What Is A Checking Account?

Checking accounts are offered by banks as a place to safely store your money until you need it

. They're the ones you want if you plan on accessing and spending your money on a regular basis (compared to a savings account, which is only for money you want to save and with which you can collect interest).

The benefits of a checking account vary depending on the bank. Some banks will offer free checks or debit cards for opening a new account with them; others only provide these services for a fee. If you're opening a checking account for the first time, make sure you've read all the fine print. How much do you need to deposit up front? Is there a monthly fee for holding the account? Do you need to maintain a minimum balance? What about fees associated with the ATM? Most banks offer their own ATM's at no charge, but bill you transaction fees if you use the ATM of another branch.

Another thing to consider when opening a checking account is how you plan on accessing it. Does your bank of choice offer online banking and bill pay? What about monthly statements? Some banks offer additional incentive if you choose to receive online statements instead of ones sent in the mail - it wastes less paper and is better for the environment.

Ask about checks and debit cards. Unless you plan on physically going to the bank every time you need to deposit or withdraw money, checks and debit cards will be how you control the flow of expenses. You'll want to make sure you understand everything about your bank's system - how much checks cost, how many you'll receive, how soon you can get more, etc. Ask about debit cards and what measures the bank has in place to protect you from identity theft. What happens if you lose your card? How much is a replacement? How much does it cost to stop fraudulent charges if someone else has gained access to your card?

Last but not least, don't forget overdraft protection. When you're overdrawn, you've tried to spend more money than what's currently in your account. This costs the bank money to fix the mistake, so they charge you for each attempt. To avoid this potentially frustrating and costly mistake, inquire after their overdraft protection - a sort of insurance you can buy that saves you the cost of fees if you ever accidentally withdraw. (Very useful if you're sharing your account with someone else and can't always keep an eye on their spending.)

It might sound overwhelming to open a checking account, but most of these are one-time questions that can answered in a single visit to your bank. Just make sure you're fully committed to your bank before choosing to open an account, because while you can legally close a checking account at any time, some banks will charge you a fee if you do it within the first 30-90 days.

by: Tony Shepard

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