Before you choose a checking account, you should know that there are several different types of accounts out there. The type of account you choose has an impact on the amount you pay for the checking account and the amount of interest you earn on your checking account balance, if you earn any interest at all.
Basic/Free Checking
Basic checking accounts don’t have any frills of fringe benefits. These accounts let you do the basic transactions: deposit money, write checks, and use a debit/check card. Many basic checking accounts are free, but some banks charge a small monthly fee for these basic checking accounts. You may be able to have the fee waived by maintaining a certain minimum balance or by depositing a certain amount of money each month.
Premier Checking
Banks may offer several different tiers of premier checking accounts. These accounts have features beyond the basic and free checking accounts. For example, premier checking accounts often pay interest in the balance. They may offer free checks, free cashiers checks, and discounted or free safe deposit boxes. You may be given a lower interest rate on loan products from the same bank or a higher interest rate on CDs. Premier checking accounts typically have a monthly or annual fee that can be waived if you deposit a certain amount in your account each month or if you maintain a certain minimum balance.
Joint Checking
A joint checking account is an account that shared by at least two people. With a joint checking account, both people have access to the money in the account. The features of a joint checking account might mimic those of either a basic or premier checking account so it’s a good idea to read the disclosure and fees associated with the account.
Student Checking
Checking accounts for students are usually free and often combine some of the features of both basic and premier checking accounts. For example, the student may get the added benefit of free checks, no fees, or free cashiers checks. The student may also enjoy a lower interest rate on credit cards or loans from the same bank.
Second Chance Checking
Not many banks offer second chance checking accounts – accounts for people who’ve written bad checks and have been put into Chex Systems. These accounts may charge higher monthly fees or have limits on the number of transactions you can make each month. You’ll be in Chex Systems for 5 years, after that you’ll be bale to get a regular checking account.
It’s a good thing banks have several different types of checking accounts and savings accounts. That way, you can sign up for an account that meets your needs.