Banking » Compare Banks » Best Checking Accounts of May 2024
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Best Checking Accounts of May 2024

Checking account helps you to manage your day to day finance, while the rate is generally low. Here are the top checking account of 2024
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Will you benefit more with a major bank whose ATM and branch locations are all over the United States?  Would you be needing more of an online bank that allows you to deposit and transfer funds electronically?

A good checking account is one with low or no fees, has access to an extensive ATM network, with a low opening balance requirement, and other features that work for you.  Throw in an interest-earning feature, if you can find one.

If you’re after a good experience, you may want to check the bank’s customer service ratings and client reviews.  These are important factors that can dictate the quality of your interaction with a bank.

Here are The Smart Investor Select’s picks for the top checking accounts:

Bank/institution
Monthly Fee
Min Deposit
Promotion

axos-bank-logo

Axos Rewards Checking
$0
$50
$300 Use Promo Code “AXOS300” for a $300 bonus when you apply for a Rewards Checking account. Expired on 06/30/2024

discover bank logo

Discover Cashback Debit
$0
$0
$150 / $200 Minimum deposit required: $15,000 or $25,000 within 30 days. [/sc]

capital one bank logo

Capital One 360 Checking
$0
$50
None
ally bank logo
Ally Interest Checking Account
$0
$0
None
american-express-bank-logo
Amex Rewards Checking
$0
$0
None
chase bank logo
Chase Total Checking®
$12 Can be waived if you maintain a $1,000 minimum daily balance, making direct deposits or Associated SnapDeposits of $500 or more per statement cycle, or holding $2,500 in combined deposit accounts with the same statement cycle date or having a Health Savings Account or investment account
$0
$300 Expired on 7/24/2024

Axos Rewards Checking

Fees

$0

Minimum Deposit

$50

Current Promotion

$300 Use Promo Code “AXOS300” for a $300 bonus when you apply for a Rewards Checking account. Expired on 06/30/2024

APY Checking

Up to 3.30% APY to get the maximum rate (up to $50,000) you'll need monthly direct deposits of $1,500 (0.40% APY), 10 transaction on your debit card (+0.30% APY), average daily balance of $2,500 on Axos Invest Managed Portfolio (+1.00% APY), average daily balance of $2,500 on Axos Invest Self Directed Trading Account(+1.00% APY) and make full monthly payment on loans (mortgage, personal and auto) with Axos account (+0.60% APY).

There are five types of checking accounts available with Axos Bank. These are:

  • Essential Checking: This account has no monthly fee or overdraft fees. There is no minimum balance requirement and you can enjoy unlimited domestic ATM fee reimbursements. Axos Bank can also allow you to receive direct deposit funds up to two days early.
  • Rewards Checking: The Reward Checking account has a $50 minimum balance and it offers all the benefits of Essential Checking, but there is a higher APY of 1%. However, to receive the full rate, you need to use your Axos debit card for 10+ transactions a month and receive at least $1,000 a month by direct deposit.
  • CashBack Checking: This account offers 1% cash back on all shopping purchases requiring a signature. It has no monthly fees and offers unlimited check writing privileges.
  • First Checking: This is designed for children aged 13 to 17 to help them learn good money management skills. The account offers 0.10% APR with no monthly or overdraft fees. There are daily transaction limits and parents can also impose account restrictions.
  • Golden Checking: This account is open to people aged 55 plus. There is a $50 minimum balance, but you’ll earn 0.10% APR on any balances.

All checking accounts provide access to the Axos Bank digital tools including online bill pay, and free mobile banking.

  • Savings Accounts
  • Checking Accounts
  • CDs
  • Money Market Account
  • Mortgage
  • Debit Card
  • Investing
  • Who is Axos Bank?

Axos Bank is an FDIC-insured technology-driven financial services company that offers a wide range of innovative products and services to individuals, businesses, and institutions across the country. Axos Bank is headquartered in San Diego, California, and has nearly $14.4 billion in assets.

We aim to be the most innovative digital bank in the United States, offering products and services that are superior to those of our competitors.

  • How is Axos physical coverage?

Axos is a bank that only operates online. Although Axos Bank has three locations, none of them are open to the public; the bank operates entirely online. As a result, if you're looking for a bank where you can get help from a teller in person, Axos is not the right choice for you.

  • How is Axos bank customer service?

Axos has a 24-hour helpline, but you can also chat with the Evo virtual assistant or browse the extensive support section of the website.

The Axos app can be used to not only transfer funds and manage transactions, but also to access support and manage your card. You can even use the app to locate the nearest fee-free ATM, which is extremely useful if you're in a foreign country. The Axos is rated 4.7/5 by Apple and 4.5/5 by Google.

  • How does the Axos savings account work?

If you want to start growing your savings and working towards your savings goals, Axos Bank has a few options for you. Axos offers a high yield savings account with an APY of Up to 0.61%, but it also has a number of other features.

You can, for example, request a free ATM card, but there are no monthly fees. There are no minimum balance requirements and interest is compounded daily. This account also gives you access to a number of online money management tools.

  • What ATMs are available to me?

Your account provides free ATM withdrawals at over 91,000 convenient locations across the country. Log in to online banking and use our ATM Locator to find out where you can make free ATM withdrawals near you.

Discover Cashback Debit

Fees

$0

Minimum Deposit

$0

Current Promotion

$150 / $200


Minimum deposit required: $15,000 or $25,000 within 30 days.

APY Checking

0% (1% cash back on up to $3,000 in debit card purchases each month)

Discover Checking Accounts offer unique offerings for your banking needs.  Discover checking accounts allow you to earn cashback rewards.  You earn 1% cash back on up to $3,000 in debit card purchases monthly.

This is a unique feature along with their lack of charging fees with their checking accounts.  There are no fees for your account maintenance, ordering checks, In-network ATM use, online bill pay, or replacement debit cards.  Discover checking accounts also have no minimum balance requirements or activity requirements.  This largely benefits the customer by eliminating excessive fees, while incorporating incentives to open an account.

It is simple to deposit paper checks as well.  Discover uses a mobile app where you can easily track your spending, move your money, and deposit paper checks.  These are exclusive features through Discover that just a few amongst the many features offered to satisfy their customer.

If you prefer online banking, instead of traveling to a physical banking branch, then this is the right bank for you.  Your mobile deposit is secure and you are never held responsible for any unauthorized transactions. 

  • Savings Accounts
  • Checking Accounts
  • CDs
  • Money Market Account
  • Mortgage
  • Credit Card
  • Debit Card
  • Personal/Student Loans

What Discover products are inflation-proof?

Discover has a decent product lineup, but the products are not particularly inflation-proof. The only exception to this is the lending products. You can access personal and home loans with a fixed rate that can help you tackle increasing inflation and interest rates.

You can lock in your rate for the duration of your loan term, so you don’t need to worry about your monthly payments increasing along with all your other household expenses as higher inflation hits. Your monthly repayments will remain the same until the end of your loan.

How's Discover's physical coverage?

Discover is a purely online bank, so it does not have a physical branch network. You can manage your transactions online or using the Bank’s app. So, you will need to be comfortable with the concept of not having face-to-face support for managing your account.

What is required to open a Discover account?

Discover must comply with federal banking regulations, so you must verify your ID and address to open an account. When you complete your application, you will need to provide your full name, a valid postal address, and your Social Security number. You will also need a valid government ID, such as a passport, driver’s license, or state ID, to support your application.

Is Discover worth it if I'm a student?

Although Discover does not have a dedicated student checking account, the bank is exceptionally student-friendly. The bank has a fee-free checking account, so you won’t need to worry about a monthly maintenance fee or a minimum balance requirement.

However, where the bank excels is that it offers student loan options, and there are two student credit card options. The Student Cash Back card offers 5% cash back on activated rotating category purchases (up to $1,500 in purchases each quarter, then 1%) and 1% on all other purchases. While the Chrome for Students card offers 2% cashback at gas and restaurants (up to $1,000 every quarter) and 1% on groceries and other student related products. This makes Discover worthy of consideration if you’re a student.

Does Discover offer a free checking account?

Discover’s checking account is free of monthly maintenance fees, and there are no minimum balance requirements. There are no charges if you have insufficient funds or have a deposit item returned.

What’s more, you’ll earn 1% cash back on debit card purchases, making it a desirable option for those who want the best value checking account.

Can you get denied by Discover?

All banks assess account applications to determine applicant suitability. Discover is quite flexible with its criteria for its checking account, but there is still the possibility that a red flag on your application may trigger a decline notification.

In this case, you may need to discuss your application with a member of the support team to find out if there is anything you can do to have your application reassessed.

Capital One 360 Checking

Fees

$0

Minimum Deposit

$50

Current Promotion

None

APY Checking

0.10%

The Capital One 360 checking accounts are mostly used and operated online for your optimal convenience.  You can easily pay your bills, get your cash, making deposits, and transfer your money without the added stress of a monthly fee.  This allows you to condense your banking work without extra trips to your local bank.

You can easily open your checking account online and manage your account securely by signing onto your phone or computer. You do not have to rely on waiting for your bank to open.  The hours are entirely at your disposal, which offers increased flexibility and user-based tools.

Another added benefit of opening a Capital One 360 checking account is the zero fees when opening a checking account.  There are no fees when opening, keeping, or using your Capital One 360 account domestically or for foreign transactions.  This is extremely helpful and beneficial to a traveling and busy adult.

There are also many other additions to this service.  You can receive overnight check delivery, overnight delivery of a replacement a card, and request to stop payments.  All of these are great improvements to your banking experience that limit any unnecessary stress.   

  • Savings Accounts
  • Checking Accounts
  • CDs
  • Credit Cards
  • Debit Cards
  • Is Capital One worth for Millenials?

As a major bank, Capital One covers your banking basics with the minimum of fuss. Millennials are also likely to appreciate the convenience and functionality of the accounts. Many of the accounts are fee free and you can access decent rates with savings and CD products. There is also a great app for both Android and iOS devices to help you manage your money on the go.

  • Is Capital One worth it if I have bad credit?

Capital One may decline your application for a checking account if you have bad credit. However, the bank does offer several products that can help you to build your credit. The savings accounts offer decent rates, so you can start to build up an emergency fund with no account fees or minimum balance requirements.

  • Is my money safe on Capital One ?

While the share price may have fluctuated a great deal during turbulent financial times, Capital One has remained a safe bank for your funds. The bank is FDIC insured, so customers are protected for up to $250,000 in deposits.
Capital One did receive a $3.5 trillion federal bail out in 2008, but the bank has repaid these funds in full.

  • Can you Be Denied on a Capital One Checking Account?

Capital One will go through your application form to determine if you will be approved to open an account. Unfortunately, the accounts are subject to approval, so there is a possibility your application may be denied. Capital One does not have a very basic checking account, so if you are denied, you may need to reapply after you have worked on building your credit.

  • Can you buy/invest in gold products via Capital One?

Capital One does not have an investment platform, so it is not possible to buy stocks or shares. This means that if you want to buy or invest in gold products, you will need to find a broker, as it will not be possible to make these trades via Capital One.

 

Capital One Transfer funds options
Transfer funds options on Capital One app (Screenshot from Capital One)

Ally Interest Checking Account

ally bank
ally bank

Ally Interest Checking Account

Fees

$0

Minimum Deposit

$0

Current Promotion

None

APY Checking

0.25%

The Ally Bank interest checking accounts is a singular checking account that offers a tiered interest rate structure.  The yields vary depending on your minimum daily balance in your account.  There are no monthly maintenance fees with your checking account. 

You can access your checking account in more than 43,000 ATMs through the Allpoint network.  You can also deposit your checks remotely through your phone and computer.  This allows you to stay connected and update your finances regardless of your location.  Your checking accounts also come with free checks and debit cards, which is an added bonus. 

Some positive aspects of the Ally Bank checking account system are the ability to earn interest on your daily balance.  You do not need a minimum deposit and there are zero monthly fees.  Along with the lack of monthly fees, there are no added costs to having standard checks or debit cards.

Along with the positive benefits of having an Ally Bank checking account, there are also limited overdraft fees that are below the national average.  You must be aware of your balance because you cannot incur more than one overdraft fee in a single day.

  • Savings Accounts
  • Checking Accounts
  • CDs
  • Money Market Accounts
  • Debit Cards
  • Mortgage
  • Investing
  • What is required to open an Ally account?

There is no minimum balance to open an Ally account. All you need to do is visit the product page for the account you would like to open and click on the “Open Account” button. You’ll need to provide some personal details and financial information. Ally will send you an email after your application is approved.
Alternatively, you can apply by phone or download the application form and mail it in.

  • Does Ally checking worth it if I'm a student?

Although Ally does not have a dedicated student account, the standard checking and savings accounts are excellent. The accounts are fee free and you can earn 0.50% on your savings balance. The downside is that Ally is a fully online bank. So, there are no branches to visit if you have a problem and Ally does not offer any form of credit card. This means that while your basic banking needs are taken care of, if you need more, you may find Ally lacking.

  • Can I open an Ally checking account online?

Ally is a fully online bank, so opening a checking account online is the best way. While it is possible to open an account over the phone or by printing off the forms and mailing them in, the online application is easy and straightforward.

Does Ally offer a free checking account?
There is just one checking account option with Ally, but it is fee free. You don’t need to worry about monthly charges, account maintenance fees, or minimum deposits. You’ll even earn 0.10% on your checking account balance.

  • Can you be denied on an Ally checking account?

Ally does need to review your checking account application, and there is a risk that your application may be denied. However, according to consumer feedback, Ally seems to have quite relaxed criteria, so it is not likely that you will be denied unless there is a large red flag on your application.

  • Does Ally work for Joint Accounts?

You can add another person to most types of Ally accounts. Ally has a standardized Additional Owner form, which you need to complete. You can then upload the signed form or return it to Ally via fax or mail. You will also need to provide a signature card for each account holder.

Ally account details summary
(Screenshot taken by our team from Ally app)

Amex Rewards Checking

Fees

$0

Minimum Deposit

$0

Current Promotion

None

APY Checking

1.00%

Existing American Express customers or those with an Amex credit card for at least three months are eligible for the American Express Rewards Checking account. But if you meet the requirements, this is a fascinating product.

You can earn American Express Rewards, which you can combine with your Amex credit card reward points to redeem for travel, experiences, or gift cards, in addition to the fact that there are no monthly maintenance costs or account minimums. Every time you make a qualifying purchase using your account debit card, you will accrue points.

With qualified purchases made with a debit card using the account, you have access to a sizable ATM network with over 37,000 machines as well as purchase protection. The fantastic app allows you to manage your account while on the road and even accept mobile check deposits.

  • Savings Accounts
  • Checking Cards
  • Credit Cards
  • Debit Cards
  • CDs
  • Personal Loans

Can anyone open a checking account with American Express Rewards?

To open an American Express Rewards Checking account, you must be an American Express® Card Member with a Consumer Card.

Prior to applying, you must be the principal cardholder and have had your card for at least three months. Amex Rewards Checking accounts can currently only be set up for individual account holders.

It takes only a few minutes to apply for an American Express Rewards Checking account.

How can I get Membership Rewards points?

One Membership Rewards point can be earned with Amex Rewards Checking for every $2 spent with an approved Debit Card. There is no cap on the number of points you can earn when redeeming them for deposits into your Amex Rewards Checking account.

How quick should I make a transfer and how to do it?

You must fund your account within 60 days after account creation in order to keep it open. You have the following choices:

  • Online Transfer: Online transfer into your Amex Rewards Checking account is possible once you've connected one of your other bank accounts.
  • Direct deposit setup: To set up direct deposit into your checking account, use the routing and account numbers provided on the home page of your Amex Rewards Checking account.
  • Mobile check deposit: By utilizing the American Express App, you can easily deposit a check from your mobile device. only accessible on iOS and Android. Rates for mobile data may apply.

Can a check be deposited into an Amex checking account?

Yes, that's possible! Use your smartphone to capture images to make mobile deposits easy with the Amex® App.

Chase Total Checking®

Fees

$12 Can be waived if you maintain a $1,000 minimum daily balance, making direct deposits or Associated SnapDeposits of $500 or more per statement cycle, or holding $2,500 in combined deposit accounts with the same statement cycle date or having a Health Savings Account or investment account

Minimum Deposit

$0

Promotion

$300 Expired on 7/24/2024

APY Checking

None

Chase Total Checking offers no minimum deposit and a bunch of options for its customers including investing options, credit cards and access to mortgage and other types of loans. In addition to a decent promotion for new customers, Chase offers a great digital experience, espeically if you carry one of Chase credit cards.

At more than 16,000 Chase ATMs around the nation and more than 4,700 branches, customers can withdraw money for nothing. According to user and customer service ratings in community reviews, Chase Bank complete checking is overall strongly advised.

  • Savings Accounts
  • Checking Accounts
  • CDs
  • Mortgage
  • Government Mortgage
  • Credit Card
  • Debit Card
  • Investing

Does Chase offer inflation proof banking products?

Many Chase products aren't particularly inflation proof, like the majority of banks. Chase does, however, provide fixed-rate loans for cars and homes. thus you won't have to be concerned about rising borrowing prices when you buy or refinance a home or car.

Your monthly payments will not change for the duration of the loan if you choose to lock in your rate at the beginning of the term. This is a fantastic approach to keep control of your money even if inflation picks up dramatically.

Is Chase prepared for a downturn?

On the surface, Chase has a strong financial reports, expreineced management and great reputation. However, during recessions we are aware of extreme conditions so it's difficult to know which banks are more exposed to potential crisis. 

Chase has a long history and a strong financial foundation. The bank has paid back the federal bailout money it received in 2008 and is also FDIC insured. This shows that despite experiencing the biggest financial crisis in recent memory, the bank was able to recover. 

Is there a free checking account offered by Chase?

All Chase checking accounts—with the exception of those for children and students—have some sort of monthly maintenance fee. However, if you satisfy one of a number of account requirements, you might be eligible to have this cost eliminated. For instance, the $12 fee for Chase Total Checking is removed if you keep your account balance at $1,500 or receive at least $500 in direct deposits.

Can I purchase or invest in gold products through Chase?

Chase offers access to investment alternatives from its sibling companies as a member of the JP Morgan group. In order to trade stocks, ETFs, and options, you can either work with an advisor or go it alone. This implies that you can buy gold equities on this site.

Additionally, new users can take advantage of limitless commission-free online trades with certain products for zero dollars. However, Chase has a highly open pricing structure, allowing you to choose your investment strategy with confidence.

If I have bad credit, is Chase still worthwhile?

Chase does not specifically offer goods for those with bad credit, but it can be a decent option if you want to improve your credit score. The bank offers a straightforward checking account with few extras so you can focus on developing sound financial practices.

The bank additionally provides customers with the Slate Edge credit card, which includes an automatic review to raise your credit limit if you make on-time payments and spend $500 or more in the first six months. Your rate could potentially decrease by 2% annually.

Therefore, even if your existing credit score initially qualifies you for a high rate, you can lower your rate and improve your credit score with responsible card use.

Chase Total Checking overview on Chase app
Chase Total Checking overview on Chase app (Screenshot from Chase app)

Banking Reviews

What is a Checking Account?

A checking account is a financial tool that provides convenient access to funds for day-to-day transactions.

Operating in conjunction with checks, debit cards, and online banking, it allows users to make purchases, pay bills, and withdraw cash. With features like direct deposit and online banking, it offers ease and flexibility. However, fees, low interest rates, and the risk of overdrafts are associated cons.

Despite these drawbacks, checking accounts remain a widely used and essential component of personal finance, facilitating the efficient management of liquid assets and providing a secure platform for routine financial activities.

Checking Account Types

Checking accounts come in various types, each designed to meet different financial needs. Here are common types of checking accounts:

  • Basic Checking Account: A straightforward account for everyday transactions, often with minimal fees and simple features.
  • Interest-Bearing Checking Account: Earns interest on the account balance, suitable for those maintaining higher balances but with typically lower interest rates compared to savings accounts.
  • Online Checking Account: Managed primarily through online platforms, offering convenience with potentially fewer fees and higher interest rates.
  • Joint Checking Account: Shared by multiple individuals, simplifying shared expenses with joint responsibility but requiring trust and communication.
  • Student Checking Account: Geared towards students, featuring lower fees, overdraft forgiveness, and tailored benefits for student needs.
  • Business Checking Account: Designed for business transactions, providing business-specific features and expense tracking with potential for higher fees.
  • Senior Checking Account: Tailored for senior citizens, featuring reduced fees and additional services for seniors with potential age restrictions.

Before choosing a checking account, it's crucial to assess individual financial habits, needs, and preferences.

Types of Checking Accounts
(Photo by NicoElNino/Shutterstock)

How to Choose a Checking Account?

Choosing the right checking account involves considering your financial habits, needs, and preferences. Here are the main factors to consider when choosing a checking account::

  • Assess Your Usage Patterns: nalyze your typical transaction volume, ATM usage, and digital banking preferences to identify features that align with your habits.
  • Fees and Charges: nderstand the fee structure, including monthly maintenance fees, ATM fees, and overdraft charges. Look for accounts with low or no fees that match your usage.
  • Interest Rates: If earning interest is a priority, consider interest-bearing checking accounts. Compare the interest rates offered and ensure they meet your expectations.
  • Online and Mobile Banking: valuate the convenience and functionality of online and mobile banking services. Ensure the platform provides easy access and meets your digital banking preferences.
  • ATM Access: heck the availability of in-network ATMs and whether the bank reimburses out-of-network ATM fees. Consider the bank's ATM network coverage.
  • Branch Access: ssess the importance of physical branch access. Some prefer online-only banks for convenience, while others prioritize having local branches.
  • Overdraft Protection: nderstand the overdraft policies and whether the bank offers overdraft protection to prevent declined transactions and fees.
  • Minimum Balance Requirements: Be aware of any minimum balance requirements and assess if you can comfortably maintain the required balance to avoid fees.
  • Additional Features: Consider extra features like mobile check deposit, bill pay services, and alerts. Choose an account with features that enhance your banking experience.
  • Account Types: elect a checking account type that suits your specific needs, such as a student account, business account, or joint account for shared expenses.
  • Customer Service: valuate the quality of customer service. Check reviews, and consider reaching out to the bank with questions to gauge their responsiveness.
  • Security Measures: prioritize accounts with robust security measures, including fraud protection, two-factor authentication, and account monitoring.

By carefully considering these factors, you can choose a checking account that aligns with your financial needs and preferences, providing a seamless and efficient banking experience.

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Checking Account Pros and Cons

Like any financial product, there are both positives and negatives associated with checking accounts. It is important to be aware of these before you make a decision about any product.

Pros
Cons
Convenience
Fees
Easy Access to Funds
Little to no interest
Online Banking
Risk of Overdrafts
Direct Deposit
Safety

Checking accounts provide a convenient way to manage everyday transactions such as paying bills, making purchases, and withdrawing cash through various channels like checks, debit cards, and online/mobile banking.

With a debit card, ATM, online transfers and direct debits, there are multiple ways to access your funds from your account.

BofA Manage debit Card
Example: manage Bofa debit card (Screenshot taken by our team from Bank Of America app)

Most banks offer online banking services, allowing you to manage your account, view transactions, pay bills, and transfer funds from the comfort of your home or on-the-go.

Many employers offer direct deposit, allowing your salary or other income to be automatically deposited into your checking account. This can save you time and effort.

Keeping money in a checking account is generally safer than holding large amounts of cash. Most banks offer fraud protection, and funds in checking accounts are typically FDIC-insured up to a certain limit.

You will also need to consider that your checking account may attract fees. The most common are overdraft fees, monthly maintenance fees and ATM fees.

Any funds you have in your checking account will earn little to no interest. This can be a little frustrating if there is a period between your paycheck arriving in your account and your expenses being withdrawn.

If you don't manage your account carefully, there's a risk of overdrawing, which can result in fees and additional complications.

Checking accounts pros and cons
(Photo by Sutthiphong Chandaeng/Shutterstock)

Where Can I Open An Account?

You can open a bank account at various financial institutions, including:

  • Traditional Banks: alk into a local branch of a traditional bank, such as Wells Fargo, Bank of America, or JPMorgan Chase, and inquire about opening an account.
  • Credit Unions: redit unions, like Navy Federal Credit Union or Alliant Credit Union, offer membership-based banking services and often provide competitive account options.
  • Online Banks: Explore online-only banks like Ally Bank, Chime, or Simple. These banks typically offer convenience and often have fewer fees.

Traditional banks have physical branches and offer a wide range of services. Pros include in-person customer service, extensive ATM networks, and a variety of account options.

However, they often have higher fees and may offer lower interest rates on savings accounts. The account-opening process may also be more time-consuming.

Online banks operate exclusively through digital platforms, offering convenience and often lower fees. They tend to provide higher interest rates on savings accounts and user-friendly online interfaces.

However, the lack of physical branches can be a drawback for those who prefer face-to-face interactions. Online banks may also have limited ATM access and less comprehensive customer service compared to traditional banks.

Credit unions are member-owned financial cooperatives that often provide lower fees and better interest rates than traditional banks. They emphasize community involvement and may offer a more personalized approach to customer service.

However, credit unions may have a smaller branch and ATM network, potentially limiting accessibility. Membership criteria and account options can vary.

Credit union benefits and drawbacks
Credit union main benefits include low fees, mid-high deposit rates and personalized service. But, there are drawbacks. (Photo by fizkes/Shutterstock)

How to Open a Checking Account?

Opening a checking account is a straightforward process that can be completed in a few steps. Here's a general guide:

  1. Choose the Right Bank or Credit Union: Research different financial institutions to find one that suits your needs. Consider factors such as fees, account features, accessibility, and customer reviews.
  2. Gather Required Documents: Typically, you'll need to provide identification documents such as a government-issued ID (driver's license, passport), social security number, and proof of address (utility bill or lease agreement).
  3. Select the Type of Checking Account: Choose the type of checking account that aligns with your financial needs, such as a basic checking account, interest-bearing account, or one designed for specific demographics like students or seniors.
  4. Visit a Branch or Apply Online: If you prefer in-person service, visit a local branch of the chosen bank or credit union. Alternatively, many institutions offer online account opening through their website or mobile app.
  5. Fill out the Application Form: Complete the required application form with personal information. This may include your name, address, date of birth, employment information, and financial details.
  6. Deposit Initial Funds: Some banks require an initial deposit to open the account. Determine the minimum deposit requirement and ensure you have the necessary funds.
  7. Review Terms and Conditions: Carefully review the terms and conditions of the checking account, including fees, interest rates, and any additional features or limitations.
  8. Receive Account Details: Once your application is approved, you'll receive your account details, including your account number and routing number. You may also receive a debit card.
  9. Set Up Online Banking: If applicable, set up online or mobile banking to access your account, monitor transactions, and manage your finances conveniently.
  10. Order Checks (Optional): If you plan to use checks, you can order them through your bank. Some banks provide an initial set for free.

Remember, the specific steps and requirements may vary between institutions, so it's essential to check with the bank or credit union you choose for their specific procedures.

Opening A checking account is quick and easy process
Opening A checking account is quick and easy process (Photo by Moon Safari/Shutterstock)

How Much Money Should I Keep in My Account?

Since checking accounts don’t typically pay much interest, but you may need to keep a minimum balance in the account, how much money you should keep in your checking account can be tricky.

Generally speaking, you should aim to keep one to two months of your living expenses in your checking account, with a 30% buffer for unexpected expenses.

It is a good idea to keep a spending log for two or three months to track how much you typically spend in a month. Don’t forget to include payments automatically deducted from your account and your card purchases. Once you have an idea of how much you spend in an average month, you can ensure that you keep sufficient funds in your account and avoid any costly overdraft fees.

Just remember to also consider if your account has a minimum balance and factor this into your calculations.

Savings are a crucial part of financial stability. Whether you have an emergency fund or investment funds, savings can provide security against unforeseen events or situations. As you can see in this chart using FED Survey of Consumer Finances data, Americans are saving more. 

 

Is My Money Safe in an Online Checking Account?

Online banks are generally safe, but you do need to check that your online checking account is insured by the FDIC. This will ensure that your checking account has the same protections that would be enjoyed by holders of a traditional bricks and mortar checking account.

FDIC insurance provides coverage for up to $250,000. You can use the FDIC BankFind tool to ensure that specific banks are insured. You can do this by searching by bank name or website address.

In addition to FDIC protection, there are some safety precautions when banking online. You should:

  • Never use a link received via email or txt. Always type the website address into your browser.
  • Change your password regularly and ensure it isn’t used elsewhere.
  • Set text message alerts to check for unauthorized transactions on the account.
  • Use multi factor authentication. A two step process adds a little work, but it does add another layer of security.

Best Uses For a Checking Account

A checking account is not the solution for all financial goals, however, there are some best uses for such an account including:

  • Keep Cash Reserves Safe: While it may still be possible to cash your paycheck and pay all your bills in cash, keeping lots of money at home or on your person is a risk. Keeping your money in a checking account allows you easy access to your funds, while keeping them secure. Additionally, some companies will offer an incentive, such as a discount if you opt to pay them through ACH debit.
  • Enjoying More Payment Options: A checking account provides greater flexibility to access your funds. You can initiate digital transfers, use a debit card, withdraw cash at an ATM and more.
PNC Virtual Wallet money Transfer
PNC Virtual Wallet money Transfer (Screenshot from PNC app)
  • Eliminate Check Cashing Fees: Most employers don’t pay by cash, they pay via direct deposit or check. So, if you don’t have a checking account, you’re likely to need to pay a fee to cash your paycheck.
  • Easier Bill Payment: Modern checking accounts often have intuitive online features including a bill payment dashboard. This allows you to pay your bills directly out of your account, or you can set up automatic bill pay for even easier payment.
  • Tracking Your Finances: If you’re trying to manage your money, it is important to understand how you spend it. A checking account provides a statement of when your money comes in and out of your account, making it easier to track your finances.
  • Access Member Benefits: Many banks offer checking account customers specific benefits or perks. For example, you may access insurance offers or retail discounts by opening up a checking account.
Best Uses For a Checking Account
Keeping cash reserve safe, payment options, check cashing or bill payment - checking account has many uses (Photo by Ground Picture/Shutterstock)

How Do ATM Networks Like MoneyPass and Allpoint Work?

Companies like MoneyPass and Allpoint operate a network of ATM machines. Businesses and locations such as grocery stores and gas stations essentially rent an ATM on the network, and receive a share of the fees charged by those using it to withdraw cash. MoneyPass or Allpoint maintain the machine, performing repairs and filling it with cash, while the business provides an accessible location, where customers can use the machine.

From a consumer point of view, the ATM networks partner with banks and financial institutions, allowing you access to the ATMs with no fees. The choice of network will depend on the bank that you choose.

If your bank participates with a network, you will find that when you use your card to withdraw cash or perform another transaction, there is no surcharge. However, you need to be careful, as if your bank is not connected to a specific network, there will be a fee for each transaction.

You also need to check whether there are other fees associated with the network. For example, Allpoint machines are available in different areas of the world, but you may incur a foreign transaction fee if you use a machine outside the US.

Checking Account: Should I Be Concerned About Inflation?

Inflation is a concern when considering your long term finances. If the rate of inflation is 2% and your savings account pays 1.5%, in the long term, you’ll be losing some of the buying power of your money.

This means that you need to seriously consider how the rate of interest compares to inflation, if you’re planning on leaving your money in an account.

However, a checking account is designed for short term, day to day transactions. Since most checking accounts pay little to no interest, it is not the right account to leave large sums. The best way to use a checking account is to have sufficient funds, along with a contingency to cover all your typical monthly expenses.

If your checking account requires a monthly balance, you will need to look at what benefits it offers to offset tying up your funds and potentially having an issue with inflation. Most accounts that require a minimum balance offer some great benefits, which more than compensate for having an interest rate below the rate of inflation.

How Minimize Checking Account Fees?

The fees associated with checking accounts can vary depending on the financial institution and specific account terms. Typically, you will need to consider monthly maintenance fees, overdraft fees, and ATM surcharges.

Fortunately, there are some ways to avoid or minimize the charges on your checking account.

Many of the major banks will waive monthly maintenance fees if you keep a minimum balance in the account. This may take the form of an average daily balance or the balance on the last billing cycle day.

Another effective way to avoid checking account fees is to have your paycheck or other forms of income automatically deposited into your account via direct deposit. This is a great option if you would struggle to maintain the minimum balance. However, you need to be aware that many banks require a minimum direct deposit amount to qualify.Discounts

Some groups such as seniors citizens, students or veterans can qualify for discounted or waived service fees.

You may also be able to avoid paying checking account fees by opening up other accounts with the same bank. Some banks will waive the fee if you open a savings account. This can also help you to more efficiently manage your money, as you can quickly and easily transfer surplus cash into an interest bearing account.

Finally, look for banks or financial institutions that offer a free checking account. These are often loss leaders for the financial institution and you may be encouraged to open a savings account, loan or credit card account.

Typically, fee free accounts are offered by online banks and credit unions, but traditional bricks and mortar banks may offer similar products to compete.

Checking Vs Savings Account

Checking accounts don’t usually have restrictions about the number of transactions that you can do each month, while a savings account would have a limit to the number of withdrawals you can make in person or from an ATM.  There could also be a limit on the number of transfers you can make from savings to checking accounts.

Generally, you can’t make direct payments from your savings account because of a federal law that limits some withdrawals.  Experts call this provision of the law Regulation D.

It’s definitely easy to use the money in your checking account via an ATM withdrawal, writing a check, using your debit card, or paying electronically.  So, if what you need is an account to disburse funds, a checking account is most appropriate.

How We Picked The Best Checking Accounts: Methodology

The Smart Investor team conducted a thorough review of various banks and credit unions to identify the best checking accounts available. We considered key factors essential for checking accounts, focusing on four main categories:

  1. Fees and Terms (35%): We evaluated the fees associated with the checking account, including monthly maintenance fees, overdraft fees, and minimum balance requirements. Banks offering lower fees and more favorable terms received higher ratings in this category.

  2. Account Features (35%): This category assessed the features and benefits offered by each checking account, such as ATM access, mobile banking capabilities, check deposit options (mobile or in-person), bill pay services, and access to surcharge-free ATM networks. Checking accounts providing a wide range of convenient features earned higher scores.

  3. Customer Experience (20%): We closely examined the ease of account opening, communication with customer service representatives, the usability of mobile banking apps (tested by our team), and the responsiveness of customer service. Banks with user-friendly interfaces, responsive support, and efficient mobile apps received higher ratings.

  4. Bank Reputation (10%): Our team analyzed each bank's reputation based on factors such as customer satisfaction ratings, JD Power scores, TrustPilot reviews, and the bank's Better Business Bureau (BBB) profile. Banks with positive reputations and minimal customer complaints received higher ratings.

In each of these categories, we assigned weights to various features and qualities to ensure a comprehensive evaluation of each checking account.

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Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
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