After you determine what you need in a checking account and understand the different fees involved, you might be ready to choose the type of account you should open. Keep in mind that banks sometimes refer to these accounts by different names.
Before making a decision, read the materials (disclosures), ask questions, and understand which checking account best fits your needs. The main types of checking accounts include:
Low-cost checking:
Many banks offer low-cost checking for people who don't write a lot of checks. The charge is often less than $5 per month. There might be a limit to the number of checks you can write without an additional charge.
ATM-checking:
Some banks offer an ATM-checking account for you at reduced-cost or a free checking account if you do all of your banking by phone and ATM. This type of account usually requires you to use direct deposit.
The bank might charge you a fee if you use the services of a teller. This type of account usually offers unlimited check writing privileges, in other words, there are no additional charges based on the number of checks you write.
Regular checking:
With a regular checking account, there is often a minimum balance required to waive the monthly service fee. This type of account usually offers unlimited check writing privileges.
Interest checking:
There are different interest-bearing accounts, such as the Negotiable Order of Withdraw (NOW) account (commonly called "interest checking") and the Money Market Deposit Account (MMDA). With these accounts, you usually need to maintain a high minimum balance in order to earn interest and avoid fees. The minimum balance is often at least $1,000.
Checking Account Fees
Before you open a checking account...
- Ask the bank for the Fee Schedule for checking accounts.
- Compare the costs of the various types of checking accounts you are considering. (For a list of common types of checking accounts, look under "Checking Accounts" in the Information Booth).
- Ask the bank whether fees can be waived and how to avoid them. Some of fees may include:
What fees can I expect when opening a checking account?
Monthly Service Fee
Monthly service fee is also called a maintenance fee. The bank might charge a fee each month, just for having the account. You might also be charged a fee if your balance drops below the required minimum.
Per Check Fee
Some accounts charge a fee for each check you write. Depending on the account, you might pay the fee for each check or only when you write more than a certain number of checks (perhaps five) a month.
ATM-Use Fee
You might be charged a fee each time you use an ATM at a bank other than your own.
Checking Printing Fee
You can buy checks from the bank or through the mail from other companies. If you buy checks from the bank, the charge for printing the checks is usually automatically deducted from your checking account.
Fancy checks cost more than basic checks. You can buy more than one box at a time. Carbon copy checks are an option, and allow you to keep a copy of the check for your personal reference.
Overdraft Fee
Overdraft Fee is also called as nonsufficient funds (NSF) fee. NSF fees apply when you bounce a check. The bank will notify you if a check is returned to the person or company to whom it was issued because there were insufficient funds in the account.
Your bank will charge a processing fee to your account because of the cost to return the check. Merchants might also charge a fee, if a bounced check is used to purchase the goods or services. The fee charged is usually posted near the cashier.
Returned Deposit Item
Banks might charge a fee if a check you deposit in your account bounces.
Stop Payment Fee
If you lose a check or need to make sure a check is not paid by the bank for some other reason, you can request a "stop payment"; There is a fee for this service, and the bank might not be able to catch the check before it is paid.
Balance Checkbook Fee
Some banks will help you balance your checkbook. Some might charge you for this service.
Phone Inquiry Fee
Some banks charge a fee if you call to check your balance or to see if a check or deposit has cleared.
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