Finance Accounts 101: Checking
I’m excited to share my first series, Finance Accounts 101. Over the next few weeks I’ll be sharing details on all of the accounts I personally use, why I use them and which companies I have accounts at.
Checking accounts… sounds simple enough, though there is more to it in terms of finding the right bank for you.
What is a checking account?
Investopedia defines a checking account as “a deposit account held at a financial institution that allows withdrawals and deposits. Also called demand accounts or transactional accounts, checking accounts are very liquid and can be accessed using checks, automated teller machines, and electronic debits, among other methods.”
Overall, most people with an income and who aren’t looking to hoard money under their mattress will likely find value in a checking account to have access to their money.
What do I need to open a new checking account?
Most banks require the following:
A US Social Security Number
A valid, government-issued ID (think driver’s license, passport etc.)
Often, a small minimum deposit is required
Be at least 18 years old. That said, you can open a bank account with your parent if you are a minor.
If you are a parent and looking to instill great financial values this is a great way to start financial ownership from an early age, especially if they have an allowance or other odd jobs like babysitting or petsitting.
How do I choose from so many options?
As a consumer in the US banking system you have the paradox of choice when it comes to banks. Brick and mortar, new online start ups, credit unions and so on. While many banks merged or shut down in the financial crisis there is new wave of start up banks emerging.
I’ve been experimenting with different checking accounts to see what is right for me. Historically, I’ve used big banks with a presence in my local area. I started with Bank of America, though I closed that account because they were going to start charging me a monthly fee.
Right now I have three checking accounts through Chase, Chime & Aspiration. see below for why I chose these accounts.
Chase - living in New York City, Chase seems like a no-brainer. They have a lot of branches and ATMs across the boroughs. The account is free and I also use Chase credit cards and Zelle payments.
Chime - I love to support new brands when possible and as long as they are FDIC insured you can count on your money being safe*. Chime is an online bank with over 60,000 fee free ATMs. Their app is easy to use and your direct deposit arrives one day before pay day!
Aspiration - similar to Chime they are an online only bank with similar perks. Aspiration also focuses on the environment and is adamant about not investing in fossil fuels. This is one reason I wanted to add Aspiration to my list.
My philosophy is to look for banks that don’t charge you any monthly fees, have no overdraft fees, have convenient ATMs to where you live and work & if possible, align with your values.
*The FDIC was created after the Great Depression and is backed by the US government. It protects your money in certain accounts up to $250,000 per depositor, per insured bank and category. You can read more on the FDIC website here.