10 Questions To Ask Before Opening A Checking Account (2024)

You need an everyday place to manage your household bills, and a checking account lets you do just that. But with all the different banks and credit unions out there to choose from, there are several questions you need to ask before you open a checking account.

To find the best checking accountfor your needs, ask these 10 questions to help match you with the perfect balance of fees and features.

1. Do You Need a Physical Branch Location?

The bank or credit union around the corner isn’t your only banking choice anymore. With the rise of online banks, you have quite a few options for where to open an account.

A bank with a physical branchmay make sense if the in-person banking experience still wins you over. From the drive-through to the teller who knows you by name, those are features you generally won’t find at an online bank (and for logical reasons).

However, if you’re a digital native of someone who already does pretty much everything online, an online bankcould be a perfect fit. With their robust online tools and savvy mobile apps, online banks cater to those who like to bank on the go and don’t need a physical branch for reassurance.

2. Do You Want Rewards or Cash Back?

Different banks offer different checking account features, including various incentive programs like loyalty rewards and cash back options. If these features are important to you, you’ll want to look for a bank that offers the type of incentive program that helps you make the most of your checking account.

Banks like Discover Bank, Axos Bankand LendingClub Bankall offer cash back checking account options, including debit cards with rewardfeatures. Some regional and national banks provide various cash back, bonus and rewards programs as well. Be sure to review how any cash back is accumulated, and read the fine print to learn about fees or requirements to activate bonuses or other rewards.

3. What Kind of Checking Account Do You Need?

Before you open your account, you need to know what type of checking accountyou need. This will help you compare features between banks on the same type of account:

• An individual checking accountis a type of personal account where you will be the sole account holder.
• A joint checking accountis shared by two or more people—usually by spouses, partners, children and their elderly parents or parents and their minor children (in which case it’s often called a custodial account).
• A business checking accountis specifically for a business—whether doing business as a sole proprietor, corporation, partnership or limited liability company (LLC).

4. What’s the Interest Rate?

Interest rates are one of the most distinguishing features of high-yield checking accountsand they can vary widely. While many national brick-and-mortar banks offer nominal interest on personal checking accounts, online banks typically offermore competitive interest rates.

Pay attention to the different interest rate tiers banks offer and any requirements you’ll need to meet to earn those yields. You may have to fulfill specific requirements each month to earn the highest yields on a checking account, like receiving direct deposits or making a certain number of debit card transactions.

5. What Are the Minimum Balance Requirements?

Some checking accounts not only have a minimum opening deposit but a minimum monthly balance requirement as well. You’ll have to meet the minimum to avoid a monthly account fee.

Sometimes banks will waive the minimum balance requirement if you meet certain qualifications each month—such as opting to receive your paycheck via direct deposit. Be sure to read the fine print to make sure you’re not opening a checking account with balance requirements that you can’t meet.

6. What About ATM Fees?

Here’s where the competition gets stiff between brick-and-mortar banks and online banks: ATM fees.

If you use an ATM that’s in your bank’s ATM network (you can usually locate these in your bank’s mobile banking app or via the bank’s website), you can likely avoid fees when you make ATM withdrawals. However, when you need money in a pinch, how will your bank charge you for using an out-of-network ATM?

When you use an ATM outside of your bank’s network, it’s common to be charged by the bank that owns the ATM, and you may also get charged by your bank. So, you could get hit with fees twice. However, some banks offer ATM fee rebates to help ease the stress of needing to find an ATM on the bank’s network.

Banks including Axos Bank, LendingClub Bankand Charles Schwab Bankoffer unlimited out-of-network ATM fee reimbursem*nt for their checking customers. Other banks may offer to refund a certain dollar amount per month. At worst, you’re stuck with the fees. If you use a lot of cash, you’ll want a bank with friendly ATM fee policies.

7. What’s the App Like?

From mobile check depositsto making sure your paycheck hits your account, a user-friendly mobile app can make all the difference when choosing achecking account.

Even if you won’t be doing all your banking from your mobile device, it pays to get a look at the app’s functionality. Don’t be shy about digging through bank and credit union websites to see if you can sneak a peek at the different features their mobile banking apps offer. If you’re looking for specific features in the mobile banking app, you can always call the bank’s customer service line or chat with their customer service team on their website.

Also, take a look at the bank’s mobile app star rating on the App Store or Google Play.

8. Does the Account Come With Bill Pay?

Bill payment features through your bank can help you stick to a budget, automate bill paymentsand avoid late fees. Because this is a popular feature with checking accounts, you have options when it comes to bill pay features.

Many banks have digital partnerships with popular credit card companies and utility providers (like cable and electric companies) and can send digital payments directly from your account. Other banks only send paper checks and you’ll have to make sure you set your bill payment date enough in advance of your due date for the payment to arrive on time.

9. What Kind of Overdraft Protection Does the Account Offer?

The last thing you want to do is bounce a check, but even the most diligent people hit a financial hiccup at times. That’s why you want to compare each bank’s features for protecting you should you overdraw your account.

Overdraft protectiononyour checking account can come in many forms. Some banks offer to make an automatic transfer from a savings account held at the same institution to cover the transaction. Others provide a grace period so you can make a deposit to cover the shortfall.

10. What Are the Account Fees?

While a no-fee checking accountis ideal, there are plenty of potential fees you could incur as a matter of doing business with your checking account. Knowing how the banks you’re considering assess fees can help you make a more apples-to-apples comparison between checking accounts.

Some common fees for checking accountsare:

• ATM fees for using an out-of-network ATM
• Cashier’s checkfees
• Check reorder fees
• Foreign transaction fees
• Minimum balance fees
• Monthly maintenance fees
• Overdraft fees
• NSF (non-sufficient funds) fees
• Wire transfer fees (incoming and/or outgoing)

Many online banks are super savvy and keep their fees to a minimum to entice you to open a checking account. Don’t be shy about speaking with a human being regarding any questions you may have about checking account fees. It’s better that you’re well-informed before you open your account.

Bottom Line

The 10 questions above can help you narrow down your options to identify the best checking accounts for your financial goals and lifestyle. A checking account is just one part of your overall financial relationship. Be sure to look at savings account options with the same bank and how the bank’s other services will complement future financial goals like buying a homeand saving for retirement.