What to Look for in a Checking Account: A Comprehensive Guide
November 09, 2023
Discover the essential features and benefits to consider when choosing a checking account.
When it comes to managing your personal finances, an essential element is a checking account. In its simplest form, a checking account allows you to deposit and withdraw money, make payments, and keep track of your daily transactions. Understanding the basics is the first step in identifying the right one for your needs. Here, we'll break down the ten most important considerations when selecting a checking account.
1. Low or No Monthly Fees - When selecting a checking account, one of the first things to consider is the monthly fees. It's essential to understand the fee structure of your potential account. While some financial institutions charge monthly maintenance fees, others waive them if you maintain a minimum balance or if you set up direct deposits. Here at Education First, we offer consumer checking accounts with zero fees.
2. ATM Access - Easy access to cash is one of the most important features people look for when selecting a financial institution, which is why it's important to consider the availability and location of ATMs when choosing a checking account. Education First FCU is part of a Co-Op network that provides access to hundreds of fee-free ATMs in Southeast Texas and beyond. In short, this means that you can access your funds without incurring fees for withdrawing cash at an ATM
3. Mobile Banking and Online Access -In today's digital age, online and mobile banking services have become increasingly important for managing your finances. Here's why these services are essential when choosing a checking account.
- Convenience: Online and mobile banking services offer convenience by allowing you to manage your account from anywhere, anytime. Whether you need to check your account balance, transfer funds, make deposits or pay bills, these services make it easy to handle your banking tasks on the go.
- Accessibility: With online and mobile banking, you can access your account 24/7, eliminating the need to visit a bank branch during business hours. This accessibility ensures that you have control over your finances and can handle your banking needs whenever it's most convenient for you. At Education First, you can even chat securely with a representative inside of online banking.
- Enhanced security: Online and mobile banking services often offer advanced security features, such as multi-factor authentication and options to add biometric identification.
- Bill Pay: At Education First Federal Credit Union, we offer this service through iPay through our online and mobile banking platforms. It's a convenient way to manage single or recurring payments, ensuring that you won't be hit with late fees.
- Additional features: Online and mobile banking apps offer additional features that can simplify your financial management. These may include the ability to set up account alerts, track your spending, categorize transactions, and even deposit checks using your smartphone camera.
- Paperless banking: Online and mobile banking services promote paperless banking, reducing the need for physical statements and receipts. This not only helps the environment but also reduces clutter and makes it easier to organize your financial documents.
When choosing a checking account, prioritize accounts that offer robust online and mobile banking services. These services can greatly enhance your banking experience, providing convenience, accessibility, security, and additional features that make managing your finances effortless.
4. Overdraft protection - Overdraft protection, sometimes known as courtesy pay is an important feature to consider when choosing a checking account. It provides a safety net in case you accidentally spend more money than you have in your account and helps to prevent overdraft fees and the embarrassment of a declined transaction. Here are some factors to consider when evaluating overdraft protection options:
- Overdraft fees: Find out how much the bank charges for overdraft protection. Some banks charge a flat fee for each transaction that exceeds your account balance, while others charge a daily fee for the duration of the overdraft. Look for an account with reasonable overdraft fees to minimize the cost of overdrawing your account.
- Overdraft limits: Determine the overdraft limit set by the bank. This is the maximum amount of money you can overdraw from your account. It's important to choose an account with an overdraft limit that meets your needs and provides a sufficient safety net.
- Overdraft transfer options: Some banks offer overdraft transfer options, where funds are automatically transferred from another linked account, such as a savings account or credit card, to cover the overdraft. This can help you avoid overdraft fees and ensure that your payments are not declined.
- Overdraft protection fees: If you opt for overdraft protection through an overdraft line of credit or linked account, be aware of any fees associated with these options. Some banks may charge fees for setting up and maintaining overdraft protection.
When evaluating overdraft protection options, consider your spending habits and financial situation. If you frequently find yourself at risk of overdrawing your account, having overdraft protection can provide peace of mind and help you avoid costly fees. But remember, it's important to use overdraft protection responsibly and avoid relying on it as a long-term solution. Monitoring your account balance, setting up alerts, and practicing good financial habits can help minimize the need for overdraft protection.
5. Minimum Balance Requirement: Some checking accounts require a minimum balance to avoid monthly fees or to earn interest. Be sure to evaluate your financial situation and determine whether you can comfortably maintain the required minimum balance. If not, you might want to consider an account with lower or no minimum balance requirements.
6. Interest Earnings: While checking accounts typically offer lower interest rates compared to savings or money market accounts, it's still worth considering the interest rate your checking account may earn. Our credit union offers checking accounts with competitive interest rates. This feature is especially important if you maintain a higher balance in your account, as it can provide a small but consistent return on your funds. To learn more about interest-bearing checking accounts, check out this blog post.
7. Debit Card Options: A debit card is a primary tool for accessing and managing the funds in your checking account. When selecting a checking account, consider the debit card features. Look for cards that offer benefits such as cashback rewards, discounts, or partnerships with local businesses. Additionally, ensure that the card can be easily replaced if lost or stolen. Education First Federal Credit Union offers our totalREWARDS debit card that allows you to earn points on all debit card transactions, easy card management tools, and the ability to get a replacement card on the spot at any of our convenient locations in Southeast Texas.
8. Fraud Prevention: The familiar saying "every rose has its thorn" is especially true when it comes to the convenience of the digital era. The ability to self-serve - from digital payments to managing your medical care and social security benefits - has resulted in our widespread proliferation of personal information on digital platforms, which are sometimes the target of cyber attacks that can result in your bank account or debit card number being exposed or used fraudulently. That's why it is important to find out what sort of protections are offered when evaluating a checking account. At Education First, members are protected from the liability of fraudulent activity resulting from a stolen debit card. Learn more about fraud protection or what to do if you are a victim of fraud.
9. Customer Service and Support: Exceptional customer service is a crucial aspect of any financial institution. When evaluating checking account options, consider the availability and quality of customer support. At our credit union, we pride ourselves on providing responsive and friendly customer service to assist you with any questions or concerns. Our support team is accessible online or on the phone Monday through Saturday. Prefer face-to-face? You can always visit one of our conveniently located branches or ITM machines across Southeast Texas to speak to a member service representative about anything you need regarding your accounts and personal finance.
10. Security and Safety: Lastly, prioritize the security and safety of your checking account. Ensure that the financial institution is federally insured and that your funds are protected up to the maximum limits provided by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). At Education First Federal Credit Union, your funds are safe and insured, giving you peace of mind and confidence in your banking choice.
Choosing the right checking account is an important decision, so it's important to consider the key features and benefits that are most important to you. By selecting the right checking account, you'll enjoy the convenience, security, and features that make managing your finances a breeze. Our team is here to help you make an informed decision, ensuring that your checking account enhances your financial well-being.