You’re retiring to a new town and need a bank, or you just graduated from college and must have a checking account. Either way, it’s important to find one that meets your needs.
1) No Monthly Fees
Paying monthly fees is taking money out of your pocket that could go toward your savings or checking account. Fees add up quickly.The average monthly fee in the United States ranges between $5 and $15. Premium checking accounts can go as high as $25 per month.
2) No Overdraft Fees
Overdrafts occur when you make a transaction, bringing your account below zero—a negative balance. Many banks charge a fee for this.Although the fee could run between $10 and $40, generally, overdraft fees are $35.
3) No Low Minimum-Balance Requirement
Some banks will charge a fee if your account falls below a specific balance. Or if you keep your account above a certain balance, you won’t have a monthly fee.
4) Checking Account That Refunds ATM Fees
You can rack up the ATM fees, especially if you’re traveling. In 2023, the average ATM fee was $4.73. It broke down to a $3.15 surcharge for using an out-of-network ATM.There was also a $1.58 charge from the user’s bank for using an out-of-network ATM.
5) Digital Products Offered
Many banks offer digital products to make banking easier.You’ll want to ensure you have a mobile app that can check balances and make check deposits. You'll also want to ensure the bank offers peer-to-peer payments like Zelle.
Other options that are now in vogue include early direct deposit. This is when you receive your direct deposit paycheck up to two days earlier than would usually happen.
Many banks have apps that let you know how much you spend on services like Uber rides. You'll then learn how to budget. These apps also remind you when a bill is due.
6) High-Yield Checking Account
First, ensure the bank you choose provides interest on checking accounts. If you tend to carry a high balance, this could be important.According to the national Federal Deposit Insurance Corp. (FDIC), as of May 20, 2024, the average checking account interest rate was 0.08 percent. This means $7 in earnings for a $10,000 deposit that wasn’t touched for a year.
Most online banks offer high-yield checking and savings accounts. For example, online bank SoFi offers 0.50 percent on checking accounts.
But there are small banks and credit unions that will also offer high-yield checking accounts.
7) Sign-Up Bonuses
This is a tricky one; yes, sign-up bonuses are important, but there could be hoops to jump through to meet the requirements.Sign-up bonuses can be anywhere from $200 to $500. Some of the banks that offer sign-up bonuses charge a large monthly fee. That can eat away at your signing bonus benefit. Also, keep in mind that a signing bonus is taxable. So that can also diminish its impact.
8) FDIC Insurance Supplement
Banks don’t fail often, but remember the Great Recession. It doesn’t hurt to have a safety net.The Federal Deposit Insurance Corp. and the National Credit Union Administration are key in providing that safety net. However, they only insure up to $250,000 for each financial institution per ownership category and per depositor.
If the same bank holds your certificates of deposit (CDs) and savings account and they both have large balances, opening a well-funded checking account could put you over the limit.
Do the Research
A checking account is a critical financial tool for daily transactions. Take the time to find one that suits your needs and lifestyle. Do the research.Besides the features, look at the bank’s reputation and what personal service you’ll receive. Put in the effort, and you'll find an account that’s a good fit.
