Check with a Pen

A checking account is a valuable tool to use in your day-to-day financial operations, but failing to keep track of your transactions can lead to some big headaches. A checking account allows you to deposit funds and withdraw the available money on demand, typically by writing a check. A check is a document instructing a bank to pay money from a checking account to a specific person or establishment. There are different types of accounts available to consumers. They are as follows:

Basic Checking: This account is for people who use a checking account for little more than paying bills and daily expenses, and who do not maintain a high balance. Some basic accounts require direct deposit or a low minimum balance to avoid fees.

Some banks have different types of basic accounts, so you should get answers to the following questions:

  • Do they require direct deposit or a minimum balance?
  • Do they charge a monthly fee for services?
  • Do they charge a fee for each check you write over a certain limit?


Interest-Bearing Account: This account pays interest on the money you have in it. It usually requires a minimum balance to open, with an even higher balance to maintain in order to avoid fees. Interest is paid monthly, at the end of your statement cycle. Be aware that the fees for falling below the minimum balance may be more than any interest you might earn.

Joint Checking Account: This account is owned by two or more people, usually sharing a household and expenses. Each co-owner has equal access to the account.

Express Account: Designed for people who prefer to bank by ATM, telephone, or personal computer. Because you do not spend much time working with bank employees, express accounts usually offer the following:

  • Unlimited check writing
  • Low minimum balance requirements
  • Low or no monthly fees

When you do visit a bank branch, you can expect to pay a fee to talk to a teller on either a per-visit or monthly basis.

Lifeline: Lifeline checking accounts are designed for low-income bank customers. Lifeline accounts have the following:

  • Low minimum deposit and balance requirements
  • Low monthly fees, ranging from $0-$3, depending on the bank
  • Limits on the number of check per month that you can write

Certain states have laws requiring banks to offer Lifeline accounts. Currently, those states are IL, MA, NJ, NY, RI and VT. In these states, the rules and regulations for Lifeline accounts are determined by state laws.

"No Frills" Checking Account: Many banks offer special checking deals if you are 55 or older, or a student. The benefits may include:

  • Free personal checks
  • Free cashier's or travelers checks
  • Wider ATM use
  • Better rates on loans and credit cards

Bag of Money

"Free Checking" Account: "Free checking" accounts typically require you to maintain a minimum balance in your account, but certain fees, like ATM and per check fees, are eliminated. This reduced fee structure can be an attractive checking alternative for some people. However, it is important that you maintain the minimum balance or your account will no longer be "free" and you will be charged fees.

NOW and Super NOW Accounts: A NOW account (Negotiable Order of Withdrawal) is both a "Free Checking" and an interest-bearing account offered by a savings and loan or "thrift" institution. Typically, the minimum balance on a NOW account exceeds that of a "Free Checking" account and, if your balance falls below the minimum, you could pay a high fee. A Super NOW Account has a higher interest rate and a higher minimum balance than the NOW Account.