Finding The Right Checking Account For You

Picking a checking account seems like an easy process. With so many financial institutions pleading for your attention there have never been so many options. From your local neighborhood credit union, big banks, small banks, and even completely online banks, the choice is yours, and there is almost no wrong decision. With all these choices, however, picking the right checking account for you and your family’s individual needs can be overwhelming and confusing.  With only slight differences between the institutions and so many types of accounts available to us now, there are a few things to consider in order to choose the right account for you. The key to choosing a checking account for you is to narrow your options by financial institution and then by the services you need or will need in the future.  

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Start your journey by narrowing down your options. Review your prospective banks and credit unions reputations. Consider how these institutions treat their customers through different review platforms like the Better Business Bureau, their geographic footprint, and the ease of access to your money such as through free world wide ATM’s. Once you have a few institutions in mind, review the services that they provide, keeping in mind your financial goals and priorities, as well as the institutions’ discounts, incentives, and fees.  

It will be useful to know a little more about discounts and incentives. Many financial institutions offer discounts to customers when their business also banks with them or when they set up direct deposit, maintain higher balances, or have a combination of products and services, which may include direct deposit, multiple accounts, investments, and/or loans. Sometimes incentives and discounts include fee waivers or favorable interest rates.

It is also important to understand the fees that could be accessed to your checking account and how much each of these fees may cost you. Some of the most common fees that are accessed to checking accounts include:

Overdraft fees: These fees are charged when a payment or withdrawal exceeds the available balance in your account and when the payment or withdrawal is covered by the bank despite the lack of funds.

Monthly service fees: These fees are charged when you do not meet one or more of the minimum requirements outlined in your contract. These can include, but are in no way limited to, a required direct deposit, a stated number of debit card transactions, or a select number of products or services required with the financial institution.  

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Minimum balance requirement fees: These fees may be assessed every time the account drops below a certain dollar amount or when the average monthly balance falls below a specified amount.

These are not the only fees out there but only a few of the most common fees associated with checking accounts. It is important to know what fees could be charged prior to entering into a contract with a financial institution and how to avoid them.

Your checking account should be used only to hold the money you are using for paying bills and making your daily transactions. Any excess money that you have sitting in your checking account is money that is not working for you. You may qualify for additional discounts on your checking account by also opening a savings account adding to your overall average balances. At the same time, putting the rest of the money that you’re not planning on spending into a savings or money market account will provide you with instant access to your funds while also allowing your money to grow. Even with interest rates at an all-time low, your money can grow more if you separate it from your everyday checking funds. Plus, as you see your savings grow you may be more inclined to rethink  and forego unnecessary purchases.

It’s important to know all that you can about your account when you open it. It is also important to pay close attention to the emails and letters that you may receive about changes to your account. Just because you fully understood what you signed up for doesn’t mean that the financial institution won’t change the terms and conditions at some time in the future.

Photo by Green Chameleon on Unsplash

When it comes to our finances, each of us is unique. Take the time to educate yourself and find the best account for meeting your needs, and talk with your financial representative to help you find the best fit.

Tell me your stories and your thoughts by leaving a comment below. Let’s have a better money conversation.

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