What Makes A Good Checking Account

I feel like lately I’ve been inundated with checking account offers.  I get them in the mail.  I see them online.  They’re all over the business section of the newspaper.  With banks offering up to a couple hundred bucks to open a new checking account, I can see why these advertisements get the responses they do.

I’ve had a no fee, no minimum checking account for about the last 15 years and I have all of my financial business (mortgage, investments, bill payments, etc.) tied to that checking account so I really haven’t been in the market for a new account for a while.  I don’t have any type of rewards associated with my checking account either but I’ve come to accept that since I don’t keep a significant balance in the account anyway.

But if I were in the market for a new checking account and I were ready to move all of my business over to the new account there are definitely a few things I’d want to have.

No Monthly Fees

This one is top of the list.  I don’t want to pay any kind of monthly or yearly fee just to have my checking account.  While many big banks have eliminated free checking accounts, there are still plenty of banks that offer no maintenance fee checking accounts so you can comfortably avoid the ones that charge for checking, such as Ally Bank Interest Checking Account.  Banks are making money off of your deposits anyway.  They don’t need to ding you an additional fee on top of it.

Reasonable Overdraft Practice and Fees

The bank should offer me either a low cost overdraft protection option or (if I choose to not have this option) a reasonable and clearly stated overdraft fee structure.  Bank of America made news recently in the wrong way for their overdraft practices.  They processed withdrawals before deposits and processed the biggest withdrawals first in order to drain bank accounts as fast as possible and generate the largest overdraft fee revenue they could.  Don’t accept a policy like this.

Full and Clear Disclosure

Perhaps the one thing I hate more than any other is to get charged a fee out of the blue and find out too late that the fact the fee could be charged was buried deep in the fine print.  This stuff needs to be stated up front and very clearly.  I don’t want to have to read mountains of legalese just to figure out how my account works.

Rewards

Rewards checking accounts are becoming such a regular feature in bank product lineups that you should easily be able to find a low- or no-fee checking account that pays you back in some form.  Whether it’s a competitive interest rate, rewards points that can be redeemed for airline tickets or cash back for certain account behaviors, you can easily earn an extra reward just for having your checking account.

Online Access

Let’s face it.  Managing your bank account online is rapidly becoming the only way to do it.  Online access to my bank account (along with the ability to set up bill payment) should be free and automatic.  I don’t want to (and shouldn’t have to) pay for this feature.

Keep these in mind if you’re searching for a new checking account and you can find yourself saving on unnecessary fees and earning rewards before you know it.

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Author Info

This post was written by David Dierking. David lives outside Milwaukee, Wisconsin and has been working in the financial services industry for over 13 years with a background in investments, accounting, and marketing. He earned his Chartered Financial Analyst designation from the CFA Institute in 2004 and was recently published in the Milwaukee Business Journal. You can also check him out at The Ultimate Fit Challenge

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