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How to Choose a Checking Account: Seek Low Fees, High Rates

Choosing a bank account is an important step in reaching your financial goals. The best account will have low fees, high interest rates and a lenient policy when you overdraft. Whether you’re looking to park your cash for the long or short term, let us help you pick the account type that fits your goals and the financial institution that has the best one.

Types of bank accounts

Some banks or credit unions offer different versions of the following accounts for teens, college students or seniors. All types are protected up to $250,000 at Federal Deposit Insurance Corp.-insured banks and National Credit Union Administration-insured credit unions.

Low fees are especially important when you’re deciding on a bank account. Sixty-one percent of Americans are avoiding banking fees, according to the American Bankers Association, and you can too. Here are some tips:

  1. Dodge fees: Avoid accounts with monthly maintenance fees and small ATM networks that don’t reimburse out-of-network ATM fees.
  2. Overdraft options: Choose an account with a lenient overdraft policy.
  3. High interest: Choose rates of 1% or higher for savings accounts and CDs.


A checking account is used for day-to-day banking, including depositing your paycheck, withdrawing cash and paying bills. It offers multiple ways to access your money — such as debit cards, ATMs and personal checks — and doesn’t limit the number of monthly transactions you can make.

The smallest transaction can overdraw an account, so you want an easygoing overdraft policy. The average overdraft fee runs to $34, according to the Consumer Financial Protection Bureau, and it can be charged several times daily.

What to look for: Some checking accounts offer interest, but your money doesn’t sit there long enough to earn it. Instead, look for an account that charges no monthly maintenance fee, requires no minimum balance, reimburses fees from ATM transactions outside the bank’s network and has a lenient overdraft policy.


A basic savings account gives you a safe place to store your money and lets you access funds quickly in the event of a medical emergency, a sudden job loss, or a trip you’re planning. However, it may limit the number of transactions you can make per month.

Most savings accounts earn very little interest. The national average rate for a savings account is currently 0.06%, but you can find online accounts that offer low fees and high rates upward of 1%.

What to look for: Low fees and the best rate you can get. The best rates are likely to be at a credit union or online-only institution.

» MORE: NerdWallet’s best savings accounts

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