Learn 7 Important Factors to Choosing the Right Checking Account

A checking account offers a secure location to deposit funds and easy access to funds used for monthly expenses. There are numerous options to pick from, as with many financial products on the market.

Consider the following seven crucial aspects when selecting the best checking account for your needs:

• Insurance
• In-person vs. internet banking
• Minimum balance and deposit requirements
• Fees
• ATM accessibility
• Interest rates
• Mobile apps

To select the best checking account, you must understand how these aspects will affect you based on your financial habits and future intentions for the account. The methods you utilize in a checking account will determine which features are most important to you.

Individuals who retain a high balance in their checking account, for example, may prioritize interest rates over features such as overdraft protection. A no-fee account, on the other hand, may be preferable for those who have difficulty keeping track of their balances and/or may find themselves spending above their available funds. Matching a checking account to your spending habits and financial demands can allow you to make the most of your money.

7 Factors to Consider

A checking account is one that allows you to deposit and take money from your credit union, bank, or financial institution. Unlike savings accounts, there are usually no withdrawal limits. This makes a checking account excellent for paying bills, making everyday purchases, and withdrawing cash.

Most checking accounts provide lower interest rates on account balances, so you may not earn much on the money in your account. However, with some investigation, you may locate a checking account with a reasonable rate, such as Lafayette Federal’s 2.02% APY Checking Account (APY = Annual Percentage Yield).

Checking accounts makes it easy to access your money. There are numerous ways to access, spend, and deposit money into your account; for example, most checking accounts include a debit or ATM card (as well as checks if needed). Depending on your financial organization, you can usually access your checking account through the institution’s online banking site or mobile app.

Insurance

You should open an account at a federally insured institution, whether through a credit union, bank, or internet institution. A credit union should be insured by the National Credit Union Administration (NCUA). If you’re thinking about opening a checking account with a local or online bank, make sure it’s FDIC-insured.

The FDIC and NCUA are independent government agencies that insure bank accounts at qualifying financial institutions. If the bank or credit union fails, the government will reimburse all account holders up to $250,000.

Keep in mind that it is uncommon to locate a bank or credit union that is not federally insured. However, you don’t want to take the risk of opening a checking account at an uninsured institution. Most banks and credit unions make it obvious that they are insured on their websites and via posted signs at physical branch locations. If you’re unsure, ask a representative for documentation.

Online Banking vs. Offline Banking

Individuals who like to manage their money mostly digitally should look for a financial institution that provides convenient online and/or mobile account access. However, if you prefer to conduct your business in person, brick-and-mortar banks and credit unions allow you to speak with bank employees and physically withdraw or deposit funds.

Many traditional financial organizations now provide Internet banking services to their consumers in addition to in-person banking. Customers benefit from both the personal touch of physical banking and the convenience of doing Internet banking operations.

Minimum Balance and Deposit Requirements

Some checking accounts have a minimum balance and/or deposit requirement. You can often keep a checking account even if you don’t meet the minimum deposit requirement, but you may be charged a monthly maintenance fee. The minimum deposit amount varies by institution.

Lafayette Federal offers checking accounts with no minimum balance or monthly maintenance cost.

Other institutions may levy a monthly maintenance fee of roughly $13.95 per month. To avoid this cost, you may be required to maintain a minimum amount ranging from $100 to $500 or more, depending on the institution and kind of account. Because the type and quantity of the minimum balance vary, be sure you understand the criteria at each financial institution you’re considering.

A minimum deposit requirement, like a minimum balance requirement, may allow you to avoid a monthly maintenance cost. This usually entails setting up a recurring monthly direct deposit into your checking account (which may also be subject to a minimum requirement). Your direct transfer could come from your employer, an employer pension, or another institution, such as the Social Security Administration.

Direct deposits are simple to set up using online banking, which is a service that most financial institutions now provide. Not only will setting up direct deposit likely minimize expenses, but it will also eliminate the bother of physically depositing checks (through mobile deposit). Monthly maintenance fees are frequently waived if you meet any of these two requirements.

Fees It is critical to understand all of the fees associated with a checking account. Monthly maintenance costs are just one of many sorts of expenses linked with checking accounts. Overdraft costs, non-sufficient funds (NSF) fees, foreign transaction fees, and ATM fees are examples of additional fees.

The quantities of particular fees will range from one institution to the next and even between different account types within the same institution. Choosing an account with a cost structure that corresponds to your financial habits can help you save money. Determine which fees pose the biggest danger and select a checking account that provides fee protection or removes them entirely.

ATM Availability

Access to ATMs is a factor that is more significant for some people than others. As many elements of life have developed online, there are more consumers today who rarely, if ever, carry cash. However, for people who still prefer to spend cash for day-to-day purchases or make deposits in this manner, ATM accessibility is a crucial feature to consider when selecting the correct checking account.

Using the ATM network affiliated with your financial institution should not cost you anything. However, out-of-network ATMs frequently charge a fee. If you frequently use an ATM, be sure your bank’s ATM network is convenient for you. If it isn’t, find out what cost you’ll have to pay if you use an ATM that isn’t part of the network. Some institutions may repay ATM fees charged by an out-of-network operator.

Interest Rates

While checking accounts aren’t always the best option for people looking for a high rate of return on their money, it’s still important to consider interest rates when selecting the perfect account for you. Because money is only kept in a checking account for a brief length of time, these accounts may have lower interest rates.

Interest-bearing checking accounts typically offer an APY of 0.04% for physical banks and credit unions and 0.31% for online-only banks. High-yield checking accounts may have a tiered APY. A tiered APY model may allow you to earn greater rates up to a particular balance than a normal rate on any assets above that.

Lafayette Federal is giving an incredible 2.02% APY bonus on all Personal Checking Accounts for new and current customers with balances up to $25,000. This is a fantastic opportunity to earn more on your checking account balances while also taking advantage of our member advantages and customized service.

Apps for mobile devices

Many banks, both traditional and online, now provide mobile apps for seamless banking on the go. After downloading the app to your smartphone or tablet, you can transfer funds, pay bills, check balances, and sync to financial management tools (such as budgeting apps) directly from your device.

Mobile apps are password protected or can be set up to access with your fingerprint, making them as secure as other online tools. Being able to access all of your financial information with the tap of a finger makes staying on top of your finances simple. If mobile banking is crucial to you, make sure the financial institution you’re considering has a mobile app.