Banking Basics: Types of Checking Accounts

"Banking Basics: Types of Checking Accounts" submitted by SchoolGrantsfor Editorial Team and last updated on Tuesday 26th April 2011

A Basic Checking account is for the customer who uses a checking account for little more than bill-paying and daily expenses, and does not maintain a high balance. Some basic accounts require direct deposit or a low minimum balance to avoid fees.

An Interest-Bearing account usually requires a minimum balance to open, with an even higher balance to maintain in order to avoid fees. A service fee is charged each month if the minimum balance is maintained. The interest rate varies per bank, and is usually paid monthly, at the conclusion of your statement cycle. For example, your bank may require you to deposit $200 to open the account, but will charge a service fee of $20 if you don't maintain a $1,000 balance. These accounts do pay monthly interest, but at a very low rate.

An Express account is designed for people who are on the go and prefer to bank by ATM, telephone or personal computer. This account usually boasts unlimited check writing, low minimum balance requirements, and low or no monthly fees. This account has a flat monthly fee and also charges teller fees.

It is common practice for banks to offer free gifts for opening a checking account. Usually the gifts are not that great, i.e. coolers, towels, camping gear, etc.. However, some banks will tempt consumers with more high price items (iPods) if you make a significant initial deposit to your account ($2000 and up).

A Joint Checking account is owned by two or more people, usually sharing a household and expenses. Each person has equal access to the account. Jointly-owned accounts are insured separately from other accounts in the individual names of each co-owner.

A Money Market account combines checking with savings and/or investment opportunities to help pursue higher earnings. This type of account requires a high minimum deposit to open, a higher balance to maintain and to avoid fees - inscribe more than three to five checks each month. This account pays a higher interest but has tighter limits on checking transactions than the basic checking or savings accounts.

A Lifeline account is focused for low-income consumers. This account is allotted a certain number of checks per month and usually does not have a minimum balance requirement or monthly fee.

A Student Checking account is offered by many banks with special bonus offers such as no charge for checks, no ATM fees and offers special rates on credit cards. These special offers vary from one bank to another.

A Senior Checking account is also offered by many banks with special perks such as no fees for cashiers and traveler's checks, and better rates on loans. These special offers vary from one bank to another.

Your funds in U.S. bank accounts are insured against loss by the federal government for up to $100,000 per depositor. Each bank varies with the names of these accounts and the interest rates. Be sure to take the time to research your options.