Lafayette Federal Credit Union
Vice President, Business Development
Checking accounts are almost essential to manage your everyday funds these days. These type of accounts allow you to deposit or withdraw money both electronically and in cash, making it ideal for staying on top of your finances.
A checking account is an account through your credit union, bank, or financial institution that allows you to deposit and withdraw money. Unlike savings accounts, there typically aren’t limits on the number of withdrawals you can make. This makes a checking account ideal for paying bills, making everyday purchases, and withdrawing cash.
Most checking accounts offer lower interest rates on account balances - so you may not earn much on the money in your account. However, with some research, you can find a checking account with a competitive rate, such as Lafayette Federal’s 2.02% APY Checking AccountOpens in New Window (APY = Annual Percentage Yield).
Checking accounts make accessing your money simple. There are many ways to access, spend, and deposit money into your account; for instance, most checking accounts come with a debit or ATM card (and checks if desired). Depending on your financial institution, you can typically access your checking account through the institution’s online banking site or mobile app.
Now that you’re familiar with what a checking account is, let’s dive further into some checking account basics, including:
Where can I open a checking account?
You can open a checking account at a credit union or a bank. Each type of financial institution has pros and cons:
What types of checking accounts are there?
Not all checking accounts have the same features and benefits, and some are even designed for specific situations. Here are some of the different types of checking accounts you may come across when you start to shop around:
How do I access the money in my checking account?
Checking accounts allow you to access your money relatively quickly and easily. You can withdraw and deposit money in several ways, including:
You should research the financial institutions you’re considering to see how many options they provide for you to access the money in your checking account. For example, if you know you’ll want to use your checking account to withdraw cash often, make sure the institution offers an easy, affordable way to withdraw cash from ATMs.
What rates, terms, and fees should I be aware of?
As mentioned above, checking accounts don’t usually offer great interest rates, when compared to some savings accounts and other financial products. This means that the money in your checking account won’t earn as much as it would in a savings account or money market account.
However, interest rates do vary by institution. You can shop around for a higher rate if that’s a priority for you. In fact, Lafayette Federal is offering a special bonus 2.02% APY on all Personal Checking Accounts for new and existing members for the entire year of 2022!
Many checking accounts require you to keep a minimum balance or pay a monthly service fee. This means that you must keep a certain amount of money in the account every day to avoid paying a fee. Some checking accounts will charge you monthly maintenance fees. In some cases, you can avoid these fees by meeting certain requirements, like maintaining a certain minimum balance, opening another account at the same institution, or signing up for direct deposit through your employer or Social Security benefits.
Also, be aware of overdraft fees. When you withdraw more money than is in your account and are enrolled in what’s called overdraft protection, your financial institution will charge you a fee. Overdraft protection means that when you overdraw your account, the bank will cover the expense — at a set cost to you. Without this in place on your account, the cost of overdrawing your account is called an overdraft fee — these fees vary by checking account and financial institution.
Checking accounts vary widely in terms of their rates, fees, and benefits. Read the fine print for any accounts you’re considering so you understand exactly what they include.
While checking accounts are relatively straightforward when it comes to your personal finances, that doesn’t mean the account will manage itself. There are a few things you should be doing on a regular basis to make sure your checking account is working for you.
Keep an eye on your account
One of the most important steps in managing your checking account is keeping track of your transactions. This is helpful for several reasons:
Review your account and transactions on a regular basis (daily or weekly) so you don’t face any surprises when your monthly statement arrives.
Use a mobile app
Mobile apps make banking more convenient. Instead of waiting around for your monthly statement to arrive in the mail, you can log into your account from anywhere and at any time.
Log into your mobile account every few days to confirm the transactions in your checking account. Checking your transactions often can save you time and headaches if and when you catch a mistake.
Mobile apps are also helpful for making deposits on the go. If you receive a check, most mobile apps let you deposit that check by taking a picture of it instead of visiting your bank in person. A huge bonus in today’s busy world!
Automate where you can
Checking accounts are very easy to use, but you can make things even easier by using automation. If you haven’t already, you can sign up for direct deposit and get your paychecks or Social Security benefits sent directly into your checking account. This saves the step of depositing a check each payday.
Through a bill pay program at your financial institution, you can also automate your bills—including credit card, utility, and subscription payments. As long as your account is fully funded to pay these bills, you don’t have to worry about late payments. Automating savings or retirement contributions is also a great way to fund your own accounts without a second thought.
If you’re ready to open a checking account—or you’re considering making a switch to a different institution or type of checking account—here are some things to consider.
Who needs a checking account?
The short answer? Just about everyone.
Checking accounts are useful in so many ways, including withdrawing cash, writing checks, paying bills, and accepting payment. If you have expenses you need to pay on a regular basis, you should have a checking account.
A checking account is also a great tool to teach teenagers about personal finance. You can even open a teen-specific or student checking account that’s tailored to this very purpose.
Checking accounts can work for more than just one individual. Married couples, partners who share finances, or adult children helping manage a parent’s finances can also use joint checking accounts. These accounts allow two or more people to use and manage a shared checking account.
What to consider when choosing a checking account
There are so various options to choose from when it comes to opening a checking account. The fees, rates, accessibility, customer service, and everything else varies between account type and institution. Here are a few of the most important things to consider when choosing a checking account:
Ultimately, there is no one-size-fits-all checking account. Decide what your priorities are so you can choose one that works for your lifestyle.
At Lafayette Federal Credit Union, we offer checking accounts with no minimum balance or monthly fees, plus additional benefits and services with our Relationship Checking program.
For 2022, we’re also offering an amazing 2.02% APY bonus on all Personal Checking Accounts (for new and existing members) on balances up to $25,000. You won’t want to miss out on this amazing opportunity to earn more on your checking account balances, while also taking advantage of our member benefits and personalized service.
We offer sound savings solutions with our NEW nationwide-leading, top-tier deposit rates!
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Enjoy our 2.02% APY³ Checking — a premium rate over 65 times higher than the national average¹
Simple terms, outstanding rate
Our members have access to Co-Op Network Shared Branches & ATMs for all basic transaction needs.
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