The Best Checking Account for Mortals

November 20, 2014 at 10:58 pm Leave a comment

I think I’ve found it, The Best Checking Account for Mortals!

After recently trying out two checking accounts due to “bonus” offers, I started a search for the best checking account.  Ideally, it would pay a decent interest rate, have no monthly fee, and offer free checks.

There are lots of Rewards checking accounts out there.  These pay an interest rate that’s usually greater than 1%, with the highest I’ve seen being around 3%.  These usually have a limit on how the amount of your balance they will pay this premium rate, like $5000, etc.  They have some tough requirements you have to meet, though.  Many of them require 10 or more debit card transactions per month, direct deposit, electronic statements, etc.  If you don’t meet those requirements, you end up with a tiny interest rate.

My problem is with the debit card transactions.  To do 10 transactions per month consistently, I’d need to take my debit card with me just about everywhere.  That would mean walking around with a card that has access to as much as 15K on it.  And since it’s a debit card, it could be stolen and used as credit by the thief.  Then, I’d have to work with my bank to get my own money back.  That’s a hassle I don’t ever want to go through.  At most, you could earn $450 per year with this account ($15K at 3%).  While this is a decent return (by today’s banking standards, at least), it’s not worth the risk to me.

What I’m terming The Best Checking Account for Mortals is sort of a Rewards account, but the requirements are quite livable.  Basically, you do a $1500 direct deposit into the account each month, and they pay you $10.  Pay two bill payments through their online banking portal, and they pay you another $10.  That’s it.  These two $10 payments are deposited into your linked savings account.  This isn’t a promotional offer, it’s good as long as they are offering this account.

So, let’s see if it meets my three criteria:

Decent interest rate:
For illustration purposes, lets say you have an average daily balance of $3K in your checking account throughout the year. With this account, you’d earn $240.  A return of $240 per year on a $3K balance works out to 8%, which is not bad at all.  That falls well within my “decent interest rate” criteria.

No monthly fee:
It has a monthly $10 fee, but it’s waived if you have a $1500/month direct deposit (which earns $10, so I’m definitely doing it), so nothing to complain about there.

Free checks:
The only real strike against it is that the only free checks it includes are the initial batch of 200.  That’s probably enough checks to last the average person at least a year, if not several years.  Personally, I only write one or two checks a month as “incidental” things come up, so this could last me 10 years or more.  (I actually write more for donations to my church, but those will come from a different account.)

So, it meets two out of three of my criteria, with the last one being livable for me.

Who offers this amazing Checking account?  Santander Bank.

Mini Review:

I signed up last Sunday night.  They use Equifax, and couldn’t validate my identity because I keep a credit freeze in place, but I lifted it and they were able to open my account on Monday.  They require a $25 deposit to open the account.  When opening it, you get a linked Savings account too, but they waive the deposit requirement for that account.

About a week later, I received the debit card, PIN number, 200 checks, and my username and initial password to online banking.  This all came in about 3 or 4 different envelopes.  Keep the debit card and PIN handy, as it is needed to add new payees to online bill pay.  This is a security measure so that, in the event your online banking account gets compromised, the attacker can’t “bill pay” with your money.

They use a security system put out by RSA, I believe.  It’s the same system that Barclays uses, as well as one other bank I’ve used in the past.  It involves a two stage login, where you put your username in on one page, then are shown an image and phrase (that you selected when initially logging into bill pay).  If the image and phrase match what you expect, you can put your password, and away you go.  This is to keep people from putting up a fake website that looks like Santander’s site, to fool users into giving away their login credentials.

Once logged in, the online banking is basically the same as you’d find at most major banks.  You can see all of your accounts (including credit card, if you got one), account history, and schedule bill payments very similar to other systems I’ve used before.  They have an iPhone app as well.

You can link your checking account to external accounts, but there is one minor issue.  You can transfer money out of the account through Santander’s online banking, but can’t pull money from linked accounts.  So, to get money into the account from another, you need to transfer it out of the source account.

Last night, from my Discover Checking account I set up a transfer to my Santander account.  To my surprise, this morning it showed up (and was immediately available) in my Santander account.

I’ve set up my paycheck so that a portion of it is deposited in this account every two weeks.  One thing I’ve noticed is that my credit union shows my direct deposit a day earlier than either Chase or Discover bank.  I’m very interested to see if it shows up a day early with Santander also, since the Discover deposit showed up so quickly.

I’ve set up three payees and scheduled a few payments so far.  Everything seems to be working as expected.



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