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How to Choose a Checking Account
In today's digital banking world—with online banking, mobile deposits and money transfer apps—it's a smart move to have a checking account at a financial institution that you trust. You can rest assured that they will keep your money safe and offer you not only convenience but also a customer experience that meets your needs.
Whether you prefer to keep a few dollars in your checking account or maintain a higher balance, there are checking account options for you. In this article, we'll explain the finer points of choosing so when you're ready to open a checking account, you can make the best decision for you. The process is fairly straightforward, and TD Bank makes it easy.
What is a checking account?
Let's start with the basics.
A consumer checking account is a bank account into which you deposit funds (such as direct deposits from your job) and from which you can pay bills and everyday expenses. You can set up bill payment on the bank's website and authorize billers to directly withdraw money, as is often the case for mortgages.
These payment accounts can be opened at traditional banks, credit unions and online banks. New accounts are easy to open with a government ID, Social Security number, proof of address and an initial deposit. No credit check is required—just your signature.
Checking is just one of multiple accounts you may have at one or more banks. You may also have a savings account, where you accumulate money for emergencies and longer-term goals.
Some checking accounts are better for those with smaller balances and some, which may earn interest, are more suited for people who can maintain higher account balances. The best accounts for you are a matter of individual needs and preferences. For example, do you want to be able to visit a brick-and-mortar branch, or are you comfortable managing everything digitally?
Now, let's look at some of the checking account features that are available from various financial institutions.
Common features that checking accounts might offer
When choosing among checking account options, a good place to start is identifying the must-have features that are most important to you. Here are a few of the account options you are likely to find as you look for a new account.
Mobile banking
If you want your banking experience to be as on-the-go as you are, look for a secure and user-friendly digital app that lets you deposit checks, pay bills, transfer money between your accounts, send money to friends and view your account information and activity from your smartphone or tablet. The TD Bank app offers all those features and more.
Early deposit/early pay
When you get paid through direct deposit, your employer notifies the bank of an incoming deposit before it clears your account. TD Bank uses this information to deposit the funds into your account up to two business days earlier than your scheduled pay date. The TD Early Pay1 service is free. If you sign up for TD Alerts, you will be notified when the funds are available.2
Direct deposit
Ninety-three percent of American workers are paid via direct deposit, according to the American Payroll Association, and direct deposit is mandatory for employees in some states. Direct deposit is faster and more secure than paper paychecks, and it saves you a trip to the bank or ATM.
Free deposits
Some banks set restrictions on the amount of cash you can deposit each month. If you exceed that amount, they charge you for deposits, usually per $100 deposited above the limit. So if you are routinely depositing large amounts of cash, look for a bank account that offers free deposits.
FDIC-insured
In case an FDIC-insured bank declares insolvency, your checking accounts are protected for up to $250,000 per account category ($500,000 for a joint account with two individuals). So, make sure your bank is FDIC-insured, as TD Bank is, by checking the FDIC's BankFind tool or looking for the FDIC window sticker.
Zelle®
Zelle® is a peer-to-peer money transfer app that allows users to send and receive funds between bank accounts, whether or not they're at the same financial institution. It's a convenient way to send money to friends, pay the babysitter or, if you have a small business, get paid. TD Bank offers Zelle® among its digital payment methods.
It's important to use Zelle® carefully because once you send the money, you can't get it back.
What to consider when choosing a checking account
Now that you've identified your must-haves and found several checking accounts at specific banks that meet your needs, it's time to take a close look at the terms, conditions and fees that will govern your personal checking account.
Monthly checking account fees
Most banks levy monthly fees to maintain your checking account. Look for banks with no- to low-fee accounts and multiple ways to waive them, such as regular direct deposits. Premium and money market accounts often carry no fees but require you to maintain a large balance.
Minimum balances
This is the least amount of money you can have on a daily basis in your account to avoid the monthly fees. Some checking accounts, particularly those geared to students and seniors, have no minimum balance requirement.
ATM fees
ATM access wherever you are is great, but if you don't pay attention to what network the ATM is in, you could be subject to surcharges of $3 or more from both your bank and the other bank's network.
Easy access to funds
Some banks make you wait for your deposits to become available for withdrawal. Look for a bank that posts mobile deposits instantly or within one business day, as TD Bank does. Convenient ATM locations and longer business hours also facilitate access to your money.
Your overall needs
Does money flow in and out of your checking account regularly, or do you tend to accumulate it? If you are a big user of your checking account, look for one that doesn't limit the number of monthly transactions. If you tend to sit on large checking account balances, consider opening a savings account to put that money to work.
Common types of checking accounts
Financial institutions have developed different consumer checking accounts to meet customer needs. Here's a look at three basic types:
Traditional checking account
Regular checking accounts typically pay no interest and may charge monthly maintenance fees. Free checking accounts may limit the number of withdrawals or transactions per month and they may require a minimum balance or direct deposit to avoid fees.
Premium checking account
Premium checking accounts are for consumers who can maintain a higher minimum balance in exchange for avoiding the monthly fees. The bank may pay interest on the balance, waive other kinds of fees and offer perks like safe-deposit box rental.
Student checking account
Some banks offer student checking accounts for high school, college and even middle school students. These accounts feature low or no monthly fees and no minimum balances. It's a great way to start teaching a young person to be a responsible money manager. Typically, a young person has to be 18 to open an account in their own name, but a parent or guardian can open a joint or custodial account for a minor to keep an eye on spending.
Checking accounts from TD Bank
An account loaded with perks
A checking account made for everyone
No checks and no overdraft fees or services
TD Business Simple CheckingSM
An ideal account with no minimum balance requirement
TD Business Convenience Checking Plus
The essential account features you need to run your business
TD Business Premier CheckingSM
Rewards for your business deposits, TD Bank relationship and more