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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Ally Bank0.60%$15k-Interest Checking Account
Accounts mentioned in this post. Rates as of August 1, 2014

Best Checking Accounts with Focus on Features Rather Than Rates

POSTED ON BY

With rates so low these days, the interest rate of a checking account may not be a priority for some people. The features of the checking account may be more of a priority. This might be especially important this year as large banks start to add monthly service fees to their free checking accounts. So I thought it would be useful to review some of the best checking accounts from internet banks with the focus on features rather than rates. To be included in this list, the checking account has to have no minimum balance requirement and no monthly service fees. Also, it has to provide free paper checks and free ATMs.

Here's my quick review of 3 top internet checking accounts:

  • Schwab Bank High Yield Investor Checking used to have high yields, but now it only pays 0.25% as of 1/13/2011. Even without the high yield, the checking account still has the no ATM fees and no monthly service fees. In addition to unlimited ATM fee rebates, there's also no currency exchange fee when you use the ATMs overseas. To open the checking account, you first have to open the Schwab One Brokerage Account. Schwab's electronic funds transfer (ETF) system is called MoneyLink which allows you to link external accounts and make online ACH transfers.
  • Ally Bank's Interest Checking offers the best interest rate compared to the other two banks, but you need at least a $15K balance to earn this top rate. Ally doesn't yet have remote deposit service, but it does provide postage paid envelopes. Ally has a solid bank-to-bank transfer service which makes it easy to pull funds from a local bank.
  • USAA Bank is one of the few internet banks that offer remote check deposits using either your PC (Deposit@Home) or smart phone (Deposit@Mobile). Although anyone can qualify for its Free Checking account, to qualify for remote deposit, you must be eligible for USAA property and casualty insurance which means that you must have a military connection. USAA does offer Easy Deposits which allows free check deposits through participating locations of The UPS store. You can also use USAA's bank-to-bank transfer service to pull funds from a local bank.

    One thing to note about USAA's free ATMs, it's not unlimited. USAA does not charge a fee for the first 10 ATM withdrawals and refunds up to $15 in other banks' ATM usage fees each month. A 1% foreign transaction fee applies to withdrawals outside the U.S.

Other Online Checking Accounts

If you don't care about free paper checks and unlimited free ATMs, ING Direct's Electric Orange, Alliant Credit Union's High Rate Checking and Incredible Bank should be considered. You can see how Electric Orange compares with Ally's Interest Checking in my Ally vs ING Direct Checking post.

Reward Checking Accounts

If high rates for your checking is a priority and you don't mind using a debit card, reward checking accounts should be considered. These may not have all the features of these internet checking accounts, but most do offer ATM fee reimbursements if you meet the monthly requirements. The vast majority of reward checking accounts are free. There are no monthly service fees even if you don't meet the requirements to qualify for the high rate and the ATM fee reimbursements. These accounts are also good choices if you want to support your local community bank and credit union. You can compare rates and features of reward checking accounts that are available nationwide and in your state in our reward checking table.

Debit Card Users with Small Savings

For those who like to use a debit card but don't keep large balances in the checking, you might want to consider PerkStreet Financial. It offers top cash back rewards for your debit card.

Edit 1/14/11: Clarified the $15K requirement at Ally


  Tags: Ally Bank, USAA Bank, Charles Schwab Bank, checking account

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Comments
12 Comments.
Comment #1 by Anonymous posted on
Anonymous
Re: USAA - keep in mind that the service at the UPS Store is currently only in San Antonio and San Diego, but they say they're rolling it out nationwide later this year.

Several years ago, USAA used to have a different type of service through the UPS Store where the stores would actually overnight your check to the bank. However, they ended this service very abruptly (I think around 2007) without providing any notice to their customers. A major inconvenience and one reason my USAA account went from being active to largely dormant at that time, and still is (I don't qualify for the remote deposit).

3
Comment #2 by Anonymous posted on
Anonymous
I opened a USAA checking account in December. The main reason was to use the remote deposit feature. No more quick trips to the local bank. The one pitfall of this feature is that it only works with deposits under $5K. Aside from that I think it's great.

3
Comment #3 by AtHomeDad (anonymous) posted on
AtHomeDad
I'd like to add a plug for First Internet Bank of Indiana. We have been with this bank since the dawn of internet banking. Most thought we were crazy to bank online way back when we joined. Obviously, this has become the standard way of operating, and now is even encouraged through fee-incentives by brick and mortar banks.

While they don't offer free checks, they do offer ATM refunds (to a limit), and a very useful account online interface. We do not put up with lousy customer service. My business is only as loyal as the quality of service I recieve. First IB has been exceptional in this regard. If I have a problem, they fix it. Period. Simple. For rates, I use other accounts, and transfer money in and out. I use a "bucket budget" so we actually have two checking accounts, one for fixed expenses, and one for variable expenses. We also use their Money Market Savings for cash reserves. If I forget to transfer money at the appropriate time, they have a free NSF feature that automatically moves it out of the MMSavings when needed.

They also offer FinanceWorks for budgeting and planning, although I don't take full advantage of this service.

It is one of the originals; its not a stellar rate performer, but it does offer steady moderately favorable rates, and impeccable service and online tools. That's all I want from my basic work-horse account. I'll finagle the rates in and out of other accounts as the need/opportunity arises. For my daily dealings, I need dependable and steady. First IB has been that since the mid-late 90's for us.

Thanks Ken for this great website. I'm finally used to the new format. This particular topic is important. Sometimes, the best rate doesn't make the best bank. There are a variety of needs that banks/c.u.'s have to meet.

3
Comment #4 by Anonymous posted on
Anonymous
Re: USAA different type of service through the UPS Store.

USAA told me that the company that handled these transactions went out of business.This company handled transactions for a number of different banks.

The remote deposit is OK, however on occasion I have to scan the checks a couple of times to get a workable image.

This is the first I have heard of a UPS service for depositing checks; can anyone expand upon this?

 



 

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Comment #5 by tightwad posted on
tightwad
In this low rate environment, No fees, and fast, free ACH capabilities able to link multiple accounts is what is important to me.

3
Comment #8 by Anonymous posted on
Anonymous
I think what you said about Ally Bank could be misread.

You do NOT need a $15k minimum for the account.  In fact, there is no minimum balance.  But the interest rate is lower on days when your balance is under $15k.

2
Comment #9 by KenBDG posted on
KenBDG
@Anonymous #8, Regarding Ally, I meant to say that you need $15K to qualify for the top rate. Ally and the other 2 checking accounts have no monthly fees. I updated the post to clarify.

1
Comment #10 by moneysaver posted on
moneysaver
Ken, thanks for including the info about these banks' ATM reimbursements and foreign ATM/foreign currency charges... For those who travel abroad a lot or even live abroad, how a U.S. bank handles foreign ATM activity is a very important consideration...and very expensive for the accountholder if they're not careful and choose wisely for the bank they use.

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Comment #11 by Anonymous posted on
Anonymous
The UPS Store service that several banks used was called QuickPost.  It was run by Netbank (which failed a few years ago).  They shut down the service in 2006 because they were losing big money on it.

 

1
Comment #12 by Anonymous posted on
Anonymous
The intrest rate is certainly important but it is definitely not the only consideration.  Banks are already using our money to make money, so if the checking account it not really "free," I will look elsewhere.  So 100% free is number one on my list for a checking account.  A nice rate of interest is a nice extra but there is not much point in a good interest rate if they can ding you in some other way.

As for your caveat about USAA bank, are there really people who make 10 withdrawals a month from ATMS?  That is twice a week, every week.  I would find it to be a chore to visit ATMS 10 times a month, not a convenience. 

1
Comment #13 by Banker Guy (anonymous) posted on
Banker Guy
In ref to your claim that the best checking accts focus on features rather than rates. Many of the large banks will have some type of service fee but in turn offer something like free checks. So really your comparison truly is not fair. Also isn't USAA only for mililtary families?

1