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Checking
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FREE CHECKING
Free checking accounts are
very popular. The number of
banks that offer them is
growing. However, less than 25
percent of these checking
accounts are actually free.
It is
very common for people to be
under the impression that they
have a free checking account.
However, many times they are
wrong. In order for there to be
no charges on the account, a
minimum balance must be
sustained and certain
restrictions must be followed.
For example, a maintenance fee
will be charged if you account
balance dips below the minimum.
Also a fee may be
imposed if you write a certain
number of checks in one month or
make a certain amount of
transactions. If you
have no problem keeping the
required balance and/or you
don't write a lot of checks or
perform many transactions,
then these requirements are not
impacting.
Free checking will save a few
dollars every month. However,
they also have some drawbacks.
They don't pay interest and it
is likely that you will be
limited to the amount of money
you can withdraw from an ATM on
a day-to-day basis. It may also
be required that your paycheck
is direct-deposited into your
account.
Fees associated with 'free'
It is important to
understand that just because
your account is 'free', that you
will likely still be charged
other fees. There are a variety
of justifiable fees that will be
imposed by your bank under
certain circumstances, i.e.
having non-sufficient funds
(NSF), check printing, stopping
payment, account inactivity,
terminating an account early.
Almost every bank will provide a
debit card for customers with
free checking accounts. These
cards allow for easy access to
money, making purchases and for
performing transactions.
However, most banks impose a fee
every time a debit card is used
for making purchases or when an
ATM is used from another bank
branch. Many consumers are very
surprised when they are hit with
these charges for the first
time. Another drawback of using
debit cards is that they don't
offer the same amount of
protection for purchases as
credit cards do. Learn more
about the
advantages of credit cards.
Check your bank's fee schedule
You should obtain a copy of
several different banks' fee schedules when
looking to apply for any type of
checking account, including free
checking. Compare the rates and fees and
determine which is the best
deal. If you need help choosing
a bank for your checking, please
contact us.
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