Kathleen Cole, Member
@kathleen_cole
A checking account is a basic deposit account held with a bank or credit union. Features like direct deposit allow employers to directly transfer paychecks into a checking account, and debit cards allow easy access to funds wherever Visa, Mastercard or American Express is accepted.
Key Things to Know About Checking Accounts
- Low interest rates. If you’re looking to earn interest on your money, don’t leave it in a checking account. Their interest rates have historically averaged only 0.03% - 0.14% APY, and some earn no interest at all.
- Fees galore. Checking accounts can charge all kinds of fees, including a monthly maintenance fee that many banks will waive if the account’s balance is kept above a certain level or if it receives regular direct deposits, such as paychecks. Read your account agreement’s fine print carefully to avoid maintenance fees, overdraft fees, and other unpleasant charges.
- Funds held in checking accounts are easy to access. You can make purchases and withdraw cash with a debit card, write checks, or even instantly transfer money to a friend via a mobile banking app, making this kind of account great for everyday use. However, if you’re trying to save money, having your funds accessible at all times could be a downside.
- Rewards? If you’re hoping to earn rewards on purchases you make with a debit card, you’ll likely be disappointed. It’s rare to find a checking account that offers this feature. Only about 5% of personal branch checking accounts offer a rewards program, according to WalletHub’s latest Banking Landscape Report.
You can use WalletHub’s checking account comparison tool to find the right checking account offer for you.
Dmitriy Fomichenko, President, Sense Financial
@dfomichenko
A checking account is a bank account held at a financial institution that allows deposit and withdrawal of money. These accounts are beneficial because of the liquidity they offer. You can withdraw funds using checks, automated teller machines (using a bank-issued debit/credit card), and electronic debits.
People also ask
What does a checking account do?
A checking account is a type of bank account designed for everyday transactions. It offers you a convenient way to deposit, withdraw, and transfer money. Here are some of its main functions:
- Depositing funds: You can add money to your checking account through various methods, such as cash deposits, checks, or electronic transfers.
- Withdrawing funds: You can withdraw money from your checking account using ATMs, checks, or by transferring funds to...
What is the difference between a checking account and a bank account?
A checking account is a specific type of bank account, but not all bank accounts are checking accounts. A bank account is a broad term that includes various types of accounts offered by banks and credit unions, including checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs).
In summary, a checking account is a type of bank account specifically designed for frequent access and transactions, while a bank account can refer to any type of account offered by...
read full answer by Ramses Delgado, Banking ModeratorIs debit card a checking account?
No, a debit card is not a checking account, but they are closely related. A debit card is a payment card that allows you to access funds directly from your checking account. It's essentially a tool that connects your checking account to your purchases. When you use a debit card, the funds are immediately withdrawn from your checking account.
A checking account, on the other hand, is a type of bank account that allows you to...
read full answer by Ramses Delgado, Banking ModeratorDid we answer your question?
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