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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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