What Checking Account Features Do I Need?
Today's checking accounts have more features than ever before. There's a lot to consider when opening a new account.A no-fee checking account is essential for some, and overdraft protection is a must-have for others. The best checking accounts should make it easy to access your money, be flexible in how you can spend it, and be NUCA-insured or FDIC-insured.
Here, we've done the research for you and listed the best features to look for when opening a new checking account.
ATM Network and Branch Presence
Having an ATM near work, home, or where ever one travels is important for convenience. A bank’s branch presence and number of ATMs will vary. Check with a financial representative to learn the exact number and coverage across the country.
Many credit unions are part of the Co-op Shared Branch network, which means you're welcome at over 5,000 shared credit unions throughout the country. You'll also have access to over 30,000 surcharge-free ATMs across the United States. Locate a credit union near you and discover a spectrum of services.
No-Fee Checking Account
No-fee accounts offer convenience without cost. In many cases, a no-fee checking account has requirements. Some require members to set up direct deposits or maintain a balance to avoid fees. Visit your financial institution and find ways to save through a no-fee checking account.
Low Minimum Balance
Students, retirees, or someone whose income fluctuates may benefit by opening a low minimum balance account. This type of account can require as little as five dollars to keep open. If you fall below the minimum, you'll be charged a fee, and fees vary.
There are different low minimum balance accounts. Knowing the difference will help you avoid fees.
- Minimum daily balance
- Minimum monthly balance
- Average minimum balance
Interest Bearing Checking
Opening a high-interest checking account is a good idea if earning interest is essential. This checking account earns interest based on the average monthly balance. Since it makes interest, these accounts usually have large minimum balance requirements.
- Interest is subject to taxation.
- Some high-interest accounts are available only online.
- Potential fees include overdraft, monthly maintenance, and foreign-ATM fees.
Overdraft fees can be expensive and drain your account quickly. Overdraft protection or bounce protection provides overdraft coverage for bills. If you don't have enough funds to cover an expense, overdraft protection can cover the amount. Your financial institution will charge a fee every time this feature is needed.
Direct deposits are funds deposited into your account electronically. Rather than using a paper check and depositing through a teller or ATM, funds are transferred through a system called ACH or Automated Clearing House. Direct deposit offers members security and time-saving benefits, including:
- No lost or stolen checks
- Quick access to funds
- No waiting at the bank or ATM
Many employers can directly deposit an employee's percentage of their pay or a flat number into multiple accounts. For example, 50% can be deposited into a checking account and the remaining into a savings account.
To set up a direct deposit, you'll need the following:
- Routing number
- Account number
- Voided check
- Bank address
Online banking allows members to access their accounts through the internet. Members must create an account and profile, and all tasks are done through a laptop or desktop computer. Online banking differs from a mobile banking app, where all financial transactions are done through a smartphone. Online banking allows members to do various financial tasks and offers a great deal of convenience.
- View accounts any time, day or night
- Print or view a back history of statements
- Apply for loans or credit cards
- Transfer money to different accounts
Personal check writing isn’t what it used to be. Members prefer the convenience and ease of using a debit card or app payment options such as Apple Pay or PayPal. However, many credit unions continue to offer free checks with accounts. Contact your local credit union to see if this feature is available.
Further Resources on the Features of Checking Accounts
Here are some additional resources that explain the features of checking accounts:
- Consumer Financial Protection Bureau: The Consumer Financial Protection Bureau provides a comprehensive guide to checking accounts, including information on fees, overdraft protection, and account features.
- Bankrate: Bankrate provides a list of additional checking account features.
- Investopedia: Investopedia provides a detailed explanation of checking accounts, including their features, fees, and benefits.
Credit Unions Offer Checking Accounts with Great Features
Credit union checking accounts generally have lower fees and higher interest rates than traditional bank checking accounts. Many credit unions also offer free checking accounts, which can be a great option for those who want to avoid monthly maintenance fees. Additionally, credit union checking accounts are typically insured by the National Credit Union Administration (NCUA).