How to Find the Best Checking Account for You
If you think that all checking accounts are more or less the same, you may want to take a closer look. The reality is that everything from the availability of services and support to fees, account balance requirements and more vary from account to account. In fact, many banks offer multiple types of checking accounts to suit customers with varying banking needs. Shopping around for a new checking account is a smart step to take, and these are a few of the more important factors to pay attention to as you compare the options.
Account Balance Requirements
Many people keep a relatively low balance in their account, and they prefer to have more money available in a savings account that is linked to their checking account. Other people, however, want to keep their money in one account, and they prefer to have an interest-bearing checking account. Some accounts have no minimum account balance, and you may only need to deposit $10 or less to open the account. Other accounts may have a much larger opening deposit requirement, and they require you to keep at least $1,000 to $25,000 or more in the account at all times. If not, you may be charged a fee, or your account may be converted to a non-interest-bearing account that the bank offers.
Interest Rates and Fees
Online banking is typically associated with few or no account and transaction fees. This is largely because online banks have minimal overhead compared to a major bank that must pay many expenses to maintain hundreds of branch locations. Online banking is also associated with higher interest rates for this same reason. Keep in mind that only some checking accounts are interest-bearing. Regardless of whether they are interest-bearing or not, the account may still be subject to various fees. These may be monthly account maintenance fees, low balance or insufficient funds fees, ATM fees, excessive withdrawal fees and more. The cost of fees associated with a checking account can add up, so carefully review all fees and understand their potential impact on your finances before opening a new account.
Many banks offer a wide range of common services, such as online bill pay, remote banking through an app and more. The availability of these services may be limited with some credit unions and local banks. Keep in mind that not all account services are free. For example, you may have to pay a small fee for each bill that you pay through an online feature. While comparing account services, think about the services that you actually need access to. Some banks offer a huge list of account services, but they may also charge more fees as a result.
Availability of Customer Service and Support
A final and important factor to think about when you are selecting a new checking account is your need for customer service and support. Some people enjoy the ability to walk into a local bank branch and to receive live assistance as needed. However, this live assistance is only available during traditional bank hours. Online banking institutions do not have local branches, so the entire banking experience is completed online or over the phone. Many larger online banks offer customer service and support for extended hours throughout most days of the week.
You can see that there are many variations between different types of checking accounts as well as checking accounts offered via various types of institutions. If you are preparing to open your first checking account or if you are thinking about changing banks soon, it makes sense to consider your needs and to compare your needs against the many account options available.