What makes the ideal checking account? - The Broke Professional

What makes the ideal checking account?

moniesThe checking account is the one type of account almost everyone in the country has.  Most savings and investment accounts need to be funded from somewhere, and that somewhere is usually a checking account.  It represents the most liquid form of money you have at your disposal and is in some ways the lifeline to your overall finances.  Almost all of your money will at one point or another enter or leave your checking account.  That’s why we need to make sure that we’re using a quality checking account.  Unfortunately many people have checking accounts that actually COST them money.  This is unacceptable and at least some effort should be made to find the ideal checking account.

I’ve been through a number of checking accounts, so over time I’ve come to realize what are the most important things to me when it comes to a quality checking account.  Here are my thoughts on some of the things that make a great checking account:

Reimbursed ATM fees:   Even though I don’t use cash as much anymore, this is still a great perk to have for the inevitable emergency trip to the ATM.  Most banks offer no ATM fee for withdrawing from their own machines, but you’re not always going to be near their machines.  It’s a great piece of mind to know you can withdraw from any ATM and not worry about a fee.  This used to be the most important feature for me but not as much anymore since most of my payments are online or with a credit card.  It’s still a great feature to have and many online banks offer it.

No account minimum fees:  This is a definite fee to avoid because it can really impact your financial health.  Some banks will levy a fee if your account goes under $1,000 for example.  So essentially you need to have $1,000 just sitting in your account doing nothing.  This money could be used to invest, pay off debt or any other financially positive things.  The fact that a bank would charge you a fee for the privilege of just having money in their account is ridiculous.  Try to avoid this fee at all costs.

No check order fee:  Almost all types of financial transactions nowadays can be done with a credit card or an online withdrawal from your checking account.  Most banks have online bill pay which you can use to pay pretty much any type of bill.  Using an actual check is becoming more and more unnecessary nowadays, so it doesn’t make sense to actually pay for them.  You should definitely be able to order them since you probably will need to write a check at some point, but you shouldn’t be charged a fee for that.  It’s nice to find a bank that doesn’t charge for checks or deposit slips.

Rewards/Interest:  Rewards are usually the domain of credit cards, but it is nice to find a checking account that offers some rewards.  Many online banks give some interest on the money in their checking accounts, but it is not much.  Hardly any of the big banks do any type of checking rewards.  The one exception I’ve seen is Citibank which offers ThankYou Points for doing things such as setting up a direct deposit or having an automatic transfer into their savings account.  This can be nice as they can be redeemed for gift cards or cash.  You won’t really hit the mother lode when it comes to checking account rewards, but it is nice if you can find them.

These are the biggest considerations for me when signing up for a checking account.  Most banks have ATM and even mobile deposit so the days of having to wait in a long line just to deposit your check are pretty much gone, so convenience really takes the forefront when it comes to checking.  The only accounts I have seen (and I’ve personally used one of them) that meet all of these criteria are the Schwab Investor Checking account and the Fidelity Cash Management Account.  You have to open some type of investment account with them in order to open the checking account, but you don’t have to use them.  I would highly recommend both of these accounts.

Checking accounts don’t really give you a big bang for your buck, but they are evolving and it makes sense to keep up with the changes and switch to a more convenient option to make your life just a little easier.

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  1. […] account:  This is the central hub of your finances, so make sure you have a good one that doesn’t hit you with any fees.  Your checking account should have enough money to pay […]

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