Key insights:
- A checking account is a common type of deposit account that can be connected to a debit card
- Some checking accounts come with account fees which may be waived if you meet certain criteria, such as a minimum balance requirement
- Most checking accounts don’t earn interest and are primarily intended for regular spending rather than saving
A checking account is a type of bank account used to deposit, withdraw and track spending. These accounts are intended for everyday expenses.
Let’s explore how a checking account is used and tips to help you choose the right one for you.
How are checking accounts used?
Most people use their checking accounts for money they plan to spend in the short term, such as paying utility bills or rent, rather than for long-term savings. Depending on the checking account, you may be able to access your funds and make transactions in several ways, such as:
- Debit cards linked to your checking account
- Online and mobile banking
- ACH or wire transfers
- ATM withdrawals
- In-person banking
- Paper checks
Each of these methods may help you manage your daily transactions. For example, you can use your checking account to pay bills, whether that’s through an online bill payment portal or via check. You can also use your debit card to make everyday purchases like groceries.
Some banks also provide access to payment apps for person-to-person payments. For instance, 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 deposits or set up direct deposits from your employer.
Types of checking accounts
While all types of checking accounts typically serve the same purpose, banks may offer checking accounts with specific features that suit different financial needs. In general, you may encounter the following types of checking accounts:
- Traditional checking accounts: These are the most common types of checking accounts, offering standard access to features like checks, debit cards and online banking. You may pay fees, such as monthly service fee and ATM withdrawal fees.
- No-fee checking accounts: With this type of account, you may access basic account features while avoiding certain checking account fees, like a monthly service fee. However, you may still pay fees for things like account overdrafts.
- Interest-bearing checking accounts: While less common, some checking accounts do let you earn interest. There may be a minimum monthly balance requirement to qualify for the annual percentage yield (APY).
- Premium checking accounts: These checking accounts are designed for those with high balances and may offer features like a higher APY or free wire transfers. You may pay a monthly service fee.
- Joint checking accounts: Designed to allow multiple parties to access a single account, joint checking accounts are commonly used by couples and family members to manage money.
Before selecting a checking account and applying, make sure you understand the different types of accounts a bank or credit union offers. That way, you can select one that makes sense for your financial needs while staying mindful of any fees or minimum balances.
What you need to apply for a checking account
You typically need to provide the following information to open a checking account:
- Name
- Date of birth
- Address
- Identification number (such as a Social Security number or individual taxpayer identification number)
You also typically must provide proof of your identity and address, including:
- Birth certificate
- A bill with your name and address on it
- U.S. or state government–issued photo ID
Depending on the bank, you may also need to make an initial deposit to open the account. Typically, those range from $25 to $100.
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:
