Opening Checking Account Online
Opening a checking account online has never been easier. In my last article about ING Direct savings accounts, I described ING Direct’s Electric Orange account. This ING Electric Orange account is a high interest online checking account. This article is to help you to do your checking accounts comparison so that you can open the best online checking account.
When I first created Smart Savings 101, I planned out my first 10 posts to write. Let me tell you that Opening Checking Account Online was not on that list. I planned on focusing on high interest rate savings accounts first. However, when I started researching the ING Direct Electric Orange high interest checking account, I was very intrigued with ING Direct’s product. So instead of starting with talking about high interest savings accounts, I am a going to start with opening an online checking account.
What is the best online checking account for you to open?
Writing a post telling you the best online checking account is very difficult. You must compare a lot of checking accounts to find the best checking account rate. It is very difficult to do a checking accounts comparison because it will only be relevant for a short period of time. Banks are constantly changing their check accounts interest rates, checking account fees and overdraft charges. So, instead of telling you what exact online checking account is best for you, let me describe the criteria that you need to know when opening checking account online.
The first criteria is a high interest account rate. You want to find a checking account with the highest interest rate possible. Right now the ING Direct Electric Orange checking account starts with a 1.75% interest rate. This is a good measuring stick to use when doing you checking accounts comparison. Some checking accounts will have higher interest rates and some will have lower interest rates. Don’t just open a checking account with the highest interest rate. You need to consider all of the factors in this Open Checking Account Online article.
The second criteria is whether the bank has a minimum balance requirement. For your checking account this minimum balance needs to be very small if not zero dollars. Your checking account needs to be your most liquid high interest banking account. You can’t have minimum balances tying down you using your money.
The third criteria that I look at is whether the checking account program has a large free ATM network. I hate spending money on ATM fees. Some banks will reimburse you for all ATM fees. I really love these online checking accounts.
The fourth criteria that I look at is the checking account’s overdraft protection program. Just like I don’t like to be charged ATM fees, I hate overdraft fees. The dreaded NSF can take away all the high interest rates savings that you accumulated. Nothing will hurt your savings like these fees.
I hope that this article on opening checking account online has helped you to understand what you need to consider when opening a checking account online. I highly recommend that you consider the ING Direct checking account.
Tags: checking accounts, high interest checking, ING Direct, open checking account
Posted in High Interest Checking Accounts |
April 9th, 2008 at 2:13 pm
While I’m sure ING has worked out well for you, you should also explore credit unions as an alternative to banks. They typically pay better dividends, offer lower interest rates and charge lower fees. Most credit unions also offer shared branching as a feature that I’ve never seen from a bank. And yes, a lot of credit unions also offer the ability to open an account online.
I can’t exactly say I’m unbiased on this matter since I’m a programmer for a credit union. But check them out for yourself. Like banks, all CUs are not created equal, but shopping for the best deal should include them.
High interest checking accounts typically are a draw with other limitations. (Limited foreign ATM access, etc.)
Minimum balance accounts typically waive fees charged by other types of accounts and pay a slightly higher rate than a regular savings account. Sometimes they carry a monthly minimum balance fee. (I know we do, so watch out.)
When considering ATM fees, remember that most Point Of Sale sites will give cash back with no fee.
There are 2 fees that can be applied. One by the ATM “owner” and one by your institution. You are warned about the ATM owner’s fee. For example, most CUs have smaller networks, but they typically partner with each other so you don’t get the ATM owner’s fee when using partnered CUs ATMs. The institution may still consider this a foreign ATM transaction (it isn’t owned by your instituion) so you typically will get a limited number of allowed transactions before your get that fee. (read the fine print, right?)
Overdraft protection can be good and bad. Mostly it is bad, since you can rack up a LOT of fees which are nearly impossible to get reversed. These fees are gravy for your institution, especially if you have direct deposit. The only good thing is they don’t count as NSFs and checks don’t get returned. If you HAVE to use it, find out how much it’s good for and make sure it is a single big hit so you avoid a lot of extra fees.
June 13th, 2008 at 4:52 am
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