What to Know About Checking Accounts

If you’re under the age of 30, “checking account” may conjure images of people paying for things with literal checks, followed by the conclusion that you don’t write checks, so you don’t need a checking account. But in actuality, “checking account” is simply the proper name for what’s colloquially referred to as a “bank account.” While a checking account does offer check-writing features (along with other conveniences), at its core it’s an account that you deposit money into and from which you make withdrawals and purchases.

Let’s take a closer look at the features and limitations of checking accounts:

  • A Variety of Ways to Pay

One of the best things about checking accounts is how versatile they are when it comes to making purchases and paying bills. You have the freedom to withdraw cash at a branch, ATM, or via a cashback option at a store; you can use a debit card to pay for purchases directly from your account in-person or online, pay your bills online, or write out a good ol’ fashioned paper check (just remember that paper checks typically take a few days to process).

  • Debit Cards vs. Credit Cards

They may look the same and be used essentially the same way, but debit and credit cards are very different. A debit card withdraws money directly from your bank account, whereas a credit card is essentially borrowing money to make purchases. That borrowed money comes with strings attached, including paying interest on your balances, at varying rates, depending on your account agreement and credit score. It’s important to keep in mind that some merchants will not accept a debit card for payments, to make reservations, or to put down deposits, and that debit cards have no impact—positive or negative—on your credit score, unlike a credit card.

  • Earning Interest

More and more financial institutions are beginning to offer checking accounts that pay interest on checking accounts, although that interest is typically lower than other savings vehicles, like savings accounts, certificates of deposit, and money market accounts.

  • ATM Access

Having a checking account with a debit card means you’ll rarely be far from accessing cash because you can also use your debit card at an ATM. Just make sure you understand your financial institution’s out-of-network terms and conditions, which brings us to…

  • Potential for Fees

It’s pretty standard for financial institutions—especially banks—to charge a fee if you use an ATM outside of their branches and network locations, but did you know you may also have to pay an ATM fee set by the company that owns the machine – and that can really add up. Conversely, credit unions typically have a large network of surcharge–free ATMs to save members from fees—Suffolk Federal has thousands! Other fees you should be aware of include potential monthly maintenance fees, a fee if your balance falls below the required minimum, and overdraft fees. That’s why it’s important to understand the finer points of your checking account before it really costs you.


Want to know more about checking accounts, what each section of a check means, and get your free assessment to determine if your current checking account meets your needs? Visit Suffolk Federal’s Financial Empowerment: Online Workshop and begin the Checking module to get started.

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