Checking accounts are an essential tool for managing our personal finances, and the main type of account you will use on a day-to-day basis in the United States. In this article, we will explain everything you need to know about them and how you can choose the best option for you.
What is a checking account and why do you need one?
A checking account is a type of bank account that allows you to deposit and withdraw money easily. It is the account most commonly used to handle everyday transactions such as paying bills, making purchases and receiving your paycheck. You need it because it provides a safe place to keep your money and allows you to conduct financial transactions efficiently.
Advantages of having a checking account
Checking accounts offer several advantages:
- First, they provide you with a safe place to keep your money.
- Second, they facilitate the management of your finances by allowing you to make transactions easily.
- Third, many checking accounts offer additional services such as debit cards, checking, and access to online and mobile banking.
Differences between checking and savings accounts
While a checking account is designed for day-to-day transactions, a savings account is designed to hold money for the long term. Savings accounts often offer higher interest rates, allowing you to earn money on your savings. However, they are not as affordable as checking accounts and may have restrictions on the number of transactions you can make.
Frequent requirements to open a checking account
Required Documentation
To open a checking account, you will generally need to provide photo identification, proof of address and your social security number or tax identification number.
At Comun, the online banking for Latinos in the United States, the main documents you will need are:
- A valid driver's license or valid personal identification issued by the U.S. government.
- A tax identification number such as ITIN or social security number (SSN).
- Proof of U.S. address such as a receipt in your name showing your U.S. address.
The process of opening a bank account with Comun is 100% online and can be completed in less than 5 minutes.
Minimum deposit and other conditions
Some banks require a minimum deposit to open a checking account. In addition, they may apply fees if your balance falls below a certain level. For example, Chase Bank offers the Chase Total Checking account and Citi Bank offers the Citi Basic Banking Package account, which include access to thousands of ATMs, online and mobile banking. However, like many of the other traditional banks, they charge a monthly service fee of between $8 to 12 unless you meet certain monthly average balance requirements or a minimum amount deposited through direct deposit monthly. In addition, they may charge overdraft fees of up to $39 or more.
However, in Comun there is no minimum deposit amount, no minimum monthly balance, no monthly service fee, and no hidden costs in the fine print.
What they don't tell you about current accounts in the United States:
Generally, you can access the funds deposited in your account through ATM withdrawals, checks, wire transfers, and debit cards. However, it is important for you to know that each banking institution may charge fees for each of these operations and it is important for you to know before opening a bank account with them in order to compare your options and identify the one that is most convenient for you in terms of practicality.
On the other hand, many banks require an initial deposit to open a checking account. The amount varies from bank to bank, but can range from $25 to $100. In the case of Comun's checking account, there is no charge, i.e. the initial deposit amount to open a checking account is $0.
Additionally, checking accounts may have various fees in addition to the monthly maintenance fees, such as ATM fees, overdraft fees and more. Some banks waive the monthly fee if you maintain a minimum balance or have regular direct deposit. In the U.S., you can deposit and withdraw money for free at more than 55,000 ATMs in the U.S. found at Walgreens, CVS, Target, and more.
Some banks offer overdraft protection that prevents you from bouncing checks or having your debit card declined if you don't have enough money in your account. However, this service can come with high fees, so it's important to understand the terms.
And if you live in the 21st century, access to online and mobile banking allows you to check your balance, pay bills, deposit checks and transfer money from anywhere.
A special feature of checking accounts is FDIC Insurance. Banks in the U.S. are usually insured by the Federal Deposit Insurance Corporation (FDIC). This means that even if the bank fails, your money (up to $250,000) is protected. For example, Comun's bank accounts are insured by the FDIC for up to $250,000 USD through the affiliated Piermont Bank.
Checking accounts are an essential tool for managing your personal finances. They provide a safe place to keep your money and allow you to conduct financial transactions efficiently. When choosing a checking account, you should consider factors such as fees, services offered, bank location and reputation, and interest rates. With the right information, you can choose the checking account that best suits your needs.
If you are looking to open a checking account and get a debit card, what are you waiting for to do it with Comun?