How To Choose A Checking Account
Did you know the term “checking account” derives from the ability to write a physical check to complete a transaction? Today, while checks are still used for some transactions, checking accounts are also linked to physical debit cards or digital wallets on your phone. With every swipe or tap, money is directly taken from your checking account to cover purchases with merchants. It’s crucial to have the right account for everyday purchases, so ensure you have the one that suits your lifestyle.
What To Look For In A Checking Account
Minimum Deposit Requirements
Many financial institutions require a minimum balance in your checking account. This is their way to know the account is active and helps to ensure you don’t accidentally overdraft. If you don’t meet the minimum deposit requirements, you may be faced with maintenance fees or even overdraft fees if you spend too much.
If you struggle to know how much is in your account at one time, you may want to find a financial institution that waives this checking account requirement.
Fees
Some checking accounts have hidden fees or charge large amounts for regular maintenance. When choosing a checking account, pick one that has the least amount of fees. You don’t want to be charged unnecessarily for using your account the way you need to.
ATM & Shared Branch Network
The best checking account allows you access to your money wherever you are. Big banks have ATMs and branches across the country you can access to make your everyday transactions. Credit unions, while they are smaller in scale, usually still have a nationwide credit union network system you can rely on. Through a network like CO-OP Shared Branch, you can access any applicable credit union branch or ATM from all over the country. With shared facilities, credit union members can perform financial transactions.
Insurance
After depositing your money into a checking account, the last thing you want is for your money to disappear due to your chosen financial institution going belly up. Did you know most credit unions and banks are backed by federally insured agencies?
- Credit unions are typically insured by the National Credit Union Administration or NCUA.
- The Federal Deposit Insurance Corporation, or FDIC, insures banks.
If your financial institution fails, the NCUA or FDIC will protect your money and reimburse you up to the balance you had in the financial institution. Each federal agency backs its financial institutions and provides a standard insurance of $250,000 per depositor, per bank or credit union.
When choosing a checking account with a financial institution, make sure they are federally insured or have some other type of insurance on your money.
Interest & Rewards
Choose a checking account that works best for you and your lifestyle. Some checking accounts come with perks like high-yield interest rates that put more money back into your account or other rewards. Depending on the financial institution, you may get rewarded for using your account regularly. You can earn points and redeem them for cashback, merchandise, or gift cards. The right checking account will mesh well with your life.
Convenience
Online features are a convenient way to keep track of your spending and the balance on your checking account. Choose a checking account that comes with online features, such as a mobile app. A mobile app can:
- Alert you when money is spent – ensuring you are the only one using your debit card
- Link to a Digital Wallet – keeping your debit card in your wallet and paying with a tap from your phone instead
- Give you a snapshot of the balances on your accounts
Features like these can make managing your finances easier in the long run.
The right checking account will come with easy maintenance and perks that match your day-to-day life. Start searching your local financial institutions to find a checking account made for you.