The Different Types of Checking Accounts
The most common relationship people have with their banks is through their checking account. If you ask 10 people what their banks do for them, you’d probably get 7 to 9 that responded by saying it is where their checking account is at. In this article we’ll take a look at the different types of checking accounts, how you can determine which one is right for you and how you can protect yourself from unnecessary fees and account problems.
Checking accounts are one of the ways banks advertise to consumers in order to bring you on as a customer. Some of incentives that are offered for checking accounts include free deposits of $100, gift cards, and other merchandise. However, you shouldn’t let these types of promotions and incentives distract you from getting the best possible account for your needs.
When looking for checking account you’re going to find that there many different types of accounts, and not all are suitable for everyone. If you don’t choose the right one for your needs and your budget, you could end up paying excessive monthly fees for features that you don’t need.
Some of most common and popular checking accounts that you can find at most banks include:
Basic checking accounts — if you use your checking account to pay bills and use it as a form of payment for expenses such as groceries and other daily purchases, basic checking is probably going to be enough for you. It is important to note though, that basic accounts sometimes require you to make direct deposits from your paycheck or maintain a minimum monthly balance to avoid fees.
Free checking accounts — this is by far the most popular checking account and is probably the best choice for most people. By free it simply means that there are no monthly service charges or other fees if you have a low balance or you do not use the account much. These accounts allow you to write as many checks as you need and to not worry about minimums. One thing that does apply to free checking accounts are insufficient funds fees. These occur when you bounce checks and do not have enough money in your account to cover your check amount.
Interest-bearing checking accounts — these accounts must always require minimum balance and initial deposit minimums just to get started. You’ll also like we have to maintain a higher balance minimum each month. One of the bonuses of this type of account though is that it pays interest. The rates are not usually high but it’s always good to be making money on money that you have sitting in accounts.
Joint checking accounts — these accounts are exactly what they sound like, you have two more people — usually a husband-and-wife, that have ownership and access to the account. With these accounts it can be a challenge to keep track of your activity and balance your statement.
Express checking accounts — if you use your ATM frequently or bank mostly on a computer, an express checking account is probably a good choice for you. These accounts have low monthly minimums and since you do most of your checking online, they have very low fees. You have to be careful though, sometimes they do charge you for doing transactions in person at the bank.
Money market checking accounts — these accounts are unique in that they combine checking with a savings account or other interest-bearing investment opportunities. This allows you to make more from your account than you would from other types of checking accounts. The initial deposit minimums are usually high and are usually one thousand dollars and up. These accounts are usually best for people who maintain high balances.
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