If you’re like most Americans, you probably have a checking account. A checking account helps you store your money safely without losing access to it, make online purchases, and get checks cashed. But even if you use yours every day, you might not know all of the benefits available to you through your checking account.
Get to know the features of your account so that you get the most out of it. Plus, if you understand what checking accounts can do, you’ll know when it’s time to switch to a better bank that offers the most benefits.
Checking Account Services
With a checking account, you can:
- Write checks
- Cash checks, make deposits, and withdraw money in person at your bank
- Deposit and withdraw money at an ATM
- Use a debit card
- Have paychecks automatically deposited
- Set up automatic payments for your bills
- Transfer money to and from your other bank accounts
With the ability to cash and deposit checks, you’re free from paying expensive fees at cash-checking businesses. Your debit card makes online shopping simple. And auto-pay takes some of the mental load off you when it comes to paying bills.
Using Your Checking Account
A checking account needs a little basic maintenance. The first job is ordering checks whenever you run out. Using the actual checks is less and less common these days, but you’ll still want to keep checks on hand to pay bills as needed.
Your online banking portal will list your transactions. You should log in often to make sure all your transactions are showing up, no mysterious transactions appear that aren’t yours, and your balance is adequate for your expenses.
If you try to spend money when your account doesn’t have enough, you will be liable for overdraft fees both from your bank and from the business where you did the transaction. This can happen with your automated transactions too! So if you see your balance getting low and you know an automated transaction is going to come out soon, it’s important to transfer money from another account or cancel the transaction as soon as possible.
When you set up an automated payment, carefully check the first month to make sure the payment goes through. Sometimes it isn’t set up correctly, and you don’t want to miss an important bill.
Lastly, if you move or change your name, you must update your information with your bank to make sure you receive any important notices.
Choosing a Checking Account
Every bank offers checking accounts, but they aren’t all created equal. Some checking accounts charge monthly fees, so finding a free checking account will save you money. Others are free only if you keep a minimum balance. Most checking accounts pay very little interest if they pay interest at all, so if an interest-earning account is important to you, you may need to search for a bank that offers one.
Many people want their account to be at a local bank so they can access the bank branch in person. However, as online banking becomes easier, that’s less vital than it used to be. You can move money around online and may be able to deposit checks by taking a photo on your phone. But if you need cash and don’t have a local branch, you’ll need to use an ATM. A bank that has a local ATM or reimburses you for ATM fees may be an important benefit.
For some circumstances, you might want a special kind of checking account. A joint account allows you to share the same account with a spouse, partner, or child. A second-chance checking account is specially designed for people who don’t qualify for other accounts due to poor financial history. Premium checking accounts have benefits like interest and free perks, but you may need to keep a high minimum balance to qualify.
If you are thinking of opening up a new checking account, do some research to make sure you’re getting the best option for your needs. A call with one of our financial advisors is a good place to start.