Everything You Need To Know About Checking Accounts

Learn about the different types of checking accounts and how to select the best one for your needs and financial goals.

Everyone has different financial goals for each stage in life. No matter your age or stage, you’ll always have expenses.

Spending is inevitable, whether for groceries, utility bills, transportation, or other necessities – and that’s where a checking account comes in handy. The institution you use to manage your checking account will keep a record of all your transactions.

Checking accounts allow you to deposit and withdraw for your living expenses and monitor where your money goes.

A checking account can help you with your financial goals. If you’re not yet aware of how, we’ll let you in on the many benefits of a checking account. You’ll also learn about the different types of checking accounts and how to select the best kind for your needs and financial goals.

What Are The Advantages Of Using A Checking Account?

Aside from convenience, there are plenty of benefits to enjoy with a checking account. These include the following:

Easy Access To Your Money

Checking accounts are for everyday expenses, so your funds in this type of account are easily accessible. You can access your money by swiping your debit card at checkout, withdrawing from automated teller machines (ATMs), making online transfers, or writing a check.

For online shopping, you can use your debit card to pay for your virtual finds. The best part is access isn’t limited to the US. You can spend your money in any country you visit to purchase goods and services of your choice.

Enhanced Safety For Your Funds

Carrying around a large amount of cash when you’re running errands or traveling can be risky since it’s easy to misplace your money or have it stolen. The safer solution is to use your checking account’s debit card.

Should you card be lost or stolen, you can quickly freeze your account and rest easy knowing that if your financial institution is federally insured, such as the National Credit Union Administration (NCUA), so are your funds – usually up to $250,000 per depositor. Also, there can be certain protections against unauthorized transactions, minimizing the risk of loss.

Ease Of Tracking Expenses

It’s easy to lose track of your expenses and go overboard when you pay for everything in cash. No one likes the feeling of not knowing where all their money went. Fortunately, one of the best benefits of a checking account is having a record of all your deposits and expenditures.

Your monthly statements will tell you exactly where you spent your money, allowing you to monitor your budget and make smarter spending choices in the future. Checking accounts also offer an excellent opportunity to teach teens about financial management from an early age.

Integration With Mobile Banking Features

Modern checking accounts offer much more than just the ability to write checks. They’re connected to various banking and mobile tools that make managing money more convenient.

You can use your checking account to instantly pay bills or send money to friends and family no matter where you are. Additionally, you can set up alerts for spending limits and monitor any suspicious activity.

All these features are easily accessible from your smartphone or computer, making financial management easier than ever.

Get Your Money Faster

A checking account isn’t just for cashing checks. You can set up direct deposit to have your paychecks, government benefits, and other deposits sent straight to your account. This eliminates the need to pay additional check-cashing fees.

Another perk of direct deposit is that you may receive your payments a few days earlier than the official payday.* This means you can take care of bills and other financial responsibilities sooner.

Earn Dividends

Some credit union checking accounts pay dividends, allowing you to grow your money without lifting a finger. Dividends are “any declared or prospective earnings on a member’s shares in a credit union to be paid to a member or to a member’s account”. Note that most checking accounts that pay dividends require you to maintain a certain account balance.

What Are The Main Checking Accounts?

Checking accounts come in various forms, each with its own purpose and benefits. If you’re looking to open one, these are the main types of checking accounts you’ll encounter in credit unions:

Traditional Checking Accounts

With traditional checking accounts, you can write checks, get an ATM or debit card, and access online banking features. Some don’t have a monthly fee, while others allow you to waive the fee by maintaining a minimum balance. Some checking accounts have overdraft protection, covering payments beyond your available balance.

Rewards Checking Accounts

If you’re a frequent shopper who prefers paying with their debit card, consider opening a rewards checking account. This type of account lets you earn points or cash back on purchases. But remember to read the fine print to see if you’re eligible for rewards. This type of account might also require a minimum opening amount or a minimum balance.

You can use checking accounts for multiple purposes. For example, a rewards checking account can also serve as a student checking account. Students can use this account type to practice managing their own money, pay via debit card, and enjoy cash back on their purchases.

Dividend-Bearing Checking Accounts

Traditional checking accounts don’t usually pay dividends. Those who want to earn money should open a dividend-bearing checking account instead. These accounts accumulate dividends at a set rate, which credit unions pay periodically. However, you might have to maintain a certain balance in your account to earn dividends.

Money Market Accounts

While checking accounts are for daily expenses, savings accounts are for setting aside money over time. You can open a money market account if you want the best of both worlds. This type of account typically earns higher dividends than a regular savings account, comes with check-writing capabilities, and may even offer a debit card. However, it usually requires a higher minimum opening deposit and that you maintain a certain balance to earn dividends or avoid a fee.

How To Choose A Checking Account

Given the number of checking account types available, selecting the right one for your financial needs and goals can be challenging. It’s crucial to do your research to make an informed decision.

Before opening a checking account, here are some factors to consider:

Insurance

Confirm that your chosen credit union has the protection of the National Credit Union Administration (NCUA) before opening an account. The NCUA’s Share Insurance Fund “protects members’ accounts in federally insured credit unions, in the unlikely event of a credit union failure” and “covers the balances of each member’s account, dollar-for-dollar up to the insurance limit…”

When a credit union is insured by NCUA, you can have peace of mind knowing you’ll receive reimbursement in the unlikely event your credit union fails.

Minimum Balance Requirements

Some checking accounts require maintaining a minimum balance and failing to meet it can lead to a monthly fee. Make sure to familiarize yourself with the requirements of any account you open so you don’t pay unnecessary fees. If you want to be safe, choose a checking account that doesn’t have a minimum required balance.

Fees

Like other financial products, checking accounts may entail fees for different reasons. The most common ones are maintenance fees, non-sufficient fees, and overdraft fees. Fortunately, you can avoid these by keeping a positive balance and managing your account responsibly.

ATM Access

If you prefer paying for everything in cash, withdrawing from ATMs may be part of your daily routine. Before you open a checking account, ask about the credit union’s network of free ATMs. That way, withdrawing will be a breeze, and you won’t have to pay additional fees for withdrawing from an out-of-network ATM.

Dividends & Rewards

While traditional checking accounts aren’t necessarily used for holding large amounts of money or earning dividends, other account types are designed for those purposes. For example, a dividend-bearing checking account accrues dividends and pays members monthly. Meanwhile, rewards checking accounts let you earn points and cash back.

Open A Checking Account With A+FCU

If you’re ready to enjoy the safety, convenience, and other benefits of having a checking account, open one at A+FCU. We offer different checking accounts to suit varying needs and goals. Plus, opening a checking account with a credit union helps support the local economy and offers other unique benefits.

Our Value Checking Account is ideal for first-time members with basic needs. Meanwhile, our Cash-Back Checking Account offers a rewarding experience for debit card users. For those who want to put their money to work, the A+ Checking Account is a great option. It pays you dividends each month you maintain a minimum $500 balance.† Lastly, we offer a Money Market Account, which provides the benefits of both a checking and savings account.

There are many benefits to being a member of A+FCU. Explore your checking account options at A+FCU and be a step closer to your financial goals.

*Early payment of funds is not guaranteed and is subject to when A+FCU receives the funds from the originator.

†$5 fee if balance falls below $500.

Membership required. Insured by NCUA. All checking accounts screened through ChexSystems. Conditions and restrictions may apply. Subject to change without notice. Fees could reduce earnings. See Fee Schedule.