Checking Accounts

You have to keep your money somewhere and touching cash is super gross. Sure you could put your money on a pay card or some sort of prepaid card but let’s assume we are trying to behave like adults here.

Checking accounts are very simple to understand but the different accounts offered by banks can vary wildly. One of the most significant ways they can vary is in the fees they charge. These can range from monthly maintenance fees, fees for check copies (physical and or digital), statement fees, overdraft fees and more. This doesn’t even include the cost of the checkbook itself. Hint: It is usually A LOT cheaper to order your checks from an online supplier.

Let’s be frank, banks are here to make money. They aren’t offering to hold your money for you to be nice. They can do that in a few ways. First, they are able to lend money based on the amount of money they have on deposit. They are generally able to lend a certain multiplier of the cash they have on hand. For instance, let’s just say for easy math that they can lend at a ratio of 2:1. That means they can lend $2 for every $1 they have on deposit. Usually the ratio is much higher than this but I want to keep the math simple. This is great for a bank because they can turn around and lend those new dollars created to another bank customer by way of a loan and earn further interest on it. This is why GOOD banks will reward their customers with free services when they keep a lot of money with them and why people with little money pay fees. That is the second way banks make money.

Since this page is about Checking accounts in particular, we won’t go over the other ways the bank makes money in this section.

We will however talk about what YOU should be looking for in a checking account.

If you make over $2000 a month and get a direct deposit you should never every have to pay for a checking account.

J. Michael Adam

The first thing to look for is a free checking account. Obviously, there is no such thing as free BUT there are ways a company can make money from you without directly taking it from YOU. Find a bank that values your deposits if not you directly. If they value your directly so much the better. It isn’t necessary however since you should have very little contact with your bank.

Second, make sure you understand the fees of those banks. Don’t feed crummy banks. If they want to fee you to death and don’t offer a clear and easy path to earn out of those fees, don’t give them the time of day. Let the new economy kill them off like the dinosaurs they are.

Once you have a few banks narrowed down compare their fees and services. Sometimes a bank may have a fee that is worth it. Good services can be worth paying for but be diligent. You can often replace these with better and less expensive third party services. This is where you also want to make sure that they have a great mobile app.

Make sure to check out our section on Savings Accounts and Credit Cards.