Know your checking style
By Laura Bruce • Bankrate.com

When you're searching for just the right checking account, keep in mind that one size definitely does not fit all.

Banks offer all sorts of accounts, and what's right for your neighbor may not be what's best for you. In most areas, you'll have lots of different choices.

We want you to find the bank with the checking account that best suits your needs.

To do that, we created three scenarios depicting most people's checking account habits.

Typical: 12 transactions a month, one bounced check a year

Transactor: 25 transactions a month, one bounced check a year

Saver: 12 transactions a month, no bounced checks during the year

All the scenarios assume a $1,500 balance is maintained in the account, and that the customer is getting checks or image statements returned.

Select the scenario that best describes you, and then use our interactive section to find the bank in your metro area that gives you the account you want with the lowest fees.

The best deals
You'll find Internet banks among the best in all three scenarios. Despite the fact that just 38 Internet accounts were surveyed vs. 1,261 accounts at traditional banks, Internet banks captured five of the top 10 spots in the Typical scenario, five of the top 10 in the Transactor scenario and eight of the top 10 in the Saver scenario.

Accounts that fared the best were ones that had no monthly service fee, or a service fee that could be avoided with a balance of $1,500 or less. In addition, the best accounts had no per-check charges for customers writing 12 or 25 checks a month.

The interest-bearing accounts that populate the best deals list pay yields of at least 1.5 percent for fairly modest balance levels. These accounts separate themselves from the average non-Internet checking account in the survey that requires a $2,330 balance yet yields only 0.61 percent.

If the Typical scenario fits your needs, the basic interest-paying checking account offered at Umbrella Bank would be your best bet. Its 3.3 percent yield (at the time of the survey) would give you $24.50 over the course of a year if you maintained the $1,500 balance and bounced only one check.

Since that account has unlimited check writing, Umbrella Bank also places first in the Transactor scenario, which is for people who write at least 25 checks a month. Again, you'd earn $24.50 in interest over the course of a year.

Umbrella Bank's basic interest-paying checking also wins the Saver category. But in this case, you'd earn $49.50 in interest with the 3.30 percent APY.

Define your needs
Bankrate.com's three scenarios are appropriate for a large number of consumers, but it's critical that you accurately define your checking account needs. The best way to do that is to look at your checkbook activity for the past year.

Do you really write just 12 checks a month? Do you let your balance slip below the minimum requirement? Are you sure you don't bounce more than one check a year?

If you write a lot of checks and you pick a basic checking account, it could cost you a lot of money.

For instance, Citibank in Miami has a basic checking account that would cost someone in the Transactor category $492 a year to maintain. Citibank vice president Mark Rodgers says that's because the bank's basic checking account is meant for people who write a maximum of eight checks a month. Someone writing 25 checks each month would incur steep fees.

"We wouldn't suggest this account to someone who writes a lot of checks. We have competitively priced accounts and we have a number of options for people," Rodgers says.

In fact, Citibank's Easy Checking account costs $150 to maintain in the Miami market under the Transactor scenario. Still pretty expensive, but a Miami customer would break even maintaining an Easy Checking account under the Saver scenario and would pay just $30 a year to maintain the account under the Typical scenario.

The traditional checking account offered at the Buffalo, N.Y., branch of Bank of Akron fares very poorly under the Typical and Saver scenarios. That's because the bank charges a $25 a month service fee if you want your checks returned. The bank's NOW checking account fared much better under all three scenarios.

And, if you didn't care about having checks returned, the company's traditional checking might be very attractive with its $1 minimum to open and no balance required to aviod fees.

The lesson here is know your checking-account personality and review all the checking accounts a bank offers before making a decision. You don't want any surprises when the statement arrives.

-- Posted: March 28, 2002