Wondering what a checking account is and whether you need one?
Well, your hunt ends here. Read this complete guide to checking accounts to gain a complete understanding.
There are 4,377 FDIC-Insured commercial banks in the United States, and they all offer a variety of bank account options. Checking accounts are the most popular type of accounts for depositing money into the bank while ensuring high liquidity and convenience.
Checking accounts have become integral to our day-to-day lives, whether it’s transferring money to someone or receiving a paycheck.
In this article, we’ll go through everything you need to know about checking accounts in the United States.
Without further ado, let’s get started with the first clarification: what exactly is a checking account?
What Is a Checking Account?
Checking accounts are a type of a deposit account that allow the holder to accept deposits and make payments and withdrawals. You can hold checking accounts with banks or credit unions.
Checking accounts provide account holders with maximum deposits availability when compared to other types of bank accounts, including savings and investment accounts. Anyone can open a checking account at brick-and-mortar bank branches, neobanks, and even credit unions.
Most often, checking accounts doesn’t have a cap on deposits or withdrawals, meaning they can accept unlimited deposits. However, they can have a daily ATM withdrawal limit ranging from $300 to $5,000, depending on the bank.
Remember that a checking account will most likely require a customer to maintain a minimum balance.
What is the Minimum Balance for Checking Accounts?
Most banks and credit unions require customers to keep a minimum account balance for checking as well as savings accounts.
Although a few banks don’t require a minimum balance for checking accounts, the minimum fund requirement can be as high as $100.
The minimum balance requirement for Axis Bank in the United States, for example, is $50 whereas Bank of America requires customers to maintain $100. Some neobanks in the United States offer great checking accounts without minimum balance requirement.
What are the Different Types of Minimum Balances Required by Banks?
To provide banking services like ATMs, cash withdrawals, deposits, and money transfers, banking institutions have to earn money from deposits that you make to your accounts.
Banks often need their customers to maintain a minimum balance in their accounts because the banks reinvest the money people deposit with them. While the primary source of income for banks is investments and interests on loans, other cash inflows include monthly service fees and other charges.
To avoid a monthly service fee, you need to maintain a minimum balance in your checking account. However, US banks calculate the minimum fund requirement in several different ways. Here are a few of them:
If a checking account description indicates only “minimum balance” without any description, it’s safe to assume that it’s relatively high. This type of minimum balance requirement for checking accounts means that your account can never go below the minimum balance.
If the minimum balance requirement for your checking account is $100, for instance, keep in mind that your account balance shouldn’t go below $100; otherwise, the bank will charge you a monthly service fee.
Minimum Daily Balance
This is how most banks check the minimum balance for checking accounts in the United States.
If you have this term associated with your checking account, your account balance can go below the required amount as long as your account meets the balance requirement at the end of the day.
Minimum Combined Balance
Many users keep their money deposited across many accounts in a bank or credit union. Minimum combined balance requires the customers to maintain a minimum balance across all their accounts combined.
Depending on your checking account requirements, the additional account types can include savings, IRAs, money market accounts, and even lines of credit.
Still not clear?
Let’s look at an example. Assume that your checking account has an $800 minimum combined balance requirement and the savings account is included in this requirement. You have $800 in your checking account and $3,000 in your savings account. In this case, even if you spend all of your checking account balance, you won’t be charged a service fee. The reason is that your minimum combined balance requirement will be met as you still have $3,000 in your savings account at more than $300 minimum requirement.
Average Monthly Balance
For average monthly balance requirements, banks record your account balance at the end of each business day. At the time of the statement cycle, these daily balances are averaged out. Your checking account’s average balance should be higher than the minimum average monthly balance requirement. If it’s not, you’ll be charged a monthly service fee.
This type of monthly balance requirement can be confusing for many users. Let’s look at a hypothetical example of a $300 average monthly balance requirement.
Let’s say that you maintain a $301 daily balance throughout 29 days, but on the last day of the month, you spend the entire $301. Will you be charged?
The answer is yes. Even if you maintained the balance throughout most of the month, that last day’s $0 balance drops your average to $291, lower than the required amount.
If you aren’t too good with calculations, you could face a lot of charges due to a lower average monthly balance. Be careful!
How to Use A Checking Account
Checking accounts have changed drastically over the last decade. They aren’t simply tied to checks anymore. There are several ways you can use your checking account. Here are some:
- Make purchases via the debit card connected to your account.
- Deposit or withdraw money via your ATM card.
- Visit your bank branch for withdrawals and deposits (only if your bank has a brick-and-mortar branch).
- Make one-time or recurring bill payments via your bank’s online bill payment service.
- Transfer funds online from and to other bank accounts.
- Set up automatic payments for utilities or credit cards.
- Check your account balance via a mobile banking app or text banking.
Types of Checking Accounts
Depending on the purpose, banks offer several types of checking accounts. You can find the types of checking accounts your preferred bank offers on their website. The types of checking accounts will differ in terms of features, requirements, and fees.
Some checking accounts are designed for customers who are tech-savvy and rarely visit the bank branch; other checking accounts can be suitable for customers who write a lot of checks.
The common differentiators of checking accounts are as follows:
- Interest: Some checking accounts pay interest on the deposits while others do not.
- Monthly maintenance fees: Depending on the type of checking account, monthly maintenance fees may be charged by banks.
- Minimum account balance: Some banks don’t charge monthly maintenance fees if the account holders maintain a specified minimum account balance. The requirement depends on the type of checking account you hold.
- Check and ATM fees: Some checking accounts offer free check and ATM services whereas others don’t.
All checking account types differ from one another based on the above-mentioned parameters. Hence, you need to decide which one suits you based on your financial behavior.
Following is a list of the most popular types of checking accounts:
- Traditional Checking Accounts
- Online-Only Checking Accounts
- Premium Checking Accounts
- Interest Checking Accounts
- Money Market Accounts
- Rewards Checking Accounts
- Specialty Checking Accounts
- Clear Access Checking Accounts
Traditional Checking Accounts
When it comes to traditional checking accounts, there typically aren’t charges regarding deposits, transfers, withdrawals, or even number of transactions. However, a traditional checking account can have other types of fees, like for overdrafts or ATM use.
Most traditional checking accounts do not pay any interest on your deposits.
While most traditional checking accounts have a minimum balance requirement, some banking institutions offer a free checking account that doesn’t require you to maintain a minimum balance.
A free checking account is a great option for someone who can’t maintain a minimum monthly balance or who doesn’t make many transactions within a month.
Online-Only Checking Accounts
Image via Capital One
Built for millennials and Gen Z’s specific requirements, online-only checking accounts allow customers to bank online exclusively. As the operating cost of these accounts is lower compared to traditional checking accounts, the maintenance fee or minimum balance requirements are comparatively lower than other types of checking accounts.
Not only for millennials or Gen Zers, people who are well-adapted to the online banking environment would do well to rely on online checking accounts to pay bills, transfer money, etc.
Premium Checking Accounts
Generally, premium checking accounts require a higher minimum balance to avoid maintenance fees. They come with a suite of benefits that aren’t offered to basic or free checking accounts.
The premium perks can include waived ATM charges, free checkbooks, and perhaps even premium customer service.
Premium checking accounts are ideal for people who require checkbooks more often and have a regular stream of income.
Interest Checking Accounts
As the name suggests, interest checking accounts pay interest to customer deposits. However, the customers may be required to keep a minimum balance (typically more than a standard checking account) to earn interest on deposits.
Those able to keep an account balance of more than the minimum requirement of a standard checking account who don’t need premium account features should opt for this type of checking account.
Money Market Accounts
Image via Ally
A money market account typically pays a higher interest rate than even an interest checking account. However, it requires a high opening deposit and will likely offer limited transactions per month.
Hence, if you’re someone who doesn’t rely on high liquidity for their money and can make large deposits, a money market account could be an ideal choice for you.
Rewards Checking Accounts
A reward checking account is aimed at providing customers with special cashback rewards, high interests, or bonuses. Banking institutions like Discover Bank offer such accounts without requiring a minimum deposit.
So if you perform lots of transactions during the month, you can earn rewards for them if you opt for a rewards checking account. If you pay bills via your debit card, for example, you might earn rewards points for doing so.
Specialty Checking Accounts
Some banks offer checking accounts aimed specifically at serving groups like seniors citizens or students. These accounts are tailor-made for particular customer segments and might have lower or no monthly maintenance fees.
One very popular example of specialty checking accounts are student checking accounts. Business checking accounts are also common and widely-used.
Second Chance or Clear Access Checking Accounts
Clear access accounts are intended to help customers with bad banking histories or even negative credit ratings. Typically, these checking accounts have some restrictions such as not giving checkbooks and eliminating the possibility of overdrafts. The monthly maintenance fees are typically higher, as well, for clear access checking accounts.
But if you have a history of writing bad checks or have a bad credit rating, a clear access checking account is likely the best choice for you. Some banks give these accounts names like “opportunity banking” or “second chance.”
Where Can You Open Your Checking Account?
You can open a checking account through both traditional banks and neobanks, as well as at credit unions. With so many choices, deciding on which financial institution to choose can get confusing.
So let’s take a moment to understand these financial institutions and their checking account offerings in order to make a more informed decision.
Traditional banks are privately-owned banking institutions that accept money deposits and offer loans. These banks accept deposits via checking accounts, savings accounts, certificate of deposits, and retirement accounts, among many others.
Your deposits with these banks are insured by FDIC as long as your account types are included in the FDIC insured list by your bank.
Also known as neobanks, online banks are a more modern approach to banking. Established on the digital infrastructure rather than on brick-and-mortar storefronts, online banks can offer banking services for more affordable, and sometimes no, monthly maintenance fees.
Neobanks often partner with a banking charter or partner to provide banking services. However, if you are used to online banking, having a checking account at online banks can feel like a very natural way of doing your banking.
Credit unions are not-for-profit financial institutions that are owned by their customers only. Credit unions aim to serve their members rather than to earn profits. Because of this approach of management, credit unions are able to offer better maintenance rates and higher interest rates.
What is a Federal Deposit Insurance Corporation (FDIC) Insured Account?
Put simply, it’s simply an account insured by the Federal Deposit Insurance Corporation (FDIC). The FDIC is an independent federal agency in the United States that is responsible for ensuring customer deposits against bank failures.
An FDIC-insured checking account means that if you have up to $250,000 in your bank account and the bank fails, the federal agency will reimburse the losses you’ve suffered.
That said, it is not advisable to deposit more than $250,000 in a single bank; you should spread your total sum among several FDIC-insured banks.
FDIC-insured banks are required to show the official sign at each teller station or window where customers regularly deposit their money. Almost all United States banks are insured by FDIC, save a few like Bank of North Dakota. (FYI, the Bank of North Dakota is insured by the State of North Dakota.)
Generally, accounts that do not qualify for FDIC insurance are investment accounts, safe deposit boxes, life insurance policies, and mutual funds.
Before opening a checking account at any financial institution, seek details for FDIC coverage from the respective institution’s customer service or on their website.
Checking Account vs Savings Account – Are They Same?
If you’re new to personal banking, you might be confused by several account-related terms. The most important among them is the savings account. A savings account is the nearest competitor of a checking account.
The main difference between a checking and a savings account is that checking accounts prioritize fund liquidity, allowing you to frequently access your money. High-yield savings accounts, however, are focused on earning interest by saving money for the long term, and therefore give you limited access every month.
Following are the differentiators between savings and checking accounts.
Most commonly, savings account holders can only make 6 withdrawals or transactions (both online as well as offline) per month. Going beyond this will usually cost the customers additional fees. Checking accounts, however, don’t have any limits in terms of the number of transactions and withdrawals allowed.
Access to Money
Even if you don’t make too many transactions within the month, a checking account will give you easy access to your money as it comes pre-equipped with debit cards, checks, and online banking services.
Savings account holders, however, don’t get these perks with their accounts. But if a savings account holder wants a debit card or a checkbook, they can simply request one from the bank. Just keep in mind that this comes with additional fees.
Although checking accounts are convenient for frequent cash needs, not everyone can have them: banks in the United States require that account holders be 18 or older for checking accounts. However, if anyone between 14 and 18 years old wants a checking account, they can have a joint account with their guardian. For savings accounts, even an infant could be part of a joint account with their guardian.
Now that you know the key differences between checking and savings accounts, you can decide which account is suitable for your needs.
So, to sum up: if you want more liquidity from your money and tend to make several transactions over the month, then a checking account is the best pick. But if your purpose behind having a bank account is simply to save money and liquidity isn’t a concern, then go with a savings account.
How to Choose a Checking Account?
If a checking account suits your needs, then the next step is to check which bank you should move forward with.
There are certain things that you’ll need to keep in mind while choosing a checking account. Remember, not all checking accounts are the same when it comes to features, maintenance fees, and other parameters.
For starters, you should decide on which type of financial institution you want to open your checking account. Earlier in this article, we discussed the types of financial institutions that offer checking accounts; let’s review those quickly.
Brick-and-mortar banks are suitable for people who tend to visit the bank branch for services, while online banks are good for younger generations that are reluctant to physically visit a branch and want to access banking services via smartphones.
Some credit unions lack infrastructure availability, which means they might not be available everywhere. Needless to say, they’re not amongst the popular choices for checking accounts.
Despite the type of institution, before opening a checking account, you should consider the following factors:
Most banks charge a monthly maintenance/service fee on checking accounts. Some common types of checking account fees include:
- Overdraft fees
- Overdraft protection fees
- Monthly maintenance fees
- Account inactivity fees
- ATM fees and surcharges
- Non-sufficient or insufficient funds fees
These fees can range between a couple of dollars to two-digit numbers, making maintaining your account costly in the long run.
Although many of these fees can be avoided if you pick the right checking account type and manage it carefully, it’s better to go with a bank that charges minimal fees in the first place.
Minimum Balance Requirements
Now that you’ve got the basics of choosing a type of account, it’s time to move on!
Just remember that different financial institutions have different minimum opening deposit requirements. Because of this, it’s a good idea to choose a financial institution that offers the lowest balance requirement for a checking account.
Interest and Rewards
Although checking accounts aren’t meant to hold huge chunks of money in the long term, there are a few banks that pay interest on deposits. However, this shouldn’t be too big of a concern when choosing a checking account, as they have a low-interest rate averaging .04%.
What you should focus on instead are the rewards. Many banks in the United States reward their checking account holders with cashback deals, loyalty points, coupons, and more for the transactions they make.
Digital Infrastructure and Mobile Apps
Even if you move forward with a brick-and-mortar bank, it’s sensible to pick one that has a fully-functional digital infrastructure. Having a mobile banking app comes in handy at times when your bank branch isn’t operational, especially at night.
Your bank’s mobile app and the online banking interface should not only allow you to make payments and transfers, but to block or freeze your debit/credit cards or even change your PIN if a security emergency comes up.
How to Open A Checking Account
Opening a checking account is a very simple and straightforward process, though you’ll need to remember to have the right documents with you when you visit a bank branch.
Your bank might offer a variety of checking accounts, and you should pick one depending on your needs. Most checking accounts come with a checkbook, ATM card, and an optional online banking facility.
Once you choose a bank and the right checking account type, you can fill in the form at the bank branch and attach the necessary documents along with the application. The process of an account opening, however, can get complicated if your bank requires you to submit very many documents.
Hence, it’s mindful to be aware of the documentation requirement beforehand. Keep reading the article to learn about what you should take with you to open a checking account in one day.
General Document Requirement for Checking Accounts
Generally, banks have several eligibility requirements for checking accounts. For example, almost all banks require account holders to be at least 18 years old. If you’re a minor, you can be listed as a joint account holder with a legal guardian.
Banks don’t issue checking accounts to people who have been involved in criminal convictions such as fraud or financial crimes. Your eligibility might be at stake if another bank has closed your account due to financial mismanagement like writing bad checks.
So first, make sure that you’re eligible to have a checking account. Following are the documents you need to carry to open a generic checking account:
Every bank requires you to submit a valid government-issued photo ID for the opening of a checking account. This confirms that you are who you claim to be.
A driver’s license is the most common government-issued photo identification. If you don’t have one, simply apply for a state-issued ID at your state’s department of motor vehicles (DMV).
Unlike a driver’s license, a state-issued ID doesn’t require you to pass a driving test. Make sure you carry your birth certificate or a US passport and proof of address with you when applying for your state ID.
Taxpayer ID Number or Social Security Card
Being a financial service provider, banks also require their existing and new customers to submit either a valid SSN (Social Security Number) or an ITIN (Individual Taxpayer Identification Number).
If you have an SSN, don’t forget to carry your social security card with you to the bank while opening your current account. Otherwise, you can bring your ITIN with you as proof.
If you don’t have either of them, you need to apply for one before going to your bank branch for a checking account opening. You can apply for ITIN at the IRS (Internal Revenue Service) by submitting Form W-7. Take into consideration that it can take a few weeks to get.
Proof of Address
Banks in the United States cannot allow customers to use post office boxes as an address. With modern KYC and AML compliances in place, banks require customers to submit a proof of residential or office address.
Following are the valid proofs of address as per most banking institutions:
- Driver’s license
- Property tax receipt or utility bill
- Posted mail with the name of the applicant
- Mortgage statement or a lease agreement
- Voter registration card
- Insurance card or policy bill
- Bank passbook or credit card statements
- College enrollment papers
Documents Required for Special Types of Checking Accounts
If you want to open a checking account such as a student checking account, joint checking account, etc., then there are special document requirements for these accounts.
If you want to open a student account, your bank might require you to submit proof of enrollment at a qualified school or university.
The reason students opt for this type of checking account is that these accounts come with very low, or in some cases, no maintenance fees.
For most banks, a valid student ID is sufficient to open a student account.
If going to the bank branch to open a joint account, make sure that the other person is with you. Because your partner/s in the joint account will also bear the same assets and liabilities for the account, they should also carry their respective documents along.
Power of Attorney
If anyone other than the account holder wants a special signing authority for a checking account, they should file a power of attorney (POA) along with the account opening application.
As a legal document, a POA authorizes other persons to make deposits and transactions for the original account holder. POAs are quite useful for senior checking accounts for elderly people who aren’t able to visit a bank branch to access their accounts.
Mortgage Documents and Tax Returns
While opening a new checking account, almost every bank will allow you to apply for a credit card and internet banking right away. If you have already decided to take advantage of such banking services along with your checking account, then you’ll want to be ready.
You can speed up the process by carrying additional documents and information to the bank. If you’re applying only for a credit card, you should carry your last two or three salary slips from work.
For loans or mortgages, it’s safe to carry at least two years of tax returns. If you carry the right documents, applying for a checking account will be a breeze.
How to Open A Checking Account Online
With the rise of digital-only banking, opening a bank account online is easier than ever. For those who don’t want to visit a brick-and-mortar bank branch, online account opening applications are a boon.
The application process for both options is quite similar. You can open the respective bank’s website or mobile app on your computer or smartphone, and you’ll be ready to roll! Here is how you can open a checking account online.
Once you’re on your bank’s website or mobile app, you can find the list of documents you require to apply for a checking account online. Here is an example of a document requirement list stated on Wells Fargo’s website.
Image via Wells Fargo
Typically, banks will require you to have the following information while applying online for a checking account:
- Personal details
- Citizenship status and proof
- Current address and proof
- Contact details
- Social security number
- Government-issued ID that has a photo on it
Complete the Online Application
The online application for checking accounts will require you to feed in your details as well as upload scanned copies of your documents. You can easily scan your documents via any free document scanning app from your mobile phone.
When you complete the online application and click on the “submit” button, you’ll receive an email and probably a text message on your mobile stating that the bank has received your application.
Verify Your Identity Online
After receiving your application, your bank will check your documents and look for your credit history and financial behavior. If you have filled in the right details, your eligibility is up to the mark, and your credit rating is satisfactory, the bank will request you go through a process of online identity verification.
Image via LinkedIn
Most often, the online identity verification process doesn’t take more than a couple of minutes. All you have to do is to show up at a video conference with a bank representative and hold your photo ID up.
Set Up Your Online Checking Account
Assuming everything goes well and your account is approved, you’ll receive digital copies of your debit card, passbook, and your online login credentials.
Even neobanks will send you a physical debit card and a passbook by mail. However, you can start operating your account right after you receive the account information via email or text message.
Often, the online onboarding process doesn’t take more than a few minutes; you’re just required to set up your online banking account and its password. Once you’re done with this, you can start accepting and making payments.
Benefits of Having a Checking Account
If you select the right type of checking account for you with the right bank or credit union, there are several benefits that you can reap.
- Enjoy FDIC insurance: Most checking accounts are FDIC-insured, which means there is possibly no safer place on earth to keep your money safe while retaining high liquidity.
- Easy access to your money: Unlike other types of accounts like savings accounts, checking accounts are aimed at providing the account holders easy, 24/7 access to their funds. You can withdraw funds via ATM, at a bank branch, or even online. On top of that, checking accounts have no limit on the number of transactions you can make within one month or day.
- Offers a debit card: Most banks offer a free debit card with a checking account. Debit cards have their own benefits, and when coupled with a checking account can be marvelous.
- Accept direct deposits: Checking account holders can set up direct deposits to their accounts from their employers. It’s always better to get your paycheck deposited into your account automatically on payday without having to wait for it in the mail.
- Early direct deposits: Some banks speed right past direct deposits to offer their checking account holders the ability to get paid as early as 2 days ahead of time.
Downsides of Having a Checking Account
While checking accounts seem packed with benefits, they have some disadvantages too. Although the following downsides won’t apply to all banks’ checking accounts, these are the most common ones.
- No interests: Most checking accounts don’t earn any interest, and those that do typically have a lower interest rate than savings accounts.
- Fees and monthly charges: Many checking accounts bear several types of fees and maintenance charges. If you’re among those who can’t manage to be compliant with a checking account’s terms, make sure that you pick a bank that has either the lowest or (better yet) no monthly charges or fees for checking accounts.
What is Overdraft Protection and How Does It Benefit Checking Account Holders?
Overdraft protection is a service offered by many banks for their checking accounts. It allows account holders to overdraw money from their accounts even when they don’t have enough funds. However, this service comes with a fee.
In fact, during the second quarter of 2021, banks in the United States charged $1.97 billion in overdraft fees.
But without the overdraft protection in place, you may face hardships like checks bouncing, automated bill payments failing to clear, or your debit card transactions being declined. Many banks charge a non-sufficient funds fee if your automated payments get declined. Even check bounces will cost you a penalty. Overdraft protection enables transactions to clear even if you don’t have sufficient funds in your checking account.
You can choose an overdraft protection service at the time of opening your checking account. Banks offer different types of overdraft protection with checking accounts; following are some popular ones:
Types of Overdraft Protection
Traditional banks, neobanks, and credit unions offer overdraft protection services. Here are some common types:
Opt-in Overdraft Protection
This is a standard overdraft protection service in which your bank provides you with extra money for selected transactions if your account reaches zero dollars. The bank might also charge a fee per transaction.
Linked Bank Account or Credit Card
Many banks allow their customers to link their savings or other bank accounts with their checking account. Given that these accounts are linked, when an overdraft occurs, the bank transfers the required funds from the linked account.
Typically, banks charge a very small transfer fee for this service. The customers can even link savings accounts or credit cards with the checking account. For every overdraft, the bank will extract the required money from the linked savings account or the credit card.
Many banks offer credit lines to qualified checking account holders. The credit line that’s offered is based on the customer’s credit ratings.
With a credit line in place, the bank transfers required funds into the checking account. The account holder then pays interest to the overdrawn amount until it’s paid off.
1. What is a checking account used for?
Checking accounts come with several usability options that aren’t available with savings accounts. You can use your checking account:
- To make online or offline purchases via debit cards connected to your checking account.
- To deposit or withdraw money using an ATM card or by visiting the bank branch.
- To make one-time or recurring bill payments via online bill payment services offered by your particular bank.
- Make funds transfers to or from your other bank accounts.
2. What’s the difference between a checking account and a savings account?
Checking and savings bank accounts have a few similarities, but they’re built for two different purposes. Checking accounts are meant for money liquidity and availability, whereas savings accounts are built for keeping money safe and earning interests.
One key difference between a checking account and a savings account is that savings account holders can make only 6 money transfers/payments a month whereas checking account holders don’t have any such limit.
3. Is a debit card a checking account?
No. Debit cards are bundled with bank accounts such as checking accounts, which means to have one, you need to have a bank account that offers a debit card.
Both online-only as well as traditional banks offer debit cards with checking and savings accounts. However, debit cards for savings accounts come with a monthly fee whereas checking accounts often don’t charge anything for debit cards.
4. Is a debit card a checking or savings account?
A debit card isn’t a bank account. It’s just a card associated with one so that you can access the money in those accounts.
5. Can I open a checking account with no money?
Yes. Financial institutions like Axos Bank offer free checking accounts that don’t require the account holders to maintain a minimum balance. It also means that you can open a checking account with no money in your account.
6. What are the 8 types of checking accounts?
Differentiated by the perks and fees, there are 8 types of checking accounts:
- Traditional Checking Accounts
- Online-Only Checking Accounts
- Premium Checking Accounts
- Interest Checking Accounts
- Money Market Accounts
- Rewards Checking Accounts
- Specialty Checking Accounts
- Second Chance or Clear Access Checking Accounts
7. How do I withdraw money from my checking account?
There are several ways to withdraw money from your checking account:
- You can visit the nearest ATM (not necessarily your banks’) and withdraw cash.
- You can fill out a check from your checkbook by entering “cash” in the payee line and handing it over to the teller at any of your bank branches.
- Fill out a withdrawal slip at any of your bank’s branches. For that, you’ll need to carry either your passbook or a govt-issued photo ID.
8. Can I withdraw all my money from my checking account?
Yes, if you wish to do so. However, your bank may charge you a maintenance fee if you don’t leave a minimum balance in your checking account. If you have a free checking account with no minimum balance requirement, feel free to sink the well.
9. What’s required to open a checking account?
You’ll need certain documents such as proof of address, personal identification, tax IDs, etc. And if your bank requires you to deposit a minimum amount for the checking account, make sure you have it ready at the time of opening the account. You can open a checking account online or offline.
10. How do I deposit cash into my checking account?
There are two ways of depositing cash into a checking account. One is to visit any of your bank’s branches, fill in the deposit receipt, and hand it over to the teller. The second is to visit your bank’s automated deposit ATM and deposit the cash.
Final Verdict – Should You Open a Checking Account?
Checking accounts aren’t for everyone who is looking for banking services. Only people with high deposit liquidity needs will opt for one. If your only purpose behind opening a checking account is to obtain a debit card or internet banking service, then be sure to carefully evaluate whether or not you need one.
However, if you can maintain a minimum balance and are looking for the benefits that having a checking account can offer, then it’s a great option!