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.
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 feature||Monthly fee||Monthly fee waiver||Earns interest||Out-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/investments||No||$2 fee per transaction (surcharge by ATM operator also applies)|
|Nationwide Bank E-Checking||$8||8 debit card transactions + 1 direct deposit per month OR $10,000 combined Nationwide deposits||Yes||No 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||-||Yes||No EverBank fee, plus unlimited ATM fee reimbursements with a $5,000 balance|
|Capital One 360 Checking||$0||-||Yes||No Capital One 360 fee (surcharge by ATM operator still applies) , surcharge-free ATM access to the Allpoint ATM network|
|Ally Bank Interest Checking||$0||-||Yes||No Ally fee, plus unlimited ATM fee reimbursements|
|Bank of Internet Rewards Checking||$0||-||Yes||No 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.