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Understanding Features of Online-Only Checking Accounts

Online Checking Accounts

Online Banking Accounts offer features and services unique from traditional checking accounts, including remote deposit, ATM fee rebates, Surcharge-Fee ATM Use, and higher interest rates. Read on to learn more or use FindABetterBank to find the checking account with the features you want.

When opening a new checking or savings account, deciding between an online bank or an "brick-and-mortar" bank can be a tough decision. While many people assume they need a local branch, banks with online accounts have been chipping away at the advantages of local branches, offering services and features that compete with services you could only find at your local branch just five years ago. Starting a new relationship with a financial institution is a big decision, and it's important to consider the accessibility, features and fees of your new bank or credit union before you sign that agreement.

Remote Deposit

Until recently, to deposit a check into an online checking account, you had to mail your checks to the bank. "Remote Deposit" or "Deposit by Image" is a service which allows you to deposit a check by sending an image of the check to your bank. You do not need to deposit the paper check, in fact, most of the time, the paper check is no longer needed and can be destroyed. There are two clear benefits of this service -- you do not need to physically go to the bank to deposit a check, and the process of crediting the check's amount to your account begins immediately after the digital deposit. Some banks even immediately credit a limited amount of the check to your account, like some banks already do with ATM deposits.

ATM Fee Rebates

ATM fees are generally so complicated, people want to avoid thinking about them altogether. They need to find the nearest bank when they're out, or make sure they go by their bank every Friday to withdraw the amount the need for the weekend. With ATM Fee Rebates this is no longer necessary. It's as if any ATM is your banks ATM.

Usually, you are charged two fees when you withdraw money from an ATM that doesn't belong to your bank (a "foreign" ATM) -- first from your bank, second from the ATM company. But often these fees subsidize many services of brick-and-mortar banks including branch maintenance and staff. To add to their appeal, online banks take advantage of these extra costs that they don't have by first, charging nothing themselves for withdrawing from a "foreign" ATM and then rebating back to you the amount the ATM fee charged by the foreign ATM. While these rebates may take a few weeks to be rebated back to your checking account, you are, in effect, not charged anything for withdrawing money from any ATM.

Well, almost any ATM. If you withdraw money in a different country, exchange fees still apply usually, and some ATM Fee Rebate programs have limits, like only rebating the first 5 withdrawals each month. But, as these rebate programs are offered by many online banks (not all), this can be a great way to have access to your money.

Surcharge-Free ATMs

If the online bank does not offer ATM rebates, undoubtedly they provide free access to ATMs that are affiliated with a network like "Allpoint" or "Star."

Higher Interest Rates

If you are the type of person who wants to earn top interest on every dollar in the bank, online bank accounts -- both checking accounts and savings accounts -- are the way you want to go. While rates for both these days aren't very high, you can still earn around 3 times as much interest with an online account as you would with a normal bank account.

Online Banks Listed in FindABetterBank

There are many online banks. Currently, we list 4 that we think offer a great alternative to traditional banks and credit unions:

What is Remote Deposit?

Remote deposit allows you to easily deposit checks into your checking account without having to go to the branch.

The process is simple and generally goes as follows:

  • Sign the check.
  • Open the App. On the iPhone or other smart phone, download the app, open it, and choose the "make a deposit" feature.
  • Take a Picture. Following the instructions, you usually required to take clear photos of the back and front of the check. The app will ask you to retake any pictures that are not clear enough.
  • Confirm the Deposit. You will be asked to confirm the amount of the deposit as listed on the check.

That's it! Depending on your financial institution, the time it takes for the deposit to be credited to your account is a couple seconds to a couple days.

This service has been legal for some time -- ever since 2004, when digital check images were considered legal for proof of purchase -- but only recently has it become offered popularly, from Online Banks like USAA and traditionally "Brick-and-Mortar" banks like Chase.

Find the Best Checking Account or Reloadable Debit Card

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Other Checking Account Tips

Features of Accounts / Institution

- Mobile Check Deposit
- How To Avoid ATM Fees
- Interest Rates On Checking Accounts
- Online Banking and BillPay
- Online Banking Advanced Features
- Overdraft Fees and Protection
- Debit Cards and Debit Reward Programs
- The Ins and Outs of Mobile Banking
- Understanding Balance Requirements
- Closing a Checking Account

Types of Accounts

- 2nd Chance Checking Accounts
- Student and Senior Accounts
> Online Checking Accounts
- High-Yield Interest "Rewards" Accounts
- Free and Basic Checking Accounts
- Reloadable Debit Cards

How We Get Our Information

We conduct our own research for the largest US banks and we audit the information provided by community banks and credit unions.

Our branch location database is sourced from the FDIC and is updated with information provided by banks and credit unions.

All deposit accounts in FindABetterBank are insured by the FDIC or NCUA.

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