Are looking to open your first checking account? Have you decided it’s time to switch your checking account from a traditional bank to an entirely online one? No matter the reason, don’t make the decision blindly. Ask yourself these three questions:
1. What kinds of checking accounts are out there?
When you first dive deep into your checking account research, you may find there’s way more options than you initially thought. How do you know which one is the right fit? It all depends on your financial goals and (I’m going to say it) spending habits.
If your passion to be thrifty has helped you maintain a consistently high account balance, an account that earns interest may help put a little extra cash in your pocket. On the other hand, if you plan on using your debit card for larger transactions like rent or car payments and don’t want to worry about maintaining a minimum balance, a non-interest checking account could be an even better fit. Furthermore, if you and your significant other have decided it’s time to make the next big step in your relationship, you’ll want to search for a joint checking account.
2. Are there any fees to be aware of?
No matter what account you decide best fits your money habits, odds are there are going to be some fees associated with it. While investigating different checking accounts, here are six common fees you’ll want to be mindful of:
- Minimum balance fees: some accounts – especially interest checking – have a required minimum balance. If you often let your account balance get below a certain amount, you’ll be charged for not meeting the required balance.
- Overdraft fees: say you’re out shopping and find the perfect 4k, smart TV for $600. You charge the purchase to your debit card, forgetting that you have other pending transactions that haven’t gone through yet. Consequently, your account will be overdrawn and you’ll receive an overdraft fee as a result.
If you don’t want your family to call you “$5 dollar fee” for getting too many overdraft fees, make sure you look for a bank that offers either offers an overdraft protection – so they can sweep (automatically transfer) money from your savings to cover the purchase – or a checking line of credit which acts as a loan attached to your checking account. - Inactivity fees: if you’re not much of a spender or plan on letting your checking account sit for periods of times without any incoming or outgoing transactions, you could be charged extra for inactivity.
- Maintenance fees: often checking accounts have monthly maintenance fees to keep your account open or if you don’t meet certain criteria, like the minimum balance fee.
- Foreign transaction fees: whether you have the travel bug or go out of the country for purely business reasons, checking accounts may charge you extra for transactions that involve foreign currency. This may occur in a fixed amount or an interest charge on your purchases, like a shopping spree in Milan or the cozy, Finnish cabin you stayed at for your honeymoon.
- ATM fees: you may be charged a fee if you withdraw, deposit or simply inquire about your account balance in an out-of-network ATM machine. If you thought, “Ugh, really?” To make your life a little easier, many banks (for example, ours) offer monthly rebates to offset these charges.
Let’s face it, extra fees are not fun. We get it. Determine what fees will be the most detrimental to your financial well being. For example, if you often let your account balance run low, make sure your future checking account has free account sweep services.
Although some of these fees are harder to avoid than others, it is possible to find an account that best fits your spending habits. You can find all fees relating to your potential checking account in your bank’s Truth In Savings Disclosures.
3. What type of mobile and online banking options do they have?
Who doesn’t love the convenience of anytime, anywhere online banking (especially when a pandemic hits)? Although most banks are expected to have some type of digital banking presence, mobile and online tools can vary. So after you’ve narrowed your checking account search, compare each bank’s technology based on functionality and user-friendliness.
Are you looking not only to make mobile deposits, but have budgeting and saving management options available? Maybe you don’t really need all the “fancy stuff”, and instead, you simply want to make regular deposits and account transfers from the comfort of your home. In either case, it’s about finding the online account with the right features for you.
Also, don’t be afraid to see what other customers have to say. Customer reviews are a great way to understand what your future user experience may be like.
Once you’ve done your research and asked yourself these three questions, you’re that much closer to finding the checking account that’s right for you. With a variety of checking account options and a team of dedicated banking experts, you may not even have to look further than our checking accounts here at First Internet Bank!
