A checking account is arguably the best financial tool for your day-to-day use and spending, but do you know how to find the best bank for checking account? It’s not actually that easy. In our financial guide, we will show you where to look for best banks and where to find the best deals on new checking account opening.
But let’s start with the basics.
What is a checking account?
A checking account, sometimes also called transactional account or demand account, is a deposit account you hold at a bank which allows you deposit and withdraw your money.
Checking accounts are in fact very liquid. You can access them via ATMs, checks, electronic debits and with many other ways.
A checking account is one of the simplest tools in the financial market, but you should learn how to use it. A checking account is actually not that great for investment because generally, even the best banks offer low-interest rates compared to a savings account, CD, and other financial instruments.
In order to work with your checking account efficiently, you should only use it for money that you want easy access to for your mortgage, monthly bills, and daily purchases. Savings are best to keep in an account that will offer a better interest rate.
How to find the best bank for checking accounts
Finding the best banks for checking account or simply a checking account that is adequate isn’t always easy. Long ago, banks mastered the basics of correctly recording our deposits and sending bills that were easy to understand. As a result, the majority of people are not very choosy when they select an account. It is a pretty common mistake to open a checking account with the bank that you already deal with.
Another common mistake when looking for the best bank to open checking account with is to choose a bank that is close to your home or business. That convenience can cost you aplenty. Keep in mind that banks that have lots of branches tend to have higher rent and operating costs, so they charge their customers more and have more fees. They offer fewer deals and your accounts are paid lower interest rates.
When choosing the best bank to open a primary checking account with, you should consider a few things:
- The best bank will be the bank that will pay you the highest interest rate.
- It will charge the lowest fees.
- Usually, the best bank for checking account will have the fewest branches or even no branches at all, instead referring their customers to their website to manage the checking accounts.
Now that we got some ideas on how to find the best banks to open a checking account with, let’s look at how we can take advantage of them and get the best deal on a new account.
How to get the best deal on checking accounts
Figuring out which checking account offers the best interest rate is pretty straightforward: the higher the interest rate being paid, the better.
Internet banks tend to offer some of the best rates, followed by the credit unions. However, credit unions’ basic checking accounts are not generally as good as the ones online banks offer. Credit unions shine at mortgages, car loans, and certificates of deposit.
Evaluate the fees for your checking account
Here are a few factors to consider when you evaluate your next checking account fees:
1. Overdraft fees
Bounced checks are pretty much a dinosaur in the banking industry, a thing of a bygone era. Nowadays banks recognize the huge amount of money they make by allowing you to overdraw your account and then charging you a fee of $30 or even more, and/or interest on the amount you are overdrawn.
Those are not exactly the best banks to open checking account with, right?
2. Minimum account fees
Most brick-and-mortar banks charge a monthly fee if your balance falls below a specific amount. The bank makes more money from high-balance accounts. Trustworthy internet banks do not charge fees, but you should always check to be sure.
3. ATM fees
Remember our statement that the best bank for checking account will not have a lot of branches? Now, keep in mind that a bank that doesn’t have branches will have no ATMs, so you need to be sure that you know what fees you will have to pay when you use the ATM of another bank.
This can be as much as $3. However, quality internet banks will reimburse the fees charged by other banks for using their ATMs.
If you are researching best internet banks for checking account, give their customer service a call and ask them lots of questions. Whether you choose a traditional bank or internet-based bank, ask about all the fees associated with the checking account you are looking to open.
We hope this article has shed some light on how to find the best bank for checking account and made your life a little bit easier. Tell us your thoughts in the comments! In the meantime, read more from our financial advice directory and find out how to choose the best credit card and learn why there is an expiration date on your debit card.
Still looking for more? Feel free to check out our comprehensive personal finance guide to learn more about managing your budget and staying financially healthy.