A checking account is the foundation of household finances, allowing you to pay bills and make purchases through electronic transfers, paper checks, and debit cards.
Consumers typically hold checking accounts for a long time: According to a 2022 Bankrate survey, the average tenure of a U.S. checking account customer is about 17 years.
The best checking accounts either don’t charge monthly fees or make it easy to avoid these fees by meeting certain conditions, and many of the best checking accounts also have ways to avoid out-of-network ATM fees or receive checks for free.
Current Account Types
These are some of the most widely available types of checking accounts offered by banks and credit unions.
Traditional Checking Account
These banks usually offer checking, debit cards, ATM cards, and online bill payment options. Often, you can waive monthly maintenance fees by maintaining a minimum balance, but some traditional checking accounts don’t charge such fees at all.
These accounts may also offer overdraft protection to cover payments that exceed the account’s available balance, but there is often a fee for such a service.
- Who is it best for?: People looking for an account to use for bill payments and debit card transactions
- Common main features: Check, debit card, online bill payment
Premium Current Account
These accounts usually offer perks for a fee. Perks may include free safe deposit boxes, free personal checks, free official checks, free money orders, waiving fees for some or all out-of-network ATMs, etc. Premium accounts usually require you to maintain a higher minimum balance.
- Who is it best for?: Customers with large account balances
- Common main features: Free checks, money orders, and safe deposit boxes; no need to use out-of-network ATMs
Student Current Account
These accounts are typically for students between the ages of 18 and 23. Student checking accounts may have no maintenance fees if you qualify, and they may offer perks like overdraft waivers, ATM fee rebates, and free checking. These accounts are a convenient way for students to start managing their money, as they allow them to make purchases and withdraw cash using their debit cards.
While a student checking account may be a great choice for some, it’s important to note that if you’re not being reimbursed for ATM fees, there may be a better option. Even if your checking account doesn’t have “student” in the name, you should consider a bank that allows you to use out-of-network ATMs without a fee.
- Who is it best for?: Students aged 18 to 23
- Common main features: Overdraft forgiveness, ATM fee rebates, free checking
Senior Checking Account
These accounts are typically available to people over the age of 55 or 60. They may offer free checking, no monthly maintenance fees, and other benefits that can be beneficial for retirees or those living on a fixed income.
But don’t just look at the name of the account and assume it’s the right one for you without doing your research; you might get a better deal from an account not marketed to seniors.
- Who is it best for?: 55 years old or older
- Common main features: Free inspection, no monthly maintenance fees
Interest-bearing accounts
Interest-bearing checking accounts can help you earn interest, and some of these accounts have specific requirements, like a minimum direct deposit amount or a minimum number of debit card transactions, in order to earn a certain annual percentage rate (APY).
There may also be limits on the amount of your balance that can earn a particular APY. While some interest-bearing checking accounts offer higher APYs than savings or money market accounts, interest-bearing checking accounts tend to only pay a high APY on funds up to a certain balance threshold and earn a lower rate on funds above that.
Other interest-bearing checking accounts offer only a fraction of the yield you can get from a top-yield savings account. For example, checking accounts offer 0.1 percent APR, while the top-yield savings accounts currently offer 5 percent or more APR. With this in mind, it may be wise to keep a small amount in your checking account and put any excess funds in a high-yield savings account.
- Who is it best for?: People with large current account balances
- Common main features: Pay interest on the balance
Business Checking Account
This type of checking account helps you run your business. For example, you can have one checking account for payroll and another for operating expenses. You can also have separate accounts for specific purposes.
Business checking accounts may charge customers extra fees for transactions over a certain amount, so if your company deposits cash regularly, be sure to consider these fees carefully when comparing business checking accounts.
- Who is it best for?: Business owners
- Common main features: You can accept business checks, credit cards, and debit cards.
No check required checking account
These accounts don’t issue checks, so you must use a debit card for transactions. This type of account may not have overdraft fees. If you can’t remember the last time you wrote a check, this may be a preferable banking option. Some checkless checking accounts have monthly maintenance fees that can’t be waived.
- Who is it best for?: People who don’t need to write paper checks
- Common main features: Debit cards, online bill payment
Reward Current Account
When you make purchases with your debit card, you can earn points or cash back. Be sure to check the fine print to see if you need to meet certain conditions to earn cash back. Other factors to consider include minimum balances required, maintenance fees, and whether there’s a cap on the amount of cash back or points you can earn.
- Who is it best for?: People who frequently shop with debit cards
- Common main features: Cash back or points on debit card purchases
Private Bank Current Account
Typically, to open a private bank current account, you must have a certain amount of money on deposit with the bank. Investments and lending relationships may be considered to meet this criteria.
With this type of account, you may get higher debit card limits, free wire transfers, higher Zelle limits, more money you can withdraw from ATMs per day, and you’ll also work with a dedicated person to handle your account.
- Who is it best for?: People who can meet the high minimum balance requirements
- Common main features: Access to private bankers, high interest rates on deposit products, low interest rates on loans, free cheques, free safe deposit boxes
Second Chance Checking Account
If you’ve been denied a standard checking account because of a history of excessive overdrafts or outstanding negative balances, consider a Second Chance Checking Account. These accounts can help you start over and maintain a good relationship with your bank.
Second chance checking accounts usually don’t offer all the services of a standard account. There may be mandatory monthly service fees, and overdraft protection may not be an option. If you keep the account in good standing for a period of time, the bank may eventually let you switch to a regular checking account.
- Who is it best for?Consumers Denied Standard Testing
- Common main features: No mandatory service fees, no overdraft protection
How to Choose the Right Current Account
Whatever your situation, you’re likely to find a checking account that fits your needs. When choosing a checking account, determine what factors are important to you. For some people, fees (and ways to avoid them) are a top priority. Other things to consider are the availability of branches and ATMs, and whether a minimum balance is required.
Conclusion
A checking account is an essential part of managing your finances. Luckily, there are a variety of options to meet your needs. Choose the right checking account for you by considering factors like fees, branch and ATM availability, and minimum balance requirements. With a little research, you can find the account that best suits your lifestyle and financial goals.
