What Is a Checking Account?

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If you want to make managing your day-to-day finances easy, you should open a checking account. With one, you can pay your bills, withdraw cash from an ATM and get your paycheck automatically deposited.

If you’ve never had a checking account, you likely have questions, such as “What is the difference between a checking account and a bank account?” and “What is a checking account vs. savings account?”

Keep reading to find out everything you need to know about checking accounts.

What Is a Checking Account?

Simply put, a checking account is one type of transactional deposit account. You can open one at a credit union, a brick-and-mortar bank or an online bank. When you have a checking account, you can use it to make purchases via checks or debit card, pay bills and deposit money. Checking accounts differ from savings accounts in that you typically use a checking account for everyday purchases and bill paying, whereas you typically keep money in a savings account for the long haul.

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What Does a Checking Account Do?

A checking account enables you to spend and deposit money, and you can usually use this type of account for a number of different types of deposits, such as:

  • In-person deposits
  • ACH deposits
  • Direct deposits
  • Mobile check deposits
  • Incoming wire transfers

Direct deposits enable you to have your paychecks or government benefits go directly into your account — all you need to do is give your employer your bank account number and routing number.

You can also make convenient mobile deposits by taking a photo of a check and depositing it in your account. Note that cash deposits still require a trip to the ATM.

When you write a check to someone, they deposit that check and the money is taken out of your account and put into theirs. But writing a check isn’t the only way you can pay for things from a checking account. You can move money to or from your checking account in the following ways:

  • ATM cards: You can use an ATM card to make deposits or withdrawals at an ATM but you can’t pay for things with one.
  • ACH transfers: You can use these electronic transfers to schedule bill payments or withdrawals or deposits online.
  • Debit card: You can use a debit card to make purchases at stores and deposit or withdraw money at an ATM.  
  • Wire transfers: You can withdraw or deposit a large sum to U.S. and foreign bank accounts with wire transfers.
  • Person-to-person payments: You can use someone’s email address or account information to send them an electronic P2P.
  • Mobile wallet: You may be able to add your debit card information to Apple Pay or Google Pay to pay for things in stores and online.
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What Are the Different Kinds of Checking Accounts?

Depending on where you bank, you’ll likely have a choice regarding what type of checking account you want to open. These choices might include the following:

  • Traditional checking: This type of checking account enables you to write checks, make purchases with a debit card and pay bills online. You might have a minimum required amount to open a checking account and it might come with fees.  
  • Student and teen checking: Teen checking accounts are designed for kids between the ages of 13 and student checking accounts are for those aged 17 to 24. These accounts charge low to no fees and are great for teaching kids how to manage their money.
  • Senior checking: Senior checking accounts come with an age requirement — usually 55 and older — and typically offer seniors perks like free checks, fee waivers and even interest.
  • Interest checking: You can earn interest on your balance with an interest checking account. You won’t earn as much as you would with, say, a high-yield savings account, but every penny counts.
  • Rewards checking: You can earn rewards as you make purchases with a rewards checking account. You’ll likely earn cash back or points, which you’ll get deposited into your account at the end of the month.
  • Second-chance checking: This is a nontraditional type of checking account for those who have had issues managing their checking accounts. You’ll get most of the same features as you would with a traditional checking account and this type of account might help you get a standard one in the future.
  • Checkless checking: This type of account requires that you do all of your transactions via your debit card or through online or mobile banking. If you’re not a big check writer, this could be a good option.

Is a Debit Card a Checking Account?

Although a debit card is typically issued when you open a checking account it’s not a checking account itself. A prepaid debit card is independent of a bank account, and you can add money to it and use it to pay for things, just like a checking account debit card.

It’s important to keep in mind that if your debit card is attached to your checking account, every purchase you make with it will come out of that account. So, say you buy $50 worth of groceries with your checking account-linked debit card. Your account balance will be reduced by that amount as well.  

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How Do I Choose a Checking Account?

The first thing you need to do when you’re looking to open a checking account is decide where you want to do it. Do you want a brick-and-mortar account, an online account or a credit union account? If you like to visit a branch occasionally, obviously the brick-and-mortar would be a good choice. But if you like the convenience of banking online or want to pay less in fees, you’ll want to consider an online bank or credit union, respectively. Here are some factors to consider when making your decision:

  • Monthly maintenance fees
  • Minimum balance fees
  • Account inactivity fees
  • Overdraft fees
  • Overdraft protection fees
  • Wire transfer fees
  • ATM fees and surcharges
  • Non-sufficient funds fees

In addition, take into consideration the features you want most out of a checking account. For example, you might want to earn rewards on the things you buy, or you may insist on online banking capabilities or a large ATM network. Try to find the best combination of features and costs to fit your own financial needs.

What Do I Need To Open a Checking Account?

Online checking accounts are easy to open — you just need to supply your personal and financial information and arrange your opening deposit.

If you’ve chosen to open a brick-and-mortar account you’ll usually have to provide the following information to the bank: name, address, birthdate, phone number, email address and Social Security number. You will also need a government-issued ID.

Bottom Line

There are plenty of reasons to open a checking account, including providing safety for your financial transactions with an FDIC-insured account and having easy access to your funds. If you decide to open a checking account it’s esssential that you first decide which type you want, then research your options so you find the best mix of features and fees that fit your individual needs.

Ashley Eneriz contributed to the reporting for this article.

Information is accurate as of Nov. 14, 2022. 

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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About the Author

Barri Segal has 20+ years of experience in the publishing and advertising industries, writing and editing for all styles, genres, mediums, and audiences. She has been writing on personal finance topics for 12 years and gains great satisfaction from making a difference in consumers’ lives.
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