Thursday, November 17, 2011

Best Checking Accounts

Charles Schwab Checking Account


1)  No ATM fees - You never have to think about planning your ATM runs.  Schwab has almost no ATMs so they refund any ATM fees you may incur at other ATMs.  It doesn't matter how close you are to a Schwab branch or how many ATM withdrawals you have a month.

2) You can get some interest on the money in the checking account, albeit a very small percentage (0.2%).

3) Unlimited Checks for free.

4)  If you have a smart phone, you can take a picture of your checks and deposit them electronically.

5) No fees, no minimums for the checking account (there is a minimum for Schwab Brokerage account - keep reading).


1)  You have no physical bank to go to.  If you have a problem you have to go online or call them up.  I personally think this is an advantage.  You can just mail all your deposits (or email them with a smartphone).  I have never had a problem that I couldn't solve quickly over the phone.

2)  Their savings account is not as competitive as Discover bank (1.1%).

3) You need a Schwab Brokerage Account which has a $1,000 minimum.  If you are someone who ends up paying ATM fees, this is a no brainer. I read online that they wave the $1,000 minimum if you have the checking account.  I don't know if this is true but it is worth a try.

My Recommendation:

Open both a Schwab Checking account and a Discover savings account.  Keep enough money in the checking account for any emergencies and any left over money keep in the Discover account so that you can take advantage of the higher rate.  You can transfer the money electronically between the two of them but it may take a few business days so you have to make sure there is enough in your Schwab for any possible expenses.

Consumers Credit Union

Update: rewards checking seems to be a thing of the past :(

Consumers Credit Union is offering one of the best rates available on their Rewards Checking.  They are currently offering 4.09% on their rewards checking on up to balancing of up to $10,000.  Also, if you qualify for the great rate they will also refund any ATM fees

There are some drawbacks:  Read all the rules on this page before you apply for it.

1)  You need to use your debit card 12 times a month (works like a credit card - you don't need to use a pin).  If you pay for most of your bills with a credit card this is usually very possible to do.  The problem is that you can't use your regular credit card for those purchases so won't get your regular rewards but even if you are normally getting 2% back, this is still a better deal unless you are spending $20,000 a year or more on your credit card.

2) You need to have direct deposit into that account.  If you can't have direct deposit, you can still have automatic bill pay from the account every month or make an online transfer once a month and that will qualify.

3) You need to log on to their online banking once a month.

4) You need to enroll in e-statements.

5) It costs $5 to join (comes with a savings Account)- not a big deal if you are getting a good rate.

6) Not FDIC Insured because it is a credit union.  Instead they are insured by National Credit Union Share Insurance Fund which is also backed up by the US government so it is the same thing as FDIC insurance.