How to find the best checking account

5 min read

Opening a new checking account might feel a bit dizzying.

Sure, it’s usually easy to open a checking account — after you know which one you want to serve as your financial hub. There are thousands of banks and credit unions to choose from in the U.S. and they offer a variety of checking accounts with different features and fees.

Here is what you need to know to find the best checking account for you.

Where to open a checking account

You have ever-more options of where you can open a checking account. There are the usual suspects: banks and credit unions. In more recent years, there are fintech companies that market checking accounts too (they design the digital experience, while a bank partner holds your money).

[READ: Bankrate’s bank reviews]

Just as there are a variety of companies offering checking accounts, you’ll also find a variety of checking account types to choose from too. What’s best for you is a matter of personal taste. If you like to have cash on hand and travel a lot, you will likely want a bank that makes a large ATM network available. If you tend to overspend, you may want an account that helps you stay more mindful about your transactions. If you want in-person banking, look for a bank or credit union that operates branches.

While preferences vary, some standout more than others. You can start by researching the best checking accounts.

Types of checking accounts

Checking accounts come in a number of different flavors.

Personal checking account

These are the classic places to park your cash while keeping your money accessible for everyday use. With a personal checking account, you can access your money in a number of ways, including: at the ATM, in the branch and on your mobile app. Often, but not always, you will get physical checks in addition to a debit card with the account.

Online-only checking account

These accounts function like personal checking accounts but are only offered online. Instead of the option to visit a branch, you will only use your checking account online. These accounts can offer more perks because of the math: Instead of spending money on their branches, online banks and credit unions can pass along this operational savings along to their customers.

Challenger bank account

These are the newest kinds of checking accounts. Fintech startups design the digital experience, while their partner banks hold your money. These accounts are known for offering low-fees and more advanced digital features.

Rewards checking account

Some checking accounts will offer you cash back on your debit swipes or provide another kind of reward in exchange for your business. While it’s not widespread, there are options. Kasasa checking, for instance, is offered by numerous financial institutions across the country and provides checking customers rewards, including cash back.

Interest-bearing checking account

Some checking accounts pay interest on the money parked in your account so that you make a small return. However, there are usually requirements to earn the APY or to avoid account fees.

Student checking account

These are often low-fee accounts for individuals in school. If you’re looking for an account for your child, you have all sorts of options. Banks across the country offer student accounts that may waive ATM fees, offer bonuses and more.

[READ: Best student checking accounts for 2019]

Joint checking account

It’s a traditional checking account but with one important distinction — two people hold the account. Couples, roommates and other types of close relationships may want to open such an account, but there are risks.

Factors to consider when searching for a checking account

  • Insurance: Checking accounts are safe places to park your money. If you get an account through a bank (or a fintech company that partners with a bank), the Federal Deposit Insurance Corp.  insures deposits up to $250,000. If you get an account at a credit union, the National Credit Union Association insures the funds up to the same amount.
  • Minimum deposit requirements: You can open a checking account with no minimum deposit. However, some accounts, especially interest-bearing checking accounts, often require a heftier deposit. Pay attention to the account requirements in order to avoid a potential fee. Some banks will charge you if your balance dips below a certain amount.
  • Fees: You will want to look for an account with low (or no) fees to save you money. Luckily, you have options. Bankrate’s 2019 checking survey found that 42 percent of non-interest bearing accounts are considered free checking accounts. These accounts have no balance requirements or monthly service fees.
  • APY: Some checking accounts pay interest and others don’t. You won’t get rich on interest from a checking account, but you can pad your wallet a bit. Some of the highest-yielding checking accounts pay 1 percent APY or higher. However, make sure you read the fine print before signing up to see what it takes to qualify for the product’s APY.
  • Mobile features:  While most banks will let you deposit checks through their mobile app, other digital features can make a checking account standout from the competition. Nowadays, some digital banking experiences will alert you if you’re in danger of overdrafting or tell you how much you can afford to safely save, for instance. Check the app reviews to see how other customers regard the digital experience. [READ: Best banks and credit unions for mobile banking]
  • Automated deposits and withdrawals: You can enroll in direct deposit so that your employer automatically sends your paycheck to your checking account.You can also set up automatic payments to billers through your checking account.
  • Debit cards: Expect the checking account to come with a debit card that will let you spend your money in your account at all sorts of places online and in-person.
  • Overdraft protection: This feature lets you spend more than what is in your checking account, but you will pay a fee. The most common overdraft fee is $33.36, per Bankrate’s 2019 Checking Account and ATM Fee Study. It’s easy to get charged multiple overdraft fees, too.
  • ATMs: Seeking out an account that lets you access your money at ATMs for free is another perk to consider. If you only bank locally, it won’t matter how many ATMs your institution offers. But if you travel a lot, find a bank that offers a large ATM network. Online banks tend to offer tens of thousands of ATMs across the country, for example.
  • Cutting-edge features: Competition for your business is fierce and firms are attempting to woo you with newer features designed to help you manage your daily cash flow. For example, challenger banks, like Chime and Current, will let some of their direct deposit customers access their paycheck two days early. You can also find accounts that let you overdraw your checking account by a small amount for free.

Has your bank closed your checking account previously?

If you’ve been blacklisted by ChexSystems, a service that tracks people whose checking accounts were involuntarily closed, a so-called second-chance account might make sense for you.

Second-chance accounts can help you access the banking system, though you will probably have to pay higher-than-normal fees or maintain a minimum balance.

Second-chance checking accounts can help you rebuild your savings in a high-yield account or sign up for online bill pay. Many banks and credit unions even bump you up to a regular checking account after one year of good behavior.

Still, consumers can get socked with high monthly fees and strict requirements, such as direct deposit or high minimum balances. Alternatively, consider using a prepaid card instead of a checking account.

Consider checking account bonuses

Banks and credit unions offer generous sign-up bonuses for new customers — especially in an environment where competition for your business is fierce.

For example, Fifth Third Bank is offering $500 to new customers who meet certain requirements through Oct. 31. Wells Fargo is also offering a $400 bonus to new checking account customers who also set up a qualifying recurring direct deposit through Dec. 31.

Banks also court you by offering additional perks, like covering a customer’s Amazon Prime membership or providing cell phone insurance.

Bottom line

You have a wide range of checking account options available to meet your needs and wishes. Shop around to find the best account for you. If you don’t feel like ditching your bank account but still want added benefits, consider plugging your checking account into a digital service that offers them.

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