Checking Accounts in the US

Best Checking Accounts

Over the last century, we have seen financial institutions drastically increase services complementing  the basic features of their personal banking products. Such is the case with checking accounts, as well. Financial institutions — both banks and credit unions — have concluded that the more perks and products a client has to choose from, the more they will be invested in staying.

This makes it more difficult to choose the right option when picking the best bank with which to have a checking account. However, what is more important to keep in mind is what range of options are at your disposal and why you should care about them depending on your financial situation.

What is a Checking Account?

When you form a contract with a bank (or a credit union) to open a checking account (also known as a transactional account or demand account), it gives you access to the bank’s infrastructure and its network of ATMs. In exchange for varying fees, you can use that infrastructure to make deposits or withdrawals. 

With a checking account, you can access your money via a teller, writing checks, or through automated teller machines (ATMs), and electronic debit cards.

Types of Checking Accounts

  • Private. Usually requiring a higher minimum deposit, this kind of checking account allows you to increase your debit card limit, alongside offering free wire transfers, and more daily ATM withdrawals
  • Checkless. instead of relying on checks, you use your debit card for all transactions. The usual perk of such a checking account is that you don’t incur overdraft fees.
  • Business. To optimize your business operations, you may have to open a business checking account, for the purpose of having separate cash outflows — payrolls, maintenance, merchandise, etc.
  • Interest-generating. If you want to earn an Annual Percentage Yield (APY), you would first have to meet the minimum deposit and minimum debit card transaction requirements. This varies highly from bank to bank, so some might have a higher APY than a savings account in other banks. Additionally, some banks place a limit on your balance as to when you can earn an interest rate.
  • Senior. For people aged 55 and older. Usually, these accounts offer free check orders and other perks suitable for a less active population that is more concerned with retirement. A bank may brand such accounts as “senior” but be aware of the fact that other accounts in certain banks may offer superior packages for exactly this demographic.
  • Student. If you qualify and you are aged between 18–23, these checking accounts usually have no maintenance fee, lenient overdrafts, ATM fee reimbursements, and other features tailored for younger people.
  • Premium. Account holders of premium checking accounts will receive extra perks in the form of free everything: personalized checks, deposit box, money orders, official checks. Additionally, premium checking accounts waive network ATM fees. In return, you will have to fill it up with an above-average minimum balance, and keep it that way.
  • Traditional. Default checking accounts facilitating money transfers via checks, ATMs, online transfers, and debit cards. Depending on account balances, you will get the opportunity to waive the monthly maintenance fee.

How to Choose the Best Checking Accounts

When you want to open an account at a financial institution, always compare the following:

  • Availability of ATMs and branches in your residential area.
  • The fee structure. Specifically, if they can be waived based on your financial activity or are they fixed.
  • Does the financial institution have a sleek website and a highly rated mobile app? This alone would tell you much about the quality of their services and customer support. After all, most people nowadays expect a smooth online banking experience.
  • How does its interest rate compare to other features and perks? Checking accounts have inherently low interest rates, so this should not be a major factor in your choice.

Checking Accounts FAQ

Do checking accounts earn interest?

Very negligible. The whole point of such accounts is frequent transactions, instead of saving money.

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

Savings accounts offer higher interest rates but anticipate a low volume of transactions, while checking accounts offer lower interest rates and anticipate a higher volume of transactions. All fees are adjusted according to these core features.

How much money should I keep in my checking account?

As much as the minimum balance allows. Some checking accounts waive certain fees if a certain level of the account balance is maintained.

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