What is a Checking Account?

A checking account is a type of bank account used to deposit, withdraw and track spending intended for everyday expenses.

Let’s look into how a checking account is used and some tips to choose the right one for you.

Checking accounts: How are they used?

Most people use their checking accounts for money they plan to spend in the short term, such as to pay utility bills or rent, rather than long-term savings. Depending on the checking account, you may be able to access your funds and make transactions in several ways:

  • Debit cards
  • Online and mobile banking
  • ACH or wire transfers
  • ATM withdrawals
  • In-person banking
  • Paper checks

Each of these methods may be able to help you manage your daily transactions. For example, if you want to send money to your friend for helping you move into your new apartment, you can send them an instant payment from the Citi Mobile® App1 without having to go to an ATM or bank branch.

To ensure you have funds available when you need them, you can also make cash deposits at your bank, utilize mobile check deposits1 or set up direct deposits from your employer.

Types of checking accounts

While all types of checking accounts serve the same purpose, banks may offer checking accounts with specific features that suit different financial needs. For instance, some banks may offer checking account options that allow you to waive specific service fees, provided you meet certain conditions.

Before applying for and choosing a checking account, make sure to understand the different types of accounts a bank or credit union offers. That way, you can select a checking account that’s effective for your own financial needs. You’ll also be able to stay mindful of any fees or minimum balances that may be required.

How to choose a checking account

After looking at the different types of checking accounts offered by a bank or credit union, you’ll be able to start the process of selecting an account that suits you. Here are a few things to look for when choosing an account:

Do you want to bank online or in-person?

For convenience, you may prefer a checking account that offers online and mobile banking. Online banking gives you easy access to your account 24/7, and you can automate paying your bills and transfers to your savings account.

If you prefer to use cash, write checks or make your deposits in-person, opening a checking account with a bank that has nearby brick-and-mortar locations is a good choice.

Citi combines both digital and in-person banking by offering online and mobile banking experiences as well as a large network of fee-free ATMs.2

What other features and benefits does a typical checking account offer?

Beyond deposits and withdrawals, checking accounts can come with many other features and benefits. When opening an account, note what features and benefits are available and how they line up with the way you prefer to use your money.

Citi checking accounts offer ways to avoid monthly service fees if you meet certain conditions, debit card access, mobile check deposit1 and more. There is no minimum deposit to open a checking account with Citi.

Learn more about opening a Citi checking account to take advantage of features and benefits like mobile check deposits1 and fee-free ATM2 access across the U.S.

How much money should I keep in my checking account?

It can help to have extra funds beyond your usual expenses in your checking account to provide a cushion. The additional money in your account can ensure you're able to pay all your bills and help cover the cost of an emergency without having to worry about how much money is available.

It's also good practice to check your bank account regularly, so you always know what's coming in and going out. You don't want to have a transaction declined because of a previous withdrawal you forgot to account for.

Is a debit card a checking account?

No, a debit card is not a checking account. It’s one of the main tools used to access funds in your checking account. When you make a purchase with a debit card, the money is withdrawn directly from your checking account balance.

Do checking accounts earn interest?

Generally, checking accounts do not earn interest. If a checking account does earn interest, it may require a higher minimum balance or monthly fees that can be waived under certain conditions.

1 Citi Mobile App and Mobile Check Deposit. Regular account charges apply. Citibank does not charge you a fee for using the Citi Mobile app or the Mobile Check Deposit service. However, you must have a Web-enabled cell or smartphone to use the Citi Mobile app or Mobile Check Deposit service and charges from your wireless carrier may apply. Citibank is not responsible for products and services offered by other companies. The Mobile Check Deposit service is for personal checking accounts only and is subject to eligibility. Deposit limits and other restrictions apply. 

2 Claim is based on locations in the United States where customers can make cash withdrawals with no surcharge (usage) fee by the ATM operator. Citibank customers can get cash, get information and make transfers between their eligible linked Citibank accounts with no surcharge fee when they use their Citibank® Banking Card at ATMs in the U.S. located at Citibank branches, ATMs at select retail store locations, and ATMs participating in the MoneyPass® Network; regular account charges apply. ATMs in retail stores and at other non-Citi locations are not owned or operated by Citibank and offer fewer functions. Use the Citi Worldwide ATM/Branch Locator on Citibank Online or the Citi Mobile® App to find the nearest ATMs and branches, including non-Citibank ATMs in the U.S. with surcharge free access. MoneyPass is a registered trademark of Fiserv, Inc.

Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.

Additional Resources

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  • Learn how FICO® Scores are determined, why they matter and more.

  • Review financial terms & definitions to help you better understand credit & finances.