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How to find the best online checking account for April 2024

Casey Bond
Updated 9 min read

These days, you probably turn to the internet for news, entertainment and shopping … so why not your checking account? Online checking accounts make it easier than ever to manage your money and often come with lower fees and higher interest rates than traditional checking accounts. Here’s what you should know if you’re considering opening one.

An online checking account is just that — a checking account that you can open and manage via the web without having to visit a local branch. These accounts are offered by traditional banks, credit unions, and online-only banks.

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You might be wondering why anyone would want a bank account that exists only online. After all, doesn’t that make it harder to manage your money and keep it safe from hackers?

Quite the opposite, actually. Online checking accounts come with several benefits:

  • Access anywhere: You can view your balance, make deposits, pay bills, and more, as long as you have a computer and internet access.

  • Bank from your phone: Many banks that offer online checking accounts also have a mobile app, allowing you to do all the above tasks from your phone or tablet too. Most allow for mobile check deposit, where you can deposit a check to your account by snapping a picture of it.

  • Electronic transfers: Online checking accounts allow for electronic bill payment and transfers between accounts and even between different banks, eliminating the need for writing checks or visiting a physical location.

  • ATM networks: Worried about how you’ll pull out cash? You’ll still need to visit an ATM for this task, but you aren’t limited to your bank’s locations. Most providers of online bank accounts are part of national ATM networks, such as Allpoint or Co-op. These allow checking account customers to use any ATM in the network without incurring a fee.

  • Lower fees: Because online accounts don’t come with the same administrative overhead costs as traditional accounts, those savings are often passed on to account holders in the form of lower (or no) fees. In some cases, the interest rates may be higher too.

  • Safety: A common misconception about online banking is that it’s not as safe as banking in person. However, an online checking account comes with the same — if not more — protections thanks to technology. Of course, it also requires some work on your part to keep your online banking information safe.

  • Easy setup: One major perk of online accounts is that you can set them up in just a matter of minutes. There’s no scheduling an appointment with a local banker or driving up to a branch location. You can open your account from anywhere using only your computer or smart phone.

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Speaking of safety, it’s important not to downplay the risks that come with managing your financial life online. However, the best online checking accounts should have robust security measures in place. And there are things you can personally do to keep your banking information out of the hands of identity thieves.

For one, your bank's website and mobile apps should use strong encryption to protect your personal and financial information. Many banks also employ two-factor authentication, which requires you to verify your identity using two separate methods before you can access your account. For example, after entering your password, you might have to enter a code sent to your phone.

Another security measure to look out for is automatic logout. If you're inactive on your online account or mobile app for a certain period, the bank should automatically log you out of your account. This helps to protect your information if you accidentally leave your device unattended.

Many banks also offer customizable alerts for various account activities. You might set up alerts for things like large transactions, login attempts from unknown devices, or when your balance falls below a certain level. But even if you don’t set up personalized alerts (though it’s really a good idea), your financial institution should be regularly monitoring your accounts for unusual activity. If they notice anything suspicious, they may contact you to confirm the activity or block the transaction.

Additionally, you can take these steps to enhance your security:

  • Use a strong, unique password for your banking accounts.

  • Regularly update your devices and banking apps to ensure you have the latest security patches.

  • Be aware of phishing attempts and never click on suspicious links or provide personal information in response to unsolicited messages.

  • Regularly review your account statements and transactions for any suspicious activity.

  • Use secure networks when accessing your banking accounts online.

Despite the many benefits, an online account isn’t for everyone. Before opening an online checking account, it’s important to take stock of your biggest financial goals and priorities.

For example, if you’re looking for a high-yield checking account with no monthly fee and an expansive ATM network, an online account is probably a good choice. On the other hand, if you handle a lot of daily transactions and often need to visit your local bank branch to get assistance from a teller, an online checking account probably won’t meet your needs. Keep in mind that you can have more than one checking account to meet different needs.

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When it comes to opening an online checking account, the choices can seem overwhelming. There are more than 350 digital banks alone. Plus, many brick-and-mortar banks and credit unions offer online accounts. So how do you go about selecting the right one? Here are some important factors to consider:

The fees associated with an online checking account are one of the most important factors to consider. Fees can hurt your bottom line and wipe out any interest earnings or rewards your account offers.

Some financial institutions charge monthly maintenance fees or non-sufficient funds (NSF) fees if your account doesn’t have enough money in it to cover a transaction. You may also be charged fees for using out-of-network ATMs, receiving paper statements, and more.

Many banks require that you make a minimum upfront deposit to open the account or, in some cases, maintain a certain minimum balance after you open it. Failing to carry at least this amount will often result in a fee, so make sure you’re confident you can meet a bank’s minimum balance requirements before opening your account.

The primary purpose of a checking account is to manage daily transactions, not grow long-term savings, so checking account rates tend to be much lower than those on traditional savings accounts. That said, it can be nice to earn a little extra return on the money you have sitting in your account.

Currently, the average checking account rate is just 0.07%. However, some higher-yield online checking accounts offer rates near 1%.

Want the best bang for your savings buck? Consider a high-yield savings account. With current rates, you could earn over 5%.

If you use cash frequently, you’ll definitely want to consider the bank's ATM network. For one, it’s important that there are many ATMs available across the country in case you’re traveling. Again, banks and credit unions that provide online checking accounts often belong to surcharge-free ATM networks that allow account holders to access their funds from many places, not just where the bank is located. Additionally, some online banks reimburse any fees incurred for using out-of-network ATMs.

Since you're considering an online checking account, the bank's digital features will be even more important, including the usability of their mobile app and online banking platform. Find out if the account comes with features such as mobile check deposit, bill pay, money transfer options, real-time alerts, etc. — all of which will help you manage your account from home (or anywhere else).

You should also check that it offers Zelle or similar peer-to-peer payment options. You can often use these to pay contractors, service providers, and even bills in lieu of cash or check.

Since online banks don’t have physical branches, look for a bank with strong customer service that can be reached through various channels, such as phone, email, live chat, and even social media. Check if they offer 24/7 support, and through which channels.

You’ll also want to find out whether the bank is reputable in general. Sites such as the Better Business Bureau and Trust Pilot can give you an idea of what other customers’ experiences have been. Comb through reviews and see if you notice any themes regarding account issues.

You’ll also want to double-check that the institution is insured. For banks, deposit insurance is provided by the Federal Deposit Insurance Corporation (FDIC). For credit unions, it’s the National Credit Union Administration (NCUA). These entities ensure your money is protected in case the institution fails, up to a limit of $250,000 per depositor.

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Once you’ve opened your checking account, be sure to monitor your account carefully.

Regularly check on your transaction activity, set up bank alerts, and periodically change your password. If you spot suspicious activity or transactions you don’t recognize, report it to your bank immediately. They will investigate, and in many cases, refund you for the fraudulent transactions.

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Yes, you can open a checking account (and often savings accounts, too) online. Online banks and credit unions offer this option, as do many traditional, brick-and-mortar banks.

Managing your finances online comes with risk, but most online banks have robust security measures in place to protect you and your information. You can further safeguard yourself by using strong passwords, logging out of banking apps when not in use, and regularly monitoring your account for suspicous activity.

Most checking accounts don’t pay interest, but online accounts are more likely to than traditional ones, as online institutions have less overhead costs to deal with. If you’re looking for a checking account that offers interest, be sure to shop around. You might also consider a high-yield savings account to maximize your interest earnings.