Checking accounts are handy financial instruments for your day-to-day needs. They give you access to money using debit cards, checks, or online transfers. These accounts should handle paying bills and making daily purchases. The best free checking accounts are building blocks to help you manage your money and hasten financial tasks.

How Do They Work?

It is vital to know how checking accounts work, especially if you own or want to get one. These accounts differ from others because they often allow for numerous withdrawals and deposits. Other bank accounts may have limits. The trade-off is that checking accounts may not offer holders interest.

Banks allow accounts with large balances to withdraw most of the excess cash. They can do so to invest it overnight and redeposit it the next day at the beginning of the bank business. They deposit the money together with the interest it makes.

Types of Checking Accounts

There are different types of checking accounts. They may have similar features, but they work differently. The qualifications vary too. They include premium accounts, joint accounts, and student accounts.

Student accounts offer special privileges to students. They remain free until they graduate. Joint accounts are for two or more people. These holders can write checks on the account. Whichever type of account you want, do your research to know how they operate.

Checking Accounts and Banks

Most banks use checking accounts as a marketing tool. They offer these accounts at a cost below the market value to attract customers. After acquiring the customers, they can entice them with loans and mortgages. To cover their losses, banks may increase their fees on checking accounts.

Checking Account Features

These accounts have different features that you need to understand. They include:

Automatic Teller Machines (ATMs)

These make it convenient to access your cash. However, ATMs may have an access fee. Typically, you may not incur charges when using your own bank’s ATM or they may be low if there are any. If you use an ATM from another bank, it could cost you. You may incur charges from your bank and the bank that owns the ATM.

Electronic Funds Transfer (EFT)

It makes it possible to transfer money directly from one account to another. You will not have to wait for a check to come in the mail. Nowadays, banks do not charge for an EFT.

Direct Deposit

This feature allows your employer to wire your paycheck to your account. The money is immediately available to you. This is great for the banks since the money deposited gives the bank available funds to lend to other customers and profit from it.

Cashless Banking

The use of the debit card has become a staple for all. We use debit cards to pay bills and make our daily purchases. They provide the ease and portability of credit cards without high interest.


The bank will sort you in case of an overdraft. Overdrafts cover the difference if you write a check or purchase more than your balance. What they do not tell you is that they will charge you. It provides a practical reason to clear your larger payments before smaller ones. Overdraft fees generate huge sums for banks.


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