Checking Accounts: A Complete Guide To Managing Your Money

A checking account gives you power over your money and the convenience of banking on the go. This type of account enables you to easily withdraw, deposit, and transfer money. Let’s take a deeper look

Federally Insured Funds

Checking accounts are insured by either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). Both of these organizations insure funds up to $250,000 per account in the event that the financial institution fails. This means if the credit union or bank at which you have a checking account fails, the NCUA or FDIC will pay insured deposits to the account holder.

The Key To Accessing Your Funds

Checking accounts are ideal for keeping funds for everyday spending and bill payments. They will give you more confidence over your purchases and financial decisions. Once you sign up for a new checking account, you can apply for a debit card that’s linked to your account.

Think of your debit card as a key to accessing the money in your checking account. You can use your debit card at nearly any register when making a purchase or through an ATM to make a deposit or to take out cash. And depending on your financial institution and the perks of your checking account, you may even avoid fees at certain ATMs.

You can also access your checking account through online bill payment features, paper checks, and your electronic banking app — where you can keep track of your deposits and withdrawals.

How To Open a Checking Account

Opening a checking account is pretty easy. You can either apply online or visit the physical branch where you want to open your account. Generally, you’ll just need to provide basic information such as your Social Security Number, contact information, driver’s license or passport, date of birth and proof of address. Then you’ll likely be asked to make an opening deposit, which is generally around $25.

In addition to personal checking accounts, there are also the following options for specific purposes:

Business Checking Accounts

If you own a small business — or want to start one — you’ll want to open a business checking account. This will help you better organize your finances and prepare for future growth of your business.

Keeping personal and business checking accounts under one account can make it difficult to determine how much your business is spending and receiving because you’ll need to sift through your personal transactions to find your business-related transactions. Additionally, having your business’s name on the checking account will lend your business credibility and professionalism, meaning customers will be more likely to trust your business when their transactions move through their accounts in your business’s name.

Joint Checking Accounts

This type of account functions like a standard personal checking account, but it’s shared between two people. A joint account is useful for couples or for parents and their teenagers.

Each person named on the account can deposit, and withdraw money. This can make it easier to budget together for shared expenses such as grocery costs, rent or mortgage payments and utilities.

However, joint checking accounts can be stressful if each account holder has different spending habits or feels more comfortable keeping separate accounts.

Student Checking Accounts

A student checking account is similar to a standard checking account, but may offer additional benefits specifically for students such as a maintenance fee waiver or a discount on the maintenance fee. However, depending on the account and financial institution requirements, the account holder may need a co-signer.

Opening a checking account is easy. Determining which checking account and financial institution is a good fit for you? Well, that’s another story.

Let’s take a look at some important features you should consider when looking at your options.

No Monthly Fees

Look for an account with no monthly fees, or one where monthly fees can be waived. For example, the monthly maintenance fee may be waived if you meet a certain deposit amount each month.

No Minimum Balance

Ideally, your checking account should have no minimum balance. Think about it — this account is for your everyday expenses and you’re constantly going to be depositing money and then using it to pay bills. You have enough to think about each day; don’t add concerns about maintaining your checking account balance to it.

Overdraft Protection

A vital piece of any checking account is overdraft protection. Overdraft fees can be some of the largest fees that consumers face.

First, make sure your checking account offers an overdraft protection program so you can keep your funds safe. Then, for additional protection, link your savings account to your checking account so overdraft funds are taken from your savings account rather than the bank.

Convenient Access

You’ll want to make sure that you can easily access your money on the go with your smartphone. Ensure that your checking account will enable you to check your balance, pay bills, and make deposits through your mobile device so you can manage your account from anywhere.

Bonus Feature: Early Pay

Setting up a direct deposit to your checking account will ensure you conveniently get your money without the hassle of cashing a paper check. Early pay is a bonus feature that will ensure you get your money even quicker.With this feature, you can receive your paycheck in your checking account up to two days before payday — with no hidden fees and no enrollment. Simply ask the financial institution if they offer early pay. (Tip: 7 17 Credit Union does!) You can pay your bills earlier, purchase groceries earlier and know what you have to spend for the rest of the month before you normally would.

Money management is the practice of making the most of your money. There are several different strategies you can implement to put your money to work. We’re exploring some of the top ones below:

Track Your Spending

Your mobile checking account is a good place to start because you can quickly see where you’re spending. However, you’ll want to get a more in-depth look in order to determine where there are patterns that you can adjust.

For example, you may not realize just how often you’re grabbing a latte from a coffee shop or how much all of those streaming services are really costing. A money management app will help you track all of this. It may be uncomfortable at first to see where your money is going, but this will help you make changes.

Set a Realistic Budget

Budgeting is one of the most essential money management practices to follow. It can seem daunting at first, but once you get started, it’s quite easy and can better position you to achieve your financial goals.

To build your budget: Add up your fixed expenses, such as your rent or mortgage payment, car payment, and loan repayments.  

Then, add up your flexible expenses such as groceries, utilities, gasoline and other expenses you have that vary each month.

Lastly, add up your discretionary expenses. These are expenses that are fun but not necessary, such as streaming services, dining out, and concert or movie tickets.

Once you’ve determined all of these expenses, subtract them from your income. At this point, you may want to evaluate if there are any discretionary expenses you want to cut completely or reduce. Knowing the amount you have free in your budget after your expenses will help you better understand how much you can put into your savings account and debt repayments.

Pay Your Bills on Time

An easy way to keep your credit score in a good place is to pay all of your bills on time each month. Paying your bills on time is weighted heavily in a credit score calculation.

With a checking account linked to your student loans, credit cards and other debts, you can make paying your bills much easier and quicker — and know exactly when your payment will be received by the lender. Plus, if you’re making a payment a few days before the due date, you may even be able to choose when your payment is applied to the loan or credit card, enabling you to avoid overdraft fees while making your payment on time.

Build Up Your Savings

Once you’ve determined your budget, it’s important to build up your savings. It’s recommended that you have approximately 3–6 months' worth of living expenses in your savings account to prepare for unexpected expenses.

With a savings account linked to your checking account, you can easily and quickly make transfers between your accounts, and the money in your savings account can also be transferred back into your checking account when needed.

Checking accounts can give you the power to manage your money how you want to. And with features like 7 17 Credit Union’s Early Pay — which deposits your paycheck into your checking account two days early — you can start paying your bills earlier, saving earlier and feeling secure knowing that your money is there and ready for you to use.

Explore our checking options and open an account today!