By Erin Lowry
It should come as no surprise that bank accounts are not made equal. Fees, interest rates and minimums all vary from bank to bank. The savvy consumer looking to get the most out of a bank account probably opened a checking account with Bank A and a savings account with Bank B to maximize a no-fee checking account and highest interest savings account.
But not everyone wants to deal with the potential hassle of funds being held by two different financial institutions. The shrewd consumer who would prefer to just use one bank should look to those that offer the best deals on linked checking and savings accounts.
Before looking for the best deal, customers should become acquainted with online-only banking. Online-only banks offer higher interest rates and fewer fees than traditional brick-and-mortar banks. These banks are also FDIC-insured and secure money just as well as the big name traditional banks. The banks below all fit these criteria:
Ally Bank is one of the most well-known online-only banks. The bank's Interest Checking Account is a free account offering:
24/7 live customer service
Mobile check deposit
No monthly fee
No minimum fund requirements
No ATM fees
ATM reimbursements on fees charged by other banks or ATM terminals in the United States
Ally does charge a $9 overdraft fee or insufficient fund fee a maximum of once aday. This charge can be avoided by linking a checking account to a savings account for overdraft protection. Unlike many traditional brick-and-mortar banks, Ally doesn't charge to move funds from savings to checking to cover an overdraft.
The Interest Checking Account offers 0.10 percent on a daily balance less than $15,000 and 0.60 percent on a daily balance of more than $15,000.
Ally's Interest Checking Account can be linked to the Ally Online Savings Account, which currently offers 0.99 percent APY with no minimum to open and no tiered interest rates structure.
Tip: Link your savings account to checking in order to protect yourself from an overdraft fee.
Bank of Internet USA offers a true no-fee checking account with the bank's Rewards Checking account as well as these perks:
No minimum monthly balance
No monthly maintenance fees
No overdraft fees
No ATM fees
ATM reimbursements on fees charged by other banks or ATM terminals
There is a $100 minimum to open an account, but no minimum balance requirements after the account is open. This account does offer a tiered reward system to earn interest on checking, but customers should really focus on utilizing the fee-free checking account and receiving a higher interest rate on a savings account instead. Requirements for the checking account interest of 0.416 percent APY include monthly direct deposits of $1,000 or more and using the account's debit card 10 or 15 times a month on transactions $3 or more.
Bank of Internet USA offers a flat 0.61 percent APY on the High Yield Savings account. The savings account can be linked to checking to provide overdraft protection and avoid any bounced checks or insufficient funds. However, if customers don't set up overdraft protection, the bank still doesn't penalize them and simply denies the charge. Keep in mind, this could result in a missed bill payment for people who set up autopay. For example, if you set up autopay with your cable company and don't have sufficient funds in your account, Bank5 Connect will deny the payment instead of allowing your account to be in the negative.
Tip: Setting up a direct deposit for $1,000 or more will earn 0.416 percent APY on checking. Unless you set up direct deposit, don't focus on earning interest with the checking account.
Bank5 Connect offers customers a High-Interest Checking Account without the hoops to jump through. Bank5 Connect provides 0.76 percent APY on its checking accounts with minimum balances of $100 or more. Customers only need to pay $10 to open an account. Bank5 also minimizes fees:
No monthly maintenance fee
No ATM fee
$15 reimbursement each statement cycle for other banks' ATM surcharges
No overdraft charges with overdraft protection
Bank5 Connect does charge $15 for an overdraft charge or insufficient funds charge for customers who don't use overdraft protection.
Customers can use Bank5 Connect's High-Interest Savings Account to opt into overdraft protection. The savings account offers 0.90 percent APY on accounts with a minimum balance of $100. Similar to the checking account, it only costs $10 to open the savings account.
Tip: Keep track of ATM fees to avoid spending more than $15 a month.
The Case for Making a Switch
Consumers who feel it's not worth the hassle to break an existing bank relationship to move to another bank need to just look at the numbers. Many of the traditional brick-and-mortar banks charge asininely high fees such as:
Upwards of $32 for an overdraft fee
$12 for overdraft "protection" to move money from savings to checking to cover an overdraft
$12 monthly maintenance fee
Brick-and-mortar banks also tend to offer insanely low interest rates of 0.01 percent on savings accounts. For perspective, a customer with $10,000 in savings would only earn $1 in interest. A switch to an online-only bank offering 0.90 percent would provide $99 in interest.
Customers deserve better from their banks and fortunately real alternatives exist, if they're willing to make the switch.
Erin Lowry writes about personal finance and manages social media for MagnifyMoney.com, a site dedicated to helping consumers save money by finding simple, transparent financial products. She is also the founder of the personal finance blog Broke Millennial.