How to Open an Online Checking Account

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While banks and credit unions may offer an online checking account and mobile banking, online-only banks could offer additional incentives, like higher interest rates or rewards, and better features.

A checking account with an online-only bank or neo-bank may be a better option for you but you’ll need to make some considerations.

What to Consider Before Opening an Online-Only Bank Account

For instance, you want to know the following:

  • Type of account offered. Checking accounts come in all different “shapes and sizes” or benefits and features. They may be called different things from the traditional checking account, spending account, share draft, or cash management account. All are transactional accounts but operate differently in the background.
  • Deposits insured. Verify deposit insurance of the financial institution. They can be insured by the FDIC or NCUA or use a sweeping strategy (used by cash management account) that extends insurance protections.
  • Interest and rewards. Many online-, mobile-, and neo-banks offer interest-bearing checking accounts and rewards. Instead, of the expense for office and staff, they can offer interest or rewards.
  • Fees. Assess the types of fees. Choosing an online-only bank often come with no minimum balance requirements, monthly service fees, and debit card or ATM fees.
  • ATM Access. You’ll need to access cash so a national network of ATMs is essential. Determine if the online-bank offers a network of surcharge-free ATMs, ATM fee reimbursements, or both. Learn how to find free ATMs to use here.
  • Taking deposits. Most online banks will accept direct deposit, ACH, or EFT into your account. This makes it easy to deposit money into your online checking account. Make sure they offer a mobile deposit feature for checks.
  • Online features. Choose an account that offers the ability to pay bills online, set alerts, automate savings, and a mobile app.
  • Customer service. Since you’re choosing online, it’s important to know how you can connect with a human being. Whether that interaction is on the phone, text message, app chats, or email. You want to know that help is available and won’t be routed to an online knowledgebase.

How to Open an Online Checking Account

Follow these simple steps:

  1. Ask yourself, “how you will be using the checking account?”
  2. Research your banking options. You have many to choose from.
  3. Select your new account and follow the online application process. Enter your personal information including Social Security Number.
  4. Link your existing account to your new checking account.
  5. Make a deposit using your linked account to fund your online checking account.
  6. Download the app, if you opened the account on their website.
  7. Make note of your new checking account number and online bank’s routing number.
  8. Set up direct deposit of your paycheck.

Once your new account is set up and the direct deposit has transferred, you’ll want to make sure all bill payments and electronic deposits are switched to your new online checking account.

Ready to make the switch to an online-only bank and get a new checking account? Check our marketplace for online checking accounts.

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