A Beginner’s Guide Free Checking Accounts

Checking accounts are mainly designed to allow fast access to your money (through a debit card, ATM and auto deposit/debits), mainly to be used for day-to-day spending and bill paying. Online banking and app-based banking means there are now a number of free checking account options.

We’ll cover free checking accounts, some of the benefits of choosing a free account, as well as some information to help you find the bank that works best for you. 

What’s a Free Checking Account? 

Before you learn about what makes free checking accounts so appealing, it can be helpful to learn what a checking account actually is. 

Unlike a savings account, checking accounts are intended for daily use. When you open a checking account, your bank will usually issue you a debit card. Debit cards connect directly to your bank account and withdraw money when you make a purchase using the cards. 

Major credit card companies like Visa and Mastercard issue debit cards, and you can use them nearly anywhere you can use a credit card. While checking accounts typically don’t accrue much interest, they give you quick and easy access to your money. 

In exchange for protecting your money and facilitating debit transactions, many banks charge fees for checking account holders.

Some of the most common checking account fees include:

  • Monthly maintenance charges. This is a monthly fee that you pay in exchange for basic services. It can be up to $12 a month, depending on your bank.
  • Minimum account balance fee. Some banks have a minimum account balance that you need to hold to avoid a fee. If you dip below the minimum at the end of the month, you’ll pay the fee. Minimum account balances for traditional checking accounts can be up to $1,500.
  • Overdraft fees. If you withdraw or spend more money than you have in your checking account, you’ve over-drafted on your account. In addition to paying back the money you spend over what you have in your account, you may also have to pay an overdraft fee. Overdraft fees can be up to $35 each.
  • ATM fees. If you have a bank account with a traditional bank, your bank probably has a series of free in-network ATMs that you can use without a fee. However, if you withdraw money from an out-of-network ATM, you may have to pay a fee. This fee can be especially inconvenient for travelers who aren’t part of a nationwide bank.
  • Inactivity fee. Some banks charge an inactivity fee if you don’t make at least a certain number of transactions each month.

As the name suggests, a free checking account is a checking account that allows you to store and access your money without any fees. Many free checking accounts come from online banks.

Online banks can afford to buck fees because they don’t need to maintain physical branches. Though not every online bank offers totally free checking accounts, you’re more likely to find a free checking account when you look to digital financial institutions like MoneyLion.

What are the Benefits of Free Checking Accounts?

Fee-free checking accounts offer a few benefits over traditional checking accounts.  

More money in your account

The biggest and most obvious benefit of a free checking account is that you save money. You don’t pay for things like inactivity fees or monthly maintenance charges when you choose a truly free checking account.

This gives you the opportunity to move more directly toward your financial goals. You can also spend less time stressing out about finding an in-network ATM or making sure that you never overdraw on your account. 

Higher interest rates

Most free checking accounts come from online banks. Because online banks don’t need to spend money keeping their physical branches running smoothly, they can pass the savings on to you.

Online banks like MoneyLion that offer free checking may also often other unique benefits, like cashback or credit card-like rewards for debit card purchases.  

Increased convenience 

If you’ve ever found yourself scrambling for cash to pay for something, you already know the out-of-network ATM struggle. Instead of forcing you to spend your time searching for the right ATM, many free checking accounts allow you to check your balance and withdraw cash with a much larger network of machines.

Fee-free checking accounts often have partnerships with major ATM manufacturers. MoneyLion has partnered with one of the largest ATM networks so you can access your money without incurring fees. 

How Does Free Checking Work? 

Fee-free checking accounts with online banks work in largely the same way as traditional checking accounts work and work just the same with Apple Pay or Google Pay.

These banks have individual routing numbers and account numbers, just like traditional banks. You can even link your direct deposit to issue your paychecks to your new free account. You can set up your deposits and withdrawals through the bank’s website or app. You may also be able to link outside bank accounts online or through the app as well. This makes withdrawals and deposits simple.

Free checking accounts also provide you with a debit card — just like a paid account. With an online bank, you may be able to choose your PIN through the corresponding app or by calling a representative. Debit cards issued by free checking account providers are identical to those offered by paid account providers. You can use them almost anywhere you can use a credit card.

When you need to use an ATM, you’ll follow the same process as you would with a paid checking account. Use your debit card, enter your unique PIN and withdraw your cash. The only difference? You won’t have to pay a service fee.

The bottom line: Free checking accounts from online banks provide most of the same services as traditional accounts and work in almost exactly the same manner. They all offer 24/7 access to your account and complete features are accessible on the app — and often, there are even more bonuses available.

Features to Look for in a Free Checking Account

Ready to get started and open a free checking account? Here are some of the features you should look for when you choose a bank, and MoneyLion offers all of these.  

  • No account minimums. Even if you’re a great financial planner, you can sometimes run a bit short on cash. Look for a bank that doesn’t have a minimum account balance.
  • Additional services. You want your bank account to do more than just the bare minimum. Look for banks that offer credit monitoring, cash advances, credit builder loans and more to make the most out of your new account.
  • FDIC insurance. The Federal Deposit Insurance Corporation (FDIC) provides insurance for checking and savings accounts. If you hold your money in an FDIC-insured bank, you’ll get a reimbursement for any money you lose if the bank gets hacked or robbed up to $250,000. Only put your money into a bank that has FDIC insurance.
  • Convenient user experience and interface. Because many free checking accounts come from online banks, you’ll want to choose a bank that puts a focus on an easy user experience. Look for a bank with a clean website design and an easy-to-use app.
  • Fraud protection. Do you know what you would do if you lost your debit card? Look for a bank that provides 24/7 fraud protection. For example, you might want to choose an account provider that allows you to “freeze” or “lock” your debit card from the app. 

What Do You Need to Open an Account? 

Even if you opt for an online bank, there are a few things you need to provide when you open your checking account.  

  • A valid form of photo ID. You need to prove your identity before you can open any kind of checking account. Valid forms of photo ID include passports, state-issued driver’s licenses, state ID cards and military IDs. 
  • Your Social Security number. You need to provide your social security number as well when you open a checking account. You’ll usually only need to provide your full Social Security number once. After you get your account, you may need to input the last four digits of your number to confirm your identity or change your password. 
  • Your personal information. You’ll also need to give your bank some personal information before it can give you an account. Be prepared to input your full legal name, current address, phone number and email address.

How to Open a Zero-Fee Checking Account with MoneyLion

MoneyLion is proud to offer no-fee checking accounts. Opening an account with MoneyLion is as easy as following these three steps. 

1. Download the app

Before you open your account, download the MoneyLion app. MoneyLion’s app is available for Android devices via the Google Play store and Apple device from the Apple App Store. 

2. Open a zero-fee checking account with MoneyLion

Once you download the app, input your phone number to receive a verification code. Enter the verification code and follow the in-app instructions to open your account. 

3. Link your direct deposit to your MoneyLion account

After you’ve successfully opened your account, you might want to link your direct deposit to your new checking account directly through the app.

Follow the steps provided or contact your HR representative and request to move your direct deposits to your MoneyLion account. 

It’s About Finding the Best Checking Account for You

If you’re like most people, you probably don’t spend a lot of time thinking about the features of your checking account. If you’re still banking with a traditional checking account, you might be losing money.

Do some digging so you know just how much money your bank is taking from your account every month. Whatever your financial goals for the future, switch to a zero-fee checking account to help you reach them faster. 

Are you ready to take advantage of 0% APR Instacash cash advances, low-interest credit builder loans and zero-fee banking? It’s time to open an account with MoneyLion. Visit MoneyLion today or download the MoneyLion app via the Google Play store or the Apple App store to get your no-fee checking account.