5 Little-Known Perks of Checking Accounts

Checking accounts may seem straightforward, but they have several benefits you might not be aware of.

Checking accounts are one of the most popular banking products, and you may already know about some of their benefits. You can set up direct deposit so that your paycheck automatically goes to your checking account. You can also use one to pay bills and withdraw cash at ATMs, so it's great for money management.

These aren't their only useful features, though. To get the most out of this type of account, here are the little-known perks that checking accounts offer.

1. Get cash when you travel

When you travel to a foreign country, it's good to have some of the local currency. Paying with credit cards and debit cards isn't always an option. And if you run into an emergency, you might need cash.

You could do this the old-fashioned way by going to a currency exchange. However, these places normally offer poor exchange rates. What some people don't realize is that they can get a much better deal going through their own checking accounts.

Many checking accounts allow you to withdraw cash at ATMs anywhere in the world in the local currency. Your debit card's payment network, such as Visa or Mastercard, handles the currency conversion, so you get a competitive exchange rate. Although some banks charge a foreign transaction fee for this, there are some banks for international travel that don't.

2. Get your paycheck early

Direct deposit is one of the big benefits of having a checking account. You save time when you don't need to deposit paychecks yourself, and you also don't need to pay a fee to a check-cashing service.

You may even get paid early thanks to your checking account. Some banks give you early access to your paychecks as soon as they receive notice of the upcoming deposit. You could have that money up to two days sooner.

3. Insured for up to $250,000

Some people worry about whether their money is safe in a bank. It's good to be cautious, since your bank accounts are likely where you'll keep a large portion of your savings. Fortunately, your money will be protected.

Almost all U.S. banks have FDIC insurance. Eligible accounts with this type of insurance are covered for up to $250,000 in the event of a bank failure. Checking accounts are eligible, as are savings accounts, certificates of deposit (CDs), and several other financial products that banks offer.

If you want to know whether a bank is FDIC-insured, call the bank manager. This information is also usually available online.

4. High interest rates

High-yield savings accounts get all the attention, but there are high-yield checking accounts that offer impressive interest rates, too. The difference is that checking accounts come with some strings attached to earn that interest.

With these checking accounts, you typically only earn interest up to a certain balance limit. For example, the interest rate may apply to balances up to $5,000 or $10,000. Another common requirement is a transaction minimum with your debit card. You might need to use your debit card 10 or 15 times per month to earn that high APY.

For large balances, high-yield savings accounts are still the best option. But a high-yield checking account could be worth it to earn more interest on the smaller balances you keep in that account.

5. Rewards on your purchases

Although they're not known for it, select checking accounts earn rewards on your debit card purchases. Once again, there are often strings attached with rewards checking accounts. You may only earn rewards up to a certain amount of spending, and there could be a minimum balance requirement.

It's worth mentioning that rewards credit cards offer much more value. Many of them offer higher rewards rates and generous bonus opportunities. But if you can't qualify for the top rewards credit cards yet, then a rewards checking account could be a good choice for the time being.

Checking accounts are often that default account you use for paying bills and moving money around. Although they're ideal for that, they also have several other interesting and valuable benefits to offer.