Choosing the checking account that is right for you
Whether you're getting your first checking account or you've had one for years, it's important to choose the checking account that's right for you. Checking accounts allow you flexibility in paying your bills without dealing with cash or money orders. There are a variety of checking account types so choose the one that offers the services you're need. The most popular checking accounts include free checking, interest-bearing, joint checking, senior/student checking and money market.
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- Free Checking
- This type of account will work for most people. Usually free checking has no maintenance fees and there isn't a limit on the number of checks you can write and there is no minimum balance. You may still have to pay fees with free checking including returned or bounced check fees. Also you may have to pay for checks. Many banks offer access to checking online to manage your account.
- Interest-bearing
- The accounts have the same features available with free checking. However, usually these accounts have a minimum balance to open and a minimum balance to maintain to avoid fees. The interest is typically paid monthly. However, the interest rate is usually low so you will need to compare the rates available to determine if the interest you earn offsets the potential to incur fees for not maintaining the minimum balance.
- Joint Checking
- These accounts are owned by more than one person. Each account owner has equal access to funds. This is a common account for people sharing household accounts and expense. When more than one person is drawing funds from the account, accurate account management becomes essential. Online banking can help each account owner keep track of funds used.
- Senior/Student Checking
- Many banks offers special accounts to students and seniors. The benefits vary from bank to bank but can include free checks, better rates on loans, and discounts on commonly purchased products.
- Money Market
- These accounts can combine checking and savings and other investment opportunities to achieve higher earnings. They usually require higher minimum balances to open and maintain and restrict check usage, but they pay higher interest rates than checking and savings accounts.
Once you've identified the account type that's best for you, you'll need to identify the bank that will best fit your lifestyle. Select one that has easy access from home or work and offers the services you require. When you open your account, ask about additional fees or limits that may exist including cashier visits and ATM withdrawals. Once you've opened your account be sure to keep track of your spending and balance your checkbook.
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