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What Is a Checking Account?

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Checking accounts are ideal for everyday banking needs. From small purchases to recurring bills, checking accounts offer ways to easily send, receive, and spend money.

Here's a detailed look at checking accounts, features to watch out for, and how to find and open the right account for you.

What is a checking account?

A checking account is designed to allow you to make common transactions like withdrawals and deposits. Unlike a savings account, which is meant for storing up money, you'd use a checking account for all your everyday banking activity, including:

  • Deposits
  • Withdrawals
  • Direct deposit
  • Bill pay
  • Debit card purchases, in-person and online
  • Electronic funds transfers (EFTs)

Not every checking account looks the same or offers the same benefits. Checking accounts, which are offered by banks, credit unions, and other financial institutions, often come with a debit card to use for purchases and ATM transactions.

Check-writing privileges are standard with most, but not all, checking accounts. Checks are usually supplied by the bank (or a third party) for free or for a fee. You may receive your first set of starter checks free of charge and then have to pay for replacement checks.

Many banks offer specialized checking accounts for specific customers, like:

  • Children and teens
  • Students
  • Seniors
  • Businesses
  • Commercial
  • Online-only

Joint checking accounts are available for couples too. Some banks even offer customers an opportunity to earn money through rewards, interest, or sign-up bonuses.

Why you need a checking account

A checking account should be part of every individual's personal banking line-up. Checking accounts are all about convenience. You can quickly transfer money, pay bills, make purchases, get cash, receive wages, and track spending as needed.

You can spend money using traditional payment methods, like paper checks and debit cards, or more convenient ways, like online and mobile payments. You can link your debit card to payment apps like Apple Pay and Google Wallet for contactless payments on retail purchases.

Savings accounts pay higher interest rates but only allow a limited number of transactions. This is why people often use them for their savings goals, like building an emergency fund or putting money aside for a vacation.

Pairing a checking account with a savings account gives you the best of both worlds. You can earn interest on your savings, and transfer money to your checking account when you need it. You can also avoid overdrafts by linking the accounts together.

What to look for in a checking account

Everybody's banking needs are slightly different, which means there's no single perfect checking account. That said, there are some basic features that you should look for.

No fees or low-fee options: Some banks charge monthly maintenance fees along with other miscellaneous charges, like ATM fees. Banks often waive maintenance fees if you meet specific criteria, like maintaining a minimum balance. Look for a checking account that won't charge you for activities you carry out regularly so that you can keep more of your money in the bank.

Minimum opening deposit: When you open a checking account, be aware that some of them have a minimum opening deposit requirements. Not all banks require one, and many set the bar low enough criteria to appeal to most customers.

Convenience: One of the key reasons for opening a checking account is that it's convenient. When you are comparing checking accounts, make sure they give you multiple ways to access your money. Most banks now offer online account access, and many of them have also started creating mobile apps. Mobile banking lets you access your account from almost anywhere in the world as well as transfer money, pay bills, and upload check deposits.


Read checking account reviews

ATM access: If you plan to access your account through an ATM, find a bank that has its own ATM network, or fee-free access to a larger network, or offers monthly refunds for out-of-network ATM use.

Good customer service: Your money is important, and you want a bank that will provide excellent customer service when you need it. Find a bank that offers multiple ways to connect quickly with customer service reps, whether it's visiting a branch in person or contacting the bank remotely. Communication options include phone, text, email, chat, and direct messages through mobile banking apps.

Overdraft protection: If you find that you tend to overextend your finances, it could be beneficial to find a checking account that offers overdraft protection. This might be in the form of linking another bank account, a credit card, or opening a new line of credit. Be aware that banks often charge for overdraft protection services.

Withdrawals and check writing limits: Transaction restrictions are typically seen more with savings accounts, but some banks limit withdrawals and checks or charge fees if you need to do more. Find a checking account without restrictions if you frequently make a fair number of monthly transactions.

Incentives: Some banks offer interest-bearing checking accounts. The interest earned is usually lower than you would find with a high-yield savings account or money market account. There are rewards checking accounts too, which offer cash back or other rewards to account holders.

FDIC insurance: When you open a new bank account, you want to know that your money is safe. Look to see if a bank is FDIC-insured, which means your money is protected, up to $250,000 per depositor.

What fees are associated with checking?

Depending on the account, your bank may charge you various checking account fees. You'll find some can be waived if you meet certain criteria -- like maintaining a minimum balance. More common fees include:

  • Monthly maintenance fees
  • ATM fees
  • Overdraft fees
  • Non-sufficient funds (NSF) fee

ATM fees might be charged by your bank or by other banks if you use an out-of-network ATM. These fees used to be a big source of income for banks, but now you can find plenty of good banks that have fee-free ATM networks.

Banks sometimes charge fees for additional services, like check orders, money orders, wire transfers, paper statements, and more. Take time to read through the fee schedule and other fine print so that you can avoid accounts that charge unnecessary fees -- especially for services you might use often.

How to choose a checking account

Choosing a checking account is a personal choice that depends on your banking needs. Do you want to avoid fees at all costs? Then look for an account that won't nickel and dime you. Do you like to manage your finances on the go? Choose a checking account with easy-to-use online and mobile banking access. Do you like to do your banking in person? Perhaps a brick-and-mortar bank will be more suitable.

Make a checklist of all the checking account attributes that are important to you. Use your list to narrow down your choices until you find the account that best fits your needs. You'll notice that many of the best checking accounts will tick a lot of your boxes.

How to open a checking account

Depending on the bank, you can open a checking account online or in person. Most banks now offer ways to apply for a checking account online, which typically takes only five to 10 minutes. Brick-and-mortar banks may offer this option too, but some require you to visit a branch to open an account.

Regardless of what method you use, you'll need personal information on hand to fill out an application. You may need to provide:

  • Name and date of birth
  • Mailing address
  • Social Security number
  • Government-issued photo ID
  • An initial deposit

Opening a checking account doesn't typically involve the level of scrutiny you find when applying for a credit card. Your bank may run your information through ChexSystems, which is the banking equivalent of a credit check. If you have an old account with unpaid fees or one that is still overdrawn, you may have trouble getting approved for a new checking account.

During the application process, you may have the option to request a debit card or order checks. Some banks might include these options automatically. Once approved, the bank will send checks and a debit card as requested. Your account is ready to use at this point. You can deposit, withdraw, and transfer money, set up direct deposit, connect your account to mobile banking, and more.

RELATED: See The Ascent's complete guide on how to open a checking account online

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