Free Checking Accounts Comparison: What to look for?

May 22, 2009 1 Comment »

If you are in the market for a free checking account you undoubtedly know that your options are plentiful. However, before opening a new free checking account you must make sure that you understand why banks offer them and how they work.

Related: Best Checking Account Deals of 2012.

Banks and credit unions offer free checking accounts with an array of “free features.” These can include:

  • Free checks for life
  • No Low Balance Fees
  • Free ATM and/or Debit Card
  • Free E-Statements
  • No charge for ACH and Direct Deposit transactions
  • Free online access to your account
  • Unlimited check-writing

Free Checking Account Facts and Drawbacks:

(standard free checking account features, terms and conditions)

In most instances banks and credit unions are not making a profit off of your free checking account, however they are positioning themselves to entice you in to other banking products in which they offer. If you have a long-standing relationship with a bank or credit union I’m guessing this relationship started with a simple “free checking account.”

Depending on the individual bank or credit unions needs, you may be entitled to additional “free checking features.” Below are some bonus features that may be offered through various banking institutions:

  • Free ATM use throughout the country (aka foreign ATM use reimbursement)
  • Lucrative interest rate on your balance (see interest checking)
  • Overdraft protection plans (pay attention to the fine print as there is always a fee for over-drafting a checking account)
  • Cash bonus for signing up! (See Bank Deals and/or Checking Accounts)

The Negative Aspects of Free Checking Accounts:

No interest rate associated with you monthly balance. Although I mentioned this aspect as an additional feature you may receive, it is not typical. If you are to receive an interest rate is is generally accompanied with additional requirements which will need to be met by you every month. These requirements can include a certain number of debit card uses per month, an automatic payment of a recurring bill, etc. To see which banks and credit unions are offering the best interest rate for checking accounts visit the “interest checking” tab on the top of this page.

Another potential drawback is that you may not be provided the ability to stop payments or cancel a check. If this is an element you require out of your free checking account you may want to shop around as this feature is not common. You may also lack the ability to see your paid checks. This can put a damper on your monthly check balancing if you don’t record your checks as they go out. Remember, free checking accounts in and of themselves are not profitable for banks or credit unions so additional perks and features will most likely be limited.

Who is offering the best Free Checking Account bonuses?

(Free checking account bonuses are time-sensitive)

Currently there are a handful of banks offering free checking accounts with sign up bonuses. These bonuses can range between $50 – $150 (if you’re opening a business checking account this bonus can be even greater).

Chase Bank – Chase Bank is currently offering new customers a $100 sign up bonus until the end of June. Follow the “Chase Bank” link, submit your email, and print out your coupon code to take advantage of this offer.

WaMu Free Checking – WaMu Free Checking is currently offering new customers a $100 sign up bonus until the end of June. I suppose this could go hand-in-hand with the Chase Bank offer as they are undergoing the integration phase, but they are still offering seperate but equal free checking account bonuses. Follow the WaMu Free Checking link to get your sign up bonus.

M&T Bank – M&T Bank is currently offering new free checking account customers a $100 sign up bonus as well. Follow the terms and conditions to recieve this bonus. Like all other free checking account bonuses this offer is time-sensitive and can be pulled off the table at anytime.

TCF Bank – TCF Bank is currently offering new free checking account customers a $50 sign up bonus when you complete the terms and conditions. To learn more about this offer visit our review of TCF Bank (use the TCF Bank link above).

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    Capital One is offering a $200 Bank Bonus to qualified individuals who open their rewards checking account.

    There are certain terms and conditions there however.