What is a checking account?

Everything you need to know about checking accounts

A checking account is a handy bank account for everyday expenses. You can make deposits, pay bills, and access cash with a debit card or ATM card.  

Since it allows for unlimited deposits, it’s often the most logical account to deposit your paychecks into (usually by direct deposit). You can also use it to make payments in a number of ways: using a debit card, linking it to a payment app, or even writing a check. It

can be more convenient than using money orders or prepaid debit cards, so it’s a good idea to get a checking account when you start making money and/or when you start to have lots of bills to pay!

How do I open a checking account? 

Opening a checking account is similar to opening a savings account. You’ll first want to compare a few banking services account types. Take a look at our analysis on the best checking accounts for college graduates, best checking accounts for people under 30, best checking accounts for low balances, and best checking accounts with $0 overdraft fees to get you started.

To apply, you’ll need:

• Your Social Security Number (you probably don’t need the card, just the number, which you might already have memorized). 

• A government-issued ID, such as a driver’s license or a passport (again, you may just need the information from this ID, especially if you’re applying for the account online).

• Other information that you’ll need might include your date of birth, email address, and physical address. 

• Most accounts let you apply online, though in some cases you’ll need to apply in person. Then, once you’re set up, download the app and you’ll be ready to go!

Why you need a checking account

To pay for things 

The primary reason you’ll want a checking account is to pay for things. You can easily access the money in your checking account in a number of ways.

You can, of course, write a check (people do still take checks, as surprising as that might sound). You can also access it using a debit card or link various electronic and app-based accounts to your checking account (see below for more information on this).

This is a lot easier than relying on cash and money orders and a lot cheaper too!

To have your paychecks direct deposited into your checking account

It’s also good for putting money into as well. These days, we use the word “paycheck” pretty loosely (the same way we use the phrase “hang up the phone” when we’re really just pressing the “end call button.”).

Many employers don’t pay you with an actual check (or cash, even if you work in a cash-heavy business like waiting tables), but rather set up a direct deposit program for you. You may have other sources of funds above and beyond your regular paycheck, and that money can go into your checking account, too.

(Don’t worry. You can transfer money from your checking account to your savings account so you can build up your savings each month!). Having one place where all your incoming money ends up is convenient, to say the least. 

What to look for in a checking account

• Connect to apps: Get a checking account with a great mobile app. Look for one that lets you check your balance, set up alerts, transfer funds to and from the account, and deposit checks remotely. You’ll also want to connect your checking account to mobile payment apps like Venmo, which allow you to pay (and get paid by!) your friends and family.
• Debit card: This may end up being the most common way you use your checking account. Your debit card will take money out of your checking account (electronically, of course) and provide it to the person or business you’re trying to pay, either in person or online. It works like a credit card, but it lets you pay with your own money rather than using a line of credit. Whether you’re buying something in a big box store, paying for a meal at a restaurant, or ordering something from your favorite website, your debit card will serve you well, so make sure you get a checking account that provides you with a debit card!
• ATM withdrawals: There are times when you will want cash, and you can withdraw money from your checking account via an ATM (automated teller machine), probably using the same debit card described above. The money comes right out of your account and into your hand, and you can use it to buy things the old-fashioned way! Check to see if there are lots of ATMs in your area, and find out if you get charged a fee if you use an out-of-network ATM.
• Write checks: This is where this type of account gets its name, even though fewer and fewer checks are written each year. Some people don’t write any, but there may be times when you will need to write a check. Maybe your landlord requires it. Maybe you need to pay your neighbor for something and she just doesn’t want to use PayPal or Venmo. At times like these, you’ll go old school and write that check!

Checking accounts compared

Here are three great checking accounts for consideration. Read Best Checking Accounts of 2020 for more options.

Banking product	What to compare	Link
	✓No minimum to open ✓No minimum balance ✓No monthly fees ✓No overdraft fees ✓Great mobile app + notifications   ✓Get paid 2 days early ✓Automatic savings ✓No fee for replacement debit card	Learn more
	✓No minimum to open ✓No minimum balance ✓No monthly fees ✓No overdraft fees ✓Mobile app, mobile check deposits, bill pay, push notifications available ✓Get paid 2 days early ✓Automatic savings ✓$50 referral bonus	Learn more

What to do if you don’t have a checking account

If you don’t have a checking account, then you’re likely to use alternative methods to pay your bills.

• Using cash has become increasingly difficult as many businesses are moving to cashless transactions — especially during the pandemic.

• Another option is to pay through a bill counter at your grocery store or Walmart.

• Or you can use a money order. These can be inconvenient, as you need to find a place that will make one for you and each one costs a surcharge.

• Prepaid debit cards are convenient, but they have hassles as well. Sure, you can often refill them, but that process can be a pain.  

Check out a checking account

A checking account is a useful tool that can make financial transactions a lot easier. According to The Pew Charitable Trust, nine out of 10 Americans have a checking account.

It can help you manage the money you’ve got coming in and allows you to easily pay for things.

Sure, you don’t make money like you would with a savings account that earns you interest, but the convenience of it outweighs the drawbacks. In fact, pairing a checking and a savings account together sets you up with the initial financial tools you need to take on the world!