Free Online Checking
As online banking becomes more prevalent and more efficient, free online checking has become the rule, not the exception. According to
the Online Banking Report, about 80% of online checking accounts are free for basic services, and there are a wide array of options out there. So if you're willing to work with the issues common to all online checking accounts, like having to mail in deposits and conduct business online or on the phone, then it's worth the effort to find an online checking account that's free.
But what About Security?
Online checking accounts typically do not send physical returned checks or paper statements. Some consumers see the elimination of the paper trail from traditional banking as a security liability and a simple cost-cutting measure for banks. This is a misconception, however. The most common methods of identity theft involve stealing paper bank statements from mailboxes and dumpsters. Having those paper records floating around is actually an enormous security liability. It's far safer to have them viewable over a secure connection. If you absolutely must have a paper record, you can always print them out.
As for returned checks, many banks have begun uploading optical scans of the cashed checks, also viewable online, and printable. Thus your actual physical signature is there for you to inspect, but secured behind an encrypted connection where identity thieves and forgers can't see it. USAA Federal Savings Bank was one of the first online banks to offer this feature, and it's been a great success for them and their customers.
And of course all bank deposits accounts in the U.S. are FDIC insured, so there's no need to lose any sleep worrying about "fly by night" Internet banks folding and your money evaporating along with them.
Read the Fine Print
Before you apply online for a free checking account, though, be sure to find out what "free" really means. For
online checking accounts like ING's Electric Orange,
all the services really are free, including bill pay, electronic check, overdraft protection, money transfers, and more. Others, like the Bank of America "free" online checking account, charge fees if your balance is too low or for online bill pay. Take note of the features you intend to use, and make sure you're getting the best deal from a free online checking account for your personal needs.