How to choose a checking account

How to choose a checking account

December 23, 2020

Tagged As: Personal

To pay your rent, cover your credit card, cable, and utility bills, buy your groceries, and repay your student loans, you almost certainly need a checking account. It's the only way to authorize the transfer of funds, whether you do it in writing or handle everything electronically. And it’s one of the financial products you need to stay connected to your future goals.

Choosing the checking account that's best for you can be complicated, since accounts come in several varieties. Do you regularly write checks, or do you rely on digital transactions? Are you interested in earning interest, or just want a place to put your money without fuss? Do you need any additional bank services, such as a safe deposit box? We’re here to break down account differences like these to help you find a checking account to suit your needs.

What can I do with a checking account?

Checking accounts are actually transaction accounts. That means you can authorize the bank to transfer money from your account to another person or organization either by writing a check that includes the words "Pay to the order of" or by electronic transfer. In contrast, a savings account is a non-transaction account and the only things you can do are withdrawals or transfers – electronic or traditional – to another account in your name.

Regular Checking Accounts

A regular checking account with a conventional or online bank may come with fees. Some banks charge a monthly fee, a fee for each check or ATM withdrawal, or sometimes a combination of monthly and per-use fees. The average monthly rate on checking accounts this year is nearly $15. Generally speaking, banks may waive fees like these if you keep a minimum balance in your checking account or in a combination of accounts in the bank. You may also qualify for free checking if your paycheck is deposited directly into your account.

But at Hills Bank, we’re proud to offer Free Checking with the features you expect from a bank account – and none of the minimum balance or deposit requirements. That includes unlimited, no-charge ATM transactions at Hills Bank ATMs or MoneyPass ATMs around the country. Other ATM owners may charge you a fee, but we won’t.

Free Checking is a great option if you’re looking for your first bank account as an adult, or just want to be able to store and spend money without having to worry about recurring fees. But if you’re looking for a bit more from your checking account, we also offer Gold Checking and High Interest Checking which come with certain requirements, such as a minimum balance or monthly deposits.

Making the Most of Your Banking Relationship

If you are interested in an account that has a minimum balance requirement, one way to reach it is to put the money you've set aside for your emergency fund in a bank certificate of deposit (CD), savings, or money market account. For the purpose of maintaining a minimum balance, the combination of all the money you have in the bank across your accounts is known as your banking relationship. Account requirements can vary, but oftentimes you can achieve minimum balance requirements by having the necessary amount spread over multiple accounts instead of all in your checking account. For accounts that require a minimum balance, ask about all the possible combinations to qualify.

Leveraging your banking relationship in this way can help you save for a rainy day while getting the benefits you deserve from your checking account. Money deposited into insured bank accounts is safe, which meets one of the basic criteria for an emergency fund. And if you're ever in serious enough financial trouble to withdraw the money, the potential lost interest or fees will probably be the least of your worries.

Important Considerations

To help you choose the right checking account for your needs, you might want to ask yourself a few questions:

  • How many checks or debits will you have, and how often will you use the ATM? If all you need is a place to keep your cash, you may consider a Savings Account.
  • Do you value having truly free checking or do you want an account with more frills, and possibly more fees? Our interest-bearing Gold Checking account offers features like a free small safety deposit box or credit toward a larger box for the first year (contents are not FDIC-insured). However, you’ll need to meet the minimum balance to avoid fees.
  • Do you receive direct deposit into your checking account and use it for purchases more than a credit card? If so, you may benefit from a High Interest Checking Account.

You can get help finding the right checking account for you by asking a banker. Our bankers are personal finance experts, and they’re well-versed in the types of questions people like you have about bank accounts.

In addition to a checking account, there are several other financial products you may need over the course of your life. Our bankers are here to help you make the right financial decisions at the right time for you.