How to Pick the Right Checking Account

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Checking accounts are among the simplest financial products that banks offer. Running such an account is important if you want to track your monthly expenses. You can also use a checking account as an investment tool, but the earnings are minimal.

Banks offer lower interest rates on checking accounts than on other products such as savings accounts. Most people open all of their accounts with the same bank. Such an approach may be costly because the fees charged vary across financial products. Here is a guide on how to choose the right checking account.


Banks charge different types of fees on checking accounts, including ATM withdrawal and overdraft fees. Since internet banks do not have ATM machines, they rely on other banks to serve their customers. Some will reimburse the ATM withdrawal fees that their clients incur. Consider the reimbursement policy and read all the terms carefully. The banks may limit the policy to a specific amount or a certain number of withdrawals.

Banks allow you to overdraw on your account, but charge a fee for every overdraft. The fee may be a specific amount or a percentage of the overdraft amount. You may not overdraw your account at the start, but you may need this feature in the future. Hence, you need to consider the cost of an overdraft before you open an account.

You also need to check the set amount of ATM withdrawals you can make each month, irrespective of the bank. Some will ask for very high fees when using other ATMs, and there might not be many ATMs from your institution around your area, so be on the lookout for that. Luckily, institutes such as BB&T offer special offers on some checking accounts, for example, on their student account they charge no fees for four non-BB&T ATM transactions per statement cycle.

Interest Rate

The general rule when choosing a financial product is to pick one with the highest interest rates. Do not sign up for an account with your local bank before comparing the rates that other banks offer. Your search is not limited to brick and mortar banks. Internet banks offer better rates to their clients because they incur minimal monthly expenses.

Traditional banks with many branches incur high operational costs, including rent and labor costs. Hence, they offer lower interest rates compared to internet banks. The interest rates will also vary across internet banks. Contact different institutions and ask about their interest rates or check their websites for more information.

Minimal Balance

Some banks will require you to maintain a specific amount of money in your account. You will incur a fee if your account balance falls below this amount. If you sign up for online banking services, you may not incur this cost. Most internet banks do not charge any minimum balance fees, but brick and mortar banks sometimes do. Ask about such fees and choose an account with the lowest fees. In addition, ask about the process of closing an account, including any fees charged.


The considerations to make when choosing an account are not limited to those outlined above. Choosing the right banking account can make the world of difference, especially if you make a lot of transactions each month. Hence, you need to consider the pros and cons of each account before making the final decision.

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Written by themoneyshed

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