What Features Should You Look For When Opening A Checking Account?

Competition and advancements in technology mean there are many more features available today than ever before when opening a checking account. Banks and credit unions are continually competing for customers and as such they offer many different value-added features for consumer demand deposit accounts. Internet banking, online bill pay, ATM access, overdraft protection, debit cards and more are all examples of what is available to consumers opening a checking account.

There are two key factors to keep in mind when opening a checking account. What features are specifically important to you as a consumer and what strings are attached. The reason why many consumers do not open up business checking accounts is because the features available serve no purpose to anyone other than a business owner. The same holds true for the various types of consumer checking accounts. Free out-of-network ATM access or credit card like coverage for a debit card may not be relevant if you're not interested in either of these features. Also keep in mind that there is no such thing as a free lunch and many features touted as free have hidden costs.

A common marketing technique for most financial institutions is to advertise free checking accounts to lure potential customers in the door. Once you start asking questions however, you come to realize very quickly that free also means extremely limited. Some organizations place a limit on the number of checks which can be written in a month while others require a minimum average monthly balance or for direct deposit to be added. Always read the fine print and clarify what is and isn't included in a free checking account since the limitations may not line up with your intended use.

One of the primary differentiators between checking accounts is whether or not they pay interest on average monthly balances. It is almost guaranteed that a free checking account will not be an interest-earning account. The often low monthly balance and high level of check writing doesn't make it cost effective for financial institution to pay interest on this type of account. If you're a consumer who leaves more money, on the order of thousands of dollars, sitting in a demand deposit account it is possible to earn a nominal interest rate. Interest-earning checking accounts however often have strings attached like limited check writing ability and the aforementioned required demand deposit.

Fortunately, most checking accounts available for consumers today will include access to many technological features for free. While this is advertised as a modern bank or credit union which provides nothing but the best for its customers, in reality it keeps costs significantly reduce by requiring less workers to handle the same amount of transactions or inquiries. This isn't a bad thing, it just means no consumer should ever pay for access to Internet banking or online bill pay or debit cards because these features mean less paperwork and less personnel saving the banks money.

One of the most obvious questions when opening a checking account is to ask about specific fees such as overdrafts and insufficient funds. These banking fees are ubiquitous industry wide so it's only a matter of whether or not they are egregious or in line with industry standards. Ideally, no consumer will ever have to encounter these fees but if something happens where a check bounces, make sure you're not paying twice as much as a bank down the street. Also, ask if overdraft protection is provided free of charge or if it has a monthly fee.

Virtually every single financial institution has an online presence which provides detailed information about the types of demand deposit accounts and their features. Once you narrow down the list of banks or credit unions you're interested in, give them a call and ask additional questions before stopping by. It takes a little more effort to do research but it guarantees the best service with the most features which will hopefully lead to a long business relationship.