About Ken Tumin

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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3 Best Places to Find Free Checking Accounts


When was the last time you paid a checking account fee? I would guess that many of the regular DA readers are careful to avoid checking account fees like monthly service fees and overdraft fees. In the last year, it may have become a little more difficult in avoiding fees if you have a checking account at a large bank. This NYT Economix blog article describes how big banks have continued to find new ways to charge more fees. The article recommended one way to minimize fees that you pay. That is to join a credit union. That can be a good choice, but there are other options.

Free Checking at Credit Unions and Community Banks

Free checking accounts are common at credit unions, but you should also look for credit unions that are part of the shared branch network and an ATM network. The shared branch network is called CU Service Centers and it gives credit union members access to thousands of credit union branches in the US. At a shared branch you can perform many banking transactions just as if you were at your home credit union such as making deposits, withdrawals and loan payments. For ATM networks, the big one for credit unions is the CO-OP Network. This network gives you surcharge-free access to thousands of ATMs throughout the U.S. and Canada.

Instead of a plain free checking account at a credit union, you should look for a free reward checking account. Like the plain free checking, most reward checking accounts are free with no monthly service charges. However, reward checking gives you the option of a high interest rate (high compared to what's available in today's low interest rate environment). To qualify for this high rate, you'll have to meet monthly requirements like debit card usage. Many reward checking accounts still pay higher interest rates than you can find at internet banks. However, there are balance caps that limit the high rate to a certain balance (like $15K or $25K).

In addition to credit unions, you can find reward checking accounts at many community banks. Please refer to my reward checking account overview for more details.

Free Checking at Brokerages and Mutual-Fund Firms

Another place to look for free checking accounts is at a brokerage and mutual-fund firm. The two best known free brokerage checking accounts are the Fidelity Cash Management Account and the Schwab Bank High Yield Investor Checking. This can be a good option if you are already using the brokerage for your investments. Another reason to consider one of these checking accounts is the perks like free ATMs worldwide, free checks and mobile check deposits. The main downside is low interest rates. Charles Schwab Bank used to offer high rates as its checking account name suggests, but in the last few years, the rate has been low.

Free Checking at Internet Banks

The third option for free checking accounts is at internet banks. The two best known internet checking accounts are the ING DIRECT Electric Orange account and the Ally Bank Interest Checking Account. Last June I did a comparison of these Ally and ING DIRECT accounts. One advantage over the brokerage checking accounts is a higher interest rate. However, the rates are lower than reward checking accounts. The one exception is Bank of Internet USA which is the only internet bank that offers its own reward checking account. It currently pays 1.25% APY which is low for reward checking accounts, but it applies to all balances. This account can be a good choice for a free checking account, and it can also eliminate the need for a savings account. I last reviewed this account in July.

Other Considerations

The downside with brokerages and internet banks is that you won't have a local branch. You might need a local branch to deposit cash or coins. There are ways to deposit cash to your internet bank, but a local bank office can make this much easier. There are also other services that a local branch can offer such as a notary public, Medallion stamp guarantee, safe deposit boxes and free paper shredding and coin counting. Remember, there's no reason to limit yourself to just one checking account. You may want to consider a free account at a local credit union combined with a free checking account at an internet bank or brokerage that you use as your primary checking account.

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  |     |   Comment #1
I agree. I don't think I could ever go 'Branch Free'. I still enjoy the convenience of having those services close by. Thanks Ken.
  |     |   Comment #2
My main checking account is at Navy Federal Credit Union, which, unfortunately has no offices where I live. In order to havea free, convenient local checking account,, I use a Bank of America's "e-Banking" checking account with an ATM card and online statements (I could use paper checks for this account, however, I don't bother with those and merely do everything at a Bank of America ATM using my card). There's no charge for Bank of America e-Banking AS LONG AS long as I keep everything "mechanized" (e.g., don't go to the window at a branch for something I can do at the ATM) and get statements online. The shared branch arrangement has never worked for me because the local credit union that participates in shared banking has only one of their branches that it uses for shared banking transactions and that particular branch is far from where I live.
  |     |   Comment #3
I just opened a checking account with Ally bank.  Nearly all of the local banks pay next to nothing in interest on checking accounts.  I've never paid checking account fees since I began working over 30 years ago.  I still keep the local checking accounts open in case I need access to money in a hurry.  Also in case I need some other bank related service, having a local bank account facilitates using them.  I also have credit union accounts too, but they also pay very low rates.  For me, higher rates and the availability of immediate access are the most considerations.
  |     |   Comment #4
#3: I think a great many people who are looking for a fee-free checking account are much more concerned about trying to get fee-free checking that they are about earning interest on a checking account because they simply aren't likely to have a large checking account balance in the first place. If there is real in-depth research on fee-free accounts at the big banks, I bet it would show they're out there--just like the BofA e-Banking account. Although the big banks have done and are doing things that aren't that great for consumers, they aren't stupid, and I'm sure they have made provisions for keeping those many customers who want fee-free accounts. They undoubtedly have just required those customers--many with small balances--to go through some hoops to get fee-free checking.

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