A new online checking account can help you avoid fees and get better rates - here's how to find the right one for you

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• Many online banks offer checking accounts with lower ongoing costs and better rates than you'd find at a traditional "brick-and-mortar" bank.
• Some online banks even offer a sign-up bonus for consumers who open a new checking account and meet certain requirements.
• Make sure to compare accounts in terms of their benefits, fees, and functions before you sign up.

If you're in the market for a new checking account because your current one has let you down, you may be inclined to sign up with another bank down the street. You're already familiar with the company and you may even drive by one of their branches every day, so why not choose a local bank for your checking and savings needs?

There's nothing wrong with that, but you may want to cast a wider net when comparing checking account options. Thanks to the internet, it's easier than ever to research different banks to see how they stack up in terms of their amenities and account holder perks. You may even find that an online bank suits your needs better than the bank down the street.

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Why should you bank online?

Online banking is just as safe as traditional banking since your deposits are FDIC-insured. Plus, many online banks can offer checking accounts, savings accounts, CDs, and money market accounts at a lower cost than their competitors. Without brick-and-mortar buildings to care for, they can afford to offer higher interest rates than you can find elsewhere as well.

Plus, online banks may offer more online banking options than traditional banks, including a web-based interface that allows you to monitor your account, send payments, and balance your monthly budget.

It may seem weird to switch to an online bank - especially at first, but you can rest assured that your money is safe and secure. Most online banks also offer online chat and phone-based customer service reps that can help you any time of the day or night. While this may not feel the same as heading to your local branch when you have a question, you will ultimately get the help you need.

5 steps to find the bests online checking account

If you're ready to consider an online bank for your checking needs, it's important to compare each offer at face value. Here are the five steps you should take as you compare online checking accounts to find the best option for your checking needs.

Consider bonus offers

As you compare online checking accounts, you'll probably notice that quite a few banks offer sign-up bonuses when you open an account. These bonus offers can be rather lucrative provided you are able to meet the requirements to qualify.

For example, one bank may offer a $200 bonus for people who open a new checking account and make at least one qualifying direct deposit of $500 or more within 60 days. Another bank might offer $300 when someone opens a new account and receives direct deposits of $2,500 or more within the first 60 days.

Look at ongoing interest rates

While an initial signup bonus is always intriguing, you will also want to consider your new account's interest rate if you plan to keep large sums of money in the account. While many banks save their best interest rates for savings accounts instead of checking accounts, it's possible to find online banks with a decent rate of return.

As an example online bank accounts routinely offer annual percentage yields (APY) of 1.25%-2.02% or even more. 

If you have a lot of money saved up, also keep in mind that you could stash some of your cash in an online savings account while keeping the rest in checking. 

Compare fees

Once you've compared sign-up bonuses and interest rates, you'll want to dive a little deeper to learn about any banking fees. While many online banks offer checking accounts with no fees, you'll still want to find out about any fees for paper checks, account maintenance fees, or ATM access.

If a bank does offer a network of free ATMs, you should also check to see how many are available and whether any are located close to where you live. Alternatively, you'll want to make sure ATM fees for out-of-network access are waived or reimbursed.

Finally, make sure any checking or savings account you're considering doesn't have any minimum balance requirements that would preclude you from receiving your sign-up bonus or the maximum APY they offer.

Look at all the perks

When it comes to online checking accounts, you should also make sure they offer the amenities and functionality your lifestyle requires. Generally speaking, you should look for an online checking account that offers 24/7 online account management, free online banking, free online bill pay, and mobile deposits at the very least.

Find out how difficult (or easy) it is for you to transfer money into or out of your new account, and whether the bank has a mobile app. Hint: Most online banks do!

Choose a checking account with the right combination of functionality and benefits

Once you've taken a closer look at the online checking accounts available, it's time to select an option that offers the benefits and abilities you require. While there are many factors to consider, you should choose an account with low ongoing costs and a selection of tools that make banking easier over all.

While you may feel more comfortable with a bank you already know and trust, it's probably time to ditch your local bank in favor of an online bank with better rates and more perks. Some online banks may be smaller and less recognizable, but their advantages are hard to deny.

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