With the megabanks like Bank of America and Chase gradually increasing requirements ratcheting up the fees, what is a good alternative checking account? I just closed down my Chase account of several years last month, but have kept my Bank of America for now. I usually tell people to go with a local credit union for no fees, and an online savings account linked up for higher interest on savings. Online checking accounts started getting popular with Capital One 360 Checking, but currently I find the best all-in value proposition at the Ally Bank interest checking account.
If you imagine all the requirements of your “dream” checking account, Ally Bank’s offering does a really good job covering them. Here’s a rundown:
No minimum balance, no fees, no direct deposit requirement
There is no minimum balance to open, no balance maintenance requirements, and no direct deposit requirement. There is no hassle at all to avoid monthly fees. You can fund the initial deposit online via ACH, by mail, or by wire.
No ATM Fees Across the US
Ally Bank has the best ATM fee rebate program I’ve seen. When it comes to ATM fees, you have to worry about (1) your bank charging a fee, and then (2) a fee from the bank owning the ATM you’re using. Ally Bank never charges a fee on their side. They also rebate any external bank’s ATM fees, so you can use any ATM you like in the world. You are not limited to any specific network. There are no usage caps or monthly limits to the fees.
Fees are automatically refunded at the end of each monthly statement cycle. As of August 2011, I found out they no longer give fee rebates on international ATMs.
Higher Interest Rates + Free Overdraft Transfers
Currently, Interest Checking has a tiered interest rate of 0.10% APY for balances less than $15,000, and 0.60% APY for balances of at least $15,000.
In addition, with their free Overdraft Transfer Service, they will automatically transfer available funds from your Ally online savings or Money Market account to cover any overdrafts for free. Alternatively, you can schedule balance alerts to transfer X amount over if you checking amount reaches a certain threshold. This means you can keep a relatively low balance in checking if you wish and put more into savings since it pays 0.85% APY as of 11/12/13. Remember, you can only do 6 withdrawals from savings each money due to banking regulations.
Old-Fashioned Paper Checks
Ally Bank still supports paper checks. You get free checkbooks (50 to start, order more online) and unlimited check writing. They’ll send you postage prepaid envelopes to mail in deposits. They only thing you could ask for is the ability to scan in smaller checks via computer or smartphone. Hopefully this is coming. Update: It’s here!
Other Free Stuff + 24/7 Customer Service
Let’s see, you get free online BillPay, free debit card. They are FDIC-Insured to the same limits as other banks. You can easily set up online links other other banks and ACH transfer money in and out, with the usually 2-3 business day hold. They have 24/7 customer service, either by phone or live chat. (Even the megabanks don’t have that.)
It’s not perfect, but if you go through these features one by one, you’ll see why I opened an Ally interest checking to compliment my existing Ally savings account and the 5-year CDs that I’ve talked about before. If you have further questions, I can try to help in the comments, or you can simply ask them directly using their convenient 24/7 online chat.