Types of Checking Accounts Explained

So what are the types of checking accounts? If you’re considering opening a new account, there are several checking account options. Some financial institutions have special names for checking accounts, but most will fall under these checking account examples.

1. Student accounts

Student checking accounts are specifically designed for students who are 18 or older. These accounts generally come with low or no monthly fees and minimum deposit requirements and often offer perks like free checks, in-network ATM access, and rewards for good grades.

These accounts are a smart option for students who don’t have much money to manage. Students under 18 must have a co-signer who will be responsible for them.

2. Traditional accounts

Traditional checking accounts are the most common type of account. The best checking account options have no minimum balance requirements, low monthly fees, and provide easy access to your money.

These accounts may also come with overdraft protection, the ability to write checks, and free in-network ATM withdrawals. These accounts can be a fit for people who want a no-frills, basic checking account.

3. Premium accounts

Premium checking accounts offer more benefits than traditional accounts, but they often come with higher fees and more minimum balance requirements. They can include features like unlimited ATM fee reimbursements, interest rates, and rewards programs. Premium accounts could be helpful for people looking for more perks and willing to pay higher fees.

4. Senior accounts

Banks often offer special checking accounts to senior citizens. These accounts usually have enhanced features like higher interest rates, reduced fees, free checks, and ATM access. These accounts make sense for seniors who want to save money and have all the benefits of traditional accounts.

5. Business accounts

Business checking accounts are designed for those who own or operate a business. They come with features tailored to the business’s specific needs, like higher account limits, mobile banking, electronic bill payment, and overdraft protection.

To open a business checking account, you need an Employer Identification Number (EIN) or a social security number if you’re a sole proprietor, along with your business formation documents and business license if applicable.1

6. Interest-bearing accounts

Interest-bearing checking accounts are excellent for people who want to earn interest on their deposits without investing in the stock market and other securities. However, some of these accounts come with larger opening deposit requirements and monthly maintenance fees. Also, the interest rate can change at any time. Nevertheless, high interest checking accounts offer a higher earning potential and can help your money grow while sitting in your checking account.

Some common examples of interest-bearing accounts include money market accounts and certificates of deposit (CDs). CDs have an early withdrawal penalty, but with a money market account, you can withdraw your funds at any time, just like with a regular checking account.

7. Private bank accounts

A private bank checking account is offered to individuals with deposits and or investments totaling a minimum amount, usually ranging from $250,000 to $1 million. These accounts typically come with exclusive access to advisors, credit cards, and other benefits not found with regular accounts.

They also offer higher interest rates, customized loan products, and other perks that fit the needs of high-income individuals.

8. Rewards accounts

Reward checking accounts come with various perks like cash back on specific purchases, free ATM usage, and bonus points that can be redeemed for merchandise, discounts, and travel. These types of checking accounts come with higher fees and stricter requirements. If you meet the account conditions, you could benefit from the rewards.

9. Second-chance accounts

Second-chance bank accounts are designed for those with financial issues or a low credit score and cannot open a regular account. Most banks and credit unions use ChexSystems to review your recent banking activities and see if you’ve had any negative unpaid balances or involuntary account closures.2

A negative ChexSystems report could cause the bank to deny your application to a traditional bank account, but the bank may offer you a second-chance account instead. These accounts usually have more restrictions, higher fees, and lower debit card limits. However, they are an option for those trying to rebuild their financial history and still want to open a bank account somewhere.

10. Checkless accounts

Checkless accounts are also known as “noninterest-bearing accounts.” They are similar to traditional checking accounts but do not allow check-writing. These accounts come with lower fees and a lower balance requirement. However, they may not provide as much flexibility as checkable accounts.

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