The best checking accounts feature perks such as low minimum balances, no monthly fees, overdraft protection, and widespread ATM networks so you can access your money without added charges. Every bank's account offerings are slightly different, so here's how to go about finding the best checking account for you.

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1. Understand your needs

All checking accounts have the same basic features: They allow you to deposit and withdraw money, and you can withdraw via check, debit card, or electronic transfer. But what kind of account is a good fit for you is based on your banking preferences.

There are several types of checking accounts. Depending on the bank you choose, you may have the following options:

• Student checking: These accounts are intended for children or college students. They usually have low minimum deposit requirements and no monthly fees.

• Senior checking: Senior accounts are for older adults, such as those 55 and older. They have low balance requirements, and they rarely have monthly fees.

• Free checking: A free checking account is open to anyone 18 or older. These accounts do not have monthly fees, so you can accept and make payments without paying service fees.

• Interest checking: Most checking accounts are not interest-bearing, so the money you keep in there won’t grow. However, some interest-bearing checking accounts allow you to earn interest, but they often have monthly fees or balance requirements.

• Rewards checking: A rewards checking account allows account holders to earn cash back or points on purchases. For example, you may earn 1% cash back on purchases made with your debit card. However, you usually must maintain a certain balance or complete a minimum number of transactions to qualify for the rewards.

2. Research financial institutions

Once you know the type of checking account you want, you can decide where to open it. You can open a checking account with either a credit union or bank.

• Credit union: Credit unions are nonprofit organizations, and you have to become a member to open an account. Because credit unions are nonprofits, their accounts tend to have lower checking account fees and better rates than for-profit banking institutions.

• Bank: Banks are financial institutions that are privately owned institutions licensed to offer bank accounts and loans. They typically operate multiple branches in several states, and some offer their services nationwide.

Besides those two main categories, you can also choose between online and traditional institutions.

A neobank or credit union allows you to open an account entirely online. Since an online bank doesn’t have physical branches, it has lower overhead costs, and it can pass those savings on to customers through lower fees and higher annual percentage yields (APYs). But they don’t have local branches you can visit when you need help.

Traditional banks and credit unions often have online account management tools, but they also operate branches. They tend to have higher fees and lower APYs, but you can visit any branch to withdraw or deposit money.

Regardless of which type of institution you choose, make sure it’s backed by either the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). Member FDIC and member NCUA organizations provide deposit insurance up to $250,000, protecting your money if your bank or credit union fails.

3. Compare fees and charges

Checking account fees vary by financial institution, so review the deposit account agreement for the checking account you’re considering to review all qualifying fees. The deposit account agreement is usually available through a link at the bottom of the checking account’s page in the fine print. If you can’t find it, email the bank or visit a branch in person and request it. Common fees and terms to look out for include the following:

• Monthly service fees: Monthly service fees, sometimes referred to as account or monthly maintenance fees, are what some banks charge to keep your account active. You pay the monthly fee even if you didn’t complete any transactions.

• Fee waivers: Some banks will waive the monthly fee if you meet certain criteria, such as maintaining a minimum balance or setting up direct deposit.

• Overdraft fees: Banks and credit unions charge overdraft fees when your account balance isn’t high enough to cover online or debit card purchases you make. The fee for an overdrawn account can be steep — according to the FDIC, it’s typically around $35 per transaction.

• Non-sufficient fund fees: Non-sufficient fund fees are similar to overdraft fees. They occur when you write a check for more than you have in your checking account. The bank will decline the transaction but charge you the non-sufficient fund fee.

• ATM fees: Generally, banks and credit unions provide fee-free ATMs (in-network). But if you use out-of-network ATMs, they may charge you a fee (in addition to the service charges the ATM operator charges for using its machines).

4. Think about interest rates

Checking accounts usually aren’t interest-bearing accounts, but there are some institutions that offer interest on checking accounts. However, the typical APY on these accounts is much lower than what you’d get with a traditional savings account.

These accounts tend to have monthly fees or high minimum balance requirements, so they usually only make sense for those who keep a substantial amount of money in a checking account to cover their monthly expenses. Otherwise, your money will work harder for you in a high-yield savings account (HYSA).

5. Consider added features and services

Some banks and credit unions offer their customers additional features and services. For example:

• Mobile banking: Mobile banking apps are increasingly popular, especially if you like to keep an eye on debit card transactions and your daily balance, but not all banks have their own yet. If you prefer to use your phone for banking, check the bank or credit union’s mobile app availability.

• ATM fee reimbursements: Some banks and credit unions provide customers with rebates for out-of-network ATM fees. For example, you may be eligible for up to $20 per statement cycle in ATM withdrawal fee rebates.

• Free checks: Many banks and credit unions will issue customers their first box of paper checks for free.

• Online bill pay: Many banks and credit unions have online bill pay services that allow you to pay your utilities, credit card bills, and even subscription bills through your account. You can also schedule those payments in advance and set up recurring payments.

How to open a checking account

Now that you know what factors affect the best checking accounts, you can pick a bank and open your new account.

Whether you open the account online or in person, you will generally need to provide information about yourself so the bank can verify your identity. Below is a checklist of information and documentation you should have handy to open a checking account:

• Identification, such as a driver’s license or passport

• A second form of identification, such as your Social Security card, birth certificate, or utility bills listing your name and address

• Your Social Security number or taxpayer identification number

• Money for the initial deposit (typically between $25 and $100)

You need to fill out an application to open the account. The bank will verify your information and run a deposit account inquiry through a system like ChexSystems. If the bank or credit union approves your application, you can start using your account immediately, but it may take a few days to receive your debit card and checks. If you’re employed and receive monthly direct deposits, make sure you reach out to your HR or accounting department with your new banking information.

Frequently asked questions

Do checking accounts earn interest?

Interest-earning checking accounts do exist. Unfortunately, high interest checking accounts are rare — most checking accounts have a low APY. Based on the most recent data from the FDIC, interest-earning checking accounts have an average APY of 0.07%.

If you’re looking for an FDIC-insured account that offers high interest rates, a high-yield savings account may be a better option for your personal finance goals.

Can I have two checking accounts at the same bank?

Each bank has its own policies, but having more than one checking account with the same bank is usually possible for qualifying customers. Check with your bank to learn about the process for opening a second checking account. While some allow you to open another account online and link it to your online banking, others may require you to contact them or open the account in person.

What are some alternatives to checking accounts?

If a checking account doesn’t sound like the best fit for your personal finance goals, consider the following:

• Savings accounts: A savings account may be better if you’d prefer to build an emergency fund, save for a specific goal, or seek a higher interest rate than a checking account provides. These accounts often have monthly withdrawal limits and typically don’t come with account bonuses, debit cards, or checks.

• Money market accounts: Money market accounts have rates comparable to savings accounts but come with debit card access and checks. Monthly withdrawal limits may apply with a money market account.

• Prepaid debit cards: Prepaid debit cards are another alternative if you prefer not to open a new bank account and are accepted by most retailers. With a prepaid card, you can spend up to the full deposit amount added to the card. Once you’ve spent your card’s balance, you can reload it. Note: these cards typically have high fees.