There are many ways to manage your money, but for most people, an online checking account is a key part of the plan. Money stored in an online checking account is safer than keeping it as cash at home, where it could be lost, stolen, or damaged. Modern financial institutions offer many perks for keeping your money in an account, including the opportunity to earn interest and tools to help you manage your finances better.

Between mobile deposits, daily balance alerts, and online bill pay, online checking accounts are incredibly convenient.

So if you’re considering opening an online checking account, here’s what you need to know.

Choose the right online checking account

Before you sit down to apply for an account, you’ll first need to decide which bank will get your business. There are hundreds of choices when it comes to banks and accounts, which can make the decision seem daunting. However, there are a few considerations to keep in mind that can help narrow your decision:

• Member FDIC: First, ensure the online bank you're considering is insured by the Federal Deposit Insurance Corporation (FDIC) — or the National Credit Union Administration (NCUA) if it’s a credit union. The FDIC and NCUA are federal agencies that oversee the nation’s financial system for banks and credit unions. FDIC-insured and NCUA-insured accounts are covered up to $250,000, a crucial safeguard in case the bank fails. This situation is highly unlikely, but it’s important to be protected just in case.

• Competitive rates: One of the major advantages of online accounts is that they often offer higher interest rates compared to traditional brick-and-mortar banks. Checking accounts aren’t generally meant to be used in the same way as savings accounts. But it can be an added perk to earn some extra interest on your money while it sits in the account.

• Low fees: Online checking accounts typically have fewer overhead costs than traditional accounts, so they may require fewer fees. Be sure to review the bank's fee schedule before you open an account. This includes any monthly maintenance fees, overdraft fees, and ATM fees. It’s important to look for an account that offers little to no fees and/or reimburses fees.

• ATM access: If you frequently use cash, check whether the bank offers free access to a wide network of ATMs. Alternatively, some online banks will allow you to use out-of-network ATMs and then reimburse you for any fees incurred.

• Digital experience: Since you'll be doing your banking online, the mobile banking user experience on the website and mobile app are particularly important. You’ll want an intuitive interface and robust features such as mobile check deposits, bill pay, and real-time text message alerts. You’ll also want to make sure the app works with both Android (via Google Play) and Apple (via App Store) mobile devices.

• Customer service: While most of your interactions with an online bank will be digital, there may be times when you need to speak to a person for help. Look for a bank with strong customer service reviews, and check if they offer support via phone, email, or online chat. You can read reviews on sites such as BBB.org and Trustpilot.com, as well as the app stores to see what other users are saying.

• Security policies: The bank should employ security best practices to protect your account, including encryption and two-factor authentication. Carefully review your bank account disclosures for the full breakdown of the security measures in place to ensure your money is protected.

• Bonus offers and perks: Some online banks offer sign-up bonuses for new customers, such a cash back for debit card purchases. Other perks may include fee-free ATM transactions or ATM fee refunds, no monthly service fees, or overdraft protection. These can be a nice perk, but make sure you understand any qualifying requirements you must meet to earn the bonus.

Opening a checking account online

Once you've decided which online checking account you want, read the account agreement, and reviewed the fees, interest rates, and policies, you can proceed with the application process.

Provide personal and financial info

Note that banks require you to be at least 18 years old to open an account. Minors who want to open a teen or student checking account will need a parent or guardian to serve as co-owner.

The bank will also need to verify your identity, so be prepared to provide your Social Security number or Individual Taxpayer Identification Number (ITIN), government-issued ID, date of birth, and address. As an added security measure, you might also need to answer a few questions based on public records, such as your previous address.

Additionally, the bank may ask for proof of your current address. This can often be provided by uploading a copy of a utility bill or bank statement.

Fund the account

Many banks require an initial deposit to open a checking account. If that’s the case, it will likely be a small amount — around $25 to $100. You have a few options for funding your online checking account:

• Electronic transfer from another bank account

• Debit card

• Prepaid card

In some cases, you may be able to visit the bank branch (if one exists) and fund your account in person. Of course, this somewhat defeats the purpose of opening an online checking account.

Submit the application and wait for approval

After you've filled out the online form and made your initial deposit, double-check that all the information in your application is correct. Errors could lead to a delay in being approved.

Once you’re sure everything’s ready, you can submit your application. The bank will review your application, and if everything is in order, you should receive confirmation of your new account. Usually, this takes one or two business days.

Setting up online banking access

You can set up your online banking credentials after receiving a notification that your account is approved and opened. Usually, you can find the link to set up online banking on the home page of your bank’s website.

You’ll need to create login credentials, including a secure password. It’s important to choose a password that’s unique in case any of your other online accounts get compromised. If you have trouble thinking of and remembering strong passwords to all of your accounts, consider using a password manager such as LastPass.

You should also take the time to set up additional security features, such as two-factor authentication and alerts.

Making transactions

Once your account is approved and funded, you can also begin setting up online banking services. For example, you can work with your Human Resources department to get your paycheck set up for direct deposit. If you have any regular bills you’d like to automate, such as insurance premiums or student loans, you can also set up automatic bill pay. And if you’re building up your savings, you can also automate transfers from your checking to your savings account.

Remember that if you set up automatic withdrawals, you’ll need to maintain a cash buffer so that you don’t accidentally overdraw your account.

Managing and maintaining the online checking account

Opening your online checking account is just the beginning. Once you have everything set up, it’s important to regularly monitor your account.

Creating text or email alerts, for instance, can help you catch any fraudulent activity right away. You might set up an alert for any time a large transaction goes through, for instance, or when your balance drops below a certain threshold.

It’s also a good idea to log in and check your account balances and transactions regularly, as well as review your monthly statements. If you see any transactions you don’t recognize, contact your bank immediately. If you are the victim of fraud, federal law dictates that you are only liable for up to $50 in fraudulent transactions, but you must report the fraud in a timely manner.