Dedicated to Deposits: Deals, Data, and Discussion

Internet Checking Accounts and Paper Checks


Several internet checking accounts that pay the best interest rates don't allow paper checks. Three of the five that I mentioned in my recent post on the best internet checking accounts have this restriction. These include checking accounts from Incredible Bank, Clear Sky Accounts and ING Direct. An option is to use the bank's online bill pay. The bank will mail the check if the payee doesn't accept electronic payments. However, this isn't always a convenient option if you need to write a quick check to someone.

There are a few internet banks that allow paper checks. In fact, Ally Bank even provides free paper checks. For reward checking accounts, I can't remember any that don't allow paper checks. I think they realize that if they want customers to use these accounts as their primary checking account, they can't restrict paper checks.

I have a feeling most people want a checking account with the option of writing a paper check even if they write very few paper checks. I would also guess that most people can live without writing many checks so they would be okay if the bank placed a limit on the number of paper checks per month. An example is up to 4 free checks per month and a $1 fee for each paper check above 4.

Poll Question

That leads me to a new poll question for the day: How often do you write paper checks?

This does not include electronic checks or online bill pay. This is physically writing a paper check from your check book.

  Tags: checking account

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Comment #1 by darkdreamer4u posted on
I've never written a check in my life until I moved to the US. I've always found it antiquated and cumbersome and those retro check books are just funny in this day and age. So I write a check or two per year for only those rare occasions where other forms of payment are not accepted or not easy to implement.

Comment #2 by jshannon posted on
Initiating a paper check through billpay for a bill with a due date did not work well for me. Won't try that again.

Comment #3 by starlight posted on
I use paperchecks for my rent and play the float as it will take the landlord at least a week to cash my $2,000 rent check.  Also I write paperchecks maybe a couple times per year for those few times that someone wants payment on the spot and doesn't accept CASH or credit card!  what else is there?

Comment #4 by Anonymous posted on
I find paper checks to be the best way to pay IRS estimated taxes - long float and a paper trail.  Beyond those four checks a year I probably write just a few to small time contractors. 

Those occasional checks are the only reason I've kept my Umbrella online account now that it's returning almost no interest.  

Comment #5 by Wil posted on
I use paper checks for mortgage payments, IRS estimated taxes, and charitable donations, for the same reasons as anonymous #4 -- the float (about a week) and the paper trail. That works out to about 3-4 checks per month for me. By the way, a money market account with check writing privileges is another option for those who use only a few checks per month. Capital One Direct's High Yield Money Market is a good choice, as it has a decent rate, no fees or minimum balance, and free checks.

Comment #6 by cornfield posted on
I write about 40 checks a year.  Often as presents for birthday's and other gifts.  Plus all the goverment bills seem to go better with checks - car tags, taxes, etc.  Why should I pay the state $5 to make an online payment when I can lef tthem process the paper check.

Also it's good way to order where I don't know the merchants.  You know the ones in the Sunday paper. 

I know Ally gives free checks.  I don't undertand why some bank charge as much as $20 for a box of checks. 

Comment #7 by Anonymous posted on
I have to pay my property taxes with a paper check. The county charges a fee for receiving an e-check (an ACH payment). They claim that the company processing the e-checks charges them a fee, and our codes state that the county will not absorb any such fees. Absolutely ridiculous that a treasury needs a company to process payments. And really, what is there to process?? Talk about a bureaucratic and prehistoric system!

Comment #8 by Jeffry Pilcher | (anonymous) posted on
Jeffry Pilcher |
Rewards checking accounts have a ton of restrictions/requirements already. I don't see any issue with adding the 4 $1 idea suggested in the article. If the revenue models for rewards checking accounts indeed match their purported profitability, it seems quite possible that financial institutions realized they could swallow a low volume of check writing with these products. After all, a rewards customer has been "right-channeled" (industry term for "forced") into adopting alternate delivery channels, so you'd think these people would be e-savvy enough to self-limit their check writing.

Comment #9 by StrangerThings posted on
Maybe I am just getting old and fussy; but how can you have a CHECKING account without checks??? Isn't that  a little like a swimming pool with no water in it?? I mean  yeah, you got one but what good is it?

Comment #10 by darkdreamer4u posted on
To StrangerThings: it's called evolution. Accounts evolve, user habits evolve, still the same old name. So what? A television set is still called a TV even though today's LED 3D HDTV sets have not much in common anymore with your grandfather's good old CRT set.

Comment #11 by Anonymous posted on
It varies from month to month.  Many times, none. A few times just one and very rarely two times.  I mainly write them to pay bills from merchants who don't accept credit cards.  I also use them to deposit funds when a brand new account is opened.  Also used to send money overseas.

Comment #12 by Anonymous posted on
My idea of RCA is to use it to keep just $25k for the whole month. I use my Alliant account to write checks when needed and to fund RCAs.

Comment #13 by Anonymous posted on
Regularly: 1 check per month to pay rent because that's the only form of payment accepted.

As needed/profitable: like what others have said. 

Comment #14 by Anonymous posted on
i don"t how to convert paper checks to electronic pyments