It’s important to distinguish between online-only banks that offer a free checking account and being able to apply for a free checking account online.
This brief article will cover the internet-only banks offering free checking online.
At this time of publication, your author is aware of only six U.S. banks that qualify as online-only banks. They are:
- USAA Savings Bank
- E*Trade Bank
- Redneck Bank
- ING Direct
- Ally Bank
- Charles Schwab
A case can be made that ING Direct is no longer an online-only bank as it operates a few brick and mortar branches across the country. But for a majority of Americans, ING Direct remains basically an online-only bank.
What’s most unusual about this list of six banks is that only two of the six banks named their free checking account “Free Checking.”
Free Checking Online
Perhaps the most unusual online-only bank is the Redneck Bank located at www.redneckbank.com. It’s free checking account is named “flat out free™ checking.” If you’ve never visited this online bank’s website, you are in for a treat. It’s unlike any consumer bank you’ve ever encountered.
USAA Savings Bank named its free checking account Free Checking. Why not? It’s free of a minimum balance requirement and free of a monthly service fee. It’s honestly free checking.
The marketing folks at E*Trade Bank named its free checking account E*Trade Checking Account. It’s not a very original or descriptive name for a free checking account. Yet, this account has no minimum balance requirement and no monthly service fee. So it qualifies as free checking.
ING Direct named its free checking account Electric Orange Checking while the marketing folks at Ally Bank named their free checking account Interest Checking.
While Charles Schwab offers a free checking account, it isn’t called free checking. And, it is extremely difficult to locate it on the website. First, you won’t find it by going to the Schwab Bank website. You have to search the schwab.com investment site. And even on this site, it’s not easy to find. Once you do locate the appropriate landing page, you’ll find copy advising you that free checking at Schwab comes with a Schwab One Brokerage Account. Therefore, Charles Schwab isn’t the best choice if you are seeking a standalone free checking account.
Most online-only banks can offer free checking – even though they may not call their accounts free checking – because they don’t have expensive brick and mortar branch networks. Such branch networks are extremely costly and these costs are generally allocated to the banks’ checking accounts. Today, allocating branch costs to checking accounts seems like an irony given that the banks have been driving checking customers from the branches since the first ATM was installed at Chemical Bank in 1968.
If you are seeking a free checking account from an online-only bank, just make sure you do your research to verify that the checking account is free if you don’t find an account named free checking in the bank’s product menu. To ensure a checking account is free, you must make sure it is…
…free of a minimum monthly balance requirement and,
…free of a monthly service charge or fee.
Some banks claim to offer free checking if you agree to direct deposit. If you are able to arrange a direct deposit then for you, the account will be free checking. But, there are millions of Americans who do not qualify for a direct deposit from their employer or from the government (e.g. social security payments or similar payments).
If you are aware of any other online-only bank or credit union that offers free checking, be sure to send us an email with the information so we can add it to our list. You can contact us via the link at the top of the home page or any landing page.