Perhaps you’ve found yourself driving across town to locate an ATM in your bank’s network. Or maybe you’ve been hearing about rewards checking accounts with benefits like cash back, which yours doesn’t offer. Oh, yeah. And what about that charge you saw on your last statement for not carrying a high enough balance? It’s pretty easy to feel like the only person on Earth with a checking account that’s just not cutting it.
Robert Farrington, founder of the personal finance website The College Investor, says it’s important to routinely review your checking account to make sure it still meets your needs. “You might have opened a checking account in high school, college or when you got your first job, and you haven’t looked back,” Farrington says. “But banking has changed—and it’s likely that your needs have as well.”
Given the growing crop of new checking accounts with flexible and appealing features, it’s probably time to take a closer look at your current account offerings: What are they doing for you? Do they align with your current financial situation? What benefits are you missing?
However, with all the options out there, you’re probably thinking, “How do I choose a checking account?” It’s simple, really. Just consider these three needs: no fees, convenience and lifestyle compatibility.
“You might have opened a checking account in high school, college or when you got your first job, and you haven’t looked back. But banking has changed—and it’s likely that your needs have as well.”
Read on for how to assess your checking account’s performance for each need, and, if it’s lacking, how to select a checking account:
Find out if fees are eating away at your funds
Fees are a big consideration when picking a new checking account. One way to determine whether your current checking account is treating you fairly in regards to fees is to review your statements from the past few months, Farrington says. You may be getting charged for things you aren’t aware of, such as not meeting a minimum balance.
“If you have an account that requires a minimum balance or a certain number of transactions, then looking at past banking records can help you determine if you’re meeting those requirements,” he says. If keeping a minimum balance seems to be a challenge, you might want to consider alternative options to help you avoid checking account fees.
What else should you keep an eye out for fee-wise on your monthly statements if you’re considering picking a new checking account? How about charges for out-of-network ATM usage? When you withdraw cash out of network because your bank doesn’t have branches or ATMs that are convenient for you, those fees can add up. According to Bankrate’s 2018 checking account and ATM fee study, the average ATM surcharge (the fee from the ATM owner for non-customers) has gone up 19 times in the past 20 years, reaching $3.02, its highest amount at the time the report was published.
A no-fee checking account means no charges for checks, online bill pay, monthly maintenance, replacement debit cards and even insufficient funds. That’s a lot of dough saved by picking a new checking account that comes with no fees.
Online-only banks may offer some of the best deals for no-fee checking, since they don’t operate physical locations and can often pass those savings down to you. For example, Cashback Debit, Discover’s checking account, charges no account-related fees.1
Know what conveniences you need
If you’re like most people on the go, you’ll want to access your checking account fast and at any time. So convenience may be a checking account benefit that ranks high on your list when considering how to select a checking account.
When it comes to how to choose a checking account, understanding what features banks offer to make their checking account convenient is important, says Chane Steiner, the CEO of Crediful, a personal finance and credit blog.
Convenience can come in many forms—from easy access to your bank’s services and personnel, to proximity, to mobile features and more. Below is a list of services you should consider if convenience is a premium:
- Customer service that’s available after hours or 24/7.
- A large network of ATMs makes accessing your money quick and easy. So when picking a new checking account, consider the ATM network you’ll be able to use. For example, Discover’s Cashback Debit card can be used at over 60,000 no-fee ATMs nationwide. With a network this vast, you may be able to enjoy the convenience of ATMs located near you without having to pay out-of-network fees.
- Online banking can be “a great alternative to going to a branch if the majority of your transactions can be done online or you use services like direct deposit,” Steiner says. Think of the time you’ll save by banking from your computer or mobile device rather than traveling to a branch location.
- Mobile check deposits can be an important feature when learning how to choose a checking account if you are remote, travel often or need to make a lot of deposits. In many cases, you can use your bank’s app on your mobile phone or tablet to snap a picture of a check you want to deposit and upload the image.
- Branch access could be important to you if you get paid in cash—for example, if you work in childcare or are a gig worker or freelancer—because you may need to visit the physical branch location in order to deposit the cash. In this case, a checking account at a traditional bank could be convenient.
There’s also a variety of other features to consider when picking a new checking account. “You just have to define your needs and decide from there,” Steiner says.
For additional help thinking through what features are most important to you, let your lifestyle and financial goals guide you. What comes next are some tips on how to do just that.
Tailor your checking account—and its perks—to your lifestyle
Maybe you like certain benefits that you’ve learned about in your research for picking a new checking account. “But you need to decide what’s most important to you for your banking needs,” Farrington says. “And those goals may be very different from your neighbor’s based on your banking habits.” If you’ve moved or changed jobs and your branch and ATM locations are no longer convenient, for example, that could be a good reason for seeking a new checking account.
On the other hand, Crediful’s Steiner says, “If you realize you don’t go to a branch and simply need ATM access, an online checking account may be a great fit. It’s easy to open, convenient and most have all the services that a traditional bank offers—usually at a lower price or fee structure.”
Inevitable things (read: life events) should also be considered when thinking about how to select a checking account. These include getting married (think: combined lives, joint checking account) and having kids (think: convenience, cash in a pinch).
The reasons you first opened your checking account could also be different from why you need one now. Perhaps you used it to pay down a number of credit card bills in the past and regularly held a high balance. Fast forward, and now the cards are paid off and you’re no longer storing as much cash in the account, making you fall below your bank’s minimum balance requirement and causing you to get hit with fees. In that case, picking a new checking account that doesn’t have a minimum balance requirement may be a great choice.
Finding a bank that offers perks that complement your current lifestyle is important to consider when determining how to select a checking account, as it could help you make a final decision. Two benefits to consider:
Say hello to
cash back on debit
No monthly fees.
No balance requirements.
Discover Bank, Member FDIC
- Cash back rewards: If you find yourself frequently using your debit card, be sure to maximize that spending by earning rewards. On the money you spend, Discover offers 1% cash back on up to $3,000 in debit card purchases each month.2 To assess the potential value of this benefit, look at your monthly debit card spending and calculate how much you can earn in cash back. If you spend $3,000 every month, that’s an extra $360 a year. What could that extra cash be used for? Chances are, a lot of things—from a wedding gift to starting an emergency fund. Cha-ching!
- Interest: “Some checking accounts will offer interest,” Steiner says. This allows your money to grow while being held in the account. Consider this if you keep high balances in your checking account.
Once you’ve considered how to choose a checking account and know what checking account you’re going with, the rest is relatively straightforward. It’s just a matter of following the right steps.
“If you realize you don’t go to a branch and simply need ATM access, an online checking account may be a great fit.”
How to make the switch to a new account
If you’ve decided upgrading is right for you, the next step (after you’ve mastered how to choose a checking account) is to actually make the switch. The good news is that the process is much simpler than the thinking that goes into picking one out.
Here are some quick tips for your new checking life:
- Open the new account—either by completing your application online, in the case of an online checking account, or filling out an application at a branch.
- Transfer your funds from your old account to your new one.
- Change any direct deposits from the old account to the new account.
- Set up automatic bill payments from your new account (and cancel them from your old account).
- Close your old account. “It’s suggested you keep your old account open for a month or so to make sure you don’t miss any last transactions that may post,” Farrington says.
Enjoy your new checking outlook
It’s an easy process to switch checking accounts, and Steiner believes the relief you’ll feel once you’ve mastered how to select a checking account will be worth it.
“Spending a few hours to make the right choice is time well-spent and will save you plenty of headaches in the future,” Steiner adds.
You might even enjoy calculating how much you’re saving by comparing your old statements with your new ones and adding up the fees you’re no longer paying. Oh yeah, about being the only person on Earth with a checking account that’s not cutting it? Now that you’ve done the research on how to choose a checking account that will work for your financial goals, it’s pretty simple to finally be more in control of your cash. And it only took the amount of time to read this article to learn.
1 Outgoing wire transfers are subject to a service charge. You may be charged a fee by a non-Discover ATM if it is not part of the 60,000+ ATMs in our no-fee network.
2 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.