How Do I Find The Best Checking Account?

If you are like me, you don’t like shopping for a checking account.  It’s a hassle and time consuming.  You have to keep one account open until all the checks clear, while you open another and order new checks.  If you use online bill pay ordering checks isn’t your main concern as much as changing the bill pay from the old account to the new one.  Why go through the hassle?

Review your checking account statement to determine the fees you are paying, such as monthly service charges, ATM fees, overdraft fees, etc.  If you are paying too much (in your mind), you should consider switching institutions or at least look at other account options.  You want to get as many of these services for free as possible.  How do you start?

You need to determine the checking account services you want and get a list of the fees at banks and credit unions to determine the best deal for you.  You may be able to find this on the internet or you may have the contact the institution. The big banks offer more services, have more locations,  but can charge more and don’t have a reputation for good customer service.

Credit unions usually offer free checking and charge lower fees, but have fewer locations, so you have to consider the ATM network and those fees. Credit unions are usually the best deal, but you have to weigh the pros and cons.

Here is a list of items to consider, and of course you want all of these items for free:

• ATMs – Look at the fees charged for using their ATM  in and out of network and the location of the ATMs.

• Online bill pay – If you pay bills online or plan to do so, make sure this is available for free.  Also find out the turnaround time to process and pay bills.

• Debit card – If you are a debit card user, you need to check the policy and the fees.

• Monthly fee – There are many types of checking accounts with many different features.  Some charge a monthly fee and/or price per check/transaction.  In order to waive the monthly fee,  a minimum balance may be required.  Most will give you free checking with automatic payroll deposit.

• NSF fees – All charge fees for non-sufficient funds unless you have overdraft protection.  Note those that charge the lowest fees and pay attention to other fees associated with NSF.

• Overdraft protection – Overdraft protection prevents your account from being overdrawn.  Overdraft protection is considered a line of credit account and you are charged for the overdrawn amount plus interest.  This may be cheaper than paying NSF fees, if you are a person that bounces checks. This account is also reported to the credit reporting agencies.  Some banks have begun to charge an annual fee for this account,  so beware of this.

• Paper checks – Some checking accounts provide free checks.  If you don’t write many checks this may not be important to you.

• Statements –  One way for them to reduce costs is to stop sending monthly statements.  There may be fees for paper statements and copies of checks.

• Customer service – Look at the hours you can contact customer service and their customer service reputation.

• Interest on checking – Interest rates are so low you may get a few cents a month.  This is no longer an incentive.

When you shop for a checking account, you need to determine what is important to you to meet your lifestyle.  The more you can get for free, the better.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Money & Identity, Saving Money

This post was written by John Ulzheimer