Getting A Checking Account For The First Time? Here's How To Determine Which One Best Fits Your Needs

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Having a checking account is nearly essential in modern society; it allows you access to your money from ATMs and allows you to easily pay bills such as rent and utilities. If you're interested in opening a checking account, whether you are still in high school or already in retirement, you'll want to select the financial institution offering checking services that meets your specific needs. Pay attention to any fees that the checking account will incur and ensure that you use it responsibly and do not maintain a negative balance for a long period of time. Here's what you need to know to find the perfect checking account for you.

Make Sure You Understand All Fees Associated With The Checking Account

Financial institutions offer a wide range of checking services; some are designed for those with low balances and offer low fees, while others have higher fees without maintaining a large minimum balance in the account but may offer better interest rates the former option. Ensure that you understand all fees associated with the checking account and are not caught off guard. Pay attention to monthly maintenance fees, identity theft protection fees and penalty fees for not having having a large enough balance in the account.

Thankfully, many financial institutions offer checking accounts with low or no fees for college students or for those who are just graduating from high school. Most of the time, these accounts will have an age cutoff when you must convert to a normal checking account. This is a good time to shop around different financial institutions to find the best deal for you. You can often eliminate fees associated with checking accounts by signing up for direct deposit from your employer or maintaining a minimum balance in the account.

Avoid Overdrafts Or Turn Overdraft Coverage Off

Overdrafting your account is a quick way to get into financial trouble. This occurs when you don't have enough money in the account to pay for a transaction; your bank will cover the transaction for you so that your check does not bounce or your debit card is not declined, but your account balance will go into the negative and you will be charged an overdraft fee for this service. Multiple transactions on a single day that take your account into a negative balance can cause overdraft fees to add up quickly. Accounts that are left with a negative balance for an extended period of time will be closed and you will be added to checking reporting agencies such as Chexsystems. This can make it very difficult to find checking services in the future, so it should be avoided at all costs.

Many financial institutions offer the ability to turn off this overdraft protection so that your bank will decline the charge instead of paying it for you. This can be a good way to protect yourself from going into a negative balance, but you may have to pay additional bounced check fees with both the bank and the recipient of your bad check.

Ensure The ATM Network Is Large Enough For Your Needs

Using a private ATM or an ATM affiliated with another financial institution will incur an ATM fee. It's important to select a financial institution with a large enough ATM network to avoid paying these fees, which can add up over time. Some online banks will waive a certain amount of ATM fees each month and some banks (especially online banks) will waive them all.

Additional convenience option exist in checking services, such as providing the ability to easily pay your bills online and allowing you to easily transfer money to other checking accounts. Above all, make sure that you use your checking account responsibly and do not maintain a negative balance for too long. It's difficult to get another checking account after you have had one canceled by another financial institution.