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Checking Accounts

Nearly everyone has a checking account because it is a good place to park your money for a short while until you are ready to spend it. While bank checking accounts are the most popular, there are a lot of ways that checking accounts are structured, and many times, your local bank will not have the best deal for you.

There are four places to shop when opening a checking account:

Here are some considerations to help you find the best checking account for you:

  • FDIC insured. FDIC insurance protects your money should the bank fail and should be an absolute requirement for any bank checking account you open. There are other types of accounts offered by reputable banks that offer the potential for higher returns (such as tax free interest) or lower costs that are not FDIC insured. These are not necessarily bad, just be aware of your risk.
  • Fees - study the fees
    • The most common fees are charged on each check that you write. Some accounts give you a certain number of "free" checks, then charge beyond that. Others offer unlimited free checking. If you write lots of checks, unlimited free checking with a low interest rate may beat a high interest account with per-check charges.
    • Checks - the initial checks should be free. If you get charged to reorder books of checks, you may find it cheaper to buy checks elsewhere for use with your account.
    • Some banks charge a fee for using an ATM, even if it is one of their own. If you travel a lot or want to use a different bank's ATM, understand whether that bank and/or your bank will charge a fee. If so, it might be smarter to open an account with the other bank.
  • Interest - Some accounts give the best of all worlds: high interest rates and unlimited free checking. See our guide to Money Market Accounts for notes on High Value Checking Accounts.
  • Minimum balance requirements - some account require a minimum amount to open and maintain the account. They may access fees if your balance falls below the minimum.

Other features that you may want for your checking account include:

  • Ability to accept direct deposits of payroll checks, Social Security benefits, and even dividend payments. This service should be free at most banks.
  • Ability to set up automated debits to pay

    utility bills, mortgage loans, insurance premiums, etc. This is a way to save time in writing checks, postage and possibly per-check fees. Some banks charge for this service.
  • Online banking - the ability to issue checks via the internet

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