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5 Types of Checking Accounts Explained

Mar 10, 2021 | 5 minute read

checking-account

A checking account is designed to provide easy access and management of your money. Having one is vital to keep track of your money and manage your income and expenses. With most checking accounts, you’re able to: access and transfer money from an online banking or mobile app, use a debit card, write and deposit checks, withdraw money from an ATM, customize account alerts for low balances or large deposits, and pay bills. Not all checking accounts are created equal, and there are several options to choose from. You can feel confident that your checking account selection meets your financial needs by reviewing the following options and identifying which features and perks are the most important to you.

Common Checking Account Types to Consider

1. Standard Checking Accounts

A standard checking account is the most basic of checking accounts and is found at just about any credit union or bank. Many standard checking accounts are unlikely to earn interest, so you won’t earn money on your balance. You may also be required to maintain a minimum balance to avoid a monthly fee. Depending on the financial institution, some have features, like: debit card rewards, a large network of ATMs, free online banking and mobile app, overdraft protection, and free access to your FICO® Score.

2. Free Checking Account

Free checking accounts are less common and becoming more difficult to find. A free checking account doesn’t have a monthly maintenance fee or require a minimum balance, and you’ll still have access to many of the account management features you’ll find in a standard checking account, such as Online Banking and a mobile app. You may be required to pay for services, such as: out-of-network ATM fees, overdraft fees, stop payment fees, and foreign transaction fees; take a moment to review the account details before selecting an account. Finally, many free checking accounts don’t earn interest, as you’re already avoiding monthly maintenance fees.

3. Interest Checking Account

An interest checking account is a checking account that pays interest on your deposits in exchange for maintaining money in the account. The amount of interest you’ll accrue depends on the annual percentage yield (APY) and, in some cases, the account balance. For the latter, this is because some accounts offer tiered interest rates. This can grow your account balance considerably, given most checking accounts don’t earn interest. Additionally, it’s common for these types of accounts to have a monthly fee, but if you maintain the minimum balance, this fee is typically waived. Be mindful though, as the cost of the monthly fee can outweigh the earned interest. Only select this type of account if you know you’ll maintain the necessary balance to avoid the fee.

4. Premium Checking Account

A premium checking account, or a high-yield checking account, offers added account benefits and accrues interest based on your balance. Compared to an interest checking account, this feature-rich account often waives fees (ex. out-of-network ATM or foreign transaction fees) and has an even higher annual percentage yield (APY) and balance requirements. If you maintain a high balance, it’s a simple way to earn interest on your money without lifting a finger. And, unlike high-yield savings accounts, you don’t have to worry about withdrawal limitations.

5. Business Checking Account

Business checking accounts are used to keep business finances separate, making it easier for financial record keeping when tax filing season rolls around each year. Many business checking accounts offer a Business Online Banking service, which provides business banking features that aren’t offered in standard Online Banking services, such as: Remote Deposit Capture, Online Wires, Check Positive Pay, and more.

Tip: Just like standard checking account types, there are various business checking account options. When deciding, review: the number of transactions you make in a month, the account’s cash deposit limits, and the account’s minimum balance requirements, among other features.

A checking account is the foundation of your financial life and essential to managing your finances efficiently and effectively. Finding the right one will require you to evaluate your financial needs and compare the different checking accounts available. At General Electric Credit Union (GECU), we offer checking accounts that work with every financial situation, whether you: want to earn interest, need an account for personal or business reasons, or just want a simple, low maintenance account. Our checking accounts were created to include best-in-class solutions, like: free access at 57,500+ ATM locations nationwide,1 free Overdraft Protection Transfers,2 Round-Up savings program,3 free eStatements, touchless payment solutions with Apple Pay®, Google PayTM, and Samsung PayTM, Online Banking, and our top-rated mobile app.

 

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1 Our ATM network is fee free for withdrawals for GECU debit cardholders and includes: GECU, Allpoint, and Fifth Third ATM networks. For details visit: gecreditunion.org/debit-atm-access. Foreign transaction fees apply to out-of-network ATMs, see Fee Schedule for details. 

2 Overdraft Protection Transfer is only available to: Simply Free, Choice, and Amplified High-Yield Checking accountholders with a GECU savings or money market account. Please refer to Truth in Savings for Reg D limitations. Should you reach your maximum transactions with your primary overdraft savings account, the switch to your secondary overdraft account will occur next business day.  

3 Round-Up is only available for Simply Free, Choice, and Amplified High-Yield Checking accounts. Funds will be added to member’s chosen GECU savings or money market account; excluding Certificates, IRAs, or IRA Money Market accounts. Match will be paid on eligible funds at the end of the month with an annual match limit up to $350; reportable on IRS Form 1099. 

 

Apple Pay™ is a trademark of Apple, Inc., registered in the U.S. and other countries.

Google Pay™ and Google Play™ are trademarks of Google, Inc.

Samsung Pay® is a registered trademark of Samsung Electronics Co., Ltd.

 

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