Checking account

Checking account

The checking account is the account type used for regular, daily use. It is excellent for frequent deposits and withdrawals. In most cases it earns you no interest. Checking accounts are usually free to open, but many banks will charge you a monthly fee if the average monthly balance of the account will drop below a certain amount. In other words you have to keep in the bank all the times a certain minimum amount of money (varies from bank to bank, but it is usually a few hundred dollars) if you want the monthly fee waived. These monthly fees are usually around $10/month. However some banks offer free checking accounts with no imposed limits called free checking accounts. The best way is to shop around, visit a few banks and ask them.

You should be aware of a "dirty trick" the banks make with your checking account if you are not careful. Usually you won't be warned about this. Here it is. If you spend more money from your checking account than you have available, and the difference is not more than $50-100, the bank will accept your transaction and will "lend" you the difference. For this service you will be charged a $25-30 flat fee called overdraft fee. You will have to pay back not only what you overspent, but the overdraft fee as well. So be careful, monitor your checking account limits and don't go below zero.

What I suggest, from my personal experience, for safety reasons try not to go below $100 on your checking amount balance. In America is quite common to pay for things in "easy monthly payments". This is how TV commercials are luring their customers in buying. Easy monthly payments. And let's say you bought your favorite wonder widget for $400, but instead of paying it off in full, you decide to go for 4 easy payments of $100. Now the problem with this is if you don't write it down to remember it, within two months you will forget it. And by any chance if that time you are running low on money on your checking account, such an "automated charge" can overdraw your account and trigger the overdraft fee.

So watch your checking account limits.