Best free checking accounts in June 2020

When it comes to banking, you shouldn’t settle for anything less than a free checking account. The best checking accounts are not only free, but may also offer you perks such as a high annual percentage yield (APY), out-of-network ATM reimbursement or free official bank checks.

Checking fees to be aware of

Many free accounts can end up costing you fees if you don’t fulfill the requirements set by the bank on the account. Make sure you know what these rules are before opening an account.

Some fees to be on the lookout for:

  • Maintenance fee: You’ll usually get charged this fee if you go below a certain balance in a monthly statement period.
  • Overdraft fee: Transactions that cause a negative balance can lead to this fee.
  • Sustained overdraft fee: This fee is charged after a certain period of time if your account remains negative.
  • ATM fees: Know what it will cost you to access your money from an out-of-network ATM. Some banks will reimburse some or all of these fees. According to Bankrate’s 2019 checking account and ATM fee study, using an out-of-network ATM costs an average of $4.72. A customer’s bank charges an average of $1.63 and then ATM surcharges from the ATM cost customers an average of $3.09.
  • Paper statement fees: Receiving paper statements in the mail will cost you at a lot of banks.

Free Checking (no monthly fees)

Banks can charge monthly fees just to maintain your checking account. But with so many free checking accounts available, it makes sense to find a no-fee option for your checking account. A no-fee checking account ensures your money isn’t being wasted on monthly service fees.

Compare: Best free checking accounts in June 2020

Ally Bank: Interest Checking Account – Best for 24/7 service

Ally Bank offers a checking account that doesn’t have a monthly maintenance fee or a minimum opening deposit. It also offers a little interest, 0.1 percent APY on balances less than $15,000 and 0.5 percent APY with a minimum daily balance of $15,000.

The interest checking account also offers freebies, such as free standard checks and access to free Allpoint ATMs.

  • Minimum deposit and balance requirements: $0
  • Yield: up to 0.5 percent APY ($15,000 minimum daily balance required for this APY.)
  • Physical branch: No.
  • Mobile app offered: Yes.
  • ATM access: 43,000 Allpoint ATMs
  • Offers and incentives: Free standard checks, cashier’s checks, incoming wire transfers without a fee and free access to Allpoint ATMs.

Capital One: 360 Checking Account – Best for branches and online combination

This checking account earns a little bit of interest on all balances and doesn’t require money to open or maintain this account. It also gives you fee-free access to more than 39,000 Capital One or Allpoint ATMs.

You can open a 360 checking account either online or at a Capital One location, so you can choose whichever account-opening process you prefer.

  • Minimum deposit and balance requirements: $0
  • Yield: 0.1 percent APY
  • Physical branch: Yes.
  • Mobile app offered: Yes.
  • ATM access: More than 39,000 Capital One and AllPoint ATMs.
  • Offers and incentives: Your first checkbook order is free.

Discover Bank: Cashback Debit Account – Best for earning cash back

This checking account doesn’t charge you a monthly maintenance fee and gives you a cash-back option. You earn 1 percent cash back on up to $3,000 in debit card purchases each month with this checking account.

This account will also let you get free standard and official bank checks.

  • Minimum deposit and balance requirements: $0
  • Yield: None
  • Physical branch: One branch.
  • Mobile app offered: Yes
  • ATM access: 60,000 ATMs in the U.S.
  • Offers and incentives: 1 percent cash back on up to $3,000 debit card transactions per month, free standard checks, official bank checks, no stop payment fees and free withdrawals at more than 60,000 in-network ATMs.

FNBO Direct: Online Checking Account – Best for annual overdraft refund

The FNBO Direct Online Checking Account only requires $1 to open the account and helps you earn some interest. The account has free incoming wires and no monthly maintenance fees. With this account, you’ll be able to access surcharge-free ATMs via Allpoint’s network.

  • Minimum deposit and balance requirements: $1 minimum deposit and no minimum balance.
  • Yield: up to 0.65 percent APY (minimum balance for APY is $0.01)
  • Physical branch: No
  • Mobile app offered: Yes
  • ATM access: 55,000 Allpoint ATMs
  • Offers and incentives: FNBO Direct automatically gives you one free overdraft fee or returned item fee refund every 12 months from the date you last received a refund. A returned item fee occurs when a transaction is returned unpaid because there’s insufficient money in the account.

nbkc bank: Personal Account – Best for high yield

nbkc bank is an online bank headquartered in Overland Park, Kansas. It also has four locations in both Kansas and Missouri. The nbkc personal account offers you a competitive APY for a free checking account. It only takes $5 to open this account.

The personal account also reimburses up to $12 worth of ATM fees incurred by using ATMs that aren’t in the nbkc or MoneyPass network.

  • Minimum deposit and balance requirements: $5 to open and no minimum balance.
  • Yield: 0.75 percent APY
  • Physical branch: Yes
  • Mobile app offered: Yes
  • ATM access: More than 32,000 MoneyPass ATMs in the U.S. and Puerto Rico.
  • Offers and incentives: Free starter book of checks and nbkc bank reimburses up to $12 of out-of-network ATM fees.

Getting a competitive yield

There are free checking accounts that will offer you a competitive APY without costing you in fees. But you’ll likely have to set up a direct deposit or make a certain number of debit card purchases to qualify for this high APY. At some banks, you might have to meet both of these requirements.

Unlike most savings accounts and money market accounts at online banks, this high APY might be capped if your balance goes beyond a certain amount. Once it surpasses a certain threshold, that additional money can earn less than the top-yielding savings accounts and money market accounts.

Minimum deposit and balance requirements

Accounts usually have a minimum amount required for opening and a minimum balance that you need to stay above to avoid a maintenance fee.

Approximately 42 percent of checking accounts that don’t earn interest are considered free, according to Bankrate’s 2019 checking account and ATM fee study. A checking account is considered free if it doesn’t charge monthly maintenance fees or require a minimum balance.

Some banks may offer a checking account that will waive this fee if you have your direct deposit going into this account.

The average minimum balance needed to open a non-interest checking account is $162.94, according to that same Bankrate study. If you want an interest-bearing checking account, you may need to deposit even more. The average minimum balance requirement on those accounts is $7,123, according Bankrate’s 2019 study.

Look for an account that either doesn’t have a maintenance fee or one with a minimum balance requirement that you can always stay above.

Rewards and incentives

Some free checking accounts will give you a higher APY if you have a direct deposit or make a certain number of purchases with a debit card. These checking accounts should be considered if you can meet their requirements.

Banks also may offer reimbursement on out-of-network ATM fees, free official checks or a free order of standard checks on an account that is free as long as you meet its direct deposit or balance conditions.

If you’ve had your checking account for years, that’s normal. The average U.S. adult has had the same primary checking account for around 14 years, according to a Bankrate survey.

But banking has changed a lot in the past 14 years. For instance, some checking accounts offer mobile apps that caution you before you overdraw your account. Others let you overdraw your account without the bank charging you a fee. It’s always good to compare checking accounts to see if there’s a better one for you, especially if your checking account is charging you fees.

Overdraft options

See if your bank has an option to enroll in debit card overdraft protection. If you’re going to enroll in this feature, ask how much the fee will be if you make a transaction that takes your account negative.

Bankrate’s 2019 checking account and ATM fee study found the average overdraft fee is $33.36.

Here are the overdraft options at Capital One, for example:

  • Auto-decline: Transactions that take your account balance negative will generally be declined by the bank.
  • Savings overdraft protection: A linked savings account or money market account can fund a transaction that would otherwise take your checking balance negative. So you’ll need to have at least two bank accounts, a savings deposit account and a checking account, for the checking to pull from savings to cover an overdraft. This type of overdraft may be less costly than standard overdraft charges.
  • Opportunity to make your account positive: You may have some time to fund your account with the amount you’re overdrawn to avoid an overdraft fee. At Capital One, it’s a full business day.

Pros and cons of free checking

Before opening a free checking account, weigh the pros and cons to see if it’s the right product for you.

The pros of opening a free checking account include:

  • There are many options that have low minimum balance requirements. Some might not even have any minimum balance required to open and maintain the account.
  • With some accounts, you may be able to use any ATM convenient to you for free.
  • Paying fees on a checking account should be avoidable. Instead of paying these fees to a bank, this money can be used to pay bills or build an emergency fund.
  • Some free checking accounts may offer you more perks and benefits, such as free checks, cash back on debit card purchases or a high APY.

The cons of opening a free checking account include:

  • If you need to make a certain number of debit card purchases to meet the account requirements to get a higher APY, you might be better off with a cash back or rewards credit card. Compare these options to see which is better for you.
  • Many checking accounts are free, as long as you maintain a certain balance. But some accounts might have high minimum balances. Having a lot of money in a checking account that isn’t earning a high APY, just to avoid a maintenance fee and for some perks, might not be worth as much as having your money in a high-yield account.

Potential fees to avoid

If you’re getting charged fees, you need to reevaluate your accounts to avoid paying these. Here are a few of the most common ones to avoid.

Maintenance fees

A bank generally charges this fee if you go below a certain balance in your account. Some banks may waive this fee if you have a direct deposit into your account, though it might have to exceed a certain dollar amount.

How to avoid this fee: Find a bank that doesn’t charge a maintenance fee or one that has a low minimum balance. Also, find a bank that will let your direct deposit waive the monthly maintenance fee.

Overdraft fees

Banks charge this fee when you spend more than what’s in your account and the bank covers the transaction.

How to avoid this fee: Sometimes having too many bank accounts can result in an overdraft. Consolidating accounts could prevent this from happening. Planning and budgeting can also help you prepare for expenses. Keep an eye on your account using an app, online banking or a checkbook register.

ATM fees

Using an out-of-network ATM is another common fee.

How to avoid this fee: Find banks that either waive a certain amount of out-of-network ATM fees or banks that have a large network or a network convenient to you. Also, you’re usually able to get cash back on a debit card purchase at a grocery store, pharmacy or convenience store. There are usually limits, just like on ATM withdrawals, to how much cash back you can receive.

What to expect when opening a checking account

Generally, it should take under half an hour to open an account. There are some circumstances where it might take longer.

The account opening process may take longer if you have a credit freeze on your credit file and the bank’s policy is to contact at least one credit bureau during the account-opening process. If you have a freeze on your credit in place, check with the bank before applying to see whether you need to lift the credit freeze at only one credit bureau or whether you need to do this at multiple bureaus.

What do I need to provide when opening a new checking account?

This will vary from bank to bank. Here is a list of items you might need to provide or be aware of when opening a new checking account:

  • Your legal name
  • Social Security number or tax identification number
  • Date of birth
  • Occupation
  • Email address
  • Phone number
  • Address
  • Scan of your government-issued photo ID
  • Initial deposit (If you’re making it electronically from an existing account, you may need the routing number and account number for this account.)

Can I open an account online?

At an online bank, you’re almost always able to open an account online. Many brick-and-mortar banks also let you open up accounts online.

An online bank may also allow you to apply for an account over the phone.

Summary of our top free checking accounts

Account name Minimum opening deposit Monthly service fee APY
Ally Bank $0 None 0.10-0.50%
Capital One $0 None 0.10%
Discover Bank $0 None N/A
FNBO Direct $1 None 0.65%
nbkc $5 None 0.75%

Featured image by katleho Seisa (E+ Collection) of Getty Images.

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