What are the different types of checking accounts?

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In a Nutshell

Banks and credit unions offer many different types of checking accounts. Each type has its own combination of benefits, rates and fees.
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A checking account is more than just a place to park your money.

Your checking account may be your hardest-working financial account, if you use it to receive your paycheck and buy things like gas and groceries. Since it gets so much use, you’ll want to make sure you get an account that’s right for you.

There are many different kinds of checking accounts, but they fall into two basic buckets: personal and business. For this article, we’ll focus on the different types of personal checking accounts.

What are some different types of checking accounts?

A checking account is a bank account that helps you cover your day-to-day expenses, pay bills and withdraw cash. You can access your money in a checking account by swiping a debit card, paying online, writing a paper check or withdrawing cash at an ATM.

Different types of checking accounts will have varying combinations of features, fees and requirements, designed to cater to different financial needs. Some are better for people who don’t write a lot of checks, or who are tech-savvy and don’t need access to a branch. Others are better for people who can maintain large balances, or who are currently in school. Some pay interest, and others don’t.

We’ll go over a few of the more-common types of checking accounts in a moment. But they typically differ based on …

  • Monthly maintenance fees. Many financial institutions charge customers a monthly fee just to have a checking account. But they also often provide ways to avoid the fee — such as keeping a certain minimum balance or using direct deposit to put money into the account.
  • Check and ATM fees. Depending on the type of account, you may need to pay a fee per written check or for using ATMs outside your bank’s network.
  • Interest. Some checking accounts pay interest on your money, and others don’t.

Now let’s look at some common types of checking accounts.

Regular checking

What it is: This standard checking account has all the features you’d expect: debit cards, ATM access, paper checks, direct deposit and bill pay. There’s usually a monthly fee associated with regular checking accounts, which can be avoided by maintaining a certain balance or meeting other criteria. Most regular checking accounts offer unlimited check-writing but don’t pay interest.

Who it’s good for: This type of checking account is a good starting point. If you’re a typical banking customer and you receive a paycheck, use a debit card and are able to keep a balance in your account, you might look at a regular checking account.

Free checking

What it is: Free checking accounts typically don’t charge monthly maintenance fees, fees per number of transactions, or fees for depositing, transferring or withdrawing money. But they may have other types of fees, such as ATM or overdraft fees. Many free checking accounts don’t pay interest, and services may be limited. For example, there may be a limit to the number of checks you can write before facing a charge.

Who it’s good for: Free checking accounts can be a good option for people who can’t meet monthly minimum balance requirements or who don’t need to write a lot of checks every month.

Premium checking

What it is: Premium checking accounts generally require higher minimum balances or have certain other criteria for avoiding monthly fees. But they often come with a suite of benefits not available for basic checking accounts. These can include higher interest rates paid, waived ATM fees and free check printing.

Who it’s good for: If you’re able to regularly keep large balances in your checking account, you may look at a premium checking account.

Interest checking

What it is: Interest checking accounts are a lot like regular checking, but they pay interest to customers on their balances. They typically require customers to keep at least $1,000 in the account to qualify for interest.

Who it’s good for: If your typical balance is higher than what you need for a regular checking account but not large enough for a premium account, you might be able to find an interest checking account that suits your needs.

Online checking

What it is: Also sometimes known as electronic checking, these accounts are typically free or low-cost if customers do all their banking online, by phone or at ATMs. You’re often required to use direct deposit, and you might face fees if you use a teller’s services inside a bank.

Who it’s good for: If you’re comfortable doing your banking online, these accounts can be a good way to save money. Online checking accounts may also pay higher interest rates.

Rewards checking

What it is: Rewards checking accounts aren’t as common, but they can offer features like a cash back percentage on transactions.

Who it’s good for: You may be able to earn more money through a cash back rewards program if you use your checking account a lot.

Money market account

What it is: Money market accounts typically pay a higher interest rate than regular checking accounts, but they require a larger opening deposit and offer a limited number of transactions per month.

Who it’s good for: If you don’t need to access your money very often and can afford the larger deposit, this can be a good way to earn interest.

Second-chance account

What it is: A second-chance checking account is intended to help bank customers with negative or little credit or banking histories. They typically carry higher fees and have more restrictions than traditional checking accounts but can help customers reestablish a positive banking history. These restrictions can include lower maximum withdrawals and no ability to overdraft the account.

Who it’s good for: If you find it hard to open a checking account because of a history of overdrawing your account or writing bad checks, you may want to consider a second-chance account.

Specialty account

What it is: Some financial institutions offer specialty checking accounts geared toward students, seniors or other groups of people. They typically have lower fees than standard checking accounts.

Who it’s good for: If you qualify, these accounts can be a good way to avoid fees. Students may also find specialized accounts helpful in establishing a relationship with a bank that they can turn to in the future when they’re ready to apply for a mortgage or auto loan.

Where can I find a personal checking account?

A variety of financial institutions offer checking accounts, including traditional banks, online banks and credit unions.

  • A traditional bank is a privately owned company that accepts deposits, makes loans and offers banking services like checking accounts, savings accounts, retirement accounts and certificates of deposit. Your checking and savings deposits are insured by the FDIC for up to $250,000 per depositor. Your bank may have physical branches in your area as well as online services.
  • An online bank, also known as a neobank, offers similar financial products and services but doesn’t have brick-and-mortar branches. Online banks may have a banking charter or partner with a chartered bank to provide banking services.
  • A credit union is a not-for-profit financial institution owned by its customers. “Profits” are returned to customers by way of lower fees, higher checking and savings rates, and lower loan rates.

How much does it cost to have a checking account?

Even though you’ll see banks market “free” checking, there’s really no such thing as a completely free bank account. Even if your account doesn’t charge a monthly maintenance fee or overdraft fees, you may still face ATM fees if you use your debit card at an ATM outside your bank’s network. Banks and other financial institutions charge fees for different products and services, while also offering ways to avoid fees. Always ask your financial institution for a fee schedule to evaluate what it’s charging.

The fee amount and how to avoid it varies from bank to bank, and it can even vary between different accounts at the same bank.

Monthly maintenance fees are perhaps the most well-known. They can range from $6 or $7 per month on the low end for basic checking accounts to $15 to $25 for premium checking accounts. Nearly every checking account that charges a monthly fee will offer ways to avoid the fee, like using direct deposit or keeping a certain balance.

Here are a few other common checking account fees you might encounter.

  • Overdraft fee: If you write a check or make a payment for more money than you have in your account, your bank may agree to cover the payment anyway. But it’ll likely charge a fee for doing so — a service called overdraft protection. These overdraft fees can exceed $35 per transaction and must be paid along with the cost of the item that overdraws your account.
  • ATM fees: You can usually use ATMs owned by your bank or credit union for free, but using another company’s ATMs will often cause you to incur a third-party fee.
  • Check printing fee: Banks often charge you for a book of blank checks.
  • Per-check fee: Some banks charge for each individual written check after a certain limit.

Consider a free checking account

A free checking account is a basic checking account that doesn’t charge any recurring fees, such as monthly maintenance fees. 

Do your research before signing up, since hidden costs can eat away at your savings. For example, you may have to pay out-of-network ATM charges, overdraft fees, foreign transaction fees and other charges or penalties. 

Some accounts may even have a minimum balance requirement, meaning you have to keep a certain amount of money in your account to avoid additional charges.

If you’re looking for a checking account that’s free to open, you might want to consider a Credit Karma Money™ Spend online checking account. It comes with no penalties, overdraft fees or minimum balance requirements.

And when you set up direct deposit with Credit Karma Money™ Spend, you can get access to your paycheck up to two days early and federal benefits up to five days early.

Next steps: How do I choose the type of checking account that’s right for me?

While deciding between the different types of checking accounts, take stock of your personal and financial situation. Pay close attention to the different ways a bank or credit union offers to help you avoid fees.

Here are some questions to consider.

  • Does your job offer direct deposit for paychecks? That will likely make it easier to avoid fees.
  • How large of a balance do you anticipate being able to keep in your account? If you can keep a large balance, a premium checking account may work for you.
  • Do you expect to use this account for day-to-day expenses, meaning you’ll be making a lot of transactions? Or are you willing to trade off a limit on transactions in exchange for a higher interest rate? In that case, a money market account could work best.

Also consider how often you’ll need to access a branch or ATM and see which financial institutions offer them near where you live and work.

When you’re ready to open your checking account, here’s what you’ll want to have on hand.

  • A government ID, like a driver’s license or passport
  • Another form of ID, which could include a birth certificate, Social Security card or bill with your name on it
  • Your Social Security number
  • An opening deposit, usually between $25 and $100

About the author: Andrew Dunn is a veteran journalist with more than a decade of experience as a reporter and editor at North Carolina news organizations, including the Charlotte Observer and the StarNews in Wilmington. In those roles,… Read more.