Checking Accounts are a fundamental part of everyone’s personal finances. If you were to ask someone where they do their banking they would most likely name the bank that they have a checking account as opposed to where they financed their automobile or home. Due to this fact we are often bombarded with advertisements for checking accounts from every bank in our vicinity.
However choosing the right checking account all boils down to each person’s needs. Like with all things not all checking accounts were created equal so assess your financial goals and then choose which account will be your best bet.
Types of Checking Accounts
There are several types of checking accounts but sometimes bank’s make it awful difficult to get a break down of them so we decided to go ahead and do it for you right here and we promise to make it as painless as possible.
1. The Basic Checking Account -This is your run of the mill checking account and is the standard at any major banking institution. A basic checking account is great for those with minimal needs such bill paying, direct deposit and the use of a debt card. But don’t let the Basic name fool you! Typically these accounts require a minimum monthly balance, a certain number of transactions or even the dreaded monthly maintenance fee.
2. The Free Checking Account – Free checking is the account option used by the majority of account holders because well it’s free! Why else? With these accounts you can look forward to having a worry free experience along with checking writing abilities, use of a debit card and all the things we’ve come to expect from our checking accounts. Just be sure to check with your institution to see what services you get with your account to ensure it provides everything you’ll need such as online bill pay for example. A free checking account should always have zero monthly fees regardless of your balance.
3. Interest Checking – Just as the name says this type of checking account will pay you interest based upon your balances along with providing all the services associated with their other checking accounts. However these accounts are best for those who can maintain a certain monthly balance at all times otherwise you’ll get stuck paying monthly fees which totally defeats the purpose. To top it off these accounts usually require a certain amount to open one and the days of decent interest rates paid out on them are long gone. Overall this type of checking isn’t suitable for the average customer.
4. Money Market Checking – These checking accounts are a combination of a checking account and a savings account with ability to incorporate investments to increase the earnings on your money. Although these accounts typically require a large minimum deposit to open them, in the range of $1000 or more, they do tend to yield much better than interest on a regular checking account. Plan on the use of a money market account for longer term savings because you’ll only be able to write a few checks per month from an account like this. Also keep in mind to avoid monthly fees you’ll need to keep a fairly high monthly balance at all times.
5. Student & Senior Citizen Checking – Many banks offers special accounts for college students and senior citizens however you should check place to see what they offer as each will differ. But you can expect things such as free checks, debit cards, zero fee options and even discounted loans and other credit related products. This is worth looking into because saving money is always a good thing so go ahead and benefit from what they have to offer!
How to Decide Which Checking Account is Best for You and Your Lifestyle?
The last thing any of us need is to go through the hassle of getting a checking account just to find out it was exactly what we didn’t need! So we’ve put together some things to consider beforehand that will help you make the perfect choice for your situation and lifestyle.
Do you want a hassle free and no cost account?
Are you looking to earn interest on your balance?
How many checks do you write per month and do you need online bill pay?
Once you’ve gone over your options we are confident you’ll have no problem selecting the perfect checking account for your needs.