6 Types Of Checking Accounts (2023)

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Checking accounts are basic financial tools that can help you manage your money. You can use a checking account to deposit checks, pay bills, make purchases and transfer funds.

However, checking accounts arenโ€™t all the same. Some checking accounts offer high interest or rewards, while others cater to a particular financial need. The best checking accounts keep minimum requirements and fees low. They also tend to offer a sizeable ATM network. Some accounts also offer interest earnings and the ability to get your direct deposit paycheck a little early.

If youโ€™re looking for a new banking option, consider these six types of checking accounts before you decide where to put your money.


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6 Types Of Checking Accounts (1)

Annual Percentage Yield

Up to 1.25%

on balances up to $50,000 (as of 9/21/22)

Minimum Deposit Requirement


(Video) What's the Difference Between Checking & Savings? Kal Penn Explains | Mashable

Annual Percentage Yield

Up to 1.25%

on balances up to $50,000 (as of 9/21/22)

Minimum Deposit Requirement


(Video) Checking and Savings 101 - (Bank Accounts 1/2)

Monthly Maintenance Fee


Types of Checking Accounts

Banks and credit unions offer various checking account types with options varying by institution type and institution. Looking at the function, features and fees can be helpful when comparing different types of checking accounts.

1. Traditional Checking Account

A traditional checking account, also referred to as a standard or basic checking account, offers the ability to write checks. It also provides access to a debit card that you can use to make purchases and withdraw cash at ATMs.

This type of checking account may charge a monthly maintenance fee. But many banks and credit unions will waive this fee if you meet certain requirements. For example, you may need to sign up for direct deposit, maintain an average minimum daily balance, sign up for additional financial accounts and services or meet other requirements.

There may be a minimum deposit requirement you need to meet to open a traditional checking account. Once you have a standard checking account, you can link your debit card to a mobile wallet or a mobile payment app. You can also connect your checking account to savings accounts, retirement investment accounts and other types of financial accounts within or outside of your bank.

If you donโ€™t need or want many special features, a traditional checking account can be an excellent way to start building a reliable home base for your money.

2. Premium Checking Account

Premium checking accounts offer upgraded benefits and features. These accounts may have a higher initial deposit requirement, higher minimum balance requirements and a higher monthly maintenance or service fee. But they can offer various valuable benefits, including rewards, bonuses and interest on deposits.

The exact rules and requirements of premium checking accounts depend on the bank or credit union. But generally, the more money you deposit with your bank, and the more financial products you sign up for, the more benefits your bank is likely to provide. Think of it like a frequent-flier program for bankingโ€”the more business you do with your bank, the harder it will try to give you a premium experience.

Here are a few major banks that offer premium checking accounts, along with their key perks and features:

BankMonthly Service FeeMinimum Balance to Waive Monthly FeeSpecial Perks and Features
Chase Sapphire Banking$25$75,000 average monthly balance in linked qualifying Chase accountsNo ATM fees, no fees on four overdrafts per 12 statement periods, no foreign exchange rate adjustment fees on international debit card purchases and ATM withdrawals
Bank of America Advantage Relationship Banking$25$10,000 in combined balance in eligible linked accountsEarns interest, overdraft protection, free or discounted paper checks (depending on your choice of check design) and some other fees waived
U.S. Bank Platinum Checking Package$24.95$25,000 in combined balances in deposit accounts, and/or credit lines with U.S. Bank and/or investments with U.S. Bancorp InvestmentsEarns interest, no ATM fees, no fees for overdraft protection transfers, 50% off safe deposit box annual fee, 50% off personal check designs and no monthly fees for family membersโ€™ Easy Checking accounts
Portfolio by Wells Fargo$25$25,000 in qualifying linked bank deposits or $50,000 in qualifying linked bank, brokerage and credit balancesEarns interest, no fees for out-of-network ATMs and no overdraft protection fee if linked to an eligible Wells Fargo home equity line of credit

If you already have a lot of money deposited with your bank, and want to potentially get a better deal by expanding your banking relationship, talk with your bank about premium checking. But read the fine print and keep in mind that not all premium perks are worth the effort. For example, in the current low interest rate environment, some premium interest-bearing checking accounts may only be paying 0.01% APY.

3. Interest-Bearing Checking Account

Interest-bearing checking accounts pay interest on balances in the same way as a savings account or money market account. Because interest rates are so low, many banks have dropped yields on their interest-bearing checking accounts.

However, itโ€™s still possible to find banks offering high-interest checking accounts.

Many credit unions offer checking accounts that pay dividends, and some of these accounts are more competitive than the interest-bearing accounts found at banks. If you are willing to donate or pay a small fee to join the credit union, you can often get a credit union account even if you donโ€™t live in the state where the credit union is located.

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Getting the highest interest rates from checking accounts can be complex. Some banks or credit unions may require you to meet certain monthly transactions or minimum balance requirements to earn interest. Earning a higher APY may not be worth all the effort. But if you want to earn money from your checking account balance, interest-bearing accounts can make it possible.

4. Rewards Checking Account

Rewards are another type of special feature that some checking accounts offer. Like credit cards that reward you for everyday purchases with cash back, rewards points or special discounts, some checking accounts reward you for your daily spending.

For example, the Discover Cashback Debit Checking account pays 1% cash back on up to $3,000 of debit card purchases per month. See website for details. Thatโ€™s a possible annual cash back reward amount of $360โ€”and with no fees. Keep in mind that checking accounts with cash back reward debit cards may charge fees or have complicated requirements that make it hard to get the accountโ€™s full benefits.

5. Student Checking Account

Student checking accounts are designed for teens and college students who want a convenient way to manage their money. Several banks offer special student checking accounts designed for the needs of high school and college students.

Whether youโ€™re getting started with your first bank account or a parent helping your child set up their separate financial life, a student checking account can be a good option.

Some of the best student checking accounts include features such as:

  • No ATM fees
  • No monthly maintenance fees
  • Next day grace periods for overdrafts
  • New account sign-up bonuses

When opening a student checking account, itโ€™s important to understand what happens to that account once the student graduates. If the bank or credit union automatically switches student checking to standard checking, this could mean an increase in fees or loss of certain benefits. Being aware of any chances beforehand allows you time to decide if you want to switch to a different account or different institution altogether.

6. Second Chance Checking Account

In the U.S., 5% of households are โ€œunbanked,โ€ which means they do not have a bank account. Some of these people have previously held bank accounts closed because of poor banking historyโ€”such as excessive overdrafts or misuse of the account.

When you get rejected for a bank account, your name typically gets listed in the ChexSystems registry of high-risk bank customers. And you may need a second chance to reestablish your name in the banking system. Thatโ€™s what second chance checking accounts are forโ€”to help rebuild banking history.

Wells Fargo, and a few financial technology companies like LendingClub and Chime, offer second chance checking accounts. Like traditional checking accounts, some second chance accounts may charge a monthly fee. But they differ in that they may have slightly different features or lower limits on how much you can spend or deposit. They may also offer customers options to graduate to a regular checking account after a specific time period of positive banking history.

If you have had a bad experience with banking in your past, donโ€™t assume that you can never get a bank account again. Second chance checking accounts can give you a fresh start and connect you with the protections and benefits of being part of the banking system.

Things to Consider When Choosing a Checking Account?

Finding the right checking account for your needs starts with asking the right questions. Specifically, when comparing different types of checking accounts, consider what you need that account to do for you and what you value most.

Once youโ€™ve determined what type of checking account may work best, you can move on to the research stage. This is where youโ€™ll compare individual checking accounts to find the one that offers the best combination of features, benefits, convenience and cost.

Average Monthly Balance

Some checking accounts have average monthly balance requirements that you must meet in order to avoid a monthly maintenance fee or service fee. If escaping high banks fees is a priority, itโ€™s important to consider how your typical average monthly balance compares to what a bank requires for a checking account.

The easiest way to do this is to look at your ending balances in your current checking account for the past six months. You can then add those amounts up and divide by six to find your average monthly balance. This is a simple calculation but it can be helpful for ruling out accounts that are a mismatch based on how much you typically keep in checking.

Banking Habits

Habits are another important consideration. You donโ€™t want to put time and effort into switching banks only to realize it doesnโ€™t necessarily work for you. When measuring the suitability of a bank or credit union, you may consider things like:

  • Online and mobile banking access
  • Branch access, if youโ€™re looking at traditional banks
  • ATM access
  • Mobile banking features, such as remote deposit capture

The main purpose of the account also matters. For example, if youโ€™re a college student then it could make more sense to look for student checking accounts versus premium accounts that require you to maintain a $25,000 average monthly balance.

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Checking Account Fees

Fees are one of the most important considerations when comparing different types of checking accounts. The more checking account fees the bank or credit union charges, the more your account will potentially cost.

When comparing banking fees, it can be helpful to review the account disclosures and fee schedule first. Some of the key fees to look for include:

  • Monthly maintenance fees
  • Overdraft fees
  • Insufficient funds fees
  • Foreign ATM surcharge fees
  • Wire transfer fees
  • Early account closing fees

You can also check to see if the institution offers any type of fee reimbursement. For example, some banks will reimburse a certain number of out-of-network ATM surcharges each month. This can help to add value to a checking account since it equates to savings for you.

Checking Account Interest

If youโ€™re considering interest-bearing checking accounts, remember to look at the interest rate and APY the account earns. Also, consider how that rate is applied.

For example, some banks may offer the same APY across all balances in checking. Others, however, may have tiered rates. So, you may earn a higher rate up to the first $10,000 or $25,000 in your account, then a lower rate for balances over that amount.

Bottom Line

Checking accounts may seem simple, but there is a lot of variety among different checking account types. There are checking accounts that can help you avoid ATM fees, earn interest, get cash back rewards, send your child off to college or get a fresh start on your financial life. The one you choose depends on your goals. Next time youโ€™re in the market for a new checking account, think about your goals and what a checking account can do for you.

Frequently Asked Questions (FAQs)

What banks offer free checking accounts?

Youโ€™re more likely to find free checking accounts at online banks versus traditional banks, as online banks tend to have lower overhead costs and pass these savings on to customers. Some of the top online banks offering checking accounts with no monthly fee include Ally Bank, Capital One and Discover Bank.

How many checking accounts can I have?

Thereโ€™s no limit on the number of checking accounts you can have. But itโ€™s important to consider how many checking accounts you can realistically manage and what you might pay in fees for each one. One checking account for paying bills and one for spending, for example, can be a manageable arrangement.

How to avoid checking account fees?

The easiest way to avoid checking account fees is to choose a bank that charges as few fees as possible. Other than that, you can avoid overdraft fees by setting up banking alerts to notify you when your balance is getting low. You can also avoid foreign ATM fees by using machines that are in your bankโ€™s ATM network.


How many types of checking accounts are there? โ€บ

Checking accounts (or โ€œshare draft accountsโ€ at credit unions) can be divided into three major account categories, each targeted at a different type of user: the general consumer, the small business owner and the college student.

What are the types of accounts in a bank answer? โ€บ

Different Types of Bank Accounts
  • Current account. A current account is a deposit account for traders, business owners, and entrepreneurs, who need to make and receive payments more often than others. ...
  • Savings account. ...
  • Salary account. ...
  • Fixed deposit account. ...
  • Recurring deposit account. ...
  • NRI accounts.

What is a checking account example? โ€บ

A checking account is a multipurpose deposit account used for everyday banking facilities like writing cheques, online transfers, wire transfers, ATM withdrawals, net banking, credit card payments, and debit card usage. Current accounts are opened with financial institutions (FIs) like banks and credit unions.

What is a checking account used for? โ€บ

Checking accounts allow you to deposit money that you can then draw against to pay bills or make purchases. They also may be called transactional accounts. Checking accounts are different from savings accounts becauseโ€”rather than being designed to hold money for the long-termโ€”they're meant for everyday use.

What is a checking account called? โ€บ

A checking account is a deposit account held at a financial institution that allows withdrawals and deposits. Also called demand accounts or transactional accounts, checking accounts are very liquid and can be accessed using checks, automated teller machines (ATMs), and electronic debits, among other methods.

Are all checking accounts the same? โ€บ

Before you open a checking account, you should know your options. After all, not all checking accounts are created alike. The same applies to your financial situationโ€”it's unique to you, so your checking account should complement it.

Is a debit card a checking account? โ€บ

What is a debit card? It's a payment card that's connected to your checking account. It gives you easy access to the funds in your account so you can use it for everyday purchases instead of cash or checks. You can also use it at the ATM and online to make purchases and pay bills.

What are the different types of accounts give examples? โ€บ

Ledger accounts that contain transactions related to individuals or other organizations with whom your business has direct transactions are known as personal accounts. Some examples of personal accounts are customers, vendors, salary accounts of employees, drawings and capital accounts of owners, etc.

What are the 4 types of current account? โ€บ

โ€‹โ€‹โ€‹โ€‹โ€‹โ€‹โ€‹Read more Current Account Minimum Balance here.
  • Packaged Current Account: The Packaged Current Account is one of those types of Current Account, which is in between the premium account and standard Current Account. ...
  • Foreign Currency Account : ...
  • Single Column Cash Book :

What are the 4 types of accounts? โ€บ

What Are Four Types of Bank Accounts?
  • Checking Account. Think of a checking account is as your โ€œeveryday account.โ€ It's a place to keep the money you use to pay your bills or cover everyday expenses. ...
  • Savings Account. ...
  • Money Market Account. ...
  • Certificate of Deposit (CD)
22 Feb 2022

Which type of checking account pays interest? โ€บ

An interest checking account pays interest on the balance of the account, typically monthly. Though savings accounts generally earn higher yields than checking accounts, having an interest-bearing checking account allows you to earn interest on the money in all of your accounts.

Do all checking accounts pay interest? โ€บ

Many traditional checking accounts don't earn interest. And most checking accounts that do pay interest pay at very low rates, with strings attached, such as a higher minimum balance requirement.

Which type of checking account requires a certain amount of money? โ€บ

Minimum balance account requires an amount of money to left in it all times in order to avoid fees.

How do you manage a checking account? โ€บ

7 Tips to Manage Your Checking Account
  1. Use automation. One of the easiest ways to manage your checking account and save time is to automate your finances. ...
  2. Know your balance. ...
  3. Explore the mobile app. ...
  4. Embrace potential earnings. ...
  5. Avoid fees. ...
  6. Consider consolidating. ...
  7. Decide where to keep extra money.

What type of asset is a checking account? โ€บ

Examples of personal assets include: Your home. Other property, such as a rental house or commercial property. Checking/savings account.

What is a checking account balance? โ€บ

Your account balance is made up of all posted credit and debit transactions. It's the amount you have in the account before any pending charges are added. Your available balance is the amount you can use for purchases or withdrawals.

What are 5 benefits of having a checking account? โ€บ

This list breaks down some key checking account benefits.
  • Get paid early. ...
  • Keep your money safe. ...
  • Access your money easily. ...
  • Manage your money through your phone. ...
  • Open an account with a small deposit. ...
  • Teach kids money management. ...
  • Transfer funds easily.
17 May 2022

What is true about checking accounts? โ€บ

Checking accounts typically come with personal checks and a debit or ATM card. You'll probably use a debit or ATM card to access the money in your account more often than checks. Checking accounts tend to have lower interest rates than savings accounts.

How safe are checking accounts? โ€บ

Is money in checking and savings accounts safe? The vast majority of deposit accounts are insured by either the Federal Deposit Insurance Corp. (FDIC) for banks or the National Credit Union Administration (NCUA) for credit unions. The FDIC ensures that when a bank fails, depositors' funds will not be lost.

What is a checking account called? โ€บ

A checking account is a deposit account held at a financial institution that allows withdrawals and deposits. Also called demand accounts or transactional accounts, checking accounts are very liquid and can be accessed using checks, automated teller machines (ATMs), and electronic debits, among other methods.

Which type of bank account is best? โ€บ

Money market accounts can offer better rates than other types of bank savings accounts. You may be able to write checks from your account or access your money using a debit or ATM card. You can open money market accounts at traditional banks or online banks.

What does Y checking mean? โ€บ

Y โ€“ every pay period. 1 โ€“ every pay period. Z โ€“ 2nd payroll of the month only. Then enter the Routing Number and the Account Number.

What types of bank accounts should I have? โ€บ

An expert recommends having four bank accounts for budgeting and building wealth.
  • Checking account for bills. ...
  • Checking account for other expenses. ...
  • Savings account for your emergency fund. ...
  • Savings account for other goals.
9 Dec 2021


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