As banks attempt to bolster their bottom line, many customers, especially at big banks, are getting stung by fees for formerly free checking accounts. The assault of new fees wouldn’t seem so onerous if banks were paying more on deposits. But the average yield on savings was recently 0.22% and on checking accounts only 0.14%, according to the online bank-comparison site DepositAccounts.com.
However, these seven online banks (including one credit union that anyone can join) offer free checking accounts, charge fewer fees than big banks and tend to offer higher rates. Because these banks lack dedicated ATMs, they usually reimburse you for other banks’ ATM charges. You’ll have to rely on direct deposit to put money in your account, although some banks allow you to deposit checks via your smart phone. As with traditional institutions, up to $250,000 per account is protected by the Federal Deposit Insurance Corp. or the National Credit Union Administration.
Ally Bank
Web site: ally.com
Ally lets you open its Interest Checking account with just $1 and promises 24/7 access to its customer-service representatives by phone, e-mail or online chat. The account has no monthly maintenance fee and offers mobile banking and free bill pay. Plus, it rebates all ATM fees nationwide. It also offers free person-to-person payments through Popmoney.
The account pays 0.4% interest on balances up to $15,000 and 0.75% on balances over that amount. By the end of the year, you will be able to use an iPhone, Android or Blackberry mobile device to deposit checks, transfer funds to accounts at other banks and pay bills.
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Bank of Internet
Web site: bofi.com
You need $100 to open a Rewards Checking account, but it has no monthly fee and no minimum monthly balance requirement. You get unlimited ATM reimbursements in the U.S. and free bill payment. Plus, you can use your iPhone or Android mobile phone to make deposits. Free FinanceWorks money-management software from Quicken lets you view all your accounts and track your spending by category.
You can earn up to 1.25% interest on your balance each month if you meet certain requirements, such as setting up direct deposit, paying bills online and using your debit card.
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INGDirect
Web site: ingdirect.com
It takes only $1 to open an Electric Orange Checking account, which has no minimum balance requirement and no monthly fees. You can use your phone to make deposits and to transfer money between accounts. Use any of Allpoint’s more than 43,000 ATMs worldwide and you pay no fee.
The checking account yields 0.2% on balances below $50,000. You can earn 0.8% interest with an Orange Savings Account. The new Savings Goal feature helps you calculate how much to contribute to reach a specified goal and sends you congratulatory e-mails when you reach periodic milestones.
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Lake Michigan Credit Union
Web site: lmcu.org
Anyone can join Lake Michigan Credit Union by donating $5 to the West Michigan chapter of the ALS Association and opening a $5 savings account. Its Max Checking account is free, with no minimum balance requirement and no monthly fees. It offers refunds of up to $15 a month for ATM fees if you aren’t using one of its 92 proprietary ATMs.
The credit union pays 3% on balances up to $15,000 if you arrange for one direct deposit per month, make ten debit card purchases, log in four times to home banking and receive e-statements rather than paper statements.
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PerkStreet Financial
Web site: perkstreet.com
This checking account, which has no minimum balance requirement and no monthly service fee as long as you use your account actively, offers round-the-clock customer service, 50 free paper checks and access to over 42,000 free ATMs in the Star network. You can transfer funds online between your PerkStreet account and an account at another bank at no charge.
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Schwab Bank
Web site: schwab.com
The Schwab High Yield Investor checking account is great for travelers because Schwab rebates all ATM fees worldwide. The account has no minimum balance requirement and no monthly service fee and provides free checks and online bill pay. Balances earn 0.15%.
You can use your phone to make deposits and pay bills. Banking customers need to open a linked Schwab brokerage account, but it has no initial funding or minimum balance requirement.
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USAA Bank
Web site: usaa.com
You need to deposit $25 to open a USAA Free Checking Account, but you pay no monthly fees. USAA also provides account holders ten free ATM withdrawals a month and refunds up to $15 in other banks’ ATM fees. USAA members who meet certain qualifications can deposit checks using their mobile phones or a home scanner. All accountholders can deposit checks at UPS stores.
Online bill pay and transfers to and from any bank are free. Use the free Money Manager software to track your bank, investment and retirement accounts.
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