Best Checking Accounts

A checking account is a crucial part of your financial life, serving as a central hub for your daily transactions, bill payments, and deposits. However, not all checking accounts are created equal, and the fees and features of different accounts can vary widely. Finding the best checking account can help you avoid unnecessary fees, earn interest on your balance, and enjoy convenient features such as mobile banking and ATM access. In this guide, we’ll explore the different types of checking accounts, the common features to look for, and how to choose the best checking account for your needs. Whether you’re opening your first checking account or looking to switch to a better option, this guide will provide you with the information you need to make an informed decision.

What are checking accounts?

A checking account is a type of bank account that is designed for frequent transactions such as deposits, withdrawals, and payments. Checking accounts typically come with a debit card, checks, and online banking access, making it easy to manage your money and pay bills. Checking accounts are typically used for day-to-day transactions, while savings accounts are designed for longer-term savings. Unlike savings accounts, checking accounts usually do not pay much interest, if any. Checking accounts can be opened at a bank or credit union, and they may have different fees, features, and requirements depending on the financial institution.

Common features of the best checking accounts

The common features of the best checking accounts can vary depending on your personal needs and preferences. However, here are some features that many people find valuable in a checking account:

1. No monthly fees or low fees: The best checking accounts often come with low fees, or even no monthly fees, making it easier to keep your money where it belongs – in your account.
2. ATM fee refunds: Many checking accounts come with ATM fee refunds, which can save you money when you need to use an out-of-network ATM.
3. Overdraft protection: Overdraft protection can help you avoid costly fees when you accidentally overdraw your account.
4. Online and mobile banking: Access to online and mobile banking can make it easy to check your account balance, deposit checks, pay bills, and transfer money from anywhere.
5. High interest rates: While most checking accounts do not earn much interest, some high-yield checking accounts can offer competitive interest rates, which can be a great way to earn extra money on your deposits.
6. Free checks: Some checking accounts offer free checks, which can save you money if you frequently need to write checks.
7. Rewards programs: Many checking accounts come with rewards programs, offering cashback or other perks for using your account.

Keep in mind that not all checking accounts will offer all of these features, and some may come with additional fees or requirements. It’s important to compare the options available to find the best checking account for your needs.

Benefits of checking accounts

There are several benefits of having a checking account. First and foremost, checking accounts provide a safe and secure way to store your money. Unlike keeping cash at home or in a safe, money in a checking account is protected by the FDIC up to $250,000 per depositor, per account ownership category. Additionally, checking accounts make it easy to pay bills, withdraw cash, and make purchases with a debit card. Most checking accounts also come with online and mobile banking features, allowing you to manage your account from anywhere and at any time. Finally, many checking accounts offer perks and rewards, such as cashback on purchases or interest on balances, which can help you save money in the long run.

Downsides of checking accounts

One of the main downsides of checking accounts is the fees that may be associated with them. Some checking accounts may have monthly maintenance fees, ATM fees, overdraft fees, and other charges that can add up over time. Additionally, some checking accounts may have lower interest rates compared to other types of accounts, such as savings accounts or money market accounts. It’s important to carefully read the terms and conditions of a checking account before opening it to ensure that you understand any fees or limitations associated with the account.

How to choose the best checking accounts

Choosing the best checking account can seem overwhelming with so many options available. However, finding the right checking account for your financial needs can save you time, money, and frustration. The best checking accounts have several common features, including low fees, easy access to your money, and useful tools to help you manage your finances. Additionally, the best checking accounts should fit your specific needs, such as offering a high interest rate or allowing unlimited ATM transactions. In this guide, we will explore the different types of checking accounts, how to compare them, and what to consider when choosing the best one for you.

How do checking accounts work?

Checking accounts are bank accounts that allow you to deposit and withdraw funds easily using checks, debit cards, or online transactions. When you open a checking account, you’ll typically be issued a debit card that you can use to make purchases, withdraw cash from ATMs, and make deposits at your bank’s branches or through its mobile app.

Checking accounts typically offer features such as direct deposit, online banking, and bill pay services, which can help you manage your money more efficiently. You’ll also have the ability to monitor your account balance and track your spending through your bank’s mobile app or website. In general, checking accounts are designed to make it easy to access your money quickly and conveniently.

Types of checking accounts

There are several types of checking accounts available, and they differ in terms of their features, requirements, and benefits. Here are some of the most common types of checking accounts:

1. Basic Checking Accounts: These are simple checking accounts that come with a low minimum balance requirement and no or minimal fees. They are best suited for people who want a basic checking account for their day-to-day transactions.
2. Interest-Bearing Checking Accounts: These are checking accounts that earn interest on the account balance. The interest rate on these accounts is usually lower than that of savings accounts, but they offer the convenience of being able to access your funds anytime.
3. Online Checking Accounts: These are checking accounts that are primarily managed online. They often come with low fees and high-interest rates. They are best suited for people who prefer to bank digitally and do not require access to brick-and-mortar branches.
4. Student Checking Accounts: These are checking accounts designed for students who are attending college. They often come with low or no fees and have no or low minimum balance requirements. They may also offer additional perks such as discounts on textbooks and other student-related expenses.
5. Joint Checking Accounts: These are checking accounts that are held by two or more people, usually couples or family members. They allow multiple people to access and manage the account, which can be useful for managing household expenses and bills.
6. Business Checking Accounts: These are checking accounts designed for businesses. They often come with features such as online bill pay, payroll services, and multiple user access.
7. High-Yield Checking Accounts: These are checking accounts that offer higher interest rates than traditional checking accounts. However, they often come with higher balance requirements and more fees.

It is important to consider your financial needs and goals when choosing a checking account type that is right for you.

Pros and cons of checking accounts

Pros:

1. Easy access to your money: You can withdraw cash or use a debit card to make purchases easily.
2. Convenient bill payments: Most checking accounts offer online bill payment services that allow you to pay bills quickly and easily.
3. Direct deposit: You can have your paycheck or other income automatically deposited into your checking account, which saves time and hassle.
4. Built-in fraud protection: If you notice fraudulent activity on your account, most banks will investigate and reimburse you for any unauthorized transactions.
5. Overdraft protection: Some banks offer overdraft protection, which allows you to overdraw your account up to a certain limit without incurring expensive fees.

Cons:

1. Fees: Many checking accounts have fees for various services, such as monthly maintenance fees, ATM fees, and overdraft fees.
2. Low interest rates: Checking accounts typically have low or no interest rates, which means you won’t earn much (if any) money on your deposits.
3. Minimum balance requirements: Some banks require a minimum balance in order to avoid monthly fees or qualify for certain services.
4. Fraud risk: If someone gains access to your checking account information, they can potentially drain your account and cause financial problems.
5. Temptation to overspend: With easy access to your money, it can be tempting to overspend and end up with a negative balance or costly overdraft fees.

How to compare the best checking accounts

When comparing the best checking accounts, consider the following factors:

1. Fees: Look for checking accounts with no monthly maintenance fees, ATM fees, or overdraft fees.
2. Interest rates: While interest rates for checking accounts are generally low, it’s still important to compare rates to make sure you’re getting the best deal possible.
3. ATM and branch access: Make sure the checking account you choose has convenient access to ATMs and branches in your area.
4. Online and mobile banking: Check for features like mobile check deposit, online bill pay, and mobile banking apps that can make managing your account easier.
5. Minimum balance requirements: Some checking accounts require a minimum balance to avoid fees or earn interest, so make sure to compare these requirements across different accounts.
6. Account features: Look for features like debit card rewards programs, cashback offers, and overdraft protection.
7. Customer service: Consider the quality of customer service offered by the bank or credit union, such as availability of customer support, response times, and ease of reaching a representative.

How many checking accounts can I get?

There is no hard and fast rule about the number of checking accounts a person can have. You can have as many checking accounts as you need and can manage. However, it is important to keep in mind that opening multiple checking accounts can also mean more fees and more paperwork to manage. Additionally, it is important to make sure that each account meets your specific financial needs, and that you can keep track of the transactions and balances in each account. Some people find it helpful to have multiple checking accounts for specific purposes, such as one for bills and one for personal spending, while others prefer to keep everything in one account. Ultimately, the number of checking accounts you have should be determined by your specific financial situation and needs.

What are common fees associated with checking accounts?

There are several common fees associated with checking accounts, including:

1. Monthly maintenance fee: This is a fee charged by the bank for maintaining your account. It can range from a few dollars to several hundred dollars per year.
2. Overdraft fee: This is a fee charged by the bank when you spend more money than you have in your account. The fee can range from $20 to $40 per overdraft.
3. ATM fees: If you use an ATM that is not owned by your bank, you may be charged a fee for the transaction. The fee can range from $2 to $5 per transaction.
4. Foreign transaction fee: If you use your debit card to make a purchase in a foreign country, you may be charged a fee for the transaction. The fee can range from 1% to 3% of the transaction amount.
5. Account closing fee: Some banks may charge a fee if you close your account within a certain period of time after opening it. The fee can range from $25 to $50.

It’s important to read the fine print and understand all the fees associated with a checking account before opening one. Some banks may offer fee waivers or discounts based on certain criteria, such as maintaining a minimum balance or setting up direct deposit.

What is the difference between a checking account and a savings account?

The main difference between a checking account and a savings account is their primary purpose. A checking account is designed for frequent transactions and everyday spending, while a savings account is designed for long-term savings and typically has a higher interest rate.

With a checking account, you can deposit and withdraw money, make purchases with a debit card, and write checks. Checking accounts are designed for easy access to your money and are often used to manage daily expenses and bills. They typically have lower interest rates than savings accounts and may come with more fees, such as monthly maintenance fees, ATM fees, and overdraft fees.

On the other hand, a savings account is designed for long-term savings and usually pays higher interest rates than checking accounts. Savings accounts are generally used to save for specific goals, such as a down payment on a house or a vacation. They may have restrictions on the number of withdrawals you can make per month, and may charge fees for exceeding that limit. However, savings accounts are generally a safer place to store your money and earn interest than keeping it in a checking account.

Overall, the main difference between checking and savings accounts is their purpose and the features they offer. While checking accounts are designed for frequent transactions and easy access to your money, savings accounts are designed for long-term savings and earning interest.

Glossary for checking accounts

Here are some common terms associated with checking accounts:

1. Checking account: A type of bank account that allows account holders to deposit and withdraw funds, make purchases with a debit card, and write checks.
2. Debit card: A plastic card that allows checking account holders to withdraw cash and make purchases directly from their account.
3. ATM: Automated Teller Machine, a machine that allows checking account holders to withdraw cash, make deposits, and perform other banking transactions.
4. Overdraft fee: A fee charged by the bank when an account holder withdraws more money than they have available in their account.
5. Minimum balance: The minimum amount of money that must be kept in a checking account to avoid fees.
6. Monthly maintenance fee: A fee charged by the bank for maintaining a checking account.
7. Interest rate: The rate at which the bank pays interest on the balance of a checking account.
8. Direct deposit: A service that allows an employer to deposit an employee’s paycheck directly into their checking account.
9. Online banking: A service that allows account holders to manage their checking account online.
10. Mobile banking: A service that allows account holders to manage their checking account through a mobile device.

How to get the most out of checking accounts

To get the most out of your checking account, you can:

1. Avoid fees: Check for fees associated with your account and try to avoid them as much as possible. Look for accounts with no monthly maintenance fees or ATM fees.
2. Earn interest: If possible, look for checking accounts that offer interest so your money can grow.
3. Use digital tools: Most banks offer online and mobile banking tools that allow you to manage your account easily and efficiently. Use these tools to monitor your account, deposit checks, transfer funds, and pay bills.
4. Use rewards programs: Some checking accounts offer rewards programs that give you points or cashback for certain transactions or activities. Take advantage of these programs to get the most out of your account.
5. Set up direct deposit: Many banks offer bonuses or perks for setting up direct deposit. This can also help ensure your funds are available quickly.
6. Monitor your account: Keep an eye on your account balance and activity to avoid overdrafts and potential fraud. Set up account alerts to receive notifications of any suspicious activity.
7. Utilize overdraft protection: If your bank offers overdraft protection, consider setting it up to avoid costly overdraft fees. However, be aware that there may be fees associated with overdraft protection as well.

What are the requirements to get checking accounts?

To open a checking account, you typically need to meet the following requirements:

1. Be at least 18 years old: Most banks require customers to be at least 18 years old to open a checking account. Some banks may offer accounts for minors, but they may require a parent or guardian to co-sign.
2. Provide identification: You’ll need to provide identification, such as a driver’s license or passport, to open a checking account.
3. Have a Social Security number: You’ll need to provide your Social Security number to open a checking account. If you’re not a U.S. citizen, you may need to provide additional documentation.
4. Make an initial deposit: Many banks require you to make an initial deposit to open a checking account. The amount may vary depending on the bank and the type of account you’re opening.
5. Meet any other requirements: Some banks may have additional requirements for opening a checking account, such as a minimum balance or direct deposit. Be sure to check with the bank you’re interested in to see what their specific requirements are.

How to apply for checking accounts

To apply for a checking account, you can follow these steps:

1. Research: Do your research to find out which bank or credit union offers the best checking account for your needs. Consider factors like fees, interest rates, minimum balance requirements, ATM access, and mobile banking features.
2. Gather information: You will need to provide some personal information to the bank or credit union, including your name, address, Social Security number, and employment information.
3. Choose the account: Decide which checking account you want to apply for, and make sure you understand the terms and conditions.
4. Apply: You can apply for a checking account online, in person at a branch, or by phone. Most banks and credit unions have online applications that you can fill out and submit. Some may require you to visit a branch to complete the application process.
5. Provide documentation: Depending on the bank or credit union, you may need to provide additional documentation to verify your identity or address. This may include a driver’s license or passport, a utility bill, or other forms of identification.
6. Fund your account: Once your application is approved, you will need to fund your new checking account. This may involve transferring funds from another account, depositing a check, or making a cash deposit.
7. Activate your account: Once your account is funded, you can activate your debit card and start using your new checking account.

It’s important to carefully review the terms and conditions of any checking account before you apply to ensure that you understand any fees or requirements associated with the account.

How to best use checking accounts

Here are some tips on how to best use checking accounts:

1. Keep track of your transactions: Regularly review your account transactions to ensure that all the deposits and withdrawals are accurate and you have not been charged any incorrect fees.
2. Set up alerts: Many banks offer alert services that notify you when your account balance drops below a certain threshold or when there is an unauthorized transaction. This helps you avoid overdraft fees and fraudulent activities.
3. Maintain a minimum balance: Some banks offer incentives for maintaining a certain minimum balance in your checking account, such as free checks or waived monthly fees.
4. Avoid overdraft fees: Overdraft fees can quickly add up and become a burden on your finances. To avoid them, make sure you have enough funds in your account to cover any pending transactions or consider signing up for overdraft protection.
5. Use online banking: Many banks offer online banking services that allow you to easily manage your checking account, pay bills, and transfer money from the comfort of your home.
6. Maximize rewards: Some checking accounts offer rewards such as cashback or points for using your debit card for purchases. Take advantage of these rewards to earn extra money or discounts.
7. Compare offers: Don’t settle for the first checking account you come across. Research and compare different offers from multiple banks to find the one that offers the best benefits and lowest fees based on your needs and preferences.

Alternatives to checking accounts

There are several alternatives to checking accounts, including:

1. Prepaid debit cards: These are reloadable cards that work like a debit card, but they are not linked to a bank account. Instead, you load funds onto the card, and you can use it to make purchases or withdraw cash.
2. Cash: For some people, using cash is still the best way to manage their finances. With cash, you don’t have to worry about fees or minimum balance requirements, and you can’t overspend.
3. Online payment services: Services like PayPal, Venmo, and Zelle allow you to send and receive money online. While these services aren’t a replacement for a checking account, they can be a convenient way to pay bills or transfer money to friends and family.
4. Money market accounts: These are similar to savings accounts, but they typically offer higher interest rates. Money market accounts may have higher minimum balance requirements than checking accounts, but they can be a good option if you’re looking to earn more interest on your savings.
5. Credit cards: While credit cards are not a direct replacement for checking accounts, they can be a useful tool for managing your finances. Credit cards allow you to make purchases and earn rewards, and you can pay off your balance each month to avoid interest charges. However, it’s important to use credit cards responsibly and not overspend.

Are checking accounts worth it?

For most people, checking accounts are an essential tool for managing their finances. They allow you to deposit and withdraw money, pay bills, and make purchases using a debit card. Checking accounts also offer some degree of safety and security for your money. While there may be some fees associated with using a checking account, the benefits usually outweigh the costs. Ultimately, whether or not checking accounts are worth it will depend on your individual financial situation and needs.

Should I get checking accounts?

In general, checking accounts can be useful for managing your day-to-day expenses and accessing various financial services such as online bill payments, direct deposits, and ATM withdrawals. It is important to evaluate your personal financial situation and needs to determine whether a checking account is the best option for you. Consider factors such as account fees, interest rates, convenience, and the availability of other financial products and services.

The future of checking accounts

The future of checking accounts is likely to be shaped by several factors, including advances in technology, changing consumer preferences, and evolving regulatory requirements. One trend that is expected to continue is the increasing use of digital channels for banking, including mobile and online banking. This has already led to the rise of online-only banks and the expansion of digital banking capabilities by traditional banks.

Another trend is the growing emphasis on personalized banking experiences, with banks leveraging data analytics and artificial intelligence to provide more customized products and services to their customers. This could include more targeted offers and rewards based on individual spending habits and preferences.

Additionally, there is likely to be continued innovation in the payments space, with the adoption of new payment technologies such as contactless payments, peer-to-peer payments, and digital wallets. This could lead to greater convenience and security for consumers, as well as increased competition among banks and payment providers.

Finally, regulatory changes could also shape the future of checking accounts. For example, there may be changes to consumer protection regulations, as well as increased scrutiny of bank fees and charges. This could lead to greater transparency and competition in the banking industry, and potentially lower costs for consumers.

Overall, the future of checking accounts is likely to be characterized by increased digitization, greater personalization, and continued innovation in the payments space.

FAQs about the best checking accounts