When you're planning to open a new checking account, it can sometimes seem like there's a credit union on every corner, and each one has a plethora of account products to choose from. Add in all the banking options that exist online-only, and you've got a big decision to make with almost too many to choose from account options. You can narrow your choices to only the best checking accounts available by considering the following features.
Features You Will Want to Look for in the Best Checking Accounts
Earning Interest
Checking accounts tend to pay less interest than savings accounts, but some still do pay. If you can maintain the minimum balance that these checking accounts typically require, then look for an account where your money will do at least some work for you by earning interest. A checking account that does not pay interest usually has no minimum balance and no monthly fees.
Overdraft Protection
Some checking accounts give you the option of overdraft protection. If you don't have enough money in your checking account but have overdraft protection, checks will be paid, and ATM and debit card transactions will still go through. The credit union will then charge you an overdraft fee and request you deposit the advanced funds. If you didn’t have this protection, checks would not be paid, and ATM and debit card transactions would be declined. Although you won’t have to pay an overdraft fee, you may be charged an insufficient fund and returned check fee. Overdraft Protection plans vary so it’s important to understand how it works and if it is right for you.
Digital Tools
Choose a checking account that comes with free digital tools like eStatements, digital wallets, online bill pay, or mobile deposits. Digital tools allow you to manage your checking account online or on your phone from the credit union’s mobile app.
Unlimited Transactions
Certain checking account types limit monthly or quarterly transactions. It's not hard to find checking accounts with zero transaction limitations. If you plan to use your account frequently, look for an unlimited account instead.
Instant Issue Debit Card
Some credit unions offer instant issue debit cards when you open a checking account. No waiting a week to receive your card in the mail when you can get it on the same day. This a valuable feature if you ever need a replacement card.
ATM Access
If you use an ATM often and commute to work or travel away from your credit union’s own ATMs, then having a checking account that offers free ATM access and reimburses other bank ATM fees is essential. Some credit unions charge a fee for using another bank or credit union’s ATM. That other bank may also charge you a non-customer ATM fee (surcharge fee.) Local credit unions typically offer a checking account with no ATM fees and will reimburse ATM fees that other credit unions charge.
Fees to Watch Out for When Shopping for the Best Checking Accounts
Fees like account maintenance, overdraft, and transaction charges add up fast. Look for a free checking account with no minimum balance. To find the best account and financial institution for you, be sure to compare the following fees:
- Maintenance/Monthly Fees
- Overdraft Fees
- Minimum Balance Requirement
- Minimum Direct Deposit Requirement
- Transactions Fees
- Debit Card and Replacement Card Fees
- Statement Fees
- ATM Fees (including fees other banks or credit unions charge for using their ATMs)
- Check Printing Cost
What You Should Use Your Checking Account For
Checking accounts are typically used to pay bills electronically, paying bills by writing checks, and covering daily transactions with a debit card. When it comes to electronic transactions like ATM withdrawals, funds transfers, ACHs, and electronic payments, checking accounts usually come with much fewer (or zero) restrictions than savings accounts (with which electronic transactions are strictly regulated). As a result, checking accounts are typically used for accepting direct deposits and paying bills.
Paying Bills vs. Investing or Saving for the Future
Responsible financial management should be comprised of a combination of saving for your future, paying down debt (if you have any), and paying your bills. With the right checking account, you can focus on paying bills, saving, or a combination of both.
Sometimes, the checking account you ultimately choose will depend on the reason you're opening it. If you just want to open an account for access to a debit card and bills, then there's not much reason to worry about interest rates. If this sounds like you, then be sure to choose an account with a low (or no) minimum balance requirement.
However, some checking account types, encourage account holders to save money by offering more competitive interest rates and even tiered interest rates that increase as your account balance increases. As long as you plan to maintain a large enough balance in your new checking account, don't worry so much about the minimum balance requirement – just be careful not to risk paying unnecessary fees by dropping below the minimum.
Other Factors to Consider in Your Next Checking Account
In addition to considering individual checking account features, you should also think about how convenient accessing your account will be. Additional factors such as whether your account will allow you to make deposits in-person and electronically (online, mobile app, or at an ATM) or how you'll be able to access your funds are just as important as fees, interest rates, and account features.
Digital Branch Capabilities
When you are looking at factors that make for a great checking account, a major consideration should be the credit union's digital branch capabilities. You want to make sure that the digital branch is truly a fully functional digital branch with a rodust system full of customer-focused offerings. Some of the best digital branches allow members to perform all their banking needs from getting loan approvals to applying for credit cards without ever having to enter a branch. This allows the members to perform their banking transactions at their convenience.
Hours of Operation
Although most financial institutions offer pretty standard hours of operations, some have extended office and drive-up hours available on various days of the week and weekends to accommodate those who might be unable to come in during regular business hours.
Online vs. Mobile Experience
Depending on how you wish to access your account information and history, you'll want to find out whether online and/or mobile banking is available with your new checking account. Online banking allows you to access your accounts from a computer, and mobile banking will enable you to access your accounts from a smartphone or tablet. Online and mobile banking offers you the option to and download your account history, statements, and tax forms. You’ll also be able to transfer funds, deposit checks, request a stop payment, set up alerts, pay bills, and keep tabs on your debit card activity.
What About Customer Service with the Best Checking Accounts?
When it comes to opening a new checking account, selecting the right financial institution is just as important as choosing the right type of checking account. Be sure you find a credit union in your community that offers the most important thing: excellent customer service. It's best to choose a credit union you can rely on, where your questions will always be promptly answered online, on the phone or in person; and where you'll always be greeted with a smile or pleasant tone. Financial institutions that focus on superior customer service want their customers to be happy and loyal. As a result, they tend to provide superior banking products, too.
With the right credit union, a customer service representative will take the time to introduce you to their menu of account products and help you select the best checking account to meet your financial needs.
