What Does Free Mean?
Some free checking accounts online say they are free, but that doesn’t mean they are really free. Unfortunately, a lot of times “free” ends of costing you a lot of money. The purpose of this article is to explain what to look when searching for free online checking accounts. In the last ten years, banking has changed dramatically. Some banks have adapted to the new consumer demands. Many banks have not.
You now have the ability to set up your bank as your personal accountant. With just a little work up front, you can have many of your monthly transactions on autopilot. The best free checking accounts online, worthy to be your free personal accountant, should then have the following characteristics.
- FDIC insurance
- No fees or minimums!
- Automatics transaction to other financial institutions
- Direct deposit
- Easy to use website
- High level of security
- High interest rates
- Large ATM network
- Free bill pay
- Outstanding customer service
- Overdraft protection
Advantages and Disadvantages to Online Banking
The advantage that online banking has over these brick and mortar banks is they have lower operating costs. Banks that have few physical locations but a large amount of assets, are able to use economies of scale to lower their operating costs check bills online. This savings is passed on to you in the form of an increased interest rate and lower fees.
Brick and mortar banks, carry a lot more day to day operating cost. Therefore, they can’t give their clients as high of an interest rate. However, brick and mortar banks, also have someone you can talk to face to face if you have problems.
Tips to Using Your Free Online Checking Account
The goal here is to put your finances on autopilot. Investing and paying off loans are a lot easier when done automatically. Here are just a few tips to optimize your online checking account.
- Use direct deposit
- Create a savings account for an emergency fund, and earn interest on it
- Set up your investments or loans to automatically withdraw after your paycheck hits
- Automatically pay your credit card bill or other bills each month
- Set up sub-accounts for short term savings goals
- Send paper checks for free
- Escrow your taxes into a sub account