By: Sean Patrick

4/9/2012

Get rid of your checking account debit card and charge everything to a credit card instead. It’s hardly the advice you would expect from one of the nation’s most read financial publications, but that’s exactly what correspondent Josh Barro suggested. In an article published on Forbes.com in April, Barro made the case that consumers should never use debit cards.

To make his case, Barro pointed to a soldier in the U.S. Army, Josh McDevitt, who got into a dispute with Bank of America over fraudulent charges made on his debit card. While spending a few days in Athens, Greece, McDevitt discovered that more than $25,000 was charged to his card at a nightclub where he visited, but had purchased only a few drinks. While the case was being disputed, McDevitt did not have access to the money he lost, which had already been withdrawn from his account. For this reason—the lack of control bank customers have over fraudulent charges to debit cards – Barro claimed it was unwise for anyone to have or use a debit card, period.

This argument might seem persuasive, but it should not be taken as fact for a number of reasons. Nearly all financial experts agree there are right times to use a credit card and wrong times, and advise against purchases when there is no plan on how to pay it off. If credit cards were to entirely replace debit cards, they would end up being used not only for everyday staples, but also impulse items—both of which are considered a bad idea. With the average interest rate for cards with balances hovering around twelve percent (12%) nationwide, these purchases can quickly lead to a debt that is difficult to overcome. At the end of the day, you simply cannot purchase more on your debit card than is available to use without incurring steep penalties.

Credit card debt isn’t just harmful to finances, but can affect the health of those who rack up large debts. The Securities Division of the Commonwealth of Massachusetts warns that debt is one of the largest causes of stress, which can lead to health problems like depression, heart disease and insomnia. I think the last thing we should suggest is something that is going to potentially going to add more stress to the life of a soldier.

Barro also claimed that a credit card offers a big advantage over debit cards in terms of fraud protection. This too is misleading as banks that issue debit cards also offer the same kind of security protections as credit card issuers. FNBO Direct has been recognized for its security functions and has been given the highest award from BankRate for its online protections. Chase Bank has a fraud monitoring system that reimburses customers within one business day of completing a dispute statement. At ING Direct, customers have access to an all-hours contact number to report possible fraud, and the institution responds to charges in dispute within 48 hours of being filed. Ally Bank, which is widely considered one of the top online banks, also has a security guarantee that gives customers no liability for fraudulent purchases. EverBank not only offers e-mail alerts on suspicious activity, but gives debit card customers an extra layer of safeguards against online scams and fraud not offered elsewhere.

Many banks allow you to set your own security settings on debit cards, such as to set daily or individual purchase spending limits and geographic limitations. CheckingAccount.com honestly finds it unbelievable that any bank allowed more than $10,000 to be charged to a debit card in one evening and thinks that any Bank of America debit card holder should double check their account limitations to make sure that this doesn’t happen to them. Even more suspect is the fact that the transaction went through when the place of purchase was in a nightclub in a foreign country.

The truth is that a person can experience problems and live through the horror story with both debit and credit cards. Even Mark Cuban, who is one of the most widely recognized billionaires in the world, had his Amex Black Card declined in a nightclub in Miami.

We here at CheckingAccount.com do not doubt that Mr. McDevitt’s unusual story was frustrating, particularly because he was overseas, and everyone here would like to thank him for his service to our country; we just think that this is a unique and rare incident and that it is being improperly used by Forbes to make a general conclusion about something that’s really not going to be applicable to many individuals.

That being said, we would like to give Josh and Forbes credit for bringing to our attention a problem that some U.S. soldiers may be facing when handling their banking while serving overseas.

CheckingAccount.com is researching further to determine whether any banks offer specialized services for U.S. soldiers, which would enable them to update their account status as they traveled. One perk that banks could offer soldiers who serve abroad is a feature that allows them to suspend recurring billing. We can only imagine the headache involved with constantly cancelling memberships or services (i.e. gyms, social networks, dating sites, etc.) that will not be used while a soldier is away defending our country. Unfortunately many online services and businesses intentionally make the cancellation process tedious in an effort to reduce the amount of turnover. With the amount of identity theft and fraud it would also be convenient to have a feature whereby the solder can block charges from geographical areas where it would be physically impossible for the solider to make a transaction on their debit card.

Taking the idea of providing even more control to the military account holder a step further, another great geographic based feature would also be to allow any U.S. soldier stationed outside of the United States to essentially block any charge that is not specifically defined as an authorized, recurring charge such as a car payment or electric bill. The purpose of this feature is to prevent account or card information from being compromised, because any charge not on the list would be stopped. For example, an account used only to pay necessities back home such as car payments, electric bills essentially the necessities. However if someone happened to gain access to the cards information and if it were cloned, thieves wouldn’t have any luck trying to buy a brand new LED TV at the local BestBuy. We’ll have an update to this article regarding some of the things mentioned above.

In closing we hope Josh and Forbes do not take our critical analysis of their reporting personally. It just seems like a very poor decision to suggest everyone ditch checking account debit cards in favor of interest accruing credit cards simply to avoid such an extreme and unlikely scenario.

With all due respect to Josh Barro, we think a better plan of action would be for Forbes to advise its readers to shop around for a bank that offers an adequate security solution, which would prevent the charges, fees, and headaches that the U.S. soldier suffered, instead of advising that debit cards should be wholly abandoned.

The sheriff’s office in Smyth County, where the thefts took place, warned residents there to stay more vigilant over both their mailboxes and their account balances. The way the first transaction was set up—as an internet check with the information, including the signature, blacked out—often went unnoticed by bank customers. The incidents highlight one the worst-case scenario for bank customers, the kind of high-tech theft they often feel helpless against combined with a real-life intrusion of their personal information.

To help consumers avoid this high-tech fraud and theft, the Federal Deposit Insurance Corporation offers some hints to make banking safer. The FDIC notes that the internet can make banking more convenient, but only with good decision making and careful oversight by the consumer. For those using online banks, the FDIC suggests they confirm that the bank is legitimate and that its deposits are insured. These customers should also keep their personal information secure, and learn to avoid scams aimed at stealing this information. E-mails asking for personal information are often fraudulent, as banks do not send unsolicited requests for things like social security numbers or banks account information. The FDIC also warns that identity thieves will often try to fool customers with look-alike sites that ask for account information. This can often happen when there is a type in the URL for the bank’s site, so it is instead re-directed to a site that only looks the same.

Since its rise to prominence in the late 1990s, internet banking has grown to the point that close to half of all Americas do at least part of their banking online. With this rise in banking has come a rise in  thefts of information, though. Unsolicited requests for information, known as phishing scams, are the most prevalent form of online fraud, but there have been other types as well. Technology savvy thieves have used viruses or spyware to penetrate the security of banks to steal customers’ information en masse. These attacks can have a devastating effect on the banking industry—estimates have put the annual amount lost at more than $3 billion, with close to 4 million victims in total. One of the largest and best-known viruses, the Sinowal Trojan, stole information from 300,000 online bank customers and 250,000 debit and credit accounts. This was not a one-and-done virus, either. It continued stealing account information over a three year period, with a six-month stretch where it accessed and stole information for 100,000 online bank accounts.

So the end result and the best advice that we can give you is to not open attachments and or anything sent to you from a friend or family member that’s clearly been copied to hundreds if not thousands of people.

The numbers were sweet for these advocates, but in the bigger picture it was like taking a few shovelfuls of sand away from the desert. Credit unions still account for just 8 percent of all federally insured deposits, while banks take up 70 percent. Total deposits at all these credit unions come to roughly $800 billion, while banks take in more than 12 times this amount–$10 trillion in total.

A look at the largest institutions makes the picture even clearer. The four largest banks—JPMorgan Chase, Citibank, Bank of America and Wells Fargo—take in $1.18 trillion. The 20 largest credit unions combine to bring in only $149 billion, just one-eighth of what the four banks take in. The largest credit union, Navy Federal Credit Union with its nearly $33 billion in deposits, is still just half the size of the 20th largest bank, the Buffalo-based M&T Bank.

The rise in popularity of credit unions is actually intertwined with the rise in size for these banks. During the economic collapse in late 2008, these banks were able to acquire smaller banks that had turned belly up, like Chase’s merger with Washington Mutual or Wells Fargo’s acquisition of Wachovia. These banks became so distanced from their peers that the smallest of them, Citibank, is still four times larger than its closest peer, US Bank.

As they grew larger through the failure of other banks and accepted billions of dollars in federal bailout money at the same time, these banks became the symbol of the problems of the financial sector. This fall financial legislation aimed at reigning in the financial sector placed a cap on what banks can charge merchants for debit card purchases, so many banks responded by instituting monthly debit card fees on customers. For many customers, this move was the last straw.

For the credit unions, there are actually benefits in being smaller, too. These institutions are actually classified as non-profit organizations that serve their members, so a small size and a focus on customers is an important draw for potential customers.

For close to two years now banking advocates have urged consumers to “go local,” moving their money out of the behemoth nationwide banks and into smaller regional banks or credit unions. This push picked up considerable steam in the fall, as 650,000 customers moved to credit unions in just a few weeks after a slate of major banks proposed monthly fees for debit card use. Many of these customers choose local credit unions, but there are now a growing number of institutions that have eased their membership restrictions to allow for customers from across the country. Some of those now accepting members from across the country include NASA Federal Credit Union, Pentagon Federal Credit Union, Stanford Federal Credit Union and 20th Century Fox Credit Union.

Credit unions exist to serve and benefit their members, so as a result the membership must share some kind of common bond. There are credit unions for neighborhoods, for churches and for workers of certain companies. To widen their membership base, some credit unions have formed to cater to the members of specific associations, then allow anyone who wishes to join the association. These credit unions are also beefing up their network of eligible ATMs, making the switch a more viable option for customers wary of paying fees anytime they want to take out money. This practice of opening up regional banks for nationwide membership has come under fire from larger banks, which claim it is an unfair practice given that credit unions are afforded tax breaks as non-profit organizations.

It is up to the individual customer’s conscience to decide whether this is fair or not, but the benefits are clear—these credit unions are generally free of fees, offer CD rates well above the competition and can give the kind of reward checking accounts not offered at large banks. Customers who are ready to make this switch and want to peruse the offerings beyond their local credit unions can start at the American Consumer Council, which includes a long list of partner organizations. Readers should check these carefully, however, as not all the credit unions listed accept members from across the country. Others have somewhat restrictive membership, allowing new customers for checking accounts but now IRAs or business accounts. The National Credit Union Administration, an advocacy organization for credit unions, also allows customers to search its database of credit unions and even look up financial information on them.

These accounts tend to come with strings attached, and while these requirements can be simple, breaking them can mean paying fees or losing the bonus. When customers open these accounts, it is the bank’s objective to keep them—and their money—for as long as they can, so banks require customers to enroll in other services, some of which may not be free. The most common requirement is a minimum account balance, which can be anywhere from $100 to $1,500 or more. Most banks also require the customer to have at least one direct deposit per month, and some go the additional step of attaching a dollar amount minimum to this deposit. Other requirements including signing up for online bill pay or making a minimum number of debit card transactions. These steps lessen the odds the customer will go through all the steps necessary to leave for another bank, and just to be safe the banks usually attach penalties for early account closure.

Over the course of a few years, chances are the bank will have earned back most, if not all, of the bonus through ATM fees, overdraft fees and even monthly fees for using debit cards, which is the latest trend in bank fees. Often these accounts are designed to attract customers into products that don’t match up terribly well with competitors’ accounts. A $100 bonus might help in the short-term, but if the account has a low interest rate or many fees attached, it could still be more cost effective to find a free checking account or an account with a better interest rate and no bonus. Signing up for these accounts can be hazardous, too, as banks sometimes use hard credit inquiries that can be damaging to a credit score. This check also helps banks spot customers to hop from bank to bank to take advantage of special offers, and these customers are usually denied accounts.

Even when all the bank requirements are met, the customer may not be in the clear yet. Banks classify these bonuses as interest rather than a gift, so when it comes time to pay the federal taxes, the account holder will have to pay taxes on these promotional gifts. So if the customer has a marginal tax rate of 28 percent, and opens an account that pays $100 bonus, they will end up handing $28 back to Uncle Sam in April.

We know, the banking industry has been making a lot of changes. Ones that could cost you a lot of money over time as well. Recently many large national banking institutions decided to begin charging for a basic consumer checking account. Many launched new fee schedules and began charging monthly fees for account holders regardless if they were long time customers or not. However once faced with a huge amount of negative press and outcry from account holders, many of whom jumped ship to a credit union or online banking company many of the banks did a quick 180 and discontinued those ill advised practices.

One of our current recommended free checking account offers can be found below. To find out more regarding that particular offer simply click on the start saving link or the company logo inside the rate box.

The difficult task that remains now for you dear reader is to know which banks are offering what and how to decipher through the fine print.

With banks today, it’s difficult to find many good offers that don’t have at least a few strings attached. Good deals on CDs require high minimum deposits or have long terms and those attractive low introductory rates on credit cards disappear into high APRs. Consumers can go pretty much anywhere, from an online bank to a local credit union to some of the largest nationwide banks, and sign up for a no-cost checking account if you know where to look and what to ask for.

Just a few decades ago, consumers’ options were limited when it came to choosing a checking account. They could go to one of the local banks or join on of the large national banks, and, well, that was pretty much it. Today, the internet and the rise of credit unions and other regional banks that accept customers from across the country means there are more choices for those seeking a free checking account. The large banks are still a safe bet, though most have some basic requirements like direct deposit. With these banks, convenience is the advantage, as they tend to offer large networks of ATMs and branches.

There are also the smaller credit unions and local banks, which also offer free checking but can tend to have a limited number of branches or ATMs to pick from. Reward checking accounts are another good option and come with higher interest rates and other perks, but also have higher requirements like minimum monthly transactions or account balances.

In the past decade or so, the rise of commerce on the internet has also led to the emergence of banks based entirely online, and with these banks come great offers for free checking accounts. As with many online services, there is a trade-off to consider before choosing an online bank. The perks and terms at these banks are generally superior to brick-and-mortar banks, but there are no branches so depositing money means using either an ATM, mailing the check in or scanning it into a computer. This isn’t often as troublesome as it might sound.

So If you have the stomach for this new media style of checking deposits, online banks have some of the best options for free checking accounts.

ING Direct Electric Orange

A few years ago, the Dutch-owned ING Direct made waves in the online banking world when it introduced its Orange Savings Account, which blew away its competitors with a 2.6 percent APY—and this was at a time when most banks had rates below 1 percent. This helped ING Direct become one of the first major players in the online banking world, one that still carries a strong reputation today. It has now branched out in the services it offers, with the ING Direct Electric Orange checking account drawing positive reviews from customers.

The account itself has some favorable interest rates and perks. For account balances up to $50,000 there is a 0.20 percent APY, but for those with more than $50,000 it is 0.90 percent APY and for more than $100,000 it is 0.95 percent. ING Direct Electric Orange offers what it calls Person2Person payment, allowing account holders to easily transfer money to any other bank account, even if it is not with ING direct. The checking account comes with a free MasterCard debit card and free bill pay online. ING Direct also has a network of more than 35,000 ATMs nationwide, spread evenly across the country, so convenience is not a concern. The bank offers free online checks, but customers can order actual checkbooks if they wish. ING Direct is known as a tech savvy bank, with expanding options for digital deposits and what is considered one of the best banking apps in the industry.

FNBO Direct Online BillPay Account

While most other online banks have popped up sometime within the last decade or so, FNBO Direct has a history that actually stretches back more than a century. The FNBO in the name stands for First National Bank of Omaha, which was established more than 150 years ago and has 6.6 million customers spread across 35 states. One of the earliest entrants into the online banking arena, FNBO Direct offers some of the best rates on both its checking and savings accounts, and has consistently earned some of the highest customer ratings among online banks.

As the name would imply, the FNBO Direct Online BillPay Account allows customers to pay bills directly from their account. There are some other good features as well, like one of the highest interest rates for the average, low balance customer. In December the rate was 0.70 percent, with a minimum deposit of only $1. Customers also get a Visa check card that serves as an ATM card for both this account and the FNBO Direct Online Savings Account. Because of its affiliation with First National Bank of Omaha, customers with this online savings account can connect with a massive network of participating ATMs—840,000 in all. Plus qualifying balances can avoid charges on four foreign ATM fees every statement period. Transferring money is easy as well with FNBO Direct Online’s Popmoney, which allows account holders to send and receive funds. For added convenience, customers can send money into their accounts through mobile or e-mail payments.

Ally Interest Checking

This is one of the newer checking accounts offered by online banks, and comes with some attractive features. The biggest is probably the ATM fees, which are nonexistent. Ally refunds all bank fees for ATM withdrawals, so the bank’s network is essentially everywhere at all times. Checks to go with the accounts are free as well, as its Ally’s bill pay feature and ATM card. While other online banks are still developing digital deposit programs, Ally has its eCheck Deposit, which allows for greater simplicity in making deposits. The account has no monthly fees and no minimum balances, either.

Since opening in 2001, Ally Financial has become one of the better known names in online banking, though until 2009 it was known as GMAC. Ally has invested some serious money in its marketing, so many customers know the Utah-based bank from television or internet advertisements. Like other online banks, Ally is known for good rates on its savings accounts, but that it not all Ally does. It also has high yield IRA CDs, traditional CDs with no early withdrawal penalties and even auto financing. Ally has earned high ratings for its customer service, with a website that allows customers to speak live with an agent, any day at any time. Ally also has a reputation for being straightforward. In a time when checking account disclosures read like an accounting textbook and fees are purposely hidden, banking with Ally is simple—no hidden fees, no surprise terms.

PerkStreet Financial

Normally good cash-back reward programs are reserved for credit cards with high interest rates, but PerkStreet Financial is the exception. This online bank offers a free checking account that pays cash back—5 percent for spending in certain categories and 2 percent on all other spending, as long as a minimum balance is maintained. For people who like the idea of getting something back for their purchases but don’t want to rack up credit card debt in order to do it, this is a great account, and PerkStreet Financial has gained attention for pioneering the concept of connecting a free checking account with a generous reward program. The Boston Globe and New York Times both praised this account as an alternative for debt-conscious consumers.

A cash back reward program is not the only feature of PerkStreet Financial. It also connects to large network with more than 40,000 ATMs and offers free bill pay, free checks and a free debit card. PerkStreet Financial earns good marks for its customer service and its website, which is easy to navigate and its bill pay section easy to set up. Perkstreet is new to this industry, but they’re getting a lot of good press and seem to becoming quite popular.

Everbank Yield Pledge Checking

While this isn’t a bank for everyone, if you plan on putting a large amount of money into your checking account, Everbank Yield Pledge Checking is hard to beat. The interest rate does change, but the bank has pledged to keep this rate among the top 5 percent of all banks, so you know you’ll have a high rate. The catch is that the account requires at least $5,000, and it allows only a limited number of customers. Everbank Yield Pledge Checking has some other great benefits, like unlimited check writing, reimbursement on all ATM fees and an online banking hub and customer service center consistently rated among the top of all banks. This bank also allows customers to scan their deposits, saving the trouble of finding an ATM or sending a check by mail.

Everbank is a name that might be familiar to those outside the banking world, as the Jacksonville-based bank bought the naming rights for the stadium where the Jacksonville Jaguars play. This financial services company also offers standard banking, mortgage and investment services, and has total assets of $11.5 billion. The bank has won a slew of awards, like “Best of the Web” from Forbes and Online Banking Report and “Best Checking Account” from Kiplinger’s Personal Finance. It also has a four-star rating from BauerFinancial, making it a safe bet for any customer.

Brick-and-Mortar Banks

Online banks might have the best perks, but that’s not to say there aren’t good offerings for free checking accounts at major banks as well. For customers who don’t want to deal with the inconvenience of mailing in deposits or searching for an ATM in the network, these brick-and-mortar banks actually have some great alternatives. The only catch with these accounts is, with few exceptions, they are not entirely free. The either come with some type of monthly fees or require direct deposits.

Many of these fees can be traced back to post-recession legislation meant to create greater oversight on the financial sector. An amendment to this bill passed in 2010 put a cap on the fees banks can charge merchants who accept debit cards, so as a result the banks introduced a slew of new fees and pulled back on free perks to help make up the difference. This legislation has only been in effect a little more than two months, so the full results may not have been felt and the bank terms listed below are subject to change any time.

PNC Bank Free Checking

PNC is the one bank that, so far, has bucked the trend of new fees. While most other checking accounts form the major banks have some kind of fees involved, this offering from PNC is entirely free. As in no monthly fees, no debit card fees, no minimum balance and no direct deposits required. The bank actually made headlines in early 2011 when it announced it would keep its checking account free, though in doing so it did eliminate some of the other benefits, like a debit card reward program and reimbursement for out-of-network ATMs. It will now cost customers $2.50 to use an ATM out of the network.

PNC is noted for its online bill pay system, which allows customers to view and pay bills online. It gives these customers the option to either pay the bills manually each month or set up an auto-pay system, and it all takes place on PNC’s easy-to-use banking portal, so there’s no need to switch between the bank’s site and other sites when paying the bills.

Another good aspect of PNC is the different types of free checking accounts it offers. There is an account tailored for non-profit organizations that includes online bill pay, a free Visa debit card and free checks. The bank had previously offered a free checking account geared toward students, but has since discontinued it.

Chase Total Checking

This account is a mixed bag of sorts. Chase decided to go against the trend and not institute monthly debit card fees, but there are other fees that kick in if the customer can’t meet the bank’s requirements. The account requires direct deposit, and this must be set up within 60 days of the opening of the account. If the account doesn’t have a direct deposit of more than $500—or if the customer has less than $1,500 in Total Checking or a total of $5,000 between all Chase accounts—there is a $12 monthly fee. There is also a $25 fee if the account is closed within 90 days and a $2 fee for out-of-network ATMs.

The bank is trying to entice new members to open accounts there, and for much of 2011 it offered $125 for those who opened new accounts with a $100 minimum deposit and who started a direct deposit within 60 days. This offer has since closed, but it demonstrates a willingness on Chase’s part to offer some kind of perks to make up for those that were stripped away. The bank does also offer a large network of ATMs and has 5,300 branches nationwide, so convenience is not an issue.

Bank of America eBanking

This is another account with some good benefits, but strings attached if minimum requirements are not met. To open an eBanking account with Bank of America, the customer must make a $25 minimum deposit and will be charged $2 for using ATMs not in the bank’s network. The account combines aspects of online banks with the convenience of one of the nation’s largest brick-and-mortar banks. Customers can do their banking through Bank of America’s online portal and make deposits through the more than 18,000 ATMs in the network. The account does have an $8.95 monthly fee, but this can be avoided if all deposits and withdrawals are made at an ATM and if the customer chooses to receive online paperless statements.

Bank of America customers came close to having a monthly fee for using debit cards, but the bank dropped this proposal after it was met with widespread criticism. Bank of America is one of the banks hit hardest by the cap on fees for merchants, and it has instituted other new fees to make up for its loss, including $5 for ordering a replacement debit card.

Citibank Basic Banking Package

Formerly know as Basic Checking, this account once had no minimum deposit, but that changed with the new banking regulations. Now Citi requires a balance of $1,500 or the customer is charged a $10 monthly fee. This fee can be waived, however, if the customer has one direct deposit and at least one online bill payment each month. The changes weren’t all bad for Citi customers, as the bank joined Bank of America in holding back on the debit card fee.

One great perk of this account is that the account can be enrolled in the Citi ThankYou rewards program. This is a fairly generous program, allowing customers to earn points for having bill pay and direct deposits, and it even lets them combine points earned from the checking account with points from credit card purchases.

U.S. Bank Easy Checking

This account has a $50 minimum initial deposit, but comes with a range of features like mobile banking that can be used to transfer funds, pay bills or locate nearby branches or ATMs. The account also offers e-mail or text messages with reminders about account activity. U.S. Bank has a network of 3,000 branch offices and 5,300 ATMs, which are designed to take deposits or make balance transfers.

There are some drawbacks to this account. There is a $8.95 monthly fee, though this can be reduced to $6.95 by using online statements instead of paper statements. The fee can be waived entirely with an account balance $1,500 or greater or with direct deposits totaling $500 each month. Also, while most banks give penalties to customers who close their accounts within 60 or 90 days, U.S. Bank Easy Checking account has a $25 penalty if the account is closed anytime within the first 180 days.

Wells Fargo Value Checking

To open a Value Checking account with Wells Fargo, you need to be ready to plunk down $100, one of the largest initial deposit requirements in the banking industry. The bank makes up for it a bit by having no early closure penalties, and the $5 monthly fee can be waived with any direct deposit or with a $1,500 balance in the account. There is a $2.50 fee for withdrawals form out-of-network ATMs, and balance inquiries at these ATMs will cost $2. Online bill pay is free for the first two months with this account, but after that there is a $6.95 monthly fee.

Wells Fargo has responded to new financial regulations by instituting debit card fees, but these have yet to take effect nationwide. If you’re unlucky enough to live in Nevada, New Mexico, Oregon, Georgia or Washington and have this account, you’ll that you’re already paying a $3 monthly fee for your debit card. Wells Fargo is still in the process of trying out the fee, and has selected these states as the testing ground.

Capital One Rewards Checking

This account comes with the bank’s flexible reward program, making it one of the few institutions to offer rewards on a free checking account. But the card does have one of the higher monthly fees among free accounts, with an $8.95 fee that can be waived with certain requirements. There is $50 minimum deposit and a $2 fee for using an ATM out of Capital One’s network. The Capital One Rewards Checking does have some cool features not offered at many other banks, like the ability to connect accounts to Quicken or Microsoft Money for free. Online bill pay is also free with this account, and Capital One’s mobile banking allows customers to do banking anytime from their phone or mobile device.

Though there are 1,000 branches and more than 2,000 ATMs in Capital One’s network, the bank is somewhat limited geographically. It has branches in eight states, mostly along the Atlantic seaboard, along with Washington, D.C.

BBVA Compass Build-to-Order Free Checking

With free online bill pay, free entry into the CompassPoints Reward program, and $2,500 in protection against identity theft, the BBVA Compass Build-to-Order Free Checking is great—if you can get it. Compass BBVA is available in only seven states stretched across the Southwest and Southeast. For those who do live in these regions, BBVA offers a nice alternative to other large banks that skimp on the benefits. With BBVA, customers can pay an extra $2 each month to get the premium features, like interest on the account balance and fee-free ATM use.

The BBVA Compass Build-to-Order Free Checking does have a larger monthly fee than most other banks at $10.95, but it also makes it easier for customers to escape the fee. Customers can make a $300 direct deposit, keep their balance at or about $1,500 or just be a student under age 25. The bank also waives the fee if the account holder is part of its preferred client program, which means carrying a balance of $100,000 or more—though these customers can probably spare the $10.95 per month.

You Still Have More Options

If you’ve gone through all the online options and all the major banks but still can’t find the right account, there are always small local banks and credit unions to check out. These have become increasingly popular in recent months, in part because the fees and obscure account disclosures at major banks spurred a national backlash against them. In just the past few months more than 650,000 customers have joined credit unions, more than joined in all of 2010. There are a number of sites that help connect customers with their local credit unions, and the National Credit Union Administration maintains a searchable database of all credit unions.

Remember to always read the fine print and ask the bank representative to explain things fully.

Disclaimer: CheckingAccount.com makes great effort to make sure all information is 100% accurate when the article was actually first published. Should any of the information be found to be inaccurate please contact us immediately with a request for an update.

It is imperative that you research any lending institution thoroughly on your own and not allow this document be your sole method of determining what bank is right for you

But these banks also come with their drawbacks, and like many things on the internet, concerns over legitimacy are top among these concerns. The latest worries come over a bank known as UFB Direct, which has the attention of readers of a financial blog over its unclear status with the FDIC. This bank made news in the fall when it came out with the highest interest rate for a savings account, a 1.3 percent APY that was bounds above nearly all of the competition. When the blog’s readers became suspicious that a new web site was offering such a high rate, many placed calls with the FDIC only to find that representatives could not confirm the site, as it was an affiliate of another bank, BofI Federal Bank.

In the end the issues with UFB Direct Bank were resolved, but worries with internet banks remain. Even for their better interest rates, many customers remain wary of online banks, and view many of the rates as “too good to be true.” It is possible to look up whether banks are insured through the FDIC, but the problem is that only the bank’s primary website address can be verified. Banks that have affiliates usually create separate websites which then would not be listed. It is then up to the customer to verify the parent bank or primary website, and then do some sleuthing to find the connection between the verified banks and the secondary website. Customers could always contact the bank directly and ask for a letter of confirmation that the affiliate bank is insured through the FDIC, but this likely isn’t worth the time to the average person comparing rates. Compounding the problem is the fact that banks are sometimes reluctant to advertise their links to the affiliates, which often have better deals on interest rates than the main banks do.

The FDIC on its website offers several tips for customers looking to verify the legitimacy of online banks. It points them first to the bank’s “About Us” page, which usually contains information about whether deposits are insured. It points out that it is only deposits that are insured—things like mutual funds, life insurance policies and annuities the bank might offer are not insured. The FDIC warns of copycat websites that come up when there is a typo in the site. Anyone who has ever accidentally typed EPSN.com knows these sites are made to look like the real thing, but often try to entice users to submit their personal information.

Being able to grapple with this new threat has been something that the European Union has struggled with for some time now, they have even gone so far as to attempt to shed the current socialist benefits within these countries. These efforts have been met with staunch resistance in Europe however; and there appears to be growing difficulty with regard to financial stabilization as a result. This has not dissuaded many banks in the US though, and the larger and smaller banks are beginning to attempt to outdo one another. Each side is offering low interest rates without the adjustable rates seen in many financial agreements in the past, the fact is that it is a great time to borrow money (if you need it). Many financial experts do stress that they believe that such a crowded US lending market could cause some banks to mismanage their risk, entering into bad arrangements.

This is not uncommon for economic conditions such as these, when everyone hops on a bandwagon together figures as well as rationale can become convoluted, leading to a lot of losses. Many banks are already aware of the risks and are doing what they can to minimize them, but in such a chaotically prosperous market there is just too much to gain. This has set many smaller banks from the defensive to the offensive, and has motivated their larger counterparts to do the same. Much of this lending is being done at a commercial level, offering new businesses the opportunity to move forward without the best credit. Smaller banks are offering more interest on deposited funds in many cases, which means they will not be able to charge as low of an interest rate. Larger banks are seizing upon this often-perceived downside by offering lower interest rates on borrowing money, as opposed to offering higher interest rates on deposited funds. This has created a dichotomy for the consumer, who is left to choose between borrowing or saving responsibly.

If this all pans out to the positive side of things and does not blow up in the banks’ face then there is a good chance that interest rates on deposits will rise across the board. When the bank makes money so too does the consumer, this is very good news for a still somewhat beleaguered US economy that could use the boost. Still, a responsibly investor or business person would take advantage of their tools of study and practice due diligence into what each bank offers before making a decision. While we still live in troubled times this is definitely a sign of prosperity, or at the very least a sign that the banks are willing to believe in it.

This is a real perk for many cardholders. Most cards offer similar terms for 12 months. Three extra months of interest-free credit is beneficial for those who need to pay over time. There are a few drawbacks. A three percent fee is charged for balance transfers. However, the $75.00 statement credit offsets the cost of this provided the amount of the transfer doesn’t exceed $2500.00.

Slate from Chase is best for those with excellent or good credit ratings. The company bases its promotions on a pricing program. Those with excellent credit are eligible for “Elite” pricing, while good and average qualify for “Premium” and “Standard.” Slate from Chase only extends the zero percent interest offers for six months for those under the Standard pricing plan.

At the end of the promotion, annual percentage rates are variable, rising and falling in accordance with the Prime Rate. The average rate for those with Elite pricing is 11.99 percent. Premium customers are charged 16.99 percent, and Standard pricing comes in at around 21.99 percent. Cash advance interest rates are 19.24 percent and 23.4 percent, respectively.

This is not necessarily bad news for those whose credit is less than perfect. Slate has a program called Blueprint, which helps cardholders save even more money on interest. There is no cost to enroll, and there is a variety of ways to save depending on purchasing habits. Users can plan for buying big items, or choose to save interest on specific categories.

Full Pay is perfect for those who shop frequently in specific categories, such as groceries or apparel. It allows a person to pay just those specific categories in full each month. This prevents any interest from accumulating on regular purchases. The member is able to choose which categories that they want to save on.

For big-ticket items, the Split Pay plan allows large expenses to be paid off separately from the outstanding card balance without accumulating additional interest charges. Finnish It is for those to want to eliminate their balance by a specific date. The customer provides Chase with the goal, and a customized repayment schedule is given. For all types of purchases, Track It provides detailed reporting and statistical graphs for keeping up with personal spending trends.

It is simple to apply for the Slate from Chase $75.00 statement credit. The online application process takes less than five minutes. Personal information, such as social security numbers and gross incomes, is needed for all applicants. If requesting a balance transfer, the new member will also need the names and account numbers of existing credit cards. Slate from Chase is a product of JP Morgan, a leader in innovative and consumer friendly banking solutions.

Bank of America and JPMorgan Chase Bank are both offering CDs that have interest rates above 2 percent, but both banks have attached some fairly complicated strings. The rates are only available on CDs with a term of 10 years, and early withdrawal comes with some especially punitive penalties—both take a full 3 percent of the principal, along with a $25 fee.

The actual rates of the CDs vary by state. In many places, the best offer from Chase on the 10-year CD is 2.25 percent APY, though in other states it is only 1.75 percent. And this CD is not exactly open to all investors, either. It comes with a $10,000 minimum deposit, and you can only get that rate if you already bank at Chase and have a checking account there, or if you’re willing to open an account to take advantage of the rate.

The rate on Bank of America’s CD also varies by state, with a 2.3 percent APY available in many locations. Unlike Chase, Bank of America’s CD is at least a little more open in some places. California residents, for instance, can lock into a term that ranges anywhere from seven to 10 years.

Chase and Bank of America are not the only large, nationwide banks to offer rates over 2 percent. In fact, a little research will uncover many banks that not only offer higher rates, but do so for a variety of terms. Discover Bank offers a 10-year CD that has a 2.5 percent APY, and its early withdrawal penalty is a little less harsh as well—nine months’ interest. At US Bank, there is a special 59-month CD that carries a 2.25 percent APY, but it too has an incredibly harsh penalty for early withdrawal. At least it is easier to make it through a nearly five-year term US Bank offers than the 10-year term the other large banks offer.

A little more poking around uncovers some lesser-known banks that offer good rates. The Pentagon Federal Credit Union has a seven-year CD that carries an APY of 2.75 percent. Another bank offering a good rate on a shorter term is USAA Bank, a Texas-based institution that has a 2.05 percent APY on a seven-year CD. Some of these good deals can be restrictive, however. Capital One Direct Banking, for example, has a 10-year CD with a 2.55 percent APY, but there is a $2,500 minimum deposit and the rate is actually only available for Costco members.