Tips on Selecting the Best Checking Account?

Answer 1

Not too many years ago, banks typically offered few options when it came to a checking account. As competition increased, new twists were developed in hopes of enticing customers to open an account or transfer an account from another bank. Today, there is a wide range of features to be found, making it easy to tailor an account that will best suit your needs.

Free checking is one type of account that many banks offer. In its purest form, this means that there is no monthly service fee, no fee for debit card transactions, and that your blank checks will be provided at no cost. In reality, banks vary a great deal in which of the free offers they support and what you must do to qualify. For example, some require that you maintain a minimum balance, while other accounts charge a maintenance fee if you write more than a set number of checks during a month. Before enrolling in this type of account, be sure to clarify all information so that you do not receive an unpleasant surprise when you try to reconcile your account.

Interest bearing checking accounts usually require that you keep a minimum balance in the account at all times. In addition, the bank will typically charge a monthly service fee. You will need to ask how the qualifications regarding the minimum balance are defined, such as the daily average over the course of the month or the balance on the statement date.

For those who wish to make the money in their account work harder for them, some banks offer a sweep account. This is a secondary investment account tied to your primary account. You and your bank determine a balance you wish to maintain in your primary account at all times. Any funds over that amount are swept into the secondary account overnight and invested. If the balance in your primary account is lower than the designated amount, funds are moved back from the sweep account. The interest earned from this type of account is normally, but not always, much better than a standard checking or savings account.

Before you commit to any account, obtain and read the complete fee schedule. See how overdrafts are handled, whether cancelled checks or at least copies of your checks are returned with your statement, and how to challenge any discrepancies you might find when reconciling the account. Banks are required to disclose this type of information, so do not hesitate to request it. When it comes to conducting your banking affairs, the more knowledge you can gather, the smoother your affairs are likely to flow.