Ultimate Guide to the (Many) Different Checking Account Types Available
Banks offer a wide range of different checking accounts some which include a basic checking account, a free checking account, and an interest bearing checking account or a joint account.
Each different account has a specific purpose or need depending on the client or the bank.
Having a checking account can be very useful, if you have a bank card that is tied to your account you can swipe your card and make purchases easily, if your card is ever lost or stolen your banking institution will replace it with no cost to you and refund any money that was taken from you, and if your bank participated in a rewards program every time you swipe your card you can get rewards points.
As I stated earlier, there many different types of checking accounts that the client can choose from. Keep in mind the best checking accounts (read that article, we give a detailed overview of the various account options) will be different depending on your specific needs.
What is a Checking Account
The checking account is the most common type of account. It’s the account you are likely to use for most things, like buying groceries, paying for stuff, pulling money out of ATMS, and depositing your paychecks.
Checking accounts don’t restrict how often you can access your money; this makes a checking account idea if you are pulling out and putting in money into your account quite often. Banks may impose some restrictions on your ATM use though, depending on the banking institution. Account fees may or may not be waived depending on how much you maintain in your daily or monthly balance (you can often get no fees if you have a balance above a certain limit).
Regular checking accounts don’t emphasize much interest payments on your balance. This means you likely won’t be given competitive interest rates on your balance. However, it’s possible to get a special checking account called an interest bearing checking account that may give up to 1% interest.
Savings Account vs Checking Account
The main difference is that savings accounts are designed to store your money while checking accounts are designed for easy access to your money while savings accounts limit your access to that money.
Savings accounts pay out much more interest than regular checking accounts.
Savings accounts are usually good if you want to save your money and you don’t plan on touching it. While interest given in a savings account is still pretty low (compared to what you get by investing your money), it’s a ‘safe’ way of keeping your money.
Savings Accounts are particularly attractive for people who want to automatically transfer money from their checking accounts as a savings method.
For example, you automatically transfer 15% of your paycheck that’s deposited into your checking account into your savings account. This is a great way to ‘save’ money with every paycheck without thinking about how to save; savings accounts are used for this often.
There are special savings accounts offered by some banking institutions:
- High Yield Savings Accounts
- CD Accounts
These are usually investment accounts, so we will ignore these for now. You can read more about them in our ultimate guide to the different bank account types
Common Checking Account Types Explained
Let’s go over the basic types of bank accounts typically offered. There are more advanced accounts tailored for specific needs (usually investors), but for most people looking for a personal bank account, these are the standard offerings by most banks.
Free Checking Account
The most popular is the free checking account. This is basically a free checking account that you can have without any maintenance fees and not having to put a certain amount of money in your account every month. Keep in mind these accounts do vary in terms of what they offer.
Recommended Free Checking Account: One of the more popular (and best-rated) Free Checking Accounts is the BVAA ClearChoice Free Checking account. It’s completely free and only costs a $25 deposit to open. You can apply online for it which is a big deal for those who want to open an account fast without having to go into a bank.
Read our Guide to the Best Free Checking Accounts for more specific recommendations.
Basic Checking Accounts
Basic checking accounts are for who mainly use their account to pay bills and to frequently write checks. Most basic accounts will have a minimum balance that the client has to have in order to prevent services charges.
Interest bearing account holders use these type of accounts when they are trying to get interested added to their balance every month, but interest bearing accounts require a high minimum balance and will charge you a hefty service fee if you fall below that balance.
Checking Accounts differ from Free Checking in that they either require a daily or monthly balance to be maintained (for the fees to be waived) or charge you a small monthly fee. But there are more perks offered to these paid checking accounts over Free checking such as lower ATM fees, higher monthly interest rates, and access to other financial products and services not offered with free checking.
Examples of regular checking accounts: the BVVA ClearConnect Checking
Premium Checking Accounts
These are offered by some banking institutions. They are basically a step up from the basic checking and offer additional perks, depending on the actual account.
Usually, these are designed for people who will be putting in and pulling out a lot of money per month in their personal checking account.
Interest Bearing Checking Accounts
These are checking accounts that pay a higher than normal interest rate for your balance. They are designed for accounts that will maintain a high balance but where the money can be easily accessed without penalty (such as with a High Yield Savings Account or CD Account). Basically, it’s a combination of a savings and checking account.
Example of an interest bearing checking account: BVAA ClearChoice Interest Checking is a popular high interest checking accounts you can apply for online.
Joint Checking Account
Another account which also very common for today’s consumers is the joint account.
Joint accounts are more like an optional feature added onto existing checking accounts rather than a type of account.
When having a joint account means that you and the other individual have equal access to the account. Both can withdraw and deposit funds however with joint accounts it’s also good to keep up with the bookkeeping to prevent overdraft fees.
This one is popular for couples who are tied together financial (i.e. married couples). Joint accounts can be added to savings, checkings accounts.
Express checking accounts
These are a variation on the free checking account. You get ATM access, unlimited check writing, personalized checks. Online banking is free but if you visit a bank teller in person, you may pay a fee. These types of accounts cater to the younger crowd.
Money Market checking Accounts
A high-interest checking account, but usually with much higher minimum balance requirements with limited access to cash (say a few withdrawals per month). These are kind of like a savings & checking account hybrid.
Business Checking Accounts
This is a specific checking account just for businesses. Business accounts have a lot of extra perks over regular accounts that make them better suited for businesses and larger cash transactions. However, they usually have higher fees or require a higher minimum balance to be maintained.
The idea here is that these accounts will have a higher volume of money flow through them vs personal checking accounts. There’s a ton of different business checking account options. We are fans of the BBVA Business Accounts, which are rated very high overall.
Second Chance Checking Accounts
Second chance accounts are for people who have been denied checking account by other banks due to check systems or bad credit. Some banks offer a second chance checking account program you just have to know where to look.
The use of non check systems is becoming widely known, basically, some states have banks that do not report to check systems thus allowing their clients to get a second chance on either opening up a new account or reestablishing the account that had went wrong and begin again at ground zero.
Having a checking account regardless of what kind of account it is, can save you time and headaches in the long run. If you are trying to open a second chance account, we recommend applying for the BBVA ClearChoice Free Checking. They do give this regular account out to people with ChexSystems problems. But if your application is denied, they will offer you their Second Chance Account as an option, which is called the BBVA Easy Checking account.
You can see more second chance account our list of the Best Second Chance Banking Accounts.
Online Only Checking Accounts
A variation on the regular checking account where you are given an online-only bank account. These work just like a regular checking account, but there is no physical branch.
Online bank accounts are becoming popular and most people do all their regular banking online anyway through their bank website portal. The online checking account is the natural extension of this, simply doing away with a physical bank pretense.
Note that some physical banks may offer online-only checking accounts; if you want to see a teller, you’ll pay a fee.
The exact details vary depending on the banking service.
Putting Money into Account
You can set up direct deposit into your online checking account with an employer; it’s possible to often mail checks to your online bank to cash. It’s even possible, depending on the bank service, to take pictures of checks with your phone and send the picture in.
You can send money to other bank accounts via wire transfer or linking different bank accounts together (if from the same bank).
You can pay bills online through the online portal or write yourself a check if needed. Most online bank services will give you a debit card so you can withdraw from ATM or make payments in stores.
Reward Checking Accounts
These are specialized checking accounts that offer you rewards perks for using the account. Think of your credit card with cashback or points and reward checking accounts work the same way.
The rewards offered may be cash back or given as reward miles/points (such air miles).
Cashback Checking Accounts
These accounts give you cashback (up to 1%). There are limitations though with maximum cashback amounts. Cashback checking accounts usually require you to maintain a higher daily balance with steep penalties if you do not.
Reward Miles Checking Accounts
To get such an account, you’ll usually have to qualify with higher usage and there may be limitations imposed on how much you can keep in the account and what you can get rewards for. For example, if you have rewards air mile checking account, you may not be able to get reward miles for purchases made on groceries, electronics, money transfers, and such, but only on travel purchases.
Lifeline Checking Accounts
These are specialized checking accounts designed for low-income persons who might not be able to get a regular bank account. These often have lower monthly fees, lower balance requirements, and offer limited check cashing.
Student Checking Accounts
Accounts made for students. These usually have lower monthly fees (or no monthly fees) and lower balance requirements. You get access to debit cards, online banking, and in 2017, mobile pay & transfer options.
Basically, these are checking accounts that offer better terms for students. Usually, these are limited to students and require proof of being a student.
Senior Checking Accounts
A checking account that caters to senior citizens. These accounts usually offer perks and bonuses to attract older persons. Some of the benefits might be free checking, free traveler checks, discounts on certain prescription drugs, and interest perks. The exact benefits vary depending on the bank.
The Final Word
As you see, there are MANY different types of checking accounts, each targeting a specific kind of use. To get the best deal (and save the most money), you should look specifically at your spending habits, how much money you need to access per month, how often you access that money, and the balance you can maintain, then decide on the best type of checking account.
Picking the right account that matches how you access your money can bring considerable perks over just using a regular plain vanila checking or savings account.
Need a Bank Account but have ChexSystems problems or Bad Credit?
Try opening a BBVA Checking Account! BBVA is one of the more forgiving banks and may give you a full-fledged REGULAR bank account when you apply online...even with bad banking and credit history.
And if you don't qualify for the regular BBVA checking account for some reason, you'll then be given the option of opening the special BBVA Easy Checking Account, an account designed specifically for those with banking problems.
...learn more about BBVA Second Chance Banking here
So do your research!