Comparing checking accounts: 7 top features to look for

Our relationships — especially with the banks housing our checking accounts — tend to be for the long haul. And as with any long-term partnership, it’s best to know what you’re getting yourself into before making a serious commitment.

Checking accounts will vary in terms of fees, ATM access, yields and bonus features. Reading through the accounts’ disclosures and fee schedules can help you find an account that matches up with your financial needs.

Of course, all of the factors you’ll need to take into account can make the process of looking for a new account seem overwhelming. Here are the top features to consider to help you narrow down your options.

1. Look for an account with no monthly fee

A checking account isn’t like a gym membership — paying more doesn’t always mean you’re getting any additional perks or special benefits. Rather, extra fees for monthly service and maintenance only take money out of your pocket that you could save or use to pay off debt.

Monthly maintenance and service fees quickly add up. The average monthly fee for non-interest checking accounts is $5.44. For interest-bearing checking accounts, that number is roughly tripled at $16.19 a month, which adds up to $194.28 in charges for the year.

One way to bypass this cost is by looking for fee-free checking accounts, many of which are offered by online banks and neobanks. Check bank fee schedules to avoid other unnecessary charges. Many banks have been eliminating or greatly reducing their overdraft charges, which are another significant fee to look out for.

2. Compare accounts with low minimum balance requirements

Monthly fees often come into play when a bank has a minimum balance requirement. Failing to follow a rule, like keeping a certain amount of money in your account by the end of each day, could easily trigger a monthly service charge.

Among accounts with a balance requirement, $539 is the average minimum needed to avoid a fee. But among non-interest bearing checking accounts, there’s more likely to be no minimum balance requirement at all, says Greg McBride, CFA, Bankrate’s chief financial analyst.

As you’re comparing checking accounts, look out for options with low or no-minimum balance requirements. In Bankrate’s most recent checking out survey, it was found that 46 percent of checking accounts have no minimum balance requirement and no monthly fees.

3. Find an account that refunds ATM fees

ATM charges are another pesky bank fee you could find yourself paying if you’re not careful. Visiting an out-of-network ATM costs $4.66, on average.

Fortunately, there are ways to avoid paying a fee when you need cash. One strategy is to be aware of the ATMs in a bank or credit union’s network. Many banks offer a search tool in their apps or websites to find in-network ATMs on a map. Getting cash back from retailers or grocery stores is another way to get cash without a charge.

Another option is to find a checking account at a bank or credit union that reimburses ATM fees. Customers with Ally Bank checking accounts, for example, will find that the bank reimburses up to $10 spent on ATM fees each statement cycle. Axos Bank offers unlimited domestic ATM reimbursements for those who open a rewards checking account.

4. Compare digital offerings

Just about all checking accounts today offer standard features like mobile check deposit and access to peer-to-peer payments. For some consumers, however, that may not be enough.

The checking account of your dreams may have additional bells and whistles, like early direct deposit, an app that says you’re spending too much money on Uber rides or a virtual assistant that reminds you when a bill is overdue.

Mobile banking apps come with many different features and benefits that can help you save. You’ll just have to do some additional research and read app and bank reviews to find out which institutions stand apart from the rest in terms of technology and innovation.

5. Consider a high-yield checking account

Anyone hoping to squeeze out extra interest may want to look into opening a high-yield checking account. Many accounts don’t pay any interest at all and among those that do, the annual percentage yield is low — rarely more than 1 percent APY.

But some high-yield accounts (also known as reward checking accounts) pay as much as 3 or 4 percent APY. The catch: you won’t earn much interest without jumping through some hoops.

Whether you should open a reward checking account depends on if you can meet the requirements to earn the high yield — typically a minimum number of debit transactions and direct deposits as well as receiving online statements, McBride says. “Even then, some of the higher-yielding checking accounts will cap the balance on which they’ll pay that higher interest rate, so you might be better off with an account that doesn’t have the highest APY but will pay it on a much larger amount.”

6. Take advantage of sign-up bonuses

You’ll typically find high-yield checking accounts at smaller banks and credit unions. Bigger banks usually offer a different benefit: a bonus you can earn when opening a new savings or checking account.

The best bank account bonuses can range anywhere from $200 to $500 or more, depending on the bank. But earning this bonus isn’t always easy and often requires customers to put in some extra leg work.

In the end, a sign-up bonus may not be worth the anxiety you experience trying to earn it. Some of the banks that offer bonuses also charge higher monthly fees. And since bank account bonuses are taxable, you could essentially earn nothing if you’re in a higher tax bracket, McBride says.

“The sign-up bonus is in big, bold lettering, but the most important details are in the fine print,” McBride says. “Be sure to check the details to see what is required to earn the bonus and decide if it still makes sense for you.”

7. Consider FDIC insurance limits

Whether you’re opening a new checking or savings account, insurance matters. Banks don’t fail as often as they did around the time of the Great Recession. But it doesn’t hurt to have a safety net in case a bank has to shut down.

This is why having insurance offered by the Federal Deposit Insurance Corp. or the National Credit Union Administration is key. Both organizations insure up to $250,000 for each bank, per account ownership category and per depositor.

That’s something to keep in mind if you’re a high roller planning to open a checking account at the same bank holding your savings account and CDs. If you had $200,000 in a single savings account and $100,000 in a single checking account at the same bank, $50,000 of your money would be uninsured.

Unless there’s access to additional insurance through a private fund, you could run into trouble if you exceed the insurance limit and there’s potential for your bank to go under.

Research pays off

Finding the best checking account will take some time. There’s a lot to think about, and you have many options to weigh as you reflect on what’s most important.

Doing research goes beyond just looking into account offerings. You may also want to look at the bank’s reputation as a whole. Maybe you prefer the close personal service of a community bank, or perhaps you want the technological innovation of a digital-only bank.

As long as you’re willing to put in the effort, you’re bound to come across an account that’s a good fit. Asking questions and looking into the account’s disclosures can help you ensure you’re fully aware of what’s to come when you choose an account.