Although there are several types of bank accounts, a checking account is the most flexible option. It allows you to access your money anytime, anywhere, using online banking and ATMs. You can also quickly pay your bills via checks or online billing. However, not all checking accounts are created equal. Here are the factors to consider when shopping for the best checking account for your needs.
1. Banks
The first decision you will have to make is which bank to open a checking account with. According to the Federal Insurance Corporation, there are 4,519 insured commercial banks in America. You will find a lot of choices, even in the smallest towns. So, how do you decide? Well, the best way is to compare the policies of their checking accounts. In particular, look at things like account fees, access to ATMs, and limits on the number of transactions. Keep an eye out for additional perks like sign-on bonuses and investment opportunities.
2. Location
Despite the advent of electronic banking, many people still consider location a primary factor when choosing where to bank. It is comforting to know that you can walk into your bank anytime. According to the FDIC, banks with more branches have lower interest rates. This means customers are charged less for interacting with the bank. When thinking of the bank location, you should also consider the number of ATMs. You want a bank with as many ATMs as possible for convenience.
3. Income Bracket
Financial institutions cover their expenses by charging a fee for their services. Most banks charge a flat fee for keeping a checking account open. However, you can avoid these fees by maintaining a set minimum balance. Choose a bank that caters to your income bracket. For instance, you should only agree to a minimum balance you know you can easily maintain. Another factor to consider is overdraft policies. You don’t want a bank that charges hefty overdraft fees. Lastly, take a look at the ATM fees. These costs add up if you withdraw cash often.
4. Age
One of the most significant milestones in life is opening your first bank account. A checking account is a lot of responsibility for a teenager. Fortunately, parents are allowed to co-own the account and monitor the activities. However, preferences vary depending on age. For instance, younger people are drawn to financial institutions with e-banking products. They would be willing to bank with an online-only bank. On the other hand, older people appreciate the importance of a face-to-face transaction.
Bottom Line
We hope this article helps you make the right choice when shopping for a current account. Although the banking industry is continually evolving, the fundamental concept remains the same. We recommend shopping around and comparing checking accounts from different banks. Ultimately, your choice will depend on individual preferences. While convenience ranks high on the things to consider, you should also look at the fees you will be charged for those services. Set up a checking account with a bank that meets most of your needs.
