Best checking accounts
Updated September 25, 2020

8 Best Checking Accounts for 2020

Checking Accounts

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A checking account is one of the most commonly-used financial products, used to hold monthly income, pay bills, access to cash, and for everyday spending.

8 Best Checking Accounts for 2020

TIAA

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    TIAA: Best for Maximizing Interest
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    • Basics: If you have an initial deposit of at least $100, you can open a Yield-Pledge Checking account through TIAA.
    • Pros: Accounts are free to open and maintain, with no minimum balance requirement and no monthly account fees. ATM fees are reimbursed. The TIAA debit card offers purchase protections.
    • Cons: The highest interest rate is reserved for year one and will drop beginning in the second year. ATM fees are reimbursed, but only up to $15 each month if you have less than $5,000 in your account.
    Monthly fees: 8/10
     
    Other fees: 8/10
     
    Interest rates: 9/10
     
    Ease of use: 7/10
     
    Mobile support: 8/10
     
    Customer support: 8/10
     

Capital One 360

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    Capital One 360: Best for Mobile App
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    • Basics: With Capital One 360, you can manage your checking and savings accounts from a top-rated and feature-rich mobile app. Through it, you’re able to see all accounts at a glance, transfer funds, find a local branch or network ATM, pay bills, deposit checks, send money through Zelle, lock your card in case it’s lost or stolen, view statements, and get your free credit score.
    • Pros: Accounts are free, with no minimum opening deposit or minimum balance. You can do your banking online or at a local Capital One Bank branch. Mobile check deposit and bill pay are free, and you’ll have access to more than 39,000 free ATMs worldwide.
    • Cons: While you’ll earn interest on your checking account balance, the rate is tiered based on your balance. Also, outgoing domestic wires can cost up to $40.
    Monthly fees: 10/10
     
    Other fees: 10/10
     
    Interest rates: 7/10
     
    Ease of use: 10/10
     
    Mobile support: 9/10
     
    Customer support: 9/10
     

Simple

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    Simple: Best for Budgeting and Saving
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    • Basics: Simple’s checking accounts are free and easy to manage. One of its best features is your ability to build savings goals and Protected Goals, linked, interest-bearing accounts you can grow automatically.
    • Pros: There are no minimum deposit requirements and no minimum balances to hold, no monthly maintenance fees, and no fees for things like stop payments and NSF charges. Linked goals and expenses make it easy to manage your budget right from your account. Unlike many online banks, Simple offers shared accounts.
    • Cons: Checking account balances earn significantly less than Protected Goals.
    Monthly fees: 10/10
     
    Other fees: 8/10
     
    Interest rates: 2/10
     
    Ease of use: 8/10
     
    Mobile support: 10/10
     
    Customer support: 6/10
     

Chase Bank

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    Chase Bank: Best for Branch Access
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    • Basics: Chase Bank controls nearly one-fifth of all bank-owned ATMs; chances are that you can find one of its 16,000 ATMs or 5,000 brick-and-mortar locations near you around the country. The mobile app and online bill pay are free, and some checking accounts earn higher-than-average interest.
    • Pros: Choose among three accounts, depending on your needs: Total Checking, Premier Plus Checking, and Sapphire Checking. Monthly fees can be waived by meeting direct deposit or average daily balance requirements, the mobile app is rated 4.8 stars in the App Store, and you can get premium checks for free.
    • Cons: What you get largely depends on the account tier you choose and how you manage your money. Monthly fees range from $12 to $25; you’ll need to keep a minimum monthly balance to waive the fee. Only Premier Plus and Sapphire Checking are interest-bearing.
    Monthly fees: 5/10
     
    Other fees: 8/10
     
    Interest rates: 6/10
     
    Ease of use: 8/10
     
    Mobile support: 9/10
     
    Customer support: 8/10
     

Discover

  • Discover Online Savings Account
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    Discover: Best for Earning Rewards
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    • Basics: Discover’s online checking account lets you earn cash back on every debit card purchase, and you’ll pay no fees on the account.
    • Pros: There are no fees with Discover checking accounts. You’ll have access to 60,000 fee-free ATMs nationwide and free standard checks and online bill pay, and you’ll earn 1.00% cash back on your first $3,000 in debit card purchases each month.
    • Cons: Discover Bank doesn’t operate local branches, so you have no way to get in-person help or deposit cash. Its online platform isn’t as intuitive as some competitors’.
    Monthly fees: 10/10
     
    Other fees: 10/10
     
    Interest rates: 2/10
     
    Ease of use: 8/10
     
    Mobile support: 8/10
     
    Customer support: 6/10
     

Chime

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    Chime: Best for No Fees
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    • Basics: Chime is a free online bank account that gives you access to free ATMs, cash back on some purchases, fee-free banking, and direct deposit up to two days earlier than other banks.
    • Pros: There are no minimum deposit or monthly balance requirements with your Chime checking account. There are more than 38,000 in-network ATMs to choose from, and the mobile app is one of the most feature-rich around. With SpotMe, Chime will cover you for up to $100 in overdrafts without a penalty.
    • Cons: Chime doesn’t have local branches. The checking account doesn’t earn interest. You will be charged a $2.50 fee for over-the-counter cash withdrawals or when you use an out-of-network ATM.
    Monthly fees: 10/10
     
    Other fees: 8/10
     
    Interest rates: 2/10
     
    Ease of use: 8/10
     
    Mobile support: 10/10
     
    Customer support: 6/10
     

Ally

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    Ally: Best for No Minimum Deposit
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    • Basics: With Ally’s online checking account, there’s no minimum deposit, no balance requirement, and you can earn a little bit of interest on your funds.
    • Pros: ACH transfers, wires, and even cashier’s checks are free. You’ll have access to more than 43,000 free AllPoint ATMs, and managing your account (including transferring funds and depositing checks) is easy within the mobile app.
    • Cons: There are no local branches, which means no cash deposits or in-person assistance.
    Monthly fees: 10/10
     
    Other fees: 10/10
     
    Interest rates: 6/10
     
    Ease of use: 10/10
     
    Mobile support: 8/10
     
    Customer support: 8/10
     

Aspiration

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    Aspiration: Best Feel-Good and Do-Good Company
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    • Basics: Aspiration is a company built on trust, aimed at helping you feel good about your banking experience and your impact on the world. Its Spend and Save account lets you save on fees while making a positive impact.
    • Pros: Open an account with just $10, and pay what you think is fair (as little as $0). You’ll have access to spending (checking) and savings accounts to divvy up your paycheck automatically. Debit card purchases earn cash back. Get reimbursed for up to five ATM withdrawals each month. Aspiration doesn’t support fossil fuel projects, and it donates 10% of profits to charity. Get free cell phone protection if you pay your wireless bill through your Aspiration account.
    • Cons: Checking account balances earn no interest; you’ll have to put funds in your Save account to earn interest. Your chosen monthly fee could be up to $10.
    Monthly fees: 10/10
     
    Other fees: 9/10
     
    Interest rates: 2/10
     
    Ease of use: 8/10
     
    Mobile support: 8/10
     
    Customer support: 5/10
     

Checking Account Basics

Here are the basics of checking accounts.

Why Open a Checking Account

There are plenty of reasons to open and use a checking account. In addition to your savings account, it’s an important part of your everyday financial strategy.

Checking accounts can be used to:

  • Receive your paycheck via electronic or in-person deposit.
  • Access funds through local branches, ATMs, and debit cards.
  • Track and monitor spending.
  • Safely store your money.
  • Set up automatic payments and transfers into other financial accounts, like savings.

Even if you prefer spending cash, a checking account is a safe way to store your money and track how you spend it.

Some banks offer additional perks on checking accounts. These might include earned interest on your balance or automatic savings. These features can be excellent additions to your existing money management strategies.

How to Spend from Your Checking Account

Checking accounts offer a few ways to access your money, including a checkbook and debit card. With these, you can spend funds from your account wherever these payment methods are accepted.

You can use a debit card to withdraw cash from an ATM. Banks often offer a network of fee-free ATMs; if you use an out-of-network ATM, you may be charged a fee by the ATM’s owner, your bank, or both. Some banks also offer ATM fee reimbursements.

Many banks give you options for easy ACH (electronic) transfers from your checking account to other accounts, such as your savings. You may also have access to bill pay services, giving you a free and quick way to pay your monthly bills directly from your checking account.

Earning Interest on Checking Account Balances

When your paycheck automatically goes into your checking account, it can be easy to leave those funds sitting there, building up your balance. If you have an interest-bearing checking account, this could be a good thing. You’ll have cash at your fingertips when you need it while also earning a return on the balance.

Earning interest on your checking account, however, isn’t as common as earning interest on a savings account, and rates are typically lower and dependent on balance requirements.

Is Checking Account Interest Taxable?

For tax purposes, the government considers your bank account interest as income. Your bank will send you a 1099-INT after each year ends, noting how much you earned in interest throughout the year. You will need to report all of this income (from each interest-bearing account you hold), though you will only pay taxes on interest over $10.

Why You Need Both Checking and Savings Accounts

Even if you earn interest on your checking account, there are still benefits to having a separate savings account.

The biggest reason for many people is that keeping your savings separate from your everyday spending money helps to prevent temptation. If your money is all in one pot, it can be easy to overspend inadvertently, just due to ease of access.

By putting it in a separate savings account — especially if the account limits monthly withdrawals — you make it easier to avoid overspending.

Savings accounts also typically earn much higher interest than checking accounts. Tucking your money away at the right bank could help grow your money faster while you save for financial goals.

Key Differences Between Checking and Savings Accounts

Let’s take a look at a few of the key differences between standard checking accounts and savings accounts.

Savings Accounts Have Withdrawal Limits

You won’t encounter spending limits with most checking accounts. Whether you only use your debit card three times a month or swipe ‘til you drop, there’s no penalty for making multiple purchases from your checking account, no matter the spending method.

With official savings accounts, however, you’ll be subject to a federal withdrawal limit of six per statement cycle. If you transfer, withdraw, or wire money out more than that, you are subject to fees, reprimands, or even account closure.

Some online banks, including Simple and Aspiration, let you access your money more easily by setting up their “savings” accounts as technically checking accounts for regulatory purposes. These let you set aside money, earn competitive interest, and still access your funds any time.

Checks and Debit Cards Are Rare for Savings Accounts

You’ll be offered a checkbook, debit card, or both through your checking account. With a savings account? You probably won’t get either.

Due to the aforementioned withdrawal limits, savings accounts don’t typically make it easy to spend your funds on the go. While you can spend from your checking with a check, swipe, tap, or transfer, savings accounts are typically limited to ACH transfers and wires.

Checking Accounts Often Offer Bill Pay

Because checking account funds are for everyday spending, including bills, many banks make it easy to pay these digitally. With bill pay platforms, you can schedule payments to many of your monthly service providers, whether it’s to cover your utilities, car payment, or cell phone bill.

Should You Keep Checking and Savings at the Same Bank?

Reasons to keep checking and savings at the same institution include:

  • Some banks offer bonuses for having multiple accounts.
  • Your savings account can provide overdraft protection for your checking account.
  • You can view and monitor all balances in one place.
  • You can quickly transfer between accounts.

You might opt for accounts at separate banks, because:

  • Having your savings too close to your checking might be all the temptation you need to overspend.
  • You can probably get a higher savings interest rate by opting for an online savings account, and those companies don’t always offer checking products.
  • You could earn multiple sign-up bonuses by splitting your money between various institutions.

How do you decide which route is right for you? It will mostly depend on how you spend and save.

If you struggle to put away enough in savings each month or are the type to blow your savings on some tempting new purchase, you could benefit from keeping your funds as far apart as possible. Sometimes, having a few days in between you and a completed transfer is all the cool-off you need to talk yourself out of a purchase.

If you need savings nearby for simplicity’s sake or as a safety net for checking, keeping both accounts at the same bank may be best.

Are Checking Accounts Free?

Many fee-free checking accounts are available today, a shift in the market from just a few years ago.

Many banks charge fees that can be waived if you meet certain requirements, such as a minimum account balance, value of direct deposits, other accounts with the bank, or debit-card transactions.

Be sure to take a look at your current spending habits and account balance before choosing a new bank. Paying for a checking account is almost always money wasted, so save that money each month if you can.

Other Checking Account Expenses You Might Encounter

Monthly maintenance fees aren’t the only expenses you might come across using your checking account. Here are a few other common expenses you might face:

  • Incoming and outgoing wire transfer fees.
  • Paper check orders.
  • Overdraft fees.
  • Stop payment fees.
  • Paper statement fee.
  • Replacement card fee.
  • Returned item fee.

Many banks will cover some or all of these fees or waive them in exchange for meeting certain requirements.

Checking Account Features to Look for

Every bank offers its own unique checking account product, with its own set of features. Finding the one that’s right for you depends not only on your financial goals, but also how you spend.

Some of the best checking account features include things like:

  • No monthly fee, or a fee that can be easily waived.
  • Mobile app with check deposit.
  • Easy-to-use mobile apps.
  • Free ATMs and/or ATM fee reimbursement.
  • Bill-pay services.
  • Sign-up bonuses.
  • Interest.
  • Easy transfers.
  • Overdraft protection (fee-free is best!).
  • Free checks.
  • Free debit cards.
  • 24/7 customer service.
  • Automatic savings options.
  • Joint accounts.
  • Ability to deposit cash.
  • Budgeting and money management tools.

You might also want a bank that has local brick-and-mortar branches if you prefer in-person banking or access to a full-service online platform.

Will Opening a Checking Account Affect Your Credit?

Opening a checking account rarely affects your credit. Many institutions will do a soft credit inquiry before you can open an account. This lets them check your credit report without dinging it as a request for credit.

The bank will be able to see the types of accounts you hold and whether you are (or have been) delinquent. It will be able to see whether you’ve had previous bank account balances go into collections or settled. A risky banking history could prevent you from opening an account.

In some cases, a bank will ask your permission to request a hard pull on your credit. This typically only happens if you apply for a line of credit or there is a brokerage account attached to your checking. Read what you’re agreeing to in the application process, so you know whether a hard credit check will be conducted; this could drop your score a few points for a while.

Second Chance Checking Accounts

If you have trouble opening a new checking account because of unpaid fees or other mistakes in the past, a second chance checking account could help you reset.

These accounts are a bit more limited than your typical checking account. Often, second chance checking accounts:

  • Charge an annual fee.
  • Don’t include overdraft protection.
  • May require direct deposit.
  • May include balance or daily spending limits.
  • Still include services like online banking, check writing, and bill pay.

Once you’ve responsibly managed your second chance checking account for a while, you may be offered the opportunity to upgrade to a standard checking account at the same bank, or you can apply again at a different bank.

How to Use Your Checking Account

Your checking account is the account that you will, in all likelihood, access the most frequently. From this account, you will likely deposit your pay, pay bills, and withdraw cash. It will be the central station through which all your funds will pass, which makes it an incredibly important account to manage.

Here are a few things to keep in mind when using a checking account:

  • Think short term. Your checking account isn’t for long-term funds. If you are setting aside funds for a rainy day, earmarking money for emergencies, or saving for retirement, that should all go into high-yield savings or tax-advantaged accounts. Your checking account is for money you earn and plan to spend in the near future.
  • Go for free whenever possible. It almost never makes sense to pay a monthly fee for a checking account. Whether this means finding a bank that is fee-free or meeting certain account criteria to waive these fees, avoid paying money just to have an account.
  • Avoid fees like the plague. Monthly maintenance fees aren’t the only way to waste money with your checking account. There are also ATM fees, overdraft fees, paper check fees, and even transfer fees. Take a look at how you use your account, and do your best to avoid wasting money on any bank-related fees.
  • Take advantage of savings features. Saving money is hard. Automating this process can help ensure success. This means utilizing features like auto-transfer and round-up savings when they are available.

Checking Account Overdraft Protections

Many checking accounts offer overdraft protection to customers. This feature may involve a connected savings account or it may charge a penalty, but it can protect you from denied charges if you overspend from your checking account.

Overdraft fees are around $35. Overdraft protection means if you overspend with a check or debit card, the bank can cover the excess charge and charge you that fee. Some banks offer a grace period in which to deposit funds before you’re charged a fee, but others will immediately add the charge when your account goes into the red by any amount.

Some banks let you link a savings account to your checking account to act as a backup in case you overspend on the checking account. This kind of overdraft protection is usually free.

Federal law requires banks to deny charges by default, so you’ll have to opt into overdraft protection. If you don’t, you’ll avoid fees, and charges will be denied when you don’t have enough money to cover them.

Is Your Money Safe in a Checking Account?

Each of the banks in this article are FDIC insured, which means your deposits are protected up to federal limits. If something were to happen to the bank where you keep your checking account, you would be protected for up to $250,000 per bank.

Your bank usually protects you from fraud, as well, if someone were to steal your debit card or checks, or fraudulently use your account number. This protection isn’t quite as comfortable as you’d get from, say, your credit card company; in most cases, you’ll be out the funds while your bank investigates the suspicious activity. However, if it is indeed found to be fraudulent, your bank will typically reimburse you.

Additionally, your deposits are safe in the sense that you cannot lose funds from a checking account the way you can in an investment account. Even if your checking account earns interest according to market trends, you cannot lose money the same way.

Having a feature-rich checking account is an important part of any financial strategy. By choosing an account that is low in fees, interest-bearing, and offers benefits that make your life easier, you can better manage both your spending and your savings.

Shop around until you find the checking account that’s right for you and how you spend.

Monthly Fee Branch Access Free ATMs or Fee Refunds Sign Up

$12 – $25, can be waived

Yes

16,000 free ATMs

$0

Yes

39,000 free ATMs

$0

No

43,000 free ATMs

$0

No

38,000 free ATMs

$0

No

60,000 free ATMs

$0

No

55,000 free ATMs

$0

No

5 free ATM withdrawals per month

$0

Yes

At least $15 in fees reimbursed monthly

Stephanie Colestock

Stephanie Colestock is a personal finance expert and writer who enjoys teaching people how to be financially independent and confident about their money choices, regardless of obstacles in their path (such as the crippling student loan debt she once held). Stephanie graduated from Baylor University, and is currently working toward her CFP certification. Her work can be seen on sites such as Forbes, Dough Roller, and Johnny Jet, among many others.

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