Checking Accounts
With a checking account, you deposit money knowing that
you’re going to write checks, make online payments or use an
ATM or debit card to withdraw the money as you need it.
Many banks will offer free checking, but you need to make sure you understand what “free” really means. Some banks will offer free checking if you have direct deposit, while others might charge a minimal fee whether you have direct deposit or not. Some banks will require that you keep a minimum balance and will charge you a fee if you go below that.
Besides the cost of the account, there are some other things to consider as you’re shopping around for a checking account:
Monthly service fee
How much will the bank charge
you to maintain your account?
ATM charges
Is there a charge to withdraw money
from your bank’s ATMs? Also, what is the charge if you
withdraw money from another bank’s
ATM?
Free checks
Will the bank provide you with free
checks? Some banks will give you one free book of checks,
some will offer you free checks for life.
Minimum balance
Is a minimum balance required for
the type of checking account you are opening?
Check writing limits
Will the bank impose a limit
on how many checks you’re able to write in a month and, if
so, what are the charges if you go over your check writing
limit?
Debit card
Will your checking account come with a
debit card, which you can use
instead of writing checks when making purchases?
Overdraft protection
Does the bank offer
overdraft protection with the checking account and how does
that work? What is the cost associated with that service?
Availability of funds
How long after you make a
deposit will your money be available to you? When you
deposit a check, you may not have instant access to the
funds.
Believe it or not, FREE isn’t always the best thing. There might be certain services or conveniences that are important to you, but not offered with a free account, so you may be willing to pay for them. Take a look at the fee rates at each bank you’re considering and decide if it’s going to bother you to pay a little each month for that “need to have it” feature or service.
Also, keep in mind that most banks will not pay interest on a basic checking account. So, if your plan is to start saving money, you’ll want to put your money in a savings account to maximize your opportunity to earn interest. Learn more about Savings Accounts.
Read more about managing your checking account.
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