What is an online checking account?
An online checking account is a bank account that allows you to perform transactions online instead of having to travel to a bank branch or ATM location. It works just like a regular checking account, as you can deposit funds, transfer money to other accounts, write checks and complete other transactions.
Online checking accounts often include the following features:
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Online statements. When you open an online checking account, you typically get your statements via email instead of receiving paper copies. You may also be able to download statements from your bank’s online account center.
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Mobile banking. Many banks offer checking accounts with mobile apps such as the Bluevine Business checking account, making it easier to manage your finances on the go. Mobile apps allow you to check your balance, transfer funds and complete other transactions.
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Bill pay. If you don’t want to write a check or use your debit card to pay a bill, your online checking account may give you access to bill pay. When you use this feature, your bank deducts the amount of the bill from your balance and then transfers that amount to the selected service provider. For example, you can have your bank transfer $75 to your cable company or utility company.
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Debit card. Many online checking accounts come with a debit card such as the Amex Rewards checking account, which allows you to shop online, withdraw funds from ATMs and make purchases at brick-and-mortar retailers.
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Early direct deposit. If you get paid via direct deposit, your bank may give you access to your funds up to two days early.
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Check writing. Some online accounts come with check-writing privileges, making it easier to pay bills.
Pros and cons of online checking accounts
Like any other banking product, online checking accounts have several pros and cons. Keep these in mind to help you choose the best checking account for you.
How to choose the best online checking account
Ultimately, the best online checking account depends on your banking needs and personal preferences.
Consider the following when you’re shopping for an online checking account:
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Minimum deposit. Does the bank require a minimum deposit? If so, how much? You may want to choose a bank with no minimum deposit or a $25 minimum deposit versus a minimum of $100 or more.
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Fees. With so many fee-free options available, there’s really no need to pay fees to maintain your online account. When you’re comparing accounts, look for maintenance fees, minimum balance fees, overdraft fees and other costs.
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Mobile app. A robust mobile app makes it easier than ever to manage your finances without stepping into a bank branch. This can be particularly beneficial with teen checking accounts as it allows you to monitor your teens spending habits. Check to make sure your bank has a highly rated mobile app with plenty of features.
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Interest and rewards. If you’re looking for an interest-bearing account, check each bank’s APY before you sign up. You should also research cash back programs and other rewards options.
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ATMs. The more ATMs a bank has in its network, the easier it is to avoid ATM fees. If your bank doesn’t have a large ATM network, check to see if it reimburses you for fees at domestic ATMs.
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Digital wallet integration. If you love using Google Pay, Apple Pay or Samsung Pay, make sure the bank you choose allows you to use your new account with your favorite digital wallet.
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Minimum balance. If you can only save a little money each month, an account with a high minimum balance requirement probably won’t work for you. As you compare accounts, note the minimum balance requirements. If they’re extremely high, you may want to eliminate several banks from your list.
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Customer support. Some online banks only have support available during business hours, while others offer 24/7 support. Make sure you understand the level of support provided by the bank you choose.
How to open an online checking account
The application process varies from bank to bank.
However, you typically fill out an application, provide some personal information and make your opening deposit. You may have to provide your driver’s license, passport or another document to verify your identity. Additional documentation may be needed to open a joint online checking account or an online business checking account.? The application takes just a few minutes, but it may take several days for the bank to verify your information and process your initial deposit.
How do I deposit cash with an online checking account?
Some online banks allow you to deposit cash at ATMs. Other banks don’t allow cash deposits, so you’ll have to transfer money from a linked account or deposit a check instead. If you are looking for a checking account where you can deposit cash, you may be better suited to a checking account from a brick and mortar bank such as a Chase checking account.
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