Checking accounts form an important part of the banking system. These accounts give consumers a place to deposit their money, write checks, pay bills, make transfers, and withdraw money from ATMs. Money kept in checking accounts is safe as all accounts are insured up to $2,50,000 per depositor by the Federal Deposit Insurance Corporation (FDIC). There are various types of checking accounts available. Before you open a checking account, you should consider factors like monthly balances, fees, convenience, and interest rates.

Monthly balance
You should decide on the average monthly balance you will keep in the account. Will the balance be the same throughout the account’s lifetime, or will you maintain large balances at certain times of the year? Certain accounts that come with perks have a minimum balance requirement. Understand the average minimum balance to be maintained, as you will be charged interest if you do not maintain the minimum balance prescribed to your account.

Fees
Fees are charged for maintenance, debit transactions, in-branch transactions, and monthly statements. These fees are deducted from the account balance. Fees can be avoided or reduced by following certain minimum balance norms. Check with your bank regarding the fees for the account type that you are planning to open.

Interest
Some checking accounts pay interest on the balance maintained every day, with interest payment done at the end of every month or quarter. Check with the bank as to which accounts pay interest on the sum deposited and decide accordingly.

Convenience
If you’re the kind of person who is not comfortable with online banking transactions and prefers in-person transactions, selects a bank with many branches so that it is easier for you to operate your accounts. Online banking is very convenient if you are well versed.

Some of the widely available types of checking accounts offered by banks and credit unions are as follows.

Traditional checking account
These type of checking accounts is most common and offer checks, ATM cards, and online bill payment options. You have the option of waiving the monthly maintenance fee by maintaining a minimum balance in the account. Some of the traditional accounts offer overdraft facilities for a charge.

Premium checking account
Premium checking accounts offer various facilities for a higher minimum balance than other checking accounts. Some of the perks offered by premium accounts are free safe deposit boxes, free personal checks, free official checks, and waiver of fees for all out-of-network ATM fees.

Senior checking account
These accounts are for people aged 55 and older. These accounts come with certain perks like free check orders or lower ATM transaction charges. Before you opt for this type of account, scout around and check the features of other accounts to see if they offer the same facilities at the same charges.

Business checking account
This type of account helps a business run its operations efficiently by checking payroll and operating expenses accounts. There are also other select options for specific purposes of the business. These services come at an extra cost. You may be charged for continuous cash deposits. Check with different banks to know the charges and select the most economical one as per your needs.

Student checking account
These accounts are offered to students aged 18-23 if they qualify for the account. They generally do not have a maintenance fee and also offer overdraft forgiveness and ATM fee reimbursement. These accounts are great for students who live on a tight budget, as they do not have to shell out extra charges and can manage their payments using debit cards and ATM transactions.