Checking Accounts

The basics

by Shannon Beineke

For those who would like to keep their spending money secure, opening a bank account is the perfect solution. The choices, however, can be quite overwhelming! One will have to decide whether monthly fees will be worth the trouble. Strictly online banking might be the perfect for some, but not feel safe to others. So which type of account is best? The one that fits just right will, of course, depend on the individual.

Online checking accounts are one of the most convenient kinds. These are widely known as "express accounts". Anyone with internet access and who can maintain the minimum balance may open one. Some online checking accounts are not only free, but they also build interest! Though internet, phone, and ATM services may be free, teller visits are usually not. Online checking is ideal for computer-savvy people who don't want to waste time standing in line.

Free checking accounts will differ depending on the bank. Most establishments offer their own combination of free ATM withdrawals, free checks, free online banking, and free bill pay. Though this is one of the most popular account types, it has its downsides. Most free checking accounts will not earn a penny of interest. Some come with strict limitations (e.g. on daily withdrawal amounts). Only maintenance and activity fees absolutely cannot be charged to free checking accounts. Still, they are great for those who dislike fees and who wouldn't care to build interest.

Checking accounts with a low monthly fee usually require a modest minimum balance, but these can be interest-bearing, and sometimes even reward spending with points or airline miles. The fees get higher for bad credit checking accounts, which are sometimes referred to as second chance checking accounts. They come with restrictions, such as the amount of bad checks one may write, until good banking habits are proven. Bad credit checking accounts are perfect for anyone who needs to reestablish credit.

Required credit checks can be intimidating or embarrassing, but checking accounts with no credit checks often come with even stricter regulations. This type of account should be avoided if possible. Still, it might be the only option due to credit history. These account holders should be prepared for a plethora of fees, high credit card interest rates, and refusal of banking basics like checkbooks. Since the particulars vary depending on the financial institution, it would be wise to shop around.

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