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Tips to Open A Checking Account

There have been numerous posts written about the importance of having a savings account. These articles range from where to open your new savings account to what to look for in a savings account. But one of the most overlooked financial products in personal finance is a checking account. A checking account is a deposit account used primarily to process transactions. Checking accounts are used for everything from bill payments to cashing paychecks. These accounts are important to the daily survival of most banking customers.

Since there is some literature lacking in the area, I want to take a look at a few of the things that you should have in a checking account:

No Fees
It is getting more and more difficult to find a checking account that does not charge its customers a fee. Monthly maintenance fees can range from as low as a few dollars up to $15 dollars. Look for a bank that does not charge fees or at least provide fee waivers. For example, some banks waive monthly fees for using direct deposit or using your debit card a certain amount. Banks like Capital One 360 have no overdraft charges, no ATM surcharges, and no monthly fees. You have to love an account like that.

Low Minimum Balances
Most commercial bank checking accounts charge customers a fee for not keeping a minimum amount in their checking account. These minimum balances can run from $2,500 to $10,000 at some banks. Look for banks that offer checking accounts with low minimum balance requirements, or ideally, with no minimum requirement. If your bank makes you keep a balance of $1,000 or more, keep shopping.

Interest Bearing Accounts
Did you know that checking accounts are supposed to pay you interest? Whenever you deposit money in a bank, you should earn interest on your deposit. Too many checking account holders allow their bank to get away with paying them nothing on the money. If you deposit $1,000 or more on a regular basis, look for an account that pays you interest of 1% or more. It’s not a lot of money, but every bit helps.

Large Amount of ATM Locations
Do you have to trek all the way across town to get to your bank? If so, then you should find a more convenient bank. Banks make a fortune off of ATM surcharges. Not only does your bank charge you a fee, the banking institution’s ATM that you use will charge you as well. In order to get around these fees, use your own ATM. The more ATM locations that your bank offers, the less likely you are to stop at a competitor’s ATM machine.

What are some of the things that you consider to be important when looking for a checking account? Are you happy with your current bank?

Mark Riddix is the founder and president of an independent investment advisory firm that provides personalized investing and asset management consulting. Mark has written financial columns for Baltimore and Washington, D.C. area newspapers and is the author of the book, "Your Financial Playbook."