Choosing a Checking Account

In the days when free checking accounts were widely available, choosing a checking account was fairly simple as long as your checking account needs were basic. Just choose the free account. Now that more banks are charging monthly checking account fees, you have to be more cautious about the type of account you open. Accounts have varying fees and services. Some fees can be waived, but you have to meet certain criteria.

First choose your bank.

The bank of your checking account is almost more important than the account itself. You want to choose a reputable bank or credit union with convenient locations if you plan to visit the bank branch or use their ATMs.

Online banks have increased in popularity in recent years. Many of these banks have low or no fees and will sometimes refund ATM fees you pay to use another bank’s ATM.

Once you choose a bank, then you can look at their checking account options to decide the best one for you.

What’s the minimum opening deposit?

You’ll need to open your account with a certain amount of money. The minimum opening deposit is often low, e.g. $25 or $50 for lower-tier checking accounts. An interest-bearing checking account with more benefits and features will require a higher minimum deposit.

Does the account come with a debit card? What’s the fee for transactions?

These days, it’s hard to transact regular business without a debit card. Ideally, your account will come with a Visa or MasterCard-branded check card so you can make credit card-like transactions at places that may not accept PIN-based transactions.

Check to see if there’s a monthly or transactional cost for having or using your debit card. The lower the cost, the better and free is best of all.

Is there a monthly fee? What can you do to avoid it?

Most checking accounts will have a monthly fee ranging from $7 to $20 per month. Don’t pay the fee if you can avoid it. Often, you can have the fee waived in a month by meeting certain criteria like: maintaining a certain minimum balance, having a periodic direct deposit of a minimum amount, depositing a certain amount into your account, making a certain number of debit card transactions, or enrolling in online bill pay. Specific criteria will vary by bank and type of account.

Before you agree to open an account that has a fee, make sure you can meet the requirements to have the fee waived. Otherwise, you’ll be charged the monthly fee in any month that you don’t meet the requirements.

What benefits does the account offer?

Checking accounts do more than just keep your money safe. At a minimum, you’ll want the ability to write checks or pay your bills online. Some accounts will link to a savings account at no additional cost if you make an automatic transfer from your checking account each month. You may even be able to use the savings account as a form of overdraft protection as long as you have enough funds in the account. Some accounts pay interest on your balance, but these typically have higher balance requirements. Free cashier’s checks and paper statements other benefits you may be interested in.

Additional benefits may not interest you. In that case, you can choose a simpler, less expensive checking account.

Is the account offered at an FDIC- or NCUA-insured bank or credit union?

The FDIC and NCUA are government agencies that guarantee your checking account deposits (under $250,000) are covered in case of a bank failure. If you open an account at an uninsured bank or credit union, you may lose all your deposits if the bank fails.

Are you a student?

Most banks have basic checking accounts for students. As long as you meet the age and sometimes school enrollment requirements, you can use the account without receiving a monthly fee. Note, however, that there may still be fees for certain transactions, like transferring money to accounts. Student accounts will typically have basic features like online and mobile banking, checking writing, and access to a Visa or MasterCard debit card.

Research online before applying.

The good thing about shopping around for a checking account in this age is that you can do most of your research and comparisons online. Do a map search to find banks near you, visit their websites and look at the checking accounts offered. Compare the banks, accounts, and benefits to made a decision before visiting the bank and applying. If you need help or explanation, you can visit the branch in person to get your questions answered.