Takeaways
- Checking accounts are bank accounts that let you save, write checks, and transfer funds.
- Checking accounts can range in offerings from high yield to second chance accounts.
- Online checking accounts offer higher APYs and easy-to-use mobile apps.
- Checking accounts are the central node in an automated financial ecosystem.
- Checking accounts differ in their account fees, monthly minimum balances, allowable transfers, and ATM access.
What Is a Checking Account?
Checking accounts are a type of bank account that allows you to deposit and withdraw money for everyday financial transactions. It is designed to provide quick and easy access to your cash, whether you are paying bills, shopping online, or withdrawing cash from an ATM.
Unlike high-yield savings accounts, which are meant for longer-term deposits and often limit withdrawals, checking accounts are intended for more frequent use. You can access your checking account by writing checks, swiping debit cards, wiring funds, making online transfers, or mobile apps.
Most people open a checking account to handle their day-to-day money needs. With features such as direct deposit, bill pay, and automatic transfers, a checking account can serve as the financial hub for automating your finances.
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6 Types of Checking Accounts
Not all checking accounts are the same. Below are six common types of checking accounts and how they differ:
1. Regular Checking Account
A regular checking account is the most basic and commonly used type. It usually allows for unlimited deposits and withdrawals, offers a debit card, and often includes access to online banking.
While some regular checking accounts have monthly fees, these fees are typically waived if you meet certain conditions, such as maintaining a minimum account balance or setting up direct deposit.[1]
- Best For: First checking accounts and moderate use
>> How much interest do you earn? Learn about Annual Percentage Yield
2. Premium Checking Account
Premium checking accounts are designed for customers who maintain higher balances and want extra benefits or perks. These benefits may include free checks, ATM fee reimbursements, higher daily withdrawal limits, and dedicated customer service.
In exchange for these perks, premium accounts require higher minimum balances and may charge steeper monthly fees if the balance drops below the threshold.
- Best For: High account balances and above-average account access
>> Get started today and Open a Checking Account
3. High-Interest Checking Account
High-interest checking accounts combine the features of a standard checking account with the opportunity to earn interest on your balance.
However, to qualify for the higher interest rate, you may need to meet specific criteria, such as making a certain number of monthly debit card purchases or enrolling in electronic statements.[2] You should sign up for one of these accounts if you want to earn interest income on your cash balance.
- Best For: High account balances and focusing on interest income
Read More: What Is Compound Interest?
4. Free Checking Account
A free checking account typically does not have monthly maintenance fees. Although overdrafts or out-of-network ATMs may still be charged, the core services are offered at no cost.
Remember that some “free” accounts may have hidden charges, so it's essential to read the fine print carefully and understand the account’s fee structure.
- Best For: Regular account balances and normal account services
5. Low-Minimum Balance Checking Account
Low-minimum checking accounts are perfect for those just starting out financially or who cannot afford to keep a large balance in their accounts. They are designed to be more accessible, often requiring just a small initial deposit to open and minimal funds to keep the account active.
If you are starting your career or working on building up your savings, this could be a great fit. You can make small deposits and drip your cash into your account. Once you build up your funds or boost your income, consider converting this account to one with better perks.
- Best For: Low or medium account balances and regular account services
>> Feel behind the curve? Try these 5 Smart Savings Habits Now
6. Second Chance Checking Account
Second-chance checking accounts are designed for account holders who have had credit problems in the past or trouble with checking accounts, such as unpaid overdrafts or account closures.
These accounts offer an opportunity to rebuild your banking history and reestablish good financial habits.
- Best For: Rebuilding banking and credit history and reduced account services
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Choose the Best Checking Account for You
Selecting the proper checking account depends on your financial goals and banking habits. Here are a few key factors to consider before opening an account:
- Monthly Balance Requirements: A premium or high-interest account is the most advantageous if you keep a large balance in your checking account. On the other hand, if your balance fluctuates or is usually low (maybe you are focusing on paying off debt), a free or low-minimum balance account could help you avoid unnecessary fees.
- Interest Rate: For those who can meet the monthly requirements, a high-interest checking account offers the added bonus of earning interest on your money. While the rate may not match that of a savings account, it is still a way to grow your funds slightly while retaining access to your money. (Our picks for Best High-Yield Checking Account).
- Account Fees: Pay close attention to the account’s fee structure. Monthly maintenance fees, overdraft fees, ATM charges, and penalties for falling below a minimum balance can add up quickly. Opt for an account with a transparent fee schedule and features that match your banking behavior.
- Checking Account Access: Consider how you will use the account. If you rely heavily on ATM access, look for banks with an extensive ATM network or those that reimburse out-of-network fees. If you prefer digital banking, choose a provider with a robust online and mobile experience.
Why You Should Use a Checking Account
Using a checking account as part of your financial toolkit provides a safe and reliable place to stash your cash and gives you immediate access to your funds when needed.
A checking account also lets you track your spending, which is crucial for budgeting and financial planning. Many banks provide tools that automatically categorize your expenses and provide prompts or alerts for upcoming bills or low-balance reminders. Additionally, you will need a checking account to set up direct deposit for your paychecks, apply for loans, and even pay your taxes.
Using a checking account helps you establish a formal relationship with a bank or credit union, making it easier for you to qualify for other financial products in the future, like credit cards, personal loans, or mortgages.
Smart Summary
A checking account is a practical and essential financial savings account for managing your daily money needs. When choosing a checking account, you need to evaluate the fees, balance requirements, access options, and annual percentage rate. The best account for you is the one that fits your spending patterns and money needs and enables you to meet your money goals.
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(1) Consumer Financial Protection Bureau. Managing your checking account. Last Accessed April 13, 2025.
(2) Consumer Financial Protection Bureau. Should I get a checking account that pays interest? Last Accessed April 13, 2025.
