Checking accounts are vital financial tools.

Perhaps the most widely used financial tool is a checking account. By understanding the basics of a checking account, you can be sure to make the most of it and make it work for you.

Types of checking accounts
When choosing a checking account, you first need to know the choices available to you.

• Basic: A basic checking account is a good choice if all you need it for is to pay a few bills and get a debit card. Usually you only have a limited number of checks per month with a basic checking account and there is a fee if you exceed that number.
• Free: A free checking account is free in the sense that you do not have to pay monthly service charges and there is no required minimum balance. However, that does not mean it is free if you write a check and have insufficient funds to cover it – you’ll have to pay the penalty fees associated with bounced checks.
• Interest-bearing: This type of checking account usually requires a minimum balance to open and avoid fees. Although you can earn interest on your balance, it is at a very low-interest rate and may not be worth the hassle of maintaining the minimum balance.
• Joint: A joint checking account is controlled by more than one person (for example, a married couple). It is important to keep close tabs on the transactions since more than one person accesses it.

Basics of a checking account

• A checking account is an easy way to pay bills, and it leaves a paper trail that the bills are paid.
• You keep track of your withdrawals and deposits in your checking account to make sure to keep sufficient funds in it.
• It is usually safer than carrying cash. If you lose your checkbook or it is stolen, you can contact the bank to cancel your checks. If you lose your cash, it is gone.
• You can use online banking with most banks. It can be used for paying bills online or for checking the account balance.

Features of a checking account

• Checks: A standard feature of a checking account is paper checks. They come with a register so that you can write down the amounts of any checks that you write. You may be allowed to use only a certain amount of checks per month depending on the type of checking account that you have.
• ATM card: An ATM card can be used to get cash, make deposits, or check balances. Sometimes an ATM card can be used to make purchases. There may be fees for either having an ATM card or for using it.
• Debit/check card: Debit cards have become a popular feature of checking accounts. They can be used as an ATM card or for purchases. It can be used like cash or check when making a purchase by using a PIN. The store immediately withdraws the amount for the purchase from your checking account electronically. Or, it can be used as a credit card in which you have to sign for the purchase and the money is withdrawn from your account in a couple of days.

If looking for a checking account, check out the options available to you at the bank of your choice. Then, find the type of checking account that best meets your needs.