Introduction
Checking accounts, which let you pay bills and make purchases through electronic transfers, paper checks, and debit cards, are a must for household money management.
Checking accounts are typically kept open for a long time by consumers. According to a 2021 Bankrate study, the typical U.S. checking client has stayed with their bank for around 14 years.
The finest checking accounts either don’t charge monthly fees or make it simple for you to do so by fulfilling specific conditions. The finest checking accounts often provide options to acquire free checks or even avoid out-of-network ATM costs.
Types of checking accounts
These checking account types are among the most prevalent ones provided by banks and credit unions.
Student checking account
The typical age range for these accounts is 18 to 23. Those who qualify may not be charged maintenance fees for student checking accounts. Additionally, they could provide free checks, ATM fee refund, overdraft forgiveness, and other benefits. Students can start managing their finances with the help of these accounts by making purchases or cash withdrawals with their own debit cards.
While a student checking account may be the perfect fit for some, if it doesn’t cover ATM fees, there might be a better choice available to you. Even if the checking account’s name doesn’t include “student,” you should think about a bank that doesn’t charge you to use out-of-network ATMs.
Free checks, refund of ATM fees
Traditional checking account
These typically provide alternatives for online bill payment, checks, and debit or ATM cards. Many traditional checking accounts don’t charge a monthly maintenance fee at all, while others do if you keep a minimum level.
Although such services frequently charge a fee, these accounts may also provide overdraft protection to cover payments that exceed your account’s available amount.
Who it’s perfect for: Anyone looking for a checking account to utilize for debit card purchases and bill payments.
Checks, a debit card, and online bill payment are common features.
Students between the ages of 18 and 23 are the target audience.
Common important characteristics: free checks, repayment for ATM fees, and overdraft forgiveness
Senior checking account
People 55 or older are often eligible for these accounts. For people who are retired or on fixed incomes, they might provide free checks, waived monthly maintenance fees, and other incentives.
Nevertheless, conduct your research before deciding an account is the best one for you based just on its name. A non-seniors-targeted account can offer you a better bargain.
Who it’s best for: People who are at least 55 years old.
Common key characteristics Free checkups and no ongoing monthly maintenance charges
Interest-bearing account
You can earn interest with these checking accounts. Some of them could demand a set number of debit card transactions or a minimum direct deposit in order to achieve a specified APY.
Additionally, there can be restrictions on how much of your balance can earn a specific APY. While some interest checking accounts do provide greater APYs than savings or money market accounts, it’s more common for these accounts to simply offer a higher rate on funds up to a specified balance level and a reduced rate on funds over that.
You won’t receive nearly the yield on a top-yielding savings account that you would on other interest-checking accounts. A checking account might give 0.1 percent annual percentage yield, whereas the best savings accounts currently pay 2 percent or more.
That it works best for: Individuals who keep a sizable checking account balance.
Common key characteristics the balance is interest-bearing.
Business checking account
A business may benefit from having one of these checking accounts. For instance, a company might have separate checking accounts for operations expenses and payroll. Additionally, it can have numerous accounts with different uses.
Customers with business checking accounts could be charged more for transactions that exceed a specified threshold. When comparing business checking accounts, take these fees into serious consideration if your company often deposits cash.
Checkless checking
You’ll have to rely on utilizing a debit card to make purchases as these accounts don’t give checks. There may not be any overdraft charges for this account type. This can be a desired banking alternative for you if you can’t recall the last time you wrote a check. A monthly maintenance fee is often imposed on checkless checking accounts and cannot be waived.
Who it’s best for: Those who don’t have to write checks on paper
Debit card, online bill payment are common vital features.
Rewards checking
When you make purchases with your debit card and have a rewards checking account, you may be able to earn points or cash back. Check the fine print to see whether you have to fulfill any conditions in order to receive cash back. Other things to think about are the minimum balance requirement, maintenance fees, and whether there is a limit on the maximum cash back or points that can be earned.
It works best for: People who frequently use debit cards to make transactions.
Common key characteristics: Points or cash back for debit purchases.
Private bank checking
To be qualified for a private bank checking account, you will often need to have a particular quantity of money deposited with a bank. Relationships with lenders and investments may be deemed to meet this need.
You might be able to use this type of account to get larger Zelle limits, free wire transfers, bigger debit card limits, or more ATM withdrawals per day. Additionally, a dedicated agent who manages your account may be assigned to you.
Who it works best for: People who can maintain a high minimum balance.
Access to a private banker, greater interest rates on deposit products, reduced interest rates on loans, free checks, and a free safe deposit box are typical essential features.
Second-chance checking
Second-chance checking is an option for those who have been turned down for a conventional checking account due to a history of frequent overdrafts or overdue negative balances. These accounts assist you in regaining your footing and keeping your banker in good graces.
The services that conventional checking accounts offer are often not available with second-chance checking accounts. Overdraft protection may not be an option, and monthly service costs may be required. If you maintain this account in good standing for a specific amount of time, the bank might eventually permit you to convert to a standard checking account.
Best suited for: Clientele that have not had standard checking
Common key characteristics service charges that must be paid, no overdraft protection.
Conclusion
Whatever your circumstance, there probably exists a checking account that meets your requirements. Determine your priorities before picking a checking account. Fees (and how to minimize them) are a major concern for some people. The accessibility of branches and ATMs, as well as whether a minimum amount is necessary, are further factors to take into account.