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Checking accounts can be a valuable tool for consumers, as they provide a safe place to keep your money while still making it easy to make payments and withdraw cash. Traditionally, checking accounts have been offered by branch-based financial institutions but are increasingly being offered by online-based banks as well. The best checking accounts should make it easy to access your money, be flexible in how you can spend your money, and be FDIC insured at minimum. We also look for low or no fees, a high APY (if available), and ATM reimbursement options. Often, the best high interest checking accounts are found online.
We've looked all over the banking industry at every account to find our picks of the top checking accounts available for you.
The Ascent's best online & high interest checking accounts:
- 0% APY: Discover Cashback Debit
- Up to 1.25% APY: Axos Bank Rewards Checking
- 0.01% APY: Chime Spending Account
- 0.25% APY: Ally Interest Checking
- 0.25% APY: Alliant High Rate Checking
- 0.03% APY: Charles Schwab High Yield Investor Checking
- 0.10% APY: Capital One 360 Checking
- 0.10% APY: TIAA Bank Yield Pledge® Checking
- Up to 0.15% APY: Radius Rewards Checking
Rates as
of March 25, 2021
Best for: Cash back
Discover Cashback Debit
-- 0%
It’s common for credit cards to offer a cash back feature, not so much for traditional checking accounts. Discover Cashback Debit earns 1% on each and every debit card transaction, for up to $3,000 in spending every month. This account also has a long list of $0 fees. For example, Discover won’t charge a dime for monthly maintenance, bill pay through its system, a replacement debit card, outbound ACH fees, and a raft of other activities. Account owners also have access to their cash at more than 60,000 ATMs throughout the U.S.
ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
Read our full review to learn more.
Best for: High APY and ATMs
Axos Bank Rewards Checking
-- Up to 1.25%
The refreshing lack of monthly maintenance fees and no minimum balance requirement make this account a winner. You can also earn a high APY when making deposits at least once per month totaling $1,000 and using a linked Visa debit card at least 15 times per month, for at least $3 per transaction. Other advantages are the unlimited domestic ATM reimbursements, overdraft protection, and online bill pay.
Read our full review to learn more.
Best for: No fees
Chime Spending Account
-- 0.01%
Chime's Spending Account is its version of a checking account, and goes largely without fees. Another valuable feature is early direct deposit, which allows account holders to access funds from two days earlier than a standard check deposit.
Read our full review to learn more.
Best for: No monthly maintenances fees
Ally Interest Checking
-- 0.25%
Online-only bank Ally offers a high APY on its interest checking account for those who can maintain a $15,000 minimum daily balance. Accountholders with lower daily balances won't be left out, since Ally Interest Checking earns a nice return for daily balances less than $15,000. Ally also offers your wallet some reprieve by not charging monthly maintenance fees or for checks.
Read our full review to learn more.
Best for: High APY and ATMs
Alliant High Rate Checking
-- 0.25%
Alliant’s marquee checking account kicks back at a decent rate. The bank’s competitive APY is returned in what it calls its “monthly dividend” and the requirements are extremely modest -- a customer need only opt into e-statements for their account, and have one direct deposit made every month. There is no monthly service fee or minimum balance requirement, and the bank will reimburse up to $20 per month in out-of-network ATM fees incurred by its clients on top of its network of 80,000 surcharge-free ATMs customer can use.
Read our full review to learn more.
Best for: ATMs and no foreign transaction fees
Charles Schwab High Yield Investor Checking
-- 0.03%
The feature-packed Schwab High Yield Investor Checking's are its lack of fees. There are no service fees, and there is no minimum required balance. Customers using their account’s Visa Platinum debit card have their ATM fees fully refunded, even those incurred abroad. Speaking of that, Schwab High Yield Investor Checking incurs no foreign transaction fees on debit card purchases.
Read our full review to learn more.
Best for: No monthly maintenances fees
Capital One 360 Checking
-- 0.10%
Capital One emphasizes the words “Fee-free” in its literature and for good reason. Very few activities with this account incur a fee (exceptions are overdraft on credit, overnight check or replacement card delivery, stop payments, and bounced checks). The goose eggs also include $0 minimums to open and/or maintain the account and this continued fee free theme makes up for the competitively lower APY.
Read our full review to learn more.
Best for: High APY and ATMs
TIAA Bank Yield Pledge® Checking
-- 0.10%
TIAA Bank offers a very generous one-year introductory APY on qualifying balances. The account doesn’t turn into a pumpkin after that year is up; the bank promises to keep it in the top 5% of what it terms “Competitive Accounts” for as long as a customer maintains it. There are also unlimited ATM fee reimbursements as long as the customer keeps at least $5,000 in the account.
Read our full review to learn more.
Best for: Cash back and ATMs
Radius Rewards Checking
-- Up to 0.15%
Radius Rewards Checking includes the table-stakes perks (no monthly maintenance fees, for example) we covet, but it also packs in an array of other perks that make it a solid contender. Notably, accountholders can earn up to 1% cash back and avoid ATM fees worldwide, plus you'll get paid two days early when direct depositing your payroll. The cherry on top is unlimited ATM fee rebates, worldwide.
Read our full review to learn more.
What is a checking account?
A checking account is a basic bank account for spending. It contrasts with a savings account, which is intended for -- yes -- saving. In the old days, when checks were a primary payment method for Americans, this was the type of account that was most easily utilized for purchases.
That isn't necessarily the case anymore, though the name 'checking account' has stuck around. Remember that this is a spending account so there are numerous other ways to use the funds it contains. Most checking accounts come with a debit card, for example, and account holders can also take advantage of online bill pay services.
What to look for in a checking account
The best checking accounts, whether they are online, high interest, or traditional brick & mortar accounts, typically have:
- High APY: Many checking accounts, especially those offered by online-based financial institutions, pay interest. To compare, look at the account's annual percentage yield, or APY.
- Low fees: Given all of the great checking account options, there's no reason that anyone should have to pay an account maintenance fee. Some online banks also don't charge any fees for insufficient funds or overdrafts.
- ATM reimbursement: Some of the best online checking accounts reimburse ATM fees charged by other banks.
- Convenience: Banks that have large branch networks can often edge out their online counterparts when it comes to convenience -- especially if you want to do your banking in person. That said, some online banks have massive ATM networks and easy methods to make deposits, even with cash.
Why should you have a checking account?
Most American adults have checking accounts, and there's a good reason why it's such a popular place to keep money.
Here are a few reasons to have a checking account, whether it be a high interest online checking account or a traditional brick & mortar bank:
- Liquidity: This is a financial term that basically means "ease of accessing and utilizing assets." With the numerous ways you can deploy funds from a checking account, it's extremely liquid for spending. On the credit side of the ledger, thanks to instruments like direct deposit, it can be quite fast in receiving money too.
- Flexibility: Checking accounts have few, and often no, restrictions on spending. If you put your funds in a savings account instead, you'd be limited to a handful of withdrawals every month. If that money's in a CD you'd be penalized for taking money out of it. Also, checking accounts typically provide different ways to transact -- checks, debit card, online banking, mobile wallets, etc.
- Protection: All checking accounts with up to $250,000 in deposits are fully insured by the FDIC, so in the unlikely event your bank melts down you won't lose one cent of your money. Also, consumer fraud protection services are now standard and free of charge in a great many checking accounts at both nationwide and local banks.
Are checking accounts free?
The short answer to this is "maybe."
Checking accounts are wonderfully convenient. You pay for this, though, and not only with razor-thin or non-existent interest rates. Checking accounts are known for the numerous fees banks impose for maintaining them.
There are a host of these charges. Here are three of the more common ones:
- Monthly maintenance fee (also known as the service charge, among other names): This is the most prevalent type of recurring checking account charge. It tends to range from $5 to $15 or so, but can vary widely. Fortunately, banks often waive this charge if a customer meets a certain standard or standards. These can include a minimum number of transactions on the account's debit card, the establishment of a recurring direct deposit from an employer, or meeting a minimum ongoing balance amount.
- Overdraft fee: This classic charge has been a staple of the checking account for many years. Should you spend more money than what you've got in the account, you'll be slapped with an overdraft fee. $35 per incident is roughly the going rate. Banks don't typically waive overdraft fees.
- ATM fee: Here's one to be careful about when using the payment card linked to your checking account. Banks like to charge ATM fees if you draw funds from cash machines that aren't theirs. A standard hit is $2 or $3 per transaction, but these can be much higher in certain locations, especially abroad.
To be clear, not all checking accounts (especially online checking accounts) charge all of these fees. For example, many of our best high interest checking account picks don't have any monthly maintenance fees or overdraft fees, and some even go so far as to reimburse customers for ATM fees charged by other banks.
Do checking accounts earn interest?
Out of the standard bank account types, the checking account is the most flexible in terms of spending. In contrast to savings accounts, checking accounts have few, if any, restrictions -- you can spend as much as you like, as often as you want, if you've got the funds to cover it.
What you gain in flexibility, however, you lose in earnings potential. In contrast to fellow banking products like money market accounts and certificates of deposit (CDs), checking accounts often don't earn interest -- or, at best, they earn at extremely thin interest rates.
This is particularly true of traditional banks with brick-and-mortar operations. Keeping branches open is expensive and resource-draining, and the prevalence and ubiquity of checking accounts make them a prime target for cost cutting.
There are, of course, exceptions to this no-interest standard. Interest-bearing checking accounts exist, but they tend to have relatively high opening and/or minimum ongoing balance requirements. The effort it takes to hit those marks, plus the funds they tie down, are not often worthwhile for many customers.
Online-only banks have a little more wiggle room to pay interest since they don't bear those brick-and-mortar costs. It's not unusual to see interest-bearing online checking accounts. Even then, we're still in a low-rate environment -- these rates might be higher than 0%, but they're still minimal.
Are online checking accounts safe?
Yes, checking accounts are safe, especially if you have less than a quarter-million dollars in the account. As we mentioned earlier, all checking accounts are FDIC-insured for as much as $250,000 per depositor, per institution. If you have more than $250,000, you can divide the balance between checking accounts at several different banks in order to ensure all of your money is protected.
In addition, most institutions offer fraud protection for checking account customers that helps protect you against unauthorized withdrawals or usage of your debit card. Many of our best checking accounts picks offer fraud protection.
How many checking accounts should I have?
Most people have just one or two checking accounts, but like most personal finance issues, it depends on you. In addition to a standard individual checking account, many couples have joint checking accounts, and many business owners also have checking accounts specifically designed for that purpose.
How does a high interest checking account differ from a savings account?
Here are some key differences between checking accounts and savings accounts:
Checking accounts are primarily designed for making day-to-day payments, while savings accounts are best suited for money intended for longer-term goals.
Savings accounts typically have higher interest rates, for example, which makes them a better choice for say, an emergency fund, or other cash you aren't anticipating using anytime soon but don't feel comfortable investing in less liquid instruments like stocks. Savings accounts downsides include restrictions that limit the amount of withdrawals you can make and the ease of access you have to your money.
Checking accounts are intended to be spending accounts used for everyday purchases with fewer limitations on the number of payments or withdrawals you can make each month. Checking accounts, because they are meant for spending, will not have a high APY like savings accounts do, even if they are high interest.
For more on the difference, be sure to check out our beginner's guide to banking.
Key checking account terms to know
When you have a checking account, there's some important terminology that you should be familiar with:
Debit card: A debit card is a payment card that's linked to a checking or savings account. It's usually (but not always) Visa- or Mastercard-branded. Unlike a credit card, which allows you to borrow money and pay it back later, debit card transactions are approved based on the current balance of your account, and the money is immediately deducted.
PIN: Short for personal identification number, a PIN is a number that's typically four to six digits, and is used to identify you when using your debit card for ATM withdrawals or in-store purchases.
Insufficient funds: If you write a check or attempt a payment transaction for a greater amount than is in your checking account, it may be rejected for insufficient funds. In simple terms, insufficient funds means that you didn't have enough money to cover a certain transaction.
Overdraft: An overdraft is the result of a transaction that causes your account to have a negative balance. The key difference between an overdraft and insufficient funds is that a transaction that results in an overdraft is approved and a transaction resulting in insufficient funds is rejected.
Mobile or remote deposit: Most checking accounts allow customers to make check deposits from their smartphone or other mobile device by uploading a photo of the check, thereby saving a trip to the bank.
Endorsement: To endorse a check means to sign the back of a check in the specified area, indicating that the person being paid is accepting the money.
Routing number: There are three important numbers on every check, and the first is the routing number. This is a nine-digit code that corresponds with the bank that holds the checking account. Some major banks have several different routing numbers, depending on the geographical location where the account was opened.
Account number: The account number is a unique series of numbers that identifies the specific deposit account within the bank indicated by the routing number. In order to send money to a checking account, you'll need both the routing and account number. In short, the routing number tells the sending institution which bank to send the money to, and the account number tells that bank where to put it.
Check number: Although it's not particularly important when it comes to most transactions, every check has a unique number (usually three or four digits). Check numbers are useful for helping the account holder keep track of payments they make by check and can also help identify fraud in many cases.
| Offer | APY | Best For |
|---|---|---|
| Discover Cashback Debit | 0% | Cash back |
| Axos Bank Rewards Checking | Up to 1.25% | High APY and ATMs |
| Chime Spending Account | 0.01% | No fees |
| Ally Interest Checking | 0.25% | No monthly maintenances fees |
| Alliant High Rate Checking | 0.25% | High APY and ATMs |
| Charles Schwab High Yield Investor Checking | 0.03% | ATMs and no foreign transaction fees |
| Capital One 360 Checking | 0.10% | No monthly maintenances fees |
| TIAA Bank Yield Pledge® Checking | 0.10% | High APY and ATMs |
| Radius Rewards Checking | Up to 0.15% | Cash back and ATMs |
FAQs
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A checking account is a type of bank account that's primarily designed to allow the account owner easy access to their money. Checking accounts typically have no limits on the amount of withdrawals or payments that can be made, unlike savings accounts.
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The costs of a checking account vary dramatically. Some have multiple fees, such as maintenance charges, overdraft fees, and ATM fees, while others are entirely fee-free.
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Some checking accounts (especially those offered by online banks) earn interest on deposits, though it is usually a small amount.
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Well-established online banks are just as secure as traditional banks. They're FDIC-insured as well, and they follow the same regulatory laws as any other bank. Not only are they required to put numerous security measures in place to protect your information, but they're also required to limit your liability as a consumer in cases of fraud.
About the Author
Kailey has been writing about banks, credit cards, loans, and all things personal finance since 2012. She also writes for The Ascent's parent company, The Motley Fool. Her work has appeared on USA Today, CNN Money, Fox Business, and MSN Money. She's a graduate of the University of Wisconsin and happily lives in the woods of northern Wisconsin where she grew up.
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