People who have never had a checking account before may not be aware that there are in fact several different types of accounts from which to choose. These multiple choices can be overwhelming if customers are not prepared to make a selection before they go into a bank to open their first checking accounts. To help them out, here is a breakdown of the different types of accounts that are available.
Basic Checking
This is the basic type of checking account that most people start out with. Oftentimes, basic checking accounts do not charge any fees for their use if customers keep a minimum balance in their accounts. Some banks do charge fees for their basic accounts if customers go over a set number of checks per month. These types of basic accounts are not good for customers who typically carry a high average balance as they do not pay interest on the balance.
Free Checking
This is one of the most popular types of checking accounts because there is no fee for their use no matter how many transactions customers use them for each month. However, that doesn’t mean that it is impossible to accrue any fees when customers use a free checking account. For example, customers who overdraw their accounts or bounce a check will usually have to pay fees.
Interest-Bearing Checking
These accounts pay customers interest on their balances every month. However, they often require a minimum deposit in order to open them, and they also usually charge fees if customers’ balances dip below a preset number. While it is nice to accrue interest with one of these accounts, the interest rates are notoriously low. Most customers often find that the hassle of keeping a minimum balance to avoid paying fees is not worth the little amounts of money that the low-interest rates generate.
Joint Checking
A joint checking account is one that allows two or more people to access the funds deposited in it. These are most commonly used by couples, but they are sometimes used by people who are in business together as well.
Express Checking
This is an account that typically offers customers low balance requirements and unlimited check writing, but it will charge customers fees for using the bank teller services more than once or twice a month.
Senior and Student Checking
These are low-fee or no-fee accounts that are offered as a service for seniors and students who are typically on low incomes. These types of accounts do not typically pay interest on their balances, but they usually do not require minimum balances either.
Money Market Checking
These are high-end checking accounts that are tailored towards wealthy individuals who want to be able to use their accounts for investing. They often charge fees for writing more than a few checks a month, but they also make it easy for users to make investments. They also typically pay out a much higher interest rate than any other type of checking account.
