Updated on Monday, November 22, 2021

Checking accounts are a safe and convenient place to store your money for everyday financial transactions, allowing you to withdraw funds to make purchases or to get cash from ATMs whenever you’d like.

Many checking accounts have different types of fees, but some financial institutions provide checking accounts that try to keep costs as low as possible. While the best free checking accounts chosen by MagnifyMoney may have some fees (such as those for out-of-network ATM use), they have no monthly maintenance fees or minimum balance requirements that trigger fees, meaning these accounts are free for ordinary checking account transactions.

Summary of best free checking accounts

Discover Bank Cashback Debit

Discover is first and foremost a credit card company, but it offers bank accounts backed by Federal Deposit Insurance Corporation (FDIC) insurance (up to the standard $250,000 deposit). Discover’s checking account, with a cashback debit card that has similar rewards to some credit cards, has no monthly fees. It also doesn’t have any fees for various other services related to the account, including stop payment orders, replacement debit cards, paper checks, and insufficient funds.

As a credit card company, Discover doesn’t operate any physical bank branches, and there are fees for out-of-network ATM use. But if you’re relying on your checking account only for in-network ATM use and online banking, it’s a strong option, especially if you plan on using your card for frequent debit purchases. You can earn up to $30 a month in cashback rewards with the Cashback Debit account.

Bottom line: Discover limits additional fees beyond its lack of monthly fees, and the cashback offered on the account could add up to a few hundred dollars by the end of the year depending on how often you use the debit card.

Ally Bank Interest Checking Account

Ally is a prominent online bank that doesn’t operate any branch locations but has over 43,000 fee-free ATMs through the Allpoint network and provides up to $10 per month in out-of-network ATM fee rebates. There are some standard fees, like those for outgoing wire transfers. Like the other accounts on this list, there are no monthly maintenance fees or minimum balance requirements.

As far as free checking accounts go, and considering the current environment of low-interest rates, Ally offers a strong rate. Even low balances can earn 0.10% APY, and balances over $15,000 — which may be more than most customers might keep in their account — earn 0.25% APY. Since this is a variable rate account, those rates may change in the future.

Bottom line: Even though interest rates across the board are low, Ally Bank offers the best available rate from a bank for an account that qualifies for this list. The out-of-network ATM fee rebates are helpful, given that there are no branch locations.

Capital One 360 Checking

Another credit card company that’s expanded into banking services, Capital One offers 360 Checking — a solid free checking account with a couple of noteworthy features. The account bears interest at 0.10% APY for all balances, offers early paychecks with regular direct deposit set up, and provides a few options in case you overdraft your account.

Unlike Discover, which doesn’t have a physical branch presence, Capital One has bank branches and cafes, in addition to a large ATM network. The 360 Checking account doesn’t have fees for out-of-network ATM use, but it also doesn’t offer rebates for fees levied by other financial institutions.

Bottom line: Capital One 360 Checking is a solid account all-around, as it bears a little bit of interest, has strong online and mobile banking platforms, offers branch access, and lets you access your paychecks a little early.

Alliant Credit Union High-Interest Checking

Alliant Credit Union is the only credit union to make it onto this list: they offer membership eligibility nationwide for those who join Foster Care to Success, and Alliant will pay the $5 membership fee on your behalf. Once you’re a member, you have access to the High-Interest Checking account, which offers one of the better available interest rates for a free online checking account (0.25% APY).

While Alliant offers access to over 80,000 ATMs and even provides rebates for out-of-network ATM fees up to $20 a month, they don’t have any branches for in-person banking. Likewise, while Alliant limits common types of fees (including overdraft protection), there are various types of fees that can apply to this account: not only are there more common fees like those for stop payments or wire transfers, there are inactivity and dormant account fees as well.

Bottom line: Alliant offers a solid 0.25% APY on all balances with no conditions, and the $20 out-of-network ATM fee rebate each month is better than most banks offer. Make sure to complete account activity to avoid fees.

Axos Bank Rewards Checking

Axos Bank is an online-only bank that has some of the most competitive rates on their deposit accounts, including up to 1.00% APY on Rewards Checking balances based on account activity. To unlock any interest-earning options, you must start by receiving monthly direct deposits totaling at least $1,500 — this earns you 0.40% APY. You can earn additional interest with each extra requirement you meet:

• Make at least 10 monthly debit card transactions or sign up for the Axos Personal Finance Manage
• Maintain $2,500 in a Managed Portfolio Account
• Maintain $2,500 in a Self Directed Trading Account
• Use the Rewards Checking account to pay Axos consumer loans

While the Rewards Checking account requires a $50 opening deposit, the Essential Checking account also has no monthly fees but has no required opening deposit. Axos doesn’t operate bank branches or its own ATMs, but there are unlimited ATM fee rebates for cash withdrawals — a nice perk.

Bottom line: As long as you set up direct deposits of at least $1,500 and complete 10 transactions per month, you’ll earn at least 0.70% APY, which would be the best rate for any account on this list.

nbkc Bank Everything Account

nbkc is a bank with an online presence, along with branches in the Kansas City area, and its Everything Account has some valuable features as far as free checking accounts go, especially the $12 per month rebate on out-of-network ATM fees. The account also bears a small amount of interest, though those rates are subject to change.

As part of the Everything Account, there are some features more commonly associated with savings accounts, namely the ability to set goals for saving money. Unlike savings accounts, there are no transaction limits for the Everything Account. nbkc also does a better job of keeping miscellaneous fees for special services down relative to other banks.

Bottom line: Between the ability to earn interest on the account, the rebates for out-of-network ATM use, and the features that help build better savings habits, the nbkc Everything Account is a quality all-around choice.

Varo Bank Account

Varo Bank specializes in simple, free online bank accounts, including the Varo Bank Account — a checking account with no minimum balance requirements or monthly maintenance fees. It’s free to open an account, but there are some hidden charges: you’ll have to pay a fee to deposit cash or use an out-of-network ATM. Varo has some advantages, including early access to paychecks and instant ACH transfers.

Bottom line: Varo keeps fees low in general, but another bank may be a better option if you know you’ll ever need to deposit checks. Otherwise, it’s a decent option for basic online banking.

Common checking account fees

Financial institutions typically levy some fees for their bank accounts. Some of those are standard monthly fees that can often be waived by maintaining a certain account balance or completing certain direct deposit requirements. The accounts listed above don’t have any of those fees, nor do they have any minimum balance requirements. However, there may be other types of fees that apply in specific situations.

• Overdraft fees: If you try to withdraw money or make a purchase for more funds than you currently have in your checking account, you could incur some overdraft fees, although some financial institutions offer the ability to cover those overdrafts with funds from another account or afford other protections to help you avoid fees.
• Out-of-network ATM fees: If you use an account from a bank that isn’t partnered with the ATM you’re withdrawing money from, you’ll likely run into some ATM fees: you can pay a fee from the company that operates those ATMs and a fee from your bank. Some banks waive that fee, and others reimburse you for fees you might incur from the ATM.
• Stop payment order fees: If you need to stop a payment from processing or cancel a check, you may need to submit a request to your financial institution to complete a stop payment order — an action that usually costs a modest fee.
• Outgoing wire transfer fees: A wire transfer is a way to complete a transfer of funds from one bank account to another, and they often incur fees — those fees tend to be higher for outgoing and international wire transfers.
• Paper statement fees: In an effort to eliminate the costs associated with sending physical paper copies of bank statements and other documents, some banks have started charging small fees for those copies.

Are free checking accounts truly free to use?

Chances are that you’ll be able to avoid fees for those services, but keep in mind that checking accounts aren’t truly free. Even if a checking account claims to have no fees, they might just be referring to monthly maintenance fees or some other common types of fees, but you may have to pay for a stop payment order, for example. The accounts were chosen by MagnifyMoney as the best free checking accounts still have some types of fees in the fine print.

Choosing the right free checking account

There are some things to consider when deciding which free checking account banks you want to open an account with. In addition to whether the account has monthly maintenance fees or minimum balance requirements, you should check the bank’s fee schedule to see if there are other types of fees and whether you’re likely to pay them. Other account features, like ATM rebates, are another consideration.

Beyond fees, it’s important to see if the checking account bears interest: in an environment of low-interest rates, it probably won’t add up to much, but rates could be subject to change in the future and it’s nice to earn a little bit of extra money just by keeping funds in your account. If earning interest on your checking account is a priority to you, we’ve compiled the best high-yield checking accounts available now.

You should also think about whether the bank offering an account is a good fit for you. Some banks have a strong brick-and-mortar presence, which may be an advantage if you like to use in-person banking services — but that might not matter much if you prefer to bank online or on a mobile app. Likewise, you should check to see where the nearest in-network ATMs are located if you plan to withdraw cash.

Methodology for choosing the best free checking accounts

MagnifyMoney reviewed checking accounts from dozens of financial institutions using information sourced from DepositAccounts.com. While it’s possible to incur some fees with the accounts on this list in some cases, there are no monthly maintenance fees or minimum balance requirements to maintain these accounts. There are also no fees for normal account use, including ATM transactions from in-network ATMs. The accounts chosen for this list must be nationally available.

Source: https://www.magnifymoney.com/blog/banking/best-free-checking-accounts/

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