4 Factors to Consider When Choosing a Checking Account

Wondering how to choose a checking account? Start by asking yourself these four questions.

Not all checking accounts are created equal. Before opening a new checking account, it pays to do a bit of research to understand the various benefits, requirements, and options available to you.

Ask yourself these four questions to help ensure you’re choosing the right checking account for your goals and needs.

1. What options do different checking accounts offer?

Chances are, your bank offers a variety of checking accounts to choose from. Some may offer benefits that are aligned with your financial goals and spending habits, while others may have requirements that make them less appropriate for your usages.

Research all of your options, then compare checking accounts based on your financial situation and spending habits. For example, if you plan to maintain a high balance, you might consider an account that offers the potential to earn interest. Or, if automating payments and banking online is a convenience you want, look for accounts that offers free online banking.

When you open a checking account, you should also consider your need for checks and checking services. While person-to-person payment and online bill pay are great resources, some businesses or individuals may prefer checks. If you expect to write a lot of checks rather than use your debit card, you might consider a personal checking account that includes unlimited check writing or online check ordering.

2. Is a minimum balance required to avoid a monthly fee?

One of the most important questions to ask when choosing a new checking account is whether you’ll need to maintain a minimum balance or take any other actions to avoid a monthly fee. If you open a checking account with a minimum balance requirement, make sure you know not only the minimum requirement but also the fee amount and how it’s incurred. Then, check your account balance often to ensure you’re meeting the minimum requirement.

Be sure to ask your bank if there are any other potential monthly fees and determine how to avoid them. For example, setting up direct deposit or using your debit card for purchases may help you avoid dropping below a minimum balance.

3. Do I want overdraft protection?

Always try to avoid spending more money than you have available in your account. Overdrafts can incur fees and result in bounced checks. If you want extra protection in case of an overdraft, check if you are able to sign up for overdraft protection.

With most overdraft protection services, if you write a check or make a payment when your checking account has insufficient available funds, your bank will transfer money from a linked savings account, credit card, or line of credit into your checking account to cover the transaction. Overdraft protection might come with a fee when it’s used, but it’s typically less than a normal overdraft fee.

4. Have I read the checking account’s fine print?

The fine print in your account contract — sometimes called a deposit agreement — can include important information about benefits, fees, and obligations associated with your account. Even if a bank representative has explained the account details to you, it’s important to read through them yourself. That way, you can ask any additional questions before signing the contract and opening the account.

With the multitude of checking account options available to you, the right selection will depend on your financial situation and the functions you need from your new account.

Looking for more guidance? Answer a few questions to find a personal checking account that fits your lifestyle and spending habits.