Editor's Note
  • April 26, 2018 - We've updated our top picks to reflect the 2018 checking account landscape. Capital One and Discover remain favorites, but our new overall top pick is Ally Bank.

The Best Checking Accounts

The best checking accounts should keep your money easy to access while providing great customer service. It also won’t strain your finances with unnecessary fines like maintenance costs and dormancy fees.

Out of 32 banks offering nationwide or online checking services, Ally Bank’s Interest Checking Account won out for its combination of excellent customer service plus low fees. You can reach a customer service rep around the clock, so you don’t have to wait for standard banking hours if you have questions about your account. We also loved Ally's ATM reimbursement policy: If you use an out-of-network ATM, you can be refunded up to $10 per month. The bank also minimizes the fees it charges customers, and even offers a very low amount of interest for the money you keep in your account (a perk usually reserved for savings accounts). Our only complaint is that Ally Bank isn't great for international banking: It doesn’t offer outbound international wire transfers, and it charges a 1% flat fee across all international transactions.

If either of those sound like deal-breakers, we also loved Capital One's 360 Checking Account. Unlike Ally Bank, Capital One offers international wire transfers ($40), and you'll still be charged a currency conversion fee, Capital One doesn’t charge a fee for using your card abroad. We also love that you can skip the overdraft fees entirely by using Capital One’s auto-decline service. If you don’t have enough money in your account, the transaction will simply decline, without fees for trying.

We like Discover Cashback Debit primarily for its rewards program: you can earn 1% back on qualifying debit card purchases, with the potential to earn $360 in rewards every year. Unless you keep a lot of money in your checking account ($50,000 or more), you’ll earn more money with Discover than our other top picks. It’s also another good option for travelers. If you travel abroad, it might take a bit more legwork to find a Discover-compatible ATM, but like Capital One, you won't be charged foreign transaction fees.

Our Picks for the Best Checking Accounts

Ally Interest Checking Account
Excellent customer service and great perks make for a convenient and user-friendly checking account.

We weren’t surprised when Ally Bank – our top pick for the best bank – also earned our award for best checking account. Ally has impressive customer service to help you get set up, with representatives available 24/7 whether you choose to contact them by phone, email, or live chat. Its mobile app also makes it easy to deposit checks, transfer funds, or check your balance from anywhere.

On top of no monthly maintenance fee, Ally Bank has the lowest fines of our top picks. If you overdraw your account and haven’t connected an Ally Online Savings or Money Market Account to draw upon, you’ll be charged $25 no more than once per day (versus the $30-$35 charged by Discover and Capital One). Ally Bank's fee outgoing wire transfers is also just $20, as opposed to Discover and Capital One's $30 charge.

You get two additional perks, as well. Ally offers $10 monthly to reimburse any out-of-network ATM fees you might incur (although they do have 38,00 in-network ATMs). Its checking account also accrues interest. The interest is modest — either a base 0.10%, or 0.60% if you maintain a balance of $15,000. But since most banks only offer interest on savings accounts, we appreciated the ability to earn anything at all via our checking accounts.

Ally Bank is excellent for domestic banking, but if you travel frequently or have financial obligations in other countries, be aware of a couple drawbacks. To start, Ally doesn’t allow outgoing international wire transfers; you’ll need to use a different bank to send money abroad. Additionally, Ally charges a 1% fee on all transactions and withdrawals made abroad with your debit card — on top of any currency conversion fee that might occur. If you’re looking for a checking account you can use globally, we recommend taking a look below at Capital One’s 360 account or Discover Cashback Debit account instead.

Best for
Frequent Travelers
Capital One 360
Capital One
With over 2 million ATMs worldwide and no foreign transaction fees, Capital One makes it easy to maintain and spend your money even while abroad.

Capital One did well in our customer service evaluation and fee assessment, with excellent customer support and a relatively low number of fees. Of note, Capital One’s Overdraft Policy defaults to “Auto-Decline,” so if you don’t have enough money in your checking account to cover the transaction, it simply won’t go through. Most banks either charge you NSF fees or require you to open up a savings account with them to protect against overdrafts.

Capital One offers four different overdraft options.If you don’t want to “auto-decline,” you can opt into free transfers from a linked savings account, use a pre-approved overdraft line of credit (which charges interest), or enroll in its next day grace program (with a $35 fee per transaction).

Like Ally, Capital One also offers interest rates for funds kept in a checking account. The annual percentage yield (APY) varies depending on your balance: 0.20% if it’s $49,999.99 or less; 0.75% if it’s between $50,000 and $99,999.99; and 1.00% if it’s over $100,000. This marginal benefit is offset, however, by Capital One’s increased fees. Our other top picks issue Cashier Checks for free and give you new boxes of checks for free – Capital One charges for both. Additionally, Capital One’s fines tend to be higher. If you do have a check bounce, or make frequent wire transfers, you’ll spend more in fees with Capital One than with Ally or Discover.

Capital One really stands out with its international services. Unlike Ally, Capital One offers international outgoing wire transfers in addition to domestic ones – so if you do business or relatives overseas, Capital One will make your life easier than Ally.

Capital One's debit cards are also backed either by MasterCard or Visa. This makes it easy to find one of Mastercard’s 1.8 million ATMs or one of Visa’s 2 million ATMs through their locator tools, no matter where in the world you go. And unlike Ally, Capital One doesn’t charge a fee for using an international ATM. (Although note that Visa and Mastercard do get to determine the exchange rate of your transactions.)

Best for
Earning Cash Back
Discover Cashback Debit
Discover’s rewards program makes it possible to earn money without having a large cash sum sitting in your checking account.

Discover Bank offers checking customers a cashback rewards system rather than the interest-bearing accounts of Ally and Capital One. With a Discover debit card, you can earn 1% cashback on up to $3,000 in qualifying purchases. You won't be able to earn more than $360 per year, but you'll still be earning more money faster than you would with Ally: Even at Ally’s highest interest rate, you’d need $60,000 in your checking account to earn $360 annually (and you’d need at least $50,000 with Capital One).

Discover is also a solid option for international travelers. Its outgoing wire transfers are cheaper than Capital One's ($30 versus $40), and like Capital One, Discover doesn't charge foreign transaction fees when you use your debit card at a restaurant, shop, or in-network ATM abroad. Discover comes with one strong caveat, though: you might have a harder time finding a compatible ATM.

Discover is accepted at roughly the same number of ATMs as Visa or MasterCard – around 1.9 million – through a network of partner banks. But actually locating those ATMs can be a struggle. You can check Discover Bank’s ATM Locator, but to find the ATMs of partner banks, you'll need to use those partner bank's ATM locators (or the Diners Club International ATM Locator, another partner). Discover Bank gives you a map of ATM locations, but Diners Club does not, and the offerings of local partner banks will vary. This translates to a lot more legwork on your part if you're in a foreign city trying to track down an ATM. And if you do end up resorting to an out-of-network ATM, Discover charges higher fees compared to Ally and Capital One – $10 or 5% of the transaction total, whichever is greater.

We’d add one final caveat about Discover Bank: even though Discover’s NSF fee is only slightly more expensive than Ally’s – $30 compared to $25 – Discover Bank’s greatest downside is its Overdraft Protection Policy. If you opt into Overdraft Protection, you’ll need to have a linked savings or money market account to transfer available funds. But Discover will only transfer funds if an externally-initiated transfer or bill payment causes the overdraft. If you set your bills to auto-pay and one of them causes an overdraft, for example, that overdraft will be covered. However, if you go to an ATM or use your debit card and cause an overdraft, Discover’s Protection Policy will not help, and you will be charged an NSF fee. If you don't normally keep a lot of cash in your checking account, this means you might have to keep a closer eye on your checking account after bills have been processed.

How Much Money Should I Keep in My Checking Account vs Savings Account?

Deciding how much money to keep in your checking account versus your savings account depends on your spending habits and risk tolerances. But it's largely a question of where your money will do you the most good – by earning the most money.

For checking, the answer is pretty straightforward. You should keep at least one month’s worth of expenditures in your checking account. This should cover your monthly expenses that you calculate for in your budget like rent, utilities, transportation, and groceries – as well as your planned “fun” spending money. Having a little extra — as Business Insider writes, at least one month’s net pay — means that if you have to make an unexpected trip to the doctor or you decide to go outside your budget for a new video game, you have enough money in your checking account to cover your credit payments and your debit card withdrawals.

Having more than that little extra, however, means you’re leaving money on the table. Checking accounts generally earn less interest than savings accounts (check out our best savings account review to read more). Keeping more money in checking means earning less interest in savings – so it’s good to make sure your checking account isn’t overfull.

It’s more difficult to say how much should be in your savings account. Forbes recommends three to six months of expenses while Business insider recommends three to six months of net pay. As CNN notes, it again comes down to the level of risk you’re willing to take. If you can predict how much you’ll make and spend for the next few months with confidence — you have a stable job and consistent spending – you might only need three months' expenses in savings account, letting you invest the rest of your earnings in higher-interest accounts like 401ks, mutual funds, IRA accounts, or investments with stock markets and lending clubs. But if you have have children, or are saving up for a larger goal like a house or car, your savings account might swell beyond this initial three to six months of net pay because the future isn’t so certain, or you need to have cash funds more immediately available.

The important thing is to be aware of your financial decisions and plan out where you intend to put your money – whether checking, savings, or elsewhere – so you can make sure that your money is in the best place for you.

Our Checking Account Review: Summed-Up

Checking Account
Ally Bank Interest Checking
Capital One 360 Checking
For Travelers
Discover Cashback Debit
For Earning Cash Back

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