Many of the worst financial mistakes we make aren’t the result of a major slipup…
They’re small opportunities that you miss day in and day out that really add up to big losses over time—like paying fees instead of switching to a completely free checking account.
I’ll tell you one of the best free checking accounts on the planet, why it’s free, and how to switch in 5 easy steps.
Use this free download to compare the best banks: Online Bank Comparison Chart (PDF)
Features of the Best Checking Accounts
If you’re still with one of the big banks, you’ve probably gotten so used to paying fees that you’re immune to them. Well, it’s time to have a serious allergic reaction, switch banks, and start saving more money.
Here’s a list of what the best accounts–like the Capital One 360 Checking–never charge you for:
- ATM use
- Monthly maintenance fees
- Debit or check cards
- Unlimited number of transactions
- Minimum balance requirements
- Online or mobile banking
- Online bill pay
- Statement copies
- Check images
- Incoming wire transfers
- Online Alerts
- Overdraft transfers from a linked account
Plus, the best checking accounts pay you interest!
You can’t beat getting the convenience of a checking account and the interest income of a high-yield savings account rolled up into one.
How Do Free Checking Accounts Work?
It’s no coincidence that the best banks are generally web-only, virtual institutions. They save a ton by not having to pay for a portfolio of brick and mortar locations, an army of employees, or real estate taxes.
Being an online-only bank means they’re greener, more efficient, and much more profitable that their traditional competitors.
Less overhead means customers bank the rewards in the form of higher interest rates, better products, and many more benefits.
What About Customer Service?
Worried that switching to an online bank means you’ll never get a human being on the phone? Don’t.
I’ve found that customer service at online banks blows the doors off the big banks. You can chat by instant message with a representative online or call an 800 number.
If your bank accounts are costing you money, rather than putting money in your pocket, it’s time to make a move. Remember—you’re the customer and have the power.
5 Steps to Switch to a Free Checking Account
Maybe you haven’t changed to a better bank yet, like the Capital One 360 Checking, because just the idea of opening a new checking account gives you hives. Switching does take a little effort, but it’s worth it, I promise.
Just follow these 5 steps to switch to a free checking account:
Step #1: Choose and open your new checking account.
Always open a new checking account before you close your old one. In fact, if you’re like me, you may want to keep an account at a local bank just to use their safe deposit box. If it comes with a minimum balance requirement, just make sure you keep enough money in the account to cover it.
Step #2: Fund your new checking account.
Your account won’t be officially open until you make the first deposit. Remember that you need to keep enough money in the old account to cover any outstanding paper checks or upcoming automatic withdrawals that clear before you can change them over to the new account.
There are several ways to fund your new online checking account:
- transfer money directly from the old account into the new account
- pay with a debit card linked to the old account
- pay with a credit card
Step #3: Switch automatic transactions to your new checking account.
Make a list of all your automatic deposits and withdrawals and gather the paperwork to update the account information. You may need to request new account forms from your employer or download them from merchant websites.
To make sure you don’t miss any recurring transactions, simply review your most recent bank statements. Update the list with each transaction amount and the next date you expect it to hit your account.
Once you submit an account change form, it may take a full accounting cycle to take effect—depending on how much advance notice is required. So don’t assume that your very next direct deposit or automatic withdrawal will hit your new account. Verify the exact date the switch will occur so you have enough funds in the right account to cover any recurring payments.
Step #4: Update linked accounts to your new checking account.
In addition to recurring deposits and withdrawals, your old checking account or debit card may be linked to other services you use, like a retail rewards program or a PayPal account. Once you’ve received your new debit or check card, log on to any linked accounts and update them with your new checking information.
Step #5: Close your old checking account.
After you’ve switched everything over, be sure to stop using your old account by removing your debit card or paper checks from your wallet. But don’t be too hasty to close your old account! Wait until you receive a checking account statement that shows a zero balance, so you know all of your automatic transactions are now linked to the new account.
If you do have a remaining balance at your old bank, it can be transferred into your new account or they can cut you a paper check. Once your account is officially closed, be sure to destroy your old debit card or paper checks.
Getting a better checking account is a smart way to pay fewer fees, get better service, and earn more interest on the money you already have.
Use this free download to compare the best banks: Online Bank Comparison Chart (PDF)
