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A Checkless Checking Account Could Save You Money, Simplify Your Life

If you’re one of those people who never carries a checkbook and hates writing checks, a checkless checking account could help you cut down on paper and fees.

Big boys such as Citibank, Bank of America and KeyBank, along with a host of smaller banks and credit unions, are offering checkless checking or e-checking accounts, as they sometimes are called.

It’s part of a growing movement among consumers who are eschewing paper and relying on mobile and online banking with debit cards.

Many consumers say paper checks are outdated.

A recent Citibank survey of 2,500 consumers found more than half see checks as inefficient and old-fashioned. That’s particularly true for those under the age of 30. In that demographic group, 60% say checks are old-fashioned, and one-fifth of those under the age of 40 don’t even have a checkbook.

Citibank’s new Access Account “caters to digital users and consumers with basic banking needs. This group includes those who like the flexibility of 24/7 online and mobile banking access, don’t require paper checks and prefer to bank online,” says Robert Beck, the U.S. retail banking chief operating officer for Citi.

Among all those surveyed, more people use online and mobile banking than paper checks to pay their monthly bills. While 38% opt for digital payments, 32% still write checks.

Even if consumers don’t like paper checks, that doesn’t mean checkless checking will work for everyone.

It’s one thing if you can make all your payments with your smartphone or computer. If you can’t, “it’s probably not the right account,” says Ben Rogers, research director at the Filene Research Institute, a Madison, Wisconsin, think tank backed by the credit union industry.

Each financial institution has its own version of the account, but generally, you do much of your banking online or with your mobile phone and use your debit card to make purchases or withdraw cash.

You typically won’t be able to write a paper check, so you’ll have to pay for a money order or cashier’s check on those occasions when you need an actual check. Or if you need to pay an individual, you can use a service such as Popmoney to transfer cash.

These accounts also generally have low or no monthly service fees and don’t permit overdrafts.

Here’s a sample of a few checkless checking accounts:

  • Citibank Access Account ( You pay a $10 monthly service fee, but it’s easy to avoid if you do simple things such as making one bill payment or having your payroll, pension or government check direct-deposited. There’s no minimum deposit required to open an account. Citi is based in New York and has more than 1,000 branches.
  • Bank of America SafeBalance Banking ( You’ll pay a $4.95 monthly fee for this account, which can’t be waived. You need a minimum deposit of $25 to open an account. Bank of America is based in Charlotte, North Carolina, and has about 5,000 branches.
  • KeyBank HassleFree Account ( This is a fee-free account, and there’s no minimum deposit required to open an account. KeyBank is based in Cleveland and has almost 1,000 branches in a dozen states, from Alaska to Maine.
  • Nationwide Bank E-Checking ( You’ll pay an $8 monthly fee unless you have a direct deposit of more than $25 and use your debit card at least eight times each month. You need to deposit at least $50 to open an account, and the account pays interest. Balances up to $2,499 earn 0.10% APY; balances from $2,500 to $9,999 earn 0.30% APY and balances above $10,000 earn 0.60% APY. If you open an account by Oct. 31 and have a monthly direct deposit of at least $200, you’ll earn a $200 bonus. This online bank is owned by the insurance giant and is based in Columbus, Ohio.

Along with those who are migrating to digital banking, “many consumers want a simple product with low fees and no overdraft fees at all,” Beck says.

Because there are no paper checks with these e-checking accounts, you can’t overdraw your account.

The median overdraft fee at the largest banks in the country is $35, a study this year by Pew Charitable Trusts found. Of the 1,800 consumers the Philadelphia nonprofit surveyed, 10% had paid an overdraft fee last year.

And oftentimes the fee snowballed, soaring to reach $69 per overdraft. “They didn’t just pay one overdraft fee, they paid multiple fees,” says Susan Weinstock, Pew’s director of consumer banking

Millennials, who are the most likely to embrace digital banking, particularly loathe overdraft fees. Think Finance, which develops online financial products, found in a survey of more than 1,000 millennials last year that more than 80% said fees were the most important consideration when choosing a financial institution.

“Banks are waking up that consumers don’t want to pay those fees,” Weinstock says.

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