Consumers are turning more and more to online banking because of the convenience it provides. But even when transactions don't involve paper checks, millions of daily financial interactions depend on having a checking account. That's why checking accounts are considered an unrivaled tool for using and spending money. But not all checking accounts are alike, especially when you consider the account holder. Each customer has different needs—and that includes couples. This article looks at the basics of checking accounts and what couples should consider when choosing the right account for them.
- Before deciding on a checking account, couples should figure out how they intend to use it and what features they require.
- Couples should research account fees and the requirements to waive monthly maintenance charges.
- Make sure online banks have a suitable ATM network.
- Some banks provide cash incentives to open a new checking account.
The Ins and Outs of Checking Accounts
Checking accounts are deposit accounts that let account holders do everyday banking transactions such as deposits, withdrawals, and transfers. They can be accessed by using a debit card and checks through branches, automated teller machines (ATM), and electronic banking services. Checking accounts provide consumers a place where they safely can store their cash temporarily. They can be easily liquidated if and when required.
Since checking accounts are not investment products, expect interest rates that are wretchedly low compared to other options such as savings accounts and certificates of deposit (CDs). Some banks don't pay interest on checking account balances at all.
Checking account features are often consistent across customer demographics, but couples may have banking needs that differ from those of other customers. Their basic requirements generally include:
- Minimal fees
- Bill payment service
- Mobile banking options
- Good ATM network
- Earns interest
- Insured by the Federal Deposit Insurance Corporation (FDIC)
It's also important to find out what type of account the bank offers. Most checking accounts couples often classify them as joint tenants with rights of survivorship. That means that if one person dies, the other owner automatically owns the account. This eliminates the need to pay to obtain and submit legal documents for the surviving party to file a claim against the account.
Cash-strapped couples should pay close attention to the fees and waiver requirements to avoid inadvertently doing something that can lead to extra charges being added to the account.
Avoid any activities that may lead to extra services charges at the end of the month.
Many checking accounts come with monthly fees—most notably, a monthly maintenance fee. Depending on the type of account, this charge ranges between $6 to $25 per month and may be waived for customers who meet certain requirements. For instance, account holders may be required to maintain a minimum daily balance or hold a combination of accounts within the institution. Other times, regular transactions—such as a direct deposit—is enough to get the fee waived.
Some banks automatically sign up new customers for overdraft protection which can be quite costly. It only makes sense to have this service if you have cash savings to cover the overdrafts or when the service is free. Otherwise, a better option is to let the debit card be declined when there isn’t enough to cover the transaction.
Some of the best checking accounts come from banks that don't have a physical presence in the market. Online banks offer all the usual services like ATM cards, checkbooks, and paper statements. Virtual banks can offer better deals on their products because they don't have the expenses traditional banks do like branch staff, rent, and utilities.
Couples should choose a bank that offers an ATM network that will meet their needs. Couples who travel frequently should focus on national banks or credit unions which have thousands of fee-free ATMs. Couples who frequently deposit cash should pay special attention to the ATM network. And those who handle most of their transactions online or on a mobile device can opt for an account with a limited ATM network.
If you're having trouble narrowing down the options, look for cash incentives when opening an account. Chase Bank offers a $300 cash bonus to customers who open a new Chase Total Checking account. Chase requires customers to set up a monthly direct deposit of at least $500. They can also waive the $12 monthly service charge with the direct deposit, by maintaining a daily minimum balance of $1,500, or by holding an average minimum balance of $5,000 with any linked Chase checking, savings, or other accounts. This account, however, does not pay interest on your deposits. Chase sweetens the pot by doubling the signup bonus to $600 if a customer opens a new savings account at the same time.
At TD Bank, new customers can earn $300 when they open a Beyond Checking Account. The account comes with no ATM fees, earns interest, and qualifies for reimbursements for the first two overdraft charges incurred within one calendar year. In order to qualify for the bonus, account holders must make $2,500 in direct deposits within 60 days. The account comes with a $25 monthly maintenance fee which can be waived by holding a minimum daily balance of $2,500, having $5,000 in monthly direct deposits, and/or $25,000 in a combined balance across eligible TD accounts.
Couples who are confident that they can meet the fee waiver requirement should pursue these cash incentives. Otherwise, the monthly fee will soon overcome the amount of the bonus. For the accounts mentioned above, if the joint account holders both work for companies that offer direct deposit, getting a fee waiver every month could be an easy task.
Both Charles Schwab Bank and United Services Automobile Association (USAA) offer outstanding checking opportunities for couples. Keep in mind that the USAA requires military affiliation which can be through a parent who was a USAA customer. Both offer no ATM fees and their customers receive fee reimbursements when they use an unaffiliated ATM machine. Further, they each provide:
- No minimum balance and no monthly service fees
- Free online bill pay service and free paper checks
- Mobile banking
- The USAA checking account pays interest at an annual percentage yield (APY) of 0.01%, while Schwab's APY is 0.15%. While it's not much, it's better than nothing when most banks offer near-zero rates.
Credit unions come into play, too. Their nonprofit membership status does not change the fact that they function exactly like banks. But they are not taxed like other banks and the savings can be passed to customers. Many credit unions offer free personal checking accounts.
The Bottom Line
A great checking account allows couples to easily access and manage the account, and earn money. Because transparency is important, both account owners need to know and understand the fee structure and other account terms. But remember, the selection process boils down to a few essential factors including the ATM network, monthly maintenance fees, interest paid on the account, bill payment services, and the ability to do your banking online.