Features to Look for in Your Next Checking Account

You work hard for your money, so being able to use it should be simple and painless. That’s why you want a checking account that is easy to use and suits your lifestyle. 

You probably already have a checking account, and granted, changing banks is time consuming, but the right checking account will make your financial life easier and, more importantly, save you money. It pays to shop around with banks and credit unions to find the right checking account to meet your needs.

Why You Need a Checking Account

There are many reasons to maintain a checking account. Consider that 25% of Americans are unbanked or underbanked. That means they don’t have a checking account and are using payday loans or check-cashing services, which means they are paying to access their own money. More than half of unbanked households say they don’t have enough cash to keep in an account, 30% don’t trust banks, and 9% say banks are inconvenient. However, even with very little money you can enjoy the convenience of a checking account.

All bank and credit union checking accounts are insured by the federal government for up to $250,000, so your money is secure. A checking account also makes it easy to pay your bills and manage your money. Everyone should maintain a household budget, and your checking account is the easiest way to manage income and expenses. A checking account also helps you establish credit, and you will need a credit rating for job applications, to apply for a lease on an apartment, and for other purposes.

A checking account can be your most valuable financial tool, but you need to know what to look for to find the best checking account for you.

What to Look for in a Checking Account

When shopping for a checking account, you want to look for convenience, ways to save, and ways to earn money. Your money should be working for you, so you want to find a checking account with the right features. Here are some things to look for: 

• Fees — Many banks charge fees for checking services. You should look for accounts with no fees, low fees, or easy ways to waive fees. For example, there may be a minimum balance requirement to waive fees, or there may be fees for paper statements. Be sure you understand what fees are tied to the checking account and how to avoid them.
  
  
• Interest rates — Many checking accounts pay interest on deposits. This usually requires maintaining a minimum balance and meeting other criteria. The average interest rate for a bank checking account is 0.06%, although credit unions tend to offer better rates at an average of 0.12%.
  
  
• ATM access — Convenience and the ability to get cash when you need it is an important consideration. Most large banks require you to use their automated teller machines (ATMs) to avoid transaction fees that can be as high as $5 per transaction. Most credit unions belong to a national ATM network. Make sure there are plenty of ATMs available, including when you travel.
  
  
• Mobile banking — Mobile banking is ranked as the most important feature for 42.5% of consumers. Make sure you have smartphone access to your checking account for routine transactions such as check deposits, money transfers, and bill pay.
  
  
• Online bill pay — Being able to pay bills remotely is a real convenience. You should be able to perform remote money transfers and pay bills from any secure web browser.
  
  
• Overdraft protection — Most financial institutions offer overdraft protection, but they use different strategies. Some require that your checking account is tied to a savings account. Others use a credit card for overdrafts. Be sure you understand the terms for overdraft protection.

Leverage Your Savings Account

Take advantage of the perks you receive when you establish and connect multiple accounts with a bank or credit union. For example, if you maintain a minimum balance in your savings account you get free checking services. For many households, it’s common practice to use your checking account for everyday expenses and use savings for emergencies or to pay for planned expenses like vacations. It pays to find a bank or credit union that offers benefits for checking and savings.

Many financial institutions want to encourage savings, so they let you set up automated deposits that transfer money from checking to savings. Some also limit the number of savings transactions you can make each month or require a minimum balance. 

Ideally, you want to find a bank or credit union that helps you earn more money with higher interest rates and few or no restrictions. iQ Credit Union offers the Easy Saver program, in which every debit card transaction is rounded up and the difference is deposited in your special savings account.

Shop for Checking Choices

Your financial needs will change over time, so it pays to shop for a financial institution that gives you choices when it comes to checking. For example, iQ Credit Union offers three types of checking accounts:

1. Basic Checking — iQ’s Basic Checking has no monthly fees or minimum balance, comes with a debit card, and offers mobile banking, online bill pay, unlimited check writing and more, including optional overdraft protection.
   
   
2. Intelligent Checking — Our most popular checking account, iQ’s Intelligent Checking has all the features of Basic Checking and earns 2.5% annual percentage yield (APY) with no monthly fees or minimum balance, and even pays fees for using ATMs not in the iQ network.
   
   
3. Interest Checking — iQ’s Interest Checking offers everything in Basic Checking as well as interest paid in deposits, overdraft protection, and service fees waived if you maintain a $500 balance.

For most people, opening a checking account is their first interaction with a bank or credit union but not their last. In addition to checking account features, be sure to see what other services the bank or credit union offers, such as credit cards, savings and retirement accounts, money market accounts, and certificates of deposit (CDs). Also be sure to see what they offer in personal, auto, and home loans.

You want to work with a financial institution you can trust with all your financial needs, not just your checking account. You will find that credit unions such as iQ typically offer full-service banking, with better interest rates and better customer service. At iQ Credit Union, you aren’t just another customer, you are a member, and that makes all the difference.