Cash News
Welcome to This Week on Reddit, our weekly series that answers redditors’ biggest banking questions. Each week, our editors choose an interesting and relevant user question to examine. Read on for our expert analysis.
A checking account is designed to manage everyday transactions, so it’s probably your most-used bank account. That’s why it’s important to make sure your checking account offers all of the features and perks you need, whether that’s low fees, widespread ATM access, or a competitive interest rate.
What’s the best checking account option on the market today? That’s what Reddit users are asking this week. And the short answer: It depends. There’s no one account that’s right for every person. That said, a handful of banks offer standout checking accounts that may fit your needs.
Let’s dive deeper.
A Reddit user who goes by Minimum_Bag2512 asked the following:
A few responses to this thread noted that overdrafts happen as a result of spending more money than you have available in your account — regardless of which bank you’re using. Overdrafts can be avoided by understanding the difference between your current balance and available balance, following a budget, and tracking your spending.
Another user also suggested keeping a buffer of $100-$500 in a checking account at all times to ensure there’s always enough money to cover transactions.
To address the original poster’s other question about receiving their paychecks early, a couple of users explained that some banks offer this feature, known as “early direct deposit” or “early payday.”
However, no one was able to definitively answer the original poster’s biggest question: Is there a checking account that offers all-around better features and lower fees than others on the market?
When it comes to finding the best checking account for you, there are a number of factors to consider. No overdraft fees and early direct deposit are two that may be important to you.
It should be noted that no checking account is more prone to overdrafts than another. Overdrafts happen when you make a purchase but don’t have enough money in your account to cover it.
In those instances, your bank or credit union may allow that transaction to go through, and it covers the difference (and charges an overdraft fee). This is known as overdraft coverage, which you must opt into. Overdraft fees are typically around $35 per transaction, so if you’re prone to overspending, this may not be the best option for you.
Some banks also offer overdraft protection, which allows you to link your checking account to another account or line of credit with the bank. In the event of an overdraft, your bank will pull funds from the linked account to cover the difference. A fee is usually involved, but it’s much less than an overdraft fee.
However, if you don’t enroll in either overdraft coverage or overdraft protection, any transactions that would put your account balance in the red are simply declined by the bank.
Another way to avoid overdraft fees is to choose a checking account that doesn’t charge them. Banks like Ally, Capital One, and SoFi offer checking accounts with no overdraft fees.
Another popular feature, early direct deposit, gives checking customers the ability to access their paychecks earlier than their scheduled payday.
When your employer sends their payroll information to your bank, it’s sent to the Automated Clearing House (ACH). This is the electronic network that banks use to send payments to one another. Typically, it will take the ACH one to two business days to verify the payment information received from your employer before your bank disburses the funds to your checking account. However, with early direct deposit, your bank makes those funds available to you immediately after your employer sends over your paycheck to the ACH — before the information has been verified.
Wells Fargo, Chase, and Chime are a few banks that offer this benefit.
But these aren’t the only factors to consider. Another big one is monthly maintenance fees, which can eat into your balance. Choosing a free checking account with no monthly fees ensures you keep your hard-earned dollars in your account. (See our picks for the 10 best free checking accounts available today.)
Other features you may want to evaluate include the bank’s reputation, customer service hours, bank and ATM locations, interest rates, and more.
Ultimately, there are countless checking account options on the market. Choosing the right one requires some thought and research into the features that matter most to you. However, you can’t really go wrong with a checking account that charges low to no fees.