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6 tips for choosing the best checking account

Checking accounts let you conveniently deposit and withdraw money, but with thousands of options, it can be hard to choose an account.

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Checking accounts offer a safe place to conveniently deposit and withdraw money, but it can be hard to choose from the overwhelming number of options.

Online banks, brick-and-mortar banks and credit unions all offer checking accounts that come with a variety of different features. Checking accounts might provide above average interest rates, no monthly maintenance fees, ATM fee reimbursements and/or other benefits. 

All of these perks can help you do the most with your money, but it takes a little research to decide on the right account for you. You should compare different accounts and narrow down your top options. If you want to choose the best checking account, follow the guidelines listed below.

How to choose a checking account

Before you open a checking account, consider these factors:

  1. Insurance
  2. Minimum deposit requirements
  3. Fees
  4. ATM network
  5. Interest and rewards
  6. Mobile app features

1. Insurance

You should verify that the bank or credit union where you open an account provides insurance from either the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA).

Both the FDIC and NCUA provide a standard insurance amount of $250,000 per depositor, per bank or credit union. This insurance protects and reimburses you up to your balance and the legal limit in the event your bank or credit union fails.

2. Minimum balance requirements

Many checking accounts require you to maintain a certain balance in order to avoid fees. If you don't meet the balance requirements, you'll incur a monthly maintenance fee up to $15.

The Chase Total Checking® account charges a $12 monthly service fee to account holders who don't meet one of these three requirements:

  1. Direct deposits totaling $500 or more each month
  2. A minimum $1,500 balance at the beginning of each day
  3. An average $5,000 or greater balance in a combination of this account and linked qualifying Chase checking and savings accounts at the beginning of each day

If you open an account that charges monthly service fees, make sure you meet any minimum balance requirements to waive the fee. Otherwise, opt for a checking account that doesn't require you to maintain a certain balance to benefit from $0 monthly service fees, such as Capital One 360 Checking®. Check out our review of the Capital One 360 Checking Account.

3. Fees

Like most financial products, checking accounts charge various fees to access your money. Some common fees include: monthly service/maintenance fee, overdraft fee, non-sufficient (NSF) fee and ATM fee. These fees can range from a couple dollars to $35 per occurrence, making repeat fees costly.

Thankfully, many of the common checking account fees can be avoided if you responsibly manage your account and always maintain a positive balance. However, you should also consider accounts that have minimal fees so you don't need to keep track of too many requirements. Consider no-fee checking accounts that never charge monthly service fees and may provide ATM fee reimbursements, which we discuss next.

4. ATM network

If you often pay with cash, you'll need to use an ATM and/or visit a branch location to withdraw money. Thankfully, checking accounts provide access to thousands of free ATMs.

If you stick to your bank or credit union's ATM network, you won't incur any ATM fees. Using an ATM from an out-of-network provider may come at a fee from both your bank/credit union and the ATM operator. However, some of the best checking accounts provide reimbursements. The Alliant Credit Union High-Rate Checking account offers up to $20 per month.

5. Interest and rewards

While checking accounts aren't built to hold large amounts of money for long-term goals, you can find accounts that provide above average interest rates. The average APY is 0.04%, but there are banks and credit unions that offer more.

The Ally Interest Checking Account provides a 0.10% to 0.50% APY (depending on your account balance), whereas the Discover Cashback Debit Account offers 1% cash back on up to $3,000 in debit card purchases each month.

6. Mobile app features

Choosing the right checking account is about more than just the financial terms. You should also consider what mobile features are offered. Look for mobile check deposit and integration with peer-to-peer payment apps, such as Zelle®. You may also want to consider if there's the option to "lock" or "freeze" your card to prevent anyone else from using it.

Another way to tell if the app is user-friendly is to check out reviews on the app store. Top-rated apps rank close to 5/5 stars and have good consumer comments.

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Information about the Capital One 360 Checking® Account, Alliant Credit Union High-Rate Checking, Ally Interest Checking Account and Discover Cashback Debit Account has been collected independently by CNBC and has not been reviewed or provided by the banks prior to publication. Chase, Capital One, Ally and Discover are a Member FDIC. Alliant Credit Union is a Member NCUA.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.