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Checking
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TYPES OF CHECKING ACCOUNTS
Banks offer a variety of
different types of checking
accounts for their
customers. Choosing an account
is not easy. Most banks have a
variety of different offers; all
of which satisfy different needs
and banking habits. If you
choose an account that does not
match your banking habits, you
can end spending a great deal of
money in fees every month.
Featured below is a detailed
breakdown of the more popular
offers available.
Luring you with gifts
It is common practice for
banks to offer free gifts for
opening a checking account.
Usually the gifts are not that
great, i.e. coolers, towels,
camping gear, etc.. However,
some banks will tempt consumers
with more high price items (iPods)
if you make a significant
initial deposit to your account
($2000 and up).
Freebies should never be the
deciding factor of whether or
not you choose a specific bank.
In fact, it should not really be
an impact in your decision
making at all. What is important
is that you obtain a checking
account that satisfies your
needs as economically as
possible; if feasible for free.
Basic checking
The most simple types of
accounts and is generally best
for those that like to pay a few
bills every month via checks and
utilize a debit card for paying
some daily expenses. It is
common for these types of
accounts to require a minimum
balance or direct deposit in
order to avoid monthly
maintenance fees. You may also
have a cap on the number of
checks you can write every
month. If you exceed the cap,
you will have to a 'per item'
fee for every additional check
you write. Basic checking
accounts usually don't pay
interest. Therefore, keeping a
large balance offers no benefit
whatsoever.
Free checking
This type of account is the
most popular. Members are not
charged monthly service fees and
do not have to pay per-item fees
no matter what their account
activity or balances are.
Therefore you can keep as little
money in your account and write
as many checks as you want every
month without having to worry
about paying any extra fees. It
is important to note that you
will be charged a fee if you
bounce a check. Learn more about
free checking accounts.
Interest-bearing
You will be required to make a
minimum deposit when opening
these types of accounts. In
addition, you may need to
maintain an even higher monthly
balance to avoid having to pay
any fees. For example, your bank
may require you to deposit $200
to open the account, but will
charge a service fee of $20 if
you don't maintain a $1,000
balance. These accounts do pay
monthly interest, but at a very
low rate.
Joint checking
These types of accounts are
owned by two or more
individuals, typically sharing a
home and living expenses. Each
person on the account has equal
access. Almost every type of
checking, savings or money
market account allow for joint
use. Fees associated with
bounced checks and overdrafts
for joint accounts tend to be
higher than other account types.
Express
These accounts are intended
for people that prefer to do
their banking via computer,
phone, or ATM. Account owners
can write as many checks as they
want every month without having
to pay any fees. In addition,
low monthly balances are
required. If you do use a teller
for conducting any of your bank
activity, you will have to pay a
fee. These accounts are
great for people that are on the
go and don't like to spend a
great deal of time on their
banking transactions.
Lifeline
These accounts are designed
for low income people. Monthly
fees are minimal, usually no
more than $5. Also, a low or
even no minimum deposit or
monthly balance is required. By
law, lifeline accounts are
required in Massachusetts, New
Jersey, Minnesota, Illinois, New
York, Rhode Island and Vermont.
Minimum terms, fees and
conditions are designated by
state laws, and not the banks.
Senior/student checking
Students and consumers 55
and older have accessibility to
special checking account deals.
The perks are going to be
different for every bank, but
may include free cashiers and
traveler's checks, free checks,
free ATM use, enhanced rates on
credit cards and loans, etc..
Money market
These accounts offer
potential high earnings by
combining checking and saving
accounts and paying higher
interest rates than normal
accounts. The minimum
requirements for opening a money
market account is high, ranging
from $1,000 - $10,000. High
balances are also going to be
required to avoid having to pay
fees.
In conclusion...
Analyzing your checking
account habits will help you
choose the right account type
for your needs.
- Total number of checks you write every month.
- Do you keep a balance in your account?
- Do you bounce checks frequently?
- Do you like to receive your account statements in the mail as opposed
to viewing them online?
- Do you prefer going to the branch for conduction your bank business or
are you comfortable doing your
banking online, at ATMs, or by
phone?
If you need help choosing a
checking account, please
contact us.
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