Checking Accounts 101

By Mentor Staff | Edited By Mentor Staff

Updated On November 1, 2021

Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.

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What is a checking account?

An online checking account is a bank account where you can write checks, pay bills and earn interest. Many of the best checking accounts deals are online, no monthly fee checking accounts. Assuming that your bank is federally-insured through the FDIC (Federal Deposit Insurance Corporation), your no fee checking account also will be FDIC-insured up to $250,000.

The best free checking account often is an online, high yield and no monthly fee checking account. A high yield checking account enables you to earn interest on your checking account balance at a higher rate than a typical checking account. A no monthly fee checking account also means more money in your pocket, since you would have to pay a monthly fee. Some banks may ask you to maintain a minimum monthly balance, while other banks will not.

Top Picks For Student Loan Refinancing

December 2022

Variable APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Variable APR means that your interest rate can fluctuate over time, which can increase or decrease your monthly student loan payment. Typically, a variable-rate loan has a lower introductory rate than a fixed-loan rate loan. Variable APR includes a 0.25% discount when you enroll in autopay.
Fixed APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Fixed APR means that your interest rate will always stay the same. Even if interest rates change, your interest rate or monthly payment will not. Fixed APR includes a 0.25% discount when you enroll in autopay.
APR
4.49% - 8.99%
4.49% - 8.99%
4.49% - 8.99%

View Details

on SoFi's website

Overview

Variable APR:
4.49% - 8.99%
Fixed APR:
4.49% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
3.99% - 8.29%
4.39% - 8.99%
3.99% - 8.99%

View Details

on Earnest's website

Overview

Variable APR:
3.99% - 8.29%
Fixed APR:
4.39% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
3.99% - 8.29%
4.39% - 8.99%
3.99% - 8.99%

View Details

on NaviRefi's website

Overview

Variable APR:
3.99% - 8.29%
Fixed APR:
4.39% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,001 ($10,001 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
3.53% - 7.24%
4.48% - 7.29%
3.53% - 7.29%

View Details

on ELFI's website

Overview

Variable APR:
3.53% - 7.24%
Fixed APR:
4.48% - 7.29%
Minimum Credit Score:
680
Minimum Income:
$35,000
Fees:
None
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 8.65%
3.99% - 8.49%
2.50% - 8.65%

View Details

on Splash's website

Overview

Variable APR:
2.50% - 8.65%
Fixed APR:
3.99% - 8.49%
Minimum Credit Score:
640
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5 – 25 years
Borrower Residency:
All states
Hardship Deferment:
Varies
Co-signer Option:
No
5.09% - 11.67%
5.39% - 11.87%
5.09% - 11.87%

View Details

on Citizens' website

Overview

Variable APR:
5.09% - 11.67%
Fixed APR:
5.39% - 11.87%
Minimum Credit Score:
Not disclosed
Minimum Income:
$24,000
Fees:
No prepayment or origination fees
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 6.80%
4.49% - 6.90%
2.50% - 6.90%

View Details

on Laurel Road's website

Overview

Variable APR:
2.50% - 6.80%
Fixed APR:
4.49% - 6.90%
Minimum Credit Score:
660
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
3.27% - 6.87%
3.99% - 10.68%
3.27% - 10.68%

View Details

on LendKey's website

Overview

Variable APR:
3.27% - 6.87%
Fixed APR:
3.99% - 10.68%
Minimum Credit Score:
680
Minimum Income:
$24,000
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except ME, ND, NV, RI, WV
Hardship Deferment:
Yes
Co-signer Option:
Yes
-
3.94% - 9.08%
3.94% - 9.08%

View Details

on ISL's website

Overview

Variable APR:
-
Fixed APR:
3.94% - 9.08%
Minimum Credit Score:
670
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except OR and ME
Hardship Deferment:
Yes
Co-signer Option:
Yes

Why do you need a checking account?

You need an online checking account for several reasons:

  1. Write checks. The best free checking accounts can help you write checks and pay bills, and use free online bill pay.
  2. Earn high yield interest. The best checking account helps you earn interest income that can be significantly higher than the national average for a traditional checking account. Most high yield, online checking accounts offer an annual percentage yield (APY) that is higher than 1%.
  3. Ease of use. An online checking account is mobile friendly and can help you manage your account and transfer money with ease.
  4. No fee checking account. Traditional checking accounts may include a minimum balance or monthly checking fee. You should look for checking account deals that offer a no monthly fee checking account.
  5. Limit on transfers. Under federal law, you can withdraw or transfer funds no more than six times per month from a checking account.

What is the difference between online, no feechecking accounts and traditional checking accounts?

When people ask “what’s a checking account,” they also like to understand the difference between traditional checking accounts and online, no fee checking accounts.

Here are the primary differences:

Traditional Checking Accounts: A traditional checking account is a default checking account offered by a brick-and-mortar bank. Traditional checking accounts may have a monthly fee and may require a minimum balance. The biggest downside of a traditional checking account is the annual percentage yield. Compared to CDs and investing accounts, the yield on traditional checking accounts are very low.

Online,No Fee Checking Account: An online, no monthly fee checking account is almost exclusively online, offers a much higher yield and has no monthly fee. The best free checking accounts can offer higher annual percentage yield (APY) because the bank saves costs by not having additional or any physical branches to support online checking accounts. Most online, no fee checking accounts have excellent customer service, so you still have access by phone, email or chat to speak with customer service. An online no fee checking account is a great option if you are comfortable with mobile and online banking. With the best free checking accounts, the good news is that you can earn a higher yield and typically do not need to maintain any minimum balance. Some online checking accounts may also pay you a higher yield if you have a higher balance. This is known as a tiered rate checking account.

How do you find the best free checking accounts?

You can find the best free checking accounts here on Mentor. Mentor’s list of the best free checking accounts includes banks that we believe offer the best no fee checking accounts rates, best customer service, checking account management tools and lowest fees.

You can compare these online checking accounts on Mentor, and choose the best checking account for you.

Then you can open a no monthly fee checking account directly through Mentor with one of our partners. It’s easy to apply for checking accounts. All you will need to provide is basic information such as you name, Social Security Number, driver’s license and other contact information.

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