emergency funds, that is a whole other story. I’ve heard of people using regular savings accounts, online savings accounts, brokerage accounts and even IRAs as “emergency funds.”

      • whitney

        people shouldn’t be using retirement accounts as “emergency funds” that’s why there is penalities associated with it, same goes for if you withdraw from a savings account or transfer out too many times, you’re essentially missing the point of the account–to save, be it for retirement or savings in general.

        while it’s cute that you use your sister because that’s who prompted you into this article, it would make more sense to look at it as a whole rather than pockets unless those pockets statistically adds up enough to put a huge dent into the traditional banking system therefore validating your title and article purpose

        as for the “fake” paypal transfers, a lot of people do business that way, or via square, and are self employed or contractors, so technically it is pay. i didn’t say anything of the sort you’ve concluded to but based on your mindset it’s clear it’s pretty narrow so I’m not surprised it leaned that way.

        for the business woman who sells her wares on eBay and than transfers it to her chase account, on a monthly basis, and doesn’t get a fee for her account in terms of monthly service, it works

        and if your sister is getting paid via checks, it takes longer for it to legally clear, good grace clearance can still lead to potential bounced checks, not to mention the obvious waste of paper for someone who is suggesting online banking.