Checking accounts are great tools to help you manage your money. You can deposit checks, make purchases, pay bills, and transfer funds. However, they are not all the same. Some cater to particular needs while others offer rewards and high interests. The best free checking accounts keep fees low, with minimum requirements.
They provide a sizeable network of ATMs and interests. Some let you get your direct deposit paycheck early. Before opening a checking account, understand their differences and the aspects of maintaining each of them. Here is a quick guide.
Traditional Checking Account
The traditional checking account is the standard checking account. It lets you write checks and provides a debit card. It may charge a monthly maintenance fee, but most banks will waive it if you meet their requirements.
You may need to sign up for a direct deposit and maintain a minimum balance. If you fall below the minimum retainer, you may lose your free checking status. There may also be a minimum deposit requirement to open the account.
Premium Checking Accounts
These offer benefits beyond those of the traditional checking account. They include fee waivers, interest payments, and free financial advice. However, they may vary from bank to bank. Some banks offer reward points when you make purchases. You can redeem the points for certain products and services. The more financial products you sign up for, the more benefits you will get.
They require higher balances than traditional checking accounts. You are also likely to pay a monthly fee if your balance falls below the minimum threshold. Make sure to read the fine print as you open this account. Some premium benefits are not worth the effort.
Interest-bearing Checking Accounts
The account earns interest on the money in it. You get a debit card to pay bills and make purchases. It will also let you write checks. Not all banks offer these accounts. Those that do have minimum balance requirements that could be high. They may also have monthly maintenance and other conditions.
Opening this account may be complex. Shop around before opening one. You may find better rates at credit unions than at banks. Sometimes, the interest you earn is not worth the effort.
Student Checking Account
These function like traditional checking accounts. However, they offer lower account minimums and maintenance fees. You may be able to avoid the charges if you set up a direct deposit and maintain the minimum balance. You may also need to make a certain number of purchases with your debit card per month.
These accounts are typically for students between 17 and 24 years old. You will need proof of active enrollment in a high school, college, vocational program, or university. Some of the best accounts will not include ATM fees or monthly maintenance fees. They will also offer you a grace period on your overdrafts. Once you graduate, the bank automatically switches the account to the standard checking account.
Ask the right questions to find the checking account for your needs. This means you need to know what you want beforehand. There are many checking accounts. Once you know which one you want, do your research. Shop around and compare to get the best convenience and benefits.