You have a checking account, right? If you don’t, now is a great time to open one. With so many physical banks, online banks and credit unions, how do you get the best checking account for your needs?
Let’s look at some features to consider in looking for that new or changed checking account.
Think through the purpose of your checking account. A typical checking account is used for regular deposits and withdrawals of money. This usually comes in the form of payroll deposits and then payments of bills and purchases.
You don’t, however, want to use the checking account as a short-term or long-term investment resource. Usually interest rates for checking accounts are on the low-end, ranging between 0.04% to 1% APY. A savings account with a higher rate is a better short-term investment tool.
Consider if you want different checking accounts at the same financial institution or at different ones. While it is convenient to have all your accounts at the same place, consider your purposes for the account and whether your current financial institution can really meet that need. This includes considering credit unions, which have specific membership requirements, as well as online banking options.
When you have all your accounts at the same financial institution, you establish yourself as a customer. However, a different bank or credit union for another account can help you limit access to the funds or give you even better interest rates on the account or financial incentives that may go with the account. For example, some financial institutions offer lower interest rates of loans in exchange for having a checking account with a monthly automatic deposit.
Fees are another aspect of banking to consider in your efforts to find the best checking account for your needs.
Ultimately, you want a free checking account or one with low rates for having the account. Fees could range from a couple dollars for printed statements and ATM fees to $35 or more for returned checks. If you add an overdraft line of credit, you will also want to look at fees associated with that. Those can range around $10-15 per overdraft protection transfer. Fees can also be imposed if a minimum balance isn’t maintained, and some places charge a fee for an inactive account or even for closing an account.
These fees can add up quickly and, depending on your needs, take away from the reason for opening a checking account. Ultimately, you want to keep your fees low and aim for at least some sort of interest rate return.
While you are looking at the interest rates and fees related to the account, don’t forget to make sure the customer service is what is needed for your level of help and the branch locations are easy for you to access for depositing and accessing funds depending on your needs.
Now, with all of that in mind, you can be better prepared to know how to get the best checking account for your needs.