Different Kinds of Checking Accounts
January 19, 2009
Choosing the right kind of checking account for your needs can be daunting because there are quite a few options. Here is a breakdown of the different types of checking accounts available.
Checking Accounts: Plenty of Choices
Once upon a time, there were very few different types of checking accounts. But now, options have proliferated.
Here's a list that may help you choose from among the herd:
Online Checking Accounts
Online checking accounts, operated exclusively online, frequently include electronic bill pay and direct deposit. Best of all, they're usually free. But ask for a quick demo of a bank's online checking account system before committing. Some are easier to use than others. Likewise, ask questions about the bank's online security systems and whether or not you can talk to a real person if you need to.
Second Chance Checking Accounts
Second chance checking accounts are for people who have had banking issues in the past--for instance, if you've been put into Chex Systems for bouncing too many checks. You'll have to pay higher fees than gold star customers, but still, you're welcome back.
Business Checking Accounts
Because banks anticipate selling business owners other products, such as loans, business checking accounts often come with great deals--some are even free. . Business checking accounts also have built-in features to track and record business expenses. Plus, with a dedicated account, you can and should keep your business and personal expenses separate.
Interest Bearing Checking Accounts
Interest bearing checking accounts are a good choice for people who maintain higher balances, because with this type of account, the higher your balance, the higher the interest rate that the bank pays you. However, read the fine print on these: if you don't maintain that high balance, you may be charged extra monthly fees.
Express Checking Accounts
If you don't go inside the bank anyway, an express checking account can provide you with ATM access, unlimited check writing, and personalized checks for an excellent monthly fee: zero dollars. Young people love these accounts. But if you do need to see a teller, you may have to pay a per visit fee.
Free Checking Accounts
Free checking accounts are popular with all types of people and are a big customer acquisition tool for major banks. On the upside, they're free. On the downside, they don't pay much interest, if any. Often, the basic account is free, with an initial batch of checks. But if you want to be able to access your checking account online, or attach a debit card to the account, or you write more than ten checks per month, you may be charged a fee.
Lifeline Checking Accounts
Lifeline checking accounts are checking accounts for lower income people who might otherwise be left out of the banking system. Usually, lifeline checking accounts are characterized by low monthly fees and a limited number of checks per month.
Senior Checking Accounts
Banks like having senior citizens as customers, so they offer senior checking accounts with various bonuses or specials to attract the older crowd. These programs vary by bank, and may include such benefits as free checking, free traveler's checks, or even discounts on prescription drugs.
Joint Checking Accounts
Every husband and wife needs a joint checking account, but you don't need to be husband and wife to get one. Both people just have to sign on the dotted line, and agree to be mutually responsible for the account.
Money Market Checking Accounts
Money market checking accounts boast higher interest than most checking accounts, but may require a minimum balance and allow only a limited number of checking account transactions per month.
Very few people walk around with wads of cash that can be lost or stolen. Checking accounts are more than just convenient--they're necessary for conducting everyday business. And with the wide selection available today, there's no reason for anyone not to have one.
