Most people consider a checking account a necessity. You may select one based on convenience, availability of ATMs or low fees. Since a checking account seems to be such a straightforward, basic banking product, you may not consider the perks and benefits some of the best checking accounts provide.
By shopping around, you can choose a checking account with many enhanced features, ranging from cash advances to interest on your balance. These benefits can make your financial life easier and even put extra cash in your pocket.
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1. Early Direct Deposit
Opening a checking account allows you to receive ACH direct deposits from employers, clients and even the federal government. But many banks today offer early direct deposit as a perk. With early direct deposit, you can receive funds as soon as two days faster than they would normally process. That typically means as soon as the money leaves the payer’s account, you can access it from your checking account.
2. Cash Advances
More banks today provide a cash advance program for customers. Best of all, you may be able to qualify even if you have poor credit or no credit history, since the bank won’t pull your credit file to see if you qualify.
The way these programs work can vary. For instance, Fifth Third Bank allows you to take out a cash advance based on upcoming direct deposits, with a borrowing limit of $50 to $1,000 through the MyAdvance program.
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3. Overdraft Protection or Overdraft Forgiveness
Overdraft protection is a bit different than a cash advance. Some banks will not charge you a fee if you put your account in the negative, as long as you bring your balance positive (or less than $50 negative, in some cases) within one business day. U.S. Bank has a program like this.
Some banks allow you to link your savings account to your checking account and will automatically transfer funds to checking to cover an overdraft, saving you from fees or a negative balance.
If your bank provides overdraft protection by transferring funds from other linked accounts, make sure it doesn’t charge fees for the transfer and that there are no limits to the number of transfers you can make per month.
4. Interest
Many online banks today offer interest-earning checking accounts that offer competitive rates. For instance, Axos Bank advertises up to 3.30% APY for checking with no fees. You’ll need to set up a minimum of $1,500 in direct deposits, make consumer loan payments (such as mortgage, personal loan or auto loan payments) through your account, use your debit card and also open a few investment accounts to qualify for the highest rate.
You can also find other financial institutions, including SoFi and Bank5 Connect, offering interest-earning checking accounts.
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5. Round-Up Savings Programs
Even if your bank doesn’t offer an interest-earning checking account, there might be a way to build your high-yield savings account’s funds even faster. Look for a bank that has a round-up savings program, where your debit card purchases are rounded up to the nearest dollar and the extra change is deposited into your linked savings account. It’s like having a virtual piggy bank to help you save money, but, unlike that piggy bank at home, you’ll earn interest on all that spare change.
6. Welcome Bonuses
Rewards that keep on giving for the life of your account can help your money grow faster. But it’s also nice to get an income boost when you first open a bank account. When you open a checking account with a bank that offers a sign-up bonus or welcome bonus, you could see anywhere from $100 to $300 or more deposited in your account after you meet certain criteria. Often, you’ll need to sign up for direct deposit and keep a balance in your account for a certain amount of time before cashing in on the welcome bonus.
Keep in mind that sign-up bonuses, unlike cash-back rewards, qualify as taxable income. You’ll receive a 1099 form in January declaring any bonuses you earned the past year.
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7. ATM Fee Reimbursement
People often choose their bank based on the availability of branches, as well as in-network ATMs in their area or regions where they travel. Knowing you can withdraw cash at an ATM easily without fees adds a layer of convenience and cost savings to your financial life.
If your bank of choice does not have a vast ATM network (although most do), look into its fee reimbursement policy.
8. Transfer Funds From Person to Person for Free
Did you know that if you have an account at a bank that works with Zelle, you can send money from your checking account directly to family and friends? Of course, you can do the same thing by linking your account to Venmo or PayPal. But unlike these services, you don’t have to worry about selecting the wrong option and incurring added fees. Zelle is always free to use and is compatible with more than 2,000 banking apps, according to its website.
9. Digital Wallet Capabilities
Avoid cash withdrawals and ATM fees altogether by relying on your digital wallet linked to your bank account. Many banks allow you to link your account to a digital wallet, such as Apple Pay or Google Pay. Then, you just scan your digital wallet at checkout to make a purchase.
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10. Access to Additional Banking Products
When you sign up for a bank account, you’ll often gain access to other products, such as CDs or investment accounts, and lower interest rates for loans than noncustomers might pay. These perks may save you substantial amounts of money, especially in the case of loyalty rates for a mortgage or car loan.
Likewise, you may be more likely to qualify for a credit card at a bank where you already have a checking account, especially if you have a solid history of maintaining a positive balance. Some credit cards are only available to customers who have a checking account at the same bank, while others might offer more generous rewards to checking customers.
Final Note
Opening a checking account not only keeps your money safe, but it can also provide tons of perks. In order to take advantage, though, you need to be aware of the benefits. Review your bank statements frequently or reach out to customer support if you have questions about the programs your bank offers.
