Checking accounts allow you to access and withdraw your funds. Unlike savings accounts,they dont have a limit. Some checking accounts can also bear interest,granted that you keep to the minimum balance requirement.
However,there many types of checking accounts. If you plan to open a checking account,you may want to know where to put your moneys worth.
The Types of Checking Accounts
Checking accounts from different banks and credit unions vary in features. Some may have higher interest rates. Others can have limitations due to the customers overdraft history. Below are the types of checking accounts in a bank or credit union near you.
Traditional Checking Account
Best for: people paying bills or doing online shopping and other debit transactions.
The traditional checking account is a great start for creating a reliable foundation for your money.
| Advantages | Disadvantages |
| Written checks Debit or ATM card Pay or buy online Overdraft protection (optional) | Dividends are low (credit union checking accounts have slightly higher dividends) Some have a monthly maintenance fee |
Premium Checking Account
Best for: People with a five-figure balance or more.
Premium accounts have higher perks but also higher fee balances and penalties.
| Advantages | Disadvantages |
| Better perks,rewards,and freebies than traditional accounts Earn slightly higher interest than traditional accounts | Requires high minimum balance Has higher fee penalties |
A premium checking account has a slightly higher flat interest than traditional checking accounts. However,other accounts,such as the money market and certificate of deposit,may be better options for investing.
Student Checking Account
Best for: Students aged 18-23
The student checking account is a great start for young adults to get their first bank account. It is best to read the conditions that will happen to the account once the owner passes the age limit.
| Advantages | Disadvantages |
| Lesser fees than traditional checking accounts Greater grace periods for overdrafts. | Some banks automatically switch the account to a traditional one upon reaching the age limit. |
Senior Checking Account
Best for: People aged 55 or 60 and older.
The senior checking account is for retired people or those living on a fixed income. The account has no monthly maintenance fees and has perks designed for seniors.
| Advantages | Disadvantages |
| No monthly maintenance fees. Has perks for older adults. | Other accounts may suit the older adults financial goals. |
Interest-bearing Account
Best for: People with a large maintaining balance.
An interest-bearing account gives small monthly returns. The interest can be flat regardless of your balance. The account can also pay more the higher your balance.
| Advantages | Disadvantages |
| The interest can be flat or higher than the account balance. No withdrawal limits | Charges may be larger than interests |
If you cannot cover the charges,look for checking accounts that give monthly dividends instead.
Business Checking Account
Best for: Business owners
A business checking account is designed to help with the financial management of a business owner.
| Advantages | Disadvantages |
| Includes business tools,such as online invoicing. Includes freebies,such as writing several checks for free. | Charges may be larger than a traditional checking account. |
Other Checking Accounts
The mentioned checking accounts above are common in most banks. There are more types of checking accounts that are not as common.
| Type of Checking Account | Best For |
| Rewards Checking | People who often use debit cards. |
| Private Bank Checking | People looking for a private banker, |
| Second-chance Checking | People denied of the traditional checking account |
| Free Checking Accounts | People who dont want balance requirements and monthly maintenance fees. (Some banks and credit unions offer free checking accounts with a return,like the Kasasa High-Dividend Cash Checking Account.) |
| Low-Balance Checking Accounts | People who can only maintain a low balance minimum requirement. |
Which Type of Checking Account Is For You?
When choosing a checking account,you must consider your convenience and specific features. What minimum balance can you afford? Do you agree with the fees? Are the rewards something you have use of?
Beyond that,there are diverse accounts to cover each individuals different needs. There are student accounts for young adults and even senior accounts for those who have retired. There are even accounts that allow you to invest. From the types of checking accounts above,which one suits your needs the most?
To learn more information,please check out Canopy Credit Union
