Online checking accounts woo millennials with cash back, no fees, and interest on your money, but anyone can take advantage


If your checking account fees just went up again, you might be wondering whether there are better alternatives. Hint: There probably are. Traditional brick-and-mortar banks have gotten surprisingly expensive for many people, with monthly fees, transaction fees, and ATM fees commonly charged.

A new breed of online-only banks has sprung up with accounts and services that are highly competitive. Most are unabashedly “millennial” in branding and marketing, but anyone can sign up. The products are often more generous (in terms of benefits) and less expensive (in terms of fees) than similar services offered by traditional banks.

Online vs. traditional banks

From the perspective of the federal government, an online bank is no different than a bank with branches. They’re subject to the same regulations, and accounts carry the same insurance.

The primary difference you’ll notice if you bank online is the lack of access to branches. This may not end up bothering you much, since online accounts fill the gaps with online services that traditional banks may not have. Granted, there are some traditional banking services you can only get at a branch (such as a cashier’s check, foreign currency exchange, and safety deposit boxes), but these are often available even if you don’t have an account at the bank.

Keep a no-fee savings account with a traditional bank for ‘relationship services’

Some banks, such as Wells Fargo, only provide certain “relationship services” (such as currency exchange) to existing customers, and you can also get discounts on loans if you have an account with the bank. Fortunately, there’s a workaround.

Most traditional banks still offer no-fee savings accounts. These are typically limited to a handful of transactions per month and pay little or no interest, but they do count as an account for relationship purposes. Depositing a small amount in a no-fee savings account while closing your high-fee checking account can allow you to “cut the cord” with your bank more gracefully.

Online banks and credit unions with great perks

These four financial institutions offer a variety of rewards and perks, like cash back on purchases and ATM fee credits.


BECU is one of the nation’s largest member-owned, not-for-profit credit unions. Accounts at BECU aren’t strictly “online-only” if you live in Washington state (or Charleston, South Carolina) where BECU has branches. However, BECU effectively operates like an online bank: even if you visit a BECU branch, most transactions are conducted online or via an ATM.

BECU is a credit union, so you need to meet eligibility rules to join. A $US20 donation to the Northwest Credit Union Foundation will get you in if none of the other criteria will.

It’s tough to pay any fees at all with BECU, and it’s also hard to find a service it doesn’t offer. The BECU Member Advantage Checking account, one of BECU’s two checking account options, gives you fee-free access to co-op network ATMs, free nationwide shared branching (so you can work with your account at a local credit union’s office), $US6 per month in ATM fee refunds, and an eye-popping 4.07% APY on your first $US500 in deposits.

No fees to write checks, deposit checks (via ATM or mobile app), or make online payments, either. What’s more, BECU even refunds the 0.2% foreign transaction fee charged by MasterCard on your (free) debit card.

Varo Money

While it’s very well hidden, Varo Money is a mobile-first digital bank that partners with The Bancorp, a private bank that services corporate clients (though Varo Money is available to the public).

Varo Money positions itself as an excellent option for international travellers because it offers access to Allpoint ATMs at no charge. There is a good network of ATMs in the United States, Canada, United Kingdom, Australia, and Mexico. Elsewhere, you’ll be subject to ATM fees, but there are no foreign transaction fees.

There is also no monthly fee, no minimum balance requirement, no transfer fee (inbound or outbound), and no debit card fees. Varo offers 2.12% APY on its savings accounts for all customers (no balance minimum or maximum) and 2.8% APY for qualifying customers with a balance under $US50,000.

You can deposit cash into your account at any Green Dot location for a $US4.95 fee.

Discover cash back Debit

Discover has the features you’d expect from an online checking account – no monthly fees or minimums, and a network of 60,000 ATMs that you can use at no charge – and its online banking interface is full-featured, allowing mobile check deposits and bill pay.

There are some particularly user-friendly features if you’re used to traditional banking, too. Discover offers printed checks and free check reorders, and it also provides no-fee official bank checks (issued from its office in Delaware). Plus, if your check bounces, Discover won’t add insult to injury by charging you a fee on top of it.

Here’s perhaps the best feature of all: For up to $US3,000 in debit card purchases per month, Discover gives you 1% back (with a few exceptions, such as peer-to-peer payments and loan payments).


Aspiration is a FINRA-registered broker-dealer, meaning it’s a brokerage firm. Organised as a B Corp, it markets to socially conscious individuals. While a separate company, Aspiration partners with Coastal Community Bank in Everett, Washington for services such as large check deposits (which cannot be made online) and debit cards.

The Aspiration fee structure is an unusual “pay what you think is fair” one, meaning that you can choose to pay no fees at all. Its cash accounts are called Aspiration Spend and Save; there are no fees, and a 2% APY is paid on savings (nothing on checking).

Checks are available, and the first order is free. Although the 1% foreign transaction fee is not waived, there are no ATM fees (they’re fully reimbursed worldwide), and some purchases made with your debit card provide a 0.5% refund. Plus, if you pay your cell phone bill with your Aspiration debit card, the company provides up to $US600 in phone insurance.

If you’re paying more than zero for checking, you’re paying too much. Check out an online account that pays you instead.

For more online checking account options, check out these offers from our partners: