Determining your Checking Account Needs

When selecting and opening a checking account, remember that financial institutions offer different types of checking accounts. To determine what you need, think about how you plan to use your checking account. The following questions will help determine what you need in a checking account.

Convenience

• How many checks do you think you will write every month?
• Do you want a bank that is close to your home or work?
• What are the bank’s hours of operation?
• Will you use the ATM often?
• Does the bank have ATMs close to where you live or work?
• How often do you plan to visit the bank to use teller services?
• What other bank services are important to you?

Cost

• How much money will you keep in your account?
• Will you be charged for writing extra checks?
• Are you willing to pay a monthly fee? If yes, how much?
• Will you be charged to use your bank’s ATM?
• Will you be charged for using other banks’ ATMs?
• Will you be charged for using teller services?
• Are there ways to avoid paying fees?

Checking Account Fees

Ask the bank for the fee schedule for checking accounts. Compare the costs of the various accounts you’re considering. Ask the bank whether fees can be waived and how to avoid fees. Some of the fees may include:

Monthly Service Fee

The bank might charge a fee each month for having the account. You might also be charged a fee if your balance drops below the required minimum. This may also be called a maintenance fee.

Per Check Fee

Some accounts charge a fee for each check you write. Depending on the account, you might pay the fee for each check or only when you write more than a certain number of checks (perhaps five) a month.

Check Printing Fee

You can buy checks from the bank or through the mail from other companies. If you buy checks from the bank, the charge for printing the checks is usually automatically deducted from your checking account.

ATM-Use Fee

You might be charged each time you use the ATM at your bank or each time you use an ATM at a bank other than your own.

Overdraft Fees

Also called “insufficient funds,” “non-sufficient funds,” or “NSF” fees, your bank will typically charge this type of fee when a check that you’ve written is returned unpaid to the person or company to whom the check is written because there is not enough money in the bank account to pay the check. This fee is considered a processing fee to cover the cost of the returned check. Merchants might also charge a fee if you write a check to them to purchase goods or services and the check is returned unpaid. The fee charged is usually posted near the cashier. The bank typically notifies you by mail if they returned one of your checks unpaid.
A new law called the Check Clearing for the 21st Century Act, or Check 21, allows an image replacement document or substitute check to have the same legal standing as the original check. Banks can exchange images instead of paper in the check collection process. This means that your check will clear the bank very quickly. So you need to make sure you have the funds to cover it when you write the check.
Many financial institutions offer “courtesy overdraft protection” or “bounce protection” plans so that your checks do not bounce and you do not overdraw your account. With these plans, you will avoid the merchant’s returned check fee, but you still have to pay the financial institution an overdraft fee or a bounce coverage fee for each item. Unlike an overdraft line of credit, with bounce protection there is no guarantee that your bank will cover your checks, ATM withdrawals, and debit card and other electronic transactions that overdraw your account.

Returned Deposit Item

Banks might charge a fee if a check you deposit in your account bounces.

Stop-Payment Fee

If you lose a check or need to make sure a check is not paid by the bank for some other reason, you can request a “stop payment.” There is a fee for this service, and the bank might not be able to stop the check before it is paid.

Phone Inquiry Fee

Some banks may charge a fee if you call to check your balance or to see if a check or deposit has cleared.
 

Fee for Helping You Balance Your Checkbook

Some banks will help you balance your checkbook for a fee.

Teller Fee

Some banks may charge a fee if you use a teller to make deposits or withdrawals more than a set number of times each month. Banks that charge this fee do so to encourage you to use an ATM for your basic banking transactions.