Checking Accounts

Checking accounts are an important part of the banking system. These deposit accounts give consumers a place to deposit their money, make transfers, write checks, pay bills, and do other routine banking transactions. The money in checking accounts is safe, as accounts are insured for up to $250,000 per depositor by the Federal Deposit Insurance Corporation (FDIC). Checking accounts are an important part of the banking system, giving consumers a place to do routine banking transactions, such as pay bills, make large purchases, store financial capital, etc. Without checking accounts, it would be hard for anyone to be able to do business around the world. Checking accounts are a systematically worldwide operation that every country participates in to make transactions.

There are things you need to know about checking accounts before getting one because not knowing can cost valuable money. Before you open a checking account, you should know your options and consider things such as monthly balances, fees, interest, and convenience. Also, consider before working with a bank if a credit union would be a better option for your money. There are several types of checking accounts that you can consider as well.

Regular Checking Accounts

A regular checking account simply lets you do all the things you’d expect from a checking account: deposit and withdraw money from an ATM, write checks, pay bills, and make purchases using a debit card. You may have to pay a monthly fee for the privilege of being an account holder, but many banks waive the fee if you keep enough money in your account. A regular checking account usually pays little or no interest on your balance.

Premium Checking Accounts

If you have a five-figure sum or more to keep in a checking account, a premium checking account may be right for you. Having that high a balance in your account should allow you to avoid paying a monthly fee and provide perks such as ATM fee reimbursements, free checks, and earning a little bit of interest. You may also receive discounts on other services from the bank, such as a slightly lower mortgage interest rate or free financial advice.

Interest-Bearing Checking Accounts

Interest-bearing checking accounts give you a small return every month for the balance in your account. Some accounts pay a flat interest rate regardless of your balance, while others pay more on higher balances. The interest rate will almost certainly be below the inflation rate, but it might be comparable to what some savings accounts pay, giving you the best of both worlds—unlimited transactions and monthly interest payments—in a single account. However, you may not come out ahead with an interest-bearing checking account if its fees are too high.

There are three types of interest-bearing accounts.

•         High yielding online checking accounts
•         Money Market Account.
•         Certificate of Deposits

Free Checking Accounts

Free checking means that the account doesn’t charge a recurring fee, such as a monthly maintenance fee, and doesn’t have a minimum balance requirement to avoid a fee. You may still have to pay for other services, including out-of-network ATM fees, check fees, overdraft fees, stop payment fees, and foreign transaction fees. These accounts may not pay any interest, as you’re already getting the benefit of not paying a monthly fee.

Low-Balance Checking Accounts

Low balance checking accounts, sometimes called “lifeline accounts,” are for customers who can only maintain a small balance but want to receive banking services. In exchange for allowing you to keep an account with a very low or no minimum balance requirement, the bank may require you to do other things that save it money, such as writing only a limited number of checks each month and receiving monthly statements electronically instead of by mail. Some of these accounts may not even have check-writing privileges—permitting only online or debit-card payments—and may not allow overdrafts.

Second-Chance Checking Accounts

If a bank has closed your checking account in the past because of an unpaid negative balance and you’re ready to start over, a second-chance checking account may give you that opportunity. In exchange, you may have to pay a monthly fee of up to $20, and your account may have restrictions that other checking accounts don’t have, such as not allowing overdrafts. Once you’ve maintained your account in good standing for a certain period—perhaps a year—you may become eligible for a regular checking account.

One thing that one must know about checking accounts is how to write a check. Click the link below to tell you how to write a check.

Check Writing