Free Checking Account

Free Checking Account

By Evie Phan

Free checking account can stand out as a huge benefit for those looking for a place to store their money, but there are also some aspects of these accounts that can be a little less appealing.

The Pros

- Checks are free. Probably one of the most obvious perks of free checking is the fact that you don't have to pay a dime to write checks once you open an account.

- Low minimum amount to start. Typically, with free checking, you can open an account with as little as $50. Again, this is great for the young person who wants to build up credit but doesn't have much up-front money to do so.

- Free debit card. When you open an account with most financial institutions, they will give you a free debit card to easily pull your money out of the ATM or at a store utilizing penalty-free cash back withdrawals.

The Cons

- Monthly automatic activity often required. One way that financial institutions make sure that they benefit from offering you free checking is by becoming actively involved with your money. If you don't participate, either you can't open the account, or fees will magically appear.

- High overdraft charges may take your money. When you open an account like this, it is likely that you will pay royally for falling below the generous minimum $0 balance. Some fees can be as high as $25 per overdraft with an additional $5 charge each day that your balance in the negative.

Aside from CD accounts, the latest financial accounts available are high-interest checking accounts. Deciding to open a high-interest checking account is a decision some are making in order to earn money while they're parking their money. There are some definite perks attached to opening this type of account.

The Basics

A high-interest checking account offers individuals who may not have money to invest an opportunity to make gains on the cash they're keeping in the bank.

Some of these stipulations might include:

• A high minimum balance. To avoid being hit with monthly penalties, you will likely have to maintain a minimum balance somewhere in the ballpark of $3,000.

• Higher balance earns higher interest rate. Again, this may not appeal to some because they may not bring in the returns they'd hoped for unless they leave several thousand in the bank - even then, the returns may not be appealing compared to those found in other forms of investment.

But despite the fact that there are some caveats associated with the high-interest checking account, there are also some perks to take advantage of.

The Perks

If you open a standard free checking account, you're likely not going to have a chance to make a buck. Another great perk is that most financial institutions reward those customers who are willing to let them "borrow" some money through the high-interest checking account.