Choosing the right checking account is an important financial decision. It's the financial hub for many daily activities—from paying bills to shopping online. With countless options available today, finding the perfect fit can be challenging. In this guide, we'll simplify the process and help you identify the key factors to consider when selecting a checking account that aligns with your goals and financial well-being.
Brick-and-Mortar vs Online Banking
To choose the perfect checking account, start by deciding between brick-and-mortar and online banks. This choice mainly hinges on your needs and preferences. Remember to consider your convenience priorities, lifestyle, proximity to physical branches, and tech comfort.
Online banks offer remote access and lower fees because they don’t have physical branch locations to maintain. Brick-and-mortar banks are ideal if you prefer in-person assistance and often deal with cash, checks, or need a wide range of financial services (such as mortgages, loans, and wealth management). Some large, traditional banks, like Armed Forces Bank, combine the advantages of both digital and physical banking, offering robust online and mobile tools for their customers.
Types of Checking Accounts
There are various types of checking accounts to consider, and the best choice depends on your needs and financial goals. Here are some categories:
- Standard Checking Account: Basic for everyday transactions.
- High-Interest Checking Account: Offers higher interest rates with minimum balance requirements.
- Rewards Checking Account: Rewards certain banking behaviors, like debit card usage.
- Online Checking Account: Operates online with lower fees and higher interest rates.
- Joint Checking Account: Shared by multiple individuals, ideal for couples or families.
- Senior Checking Account: Tailored for seniors with reduced fees and extra services.
- Student Checking Account: Designed for students with fewer fees and relaxed requirements.
- Business Checking Account: For business owners, offering business-specific features.
- Recruit Checking Account: Offers special benefits for military recruits and their families.
Once you have determined which type of checking account is best-suited for your needs and financial goals, you can start to narrow down your search.
Minimum Balance Requirements
Make sure you have a full understanding of the minimum opening balance requirements (or minimum deposits) associated with your account. These requirements can vary between banks, usually ranging from $25 to $100 or even more, depending on the account type. Also, failing to meet daily/monthly balance requirements in deposit accounts may result in extra monthly service charge fees up to $15-$20, which could impact your overall banking costs.
Keep things cost-effective and ensure that you can consistently maintain the required balance.
Understanding Account Fees
Like many financial products, checking accounts come with various fees, so it's crucial to understand them when selecting the right account. Common fees include monthly service fees, overdraft fees, non-sufficient funds fees, out-of-network ATM fees, and foreign transaction fees.
Monthly service fees are a common feature of checking accounts, but they might be waived if you meet certain account requirements. This is not guaranteed, however. It's also wise to consider overdraft fees, which vary among banks and may involve overdraft protection options. Understanding these policies can help guide you while selecting the right account.
It's important to understand that fees aren’t necessarily a bad thing. In fact, when it comes to banking, you get what you pay for. Avoiding maintenance fees might result in basic account offerings and missed opportunities savings and rewards. We recommend taking the time to research what suits you best rather than opting for what appears to be the cheapest upfront.
ATM Networks
It’s your money, so why not have access to it whenever you need? Assess your ATM usage habits and find an account that aligns with your needs. If you frequently rely on cash payments, having convenient access to ATMs should be a top priority. Look for financial institutions with extensive networks of ATMs, ideally with locations near your home, workplace, or other frequented areas.
Access to a widespread ATM network can help you avoid fees associated with out-of-network withdrawals. For instance, Armed Forces Bank is affiliated with the expansive MoneyPass® ATM network, which grants you free access to over 30,000 ATMs nationwide. This ensures hassle-free access to your funds whenever and wherever you need them.
Best Online Banking Features
When choosing a checking account, don't just focus on the money. Digital features play a big role in your decision-making process. Here are some items to take into consideration:
- Mobile Check Deposit: Look for the ability to deposit checks using your mobile device, saving you time and effort.1
- Peer-to-Peer Payments: Ensure compatibility with apps like Zelle® for seamless money transfers.
- Mobile Bill Pay: Check for online or mobile bill pay options to simplify payments anywhere, anytime.1
- Account Notifications: Stay informed with alerts for balances, transactions, and potential issues.
- Card Lock/Freeze: Enhance security by temporarily locking or freezing your debit card.
- Two-Factor Authentication: Prioritize safety with accounts offering two-factor authentication for added protection.
Having the right digital banking features not only simplifies your financial management but also allows you to handle your banking needs conveniently, even when you're on the move.