The competition for your money is heating up across the finance industry. The big banks are trying to fend off the upstart small financial institutions, while the smaller banks are only waiting to be absorbed by the industry's goliaths. Whatever the case may be, this competition is great news for your dollars and cents!
Whether you are considering changing your primary account or opening a secondary checking account to align with your financial goals, it is essential to know what you are looking for in a checking account and what you want to do with the money that you house within this account.
To make your search easier, have compiled a list of eight things you should look for in a checking account.
1. No Monthly Fee
Wait a minute. Do you have to pay to access your money? While this can seem unfair, it is ubiquitous across the major financial institutions. This monthly fee is the starting point, and then you need to factor in overdraft costs, ATM fees, and other egregious charges. But is the industry beginning to change?
A growing number of banks, especially the online ones, are ditching the monthly fee. This is beneficial because that means you get to keep more of your money. Other banks may waive the monthly charge if you maintain a minimum account balance whether it is $2,500, $5,000, or $10,000. When opening a checking account, make sure you verify that any applicable monthly fees are balanced by the other benefits offered by your account.
2. Conservative Overdraft Protection
Estimates show that the annual interest rate for overdraft protection is as high as 22 percent. Or, depending on your banking provider, you may have a fixed cost.
Overall, Americans pay between $15 billion and $34 billion per year in overdraft expenses.
If you have enough in your account at the end of each month to pay for your bills and other expenses, you do not need to worry too much about the overdraft. However, if you find yourself often navigating your way through financial emergencies, it is a good idea to have a checking account that possesses both overdraft protection and a reasonable rate.
3. Unlimited Transactions
Certain bank accounts give you a limited number of transactions per month. The number you receive is based on what type of checking account you have. But is this an outdated way of doing business? We think so.
When you are on the prowl for a new checking account, it is beneficial to find one that gives you unlimited transactions.
Since more consumers are ditching cash and paying exclusively with debit cards or smartphones, it can be restrictive to have to limit yourself to an allocated number of free transactions per month. You wouldn’t pay to use your vacuum every time you used it to clean your house. So, you shouldn’t have to pay to use your checking account for exactly what it’s supposed to be used for; accessing your money.
The funds in your checking account are dead money. It is lying there, not doing anything or receiving an extra dime. Yes, you sometimes need to maintain a minimum balance, but anything over that is allowing your hard-earned dollars and cents to be eaten away by inflation.
What is the solution? An all-in-one checking and investing account.
Not too many of the big banks pay interest on checking accounts. If they do, the variable interest rate is minimal, especially in today’s ultra-low-rate world. The best option you have is to sign up for an all-in-one checking and investing account like Finch, which lets you earn investment returns and lets you invest directly from your checking account. Liquidity and growth potential; this account does it all!
5. Free ATM Access
In the post-coronavirus economy, more people are opting not to utilize cash, whether out of concern of contracting the respiratory illness or the convenience of digital alternatives. But if you need to use cash, or that is still your preferred transaction method, you want to access your money at any time and any place (without being restricted to only using ATMs owned by your branch).
Is this something you need to pay for? It would help if you did not have to. Some banking institutions will offer no-fee ATM access, allowing you to withdraw money whenever you want, wherever you are.
6. Online and Mobile Access
When was the last time you walked into a brick-and-mortar branch?
Studies have found that more consumers use online banking and tap their mobile banking app regularly. Banks are paying attention to these consumer trends, and they are evolving towards a more seamless online and mobile user experience, with all the options you need – basic and advanced. Look for a bank that has invested in a leading-edge online banking platform, and you may never have to wait in line for a teller again!
7. Automatic Savings Plan (ASP)
Since your checking account is the primary hub for depositing and withdrawing money, this is where you will deduct from to transfer funds to your savings account. Do you have a hard time remembering to save? If so, perhaps a checking account with an automatic savings plan (ASP) is the solution for you.
An ASP is simple enough: you enroll in the program, select an amount you want to be taken from your account, and choose a recurring date to transfer the funds to your savings or investing account. In time, you will not even notice the missing money in your checking, which is great for your rainy day or emergency fund!
8. Account Alerts
Suspicious activity, data breach, or identity theft – your bank account is routinely under attack by unscrupulous individuals. It can happen to anyone at any time, and even the most cautious of us can fall victim to a fraudster.
Many financial institutions have invested and installed state-of-the-art technologies and security software to shield you and your money from criminal outfits. If account security tops your priority list, look for a bank that boasts a stellar security infrastructure. A customer service representative should likely be able to guide you through the main security features in place to protect your money and identity.
Despite its negative reputation in recent years, the banking industry has done a terrific job adapting to market conditions and innovating its financial products. As competition intensifies in the world’s largest economy, your pocketbook gains some financial relief, allowing you to select from a vast variety of financial products to meet your daily needs and unique growth goals.