8 Considerations for a Checking Account

For those of you who need a checking account, there are several answers you should have before you commit your funds to a bank or credit union. For those who have an existing checking account, its time you re-evaluate your relationship and make the necessary changes either within your existing account or with another financial institution.

1. Do not pay for printed checks. Most banks offer basic accounts with free check printing. Checks printed from a bank are usually far more expensive than those you can order outside of the bank. If you are computer and financially savvy enough you can print your own checks as you need them. With the use of cash cards, one does not need as many paper checks as in the past.

2. Look for a cash card that will offer you rewards but do not sacrifice paying other fees just to get one. Cash cards operate like checks but many times the withdrawal of your funds occurs on the spot from your account. If you don’t have a balance in your account, do not use your cash card. Most banks will not reject your use of your card should it overdraw you unless you call the bank and tell them to put a cap on your withdrawals in relation to your balance. They are just waiting to hit customers with additional fees and do not have your best interest at heart when it comes to putting money in their pockets due to your inability to manage your own funds.

3. Do not rely on float between your deposits and withdrawals. While I have talked about “float”, the time it takes between when you write a check or use your cash card to the actual withdrawal of funds from your cash balance in your checking account, I sincerely don’t recommend it. I’ve talked about how the new legislation called “Check 21” has encouraged banking institutions to submit electronic copies of your checks to speed up the “cashing” of the checks you write while being able to put a hold on the collection of your deposits. The “float” is virtually non-existent with “Check 21” and also with the use of cash cards, so hoping for and anticipating any type of float will more than likely expose your checking account funds to overdraft fees which are very expensive. Consumers who bank on “float” (or what’s left of it) are those who are constantly (every day) monitoring their checking accounts online.

4. Sign up to monitor your accounts online. It’s safe and secure. You get real time balance information and activity. You also can do a variety of other transactions without going into the physical bank such as funds transfers and online bill payments. Most banks will not charge a fee for these benefits because online access automates transactions they would normally pay a teller to do. If you are a “bare bones” consumer, operating paycheck to paycheck with little or no extra balance of funds, online banking is a better way to make sure you don’t overdraw your account. And for those who don’t want to bank online, keep a register of all deposits, checks written and cash card transactions for a reasonable calculation of available balance.

In this era of cash cards, often used just like writing out a check or taking cash out of our account, it can be a challenge to make sure you have recorded all your transactions and not forget to deduct them from your account cash balance. I suggest you always ask for receipts when using your cash card and at the end of the day, record your card receipts in your register.


5. If you are finding it hard to stay on top of your available balance and avoid
overdrafting your account, consider applying for an “overdraft line of credit”. This is usually a short term loan with a maximum approved balance you can use should one or more of your expenditures put your account in a negative situation. Be aware of the interest rate on these short term notes and don’t rely on these unless absolutely necessary. If you have to use your “overdraft protection” pay the amount you use as quickly as possible. In some instances, where you are facing a deadline and your paycheck falls after the due date you may benefit from using overdraft protection to avoid negative consequences of making a bill or credit card payment late. Again, if you believe you need overdraft protection, use it sparingly and pay it back as soon as possible. Also remember that should you leave a balance on your overdraft loan for more than 30 days you will find it calculating against your credit score. This is another bill owed and could be counted as a revolving line of credit which you could max out and will lower your credit score.

6. Avoid using your cash card for small withdrawals at ATM’s that charge you a fee and are non-affiliated with your bank. Your bank will let you know what ATM’s are free to use. Plan ahead for your cash needs so you don’t get into an emergency situation and are forced to pay ATM fees for the little cash you may withdraw. These fees can be anywhere from $1.50 to sometimes $4.00 ($2.00 for the participating ATM and an additional $2.00 to your bank for having to deal with another party for the mere $20-$40 you may withdraw). This could calculate to be as much as a 10% charge on the cash you receive. For that kind of charge I would love to be on the receiving end of those often overlooked fees. Why on earth would a financially responsible person forgo up to 10% of the funds he withdraws? You can barely earn interest at 1.5% in your savings accounts now days!

7. Avoid the interest checking account if you don’t have cash to stash. Most checking accounts that say they will pay you interest at barely 1.5% today also require you to keep a very high balance in the account. You would be better off getting a basic free checking account, no monthly fees and taking your extra cash, should you have any, to look for a good high yield money market which typically pays you better on untouched balances.

8. Set up automatic deposits. It is always better and a more efficient use of your deposits should you have them deposited electronically. Most banks will give you same day use of these types of funds compared to depositing paper checks. Paper checks are usually subject to a bank hold of up to 7 or more days depending on the distance of the participating bank. Keep in mind that when you deposit a paper check, the teller submits a 5-7 day hold on the funds but doesn’t mention that to you. It would be on your deposit receipt but most of the time you may not even know the bank is holding your funds until you get notice of “uncollected funds fees” which are equivalent to the amount the bank charges in overdraft fees.


Banks are not inherently evil but they are profit making businesses that create their profit from many types of fees and interest charges. Why not charge fees to those who don’t pay attention? As a consumer, your goal is to get as much service for as little or no cost as possible. Make your money work for you. As much as the banks and financial institutions charge fees for all their services to make a profit, so too should you avoid those fees whenever possible to conserve your everyday cash position. It’s all about value and conservation of your own worth and wealth.