Ok, you’ve got a savings account. You have money growing at a small interest and is completely hands-off. But what if you also want to keep your money safe in a bank account, and at the same time have access to it when you need? The checking account will allow you the same safety associated with the savings account, but will also allow you to write checks, pay bills, and use your money for short and medium term purchases.
When looking for a free checking account, make sure there are no annual fees, a free AMT card, and unlimited check writing. Almost every bank will have these options available for checking accounts. Usually there is a small fee for using an ATM card tied to the checking account, outside the bank. For example, if you wanted to withdraw money, but had a different bank’s ATM, you could still withdraw money but a small fee would automatically be charged to your account. If possible, look for a free checking account that doesn’t charge these fees, but keep in mind this fairly rare.
In contrast to savings accounts, checking accounts do not offer any interest on your balance. Therefore, this money is strictly for shorter-term use, while accounts that accrue interest are for long-term saving. But you don’t get paid interest, how does the bank profit from free checking accounts? If you use a bank’s free services (like opening a checking account), you are more likely to use their other services which would give them a profit. Don’t be surprised if the bank tries to sell you other services when you sign up.
If you are under 18, your options are somewhat limited for opening up an account. Some banks will allow minors at least age 16 to have a checking account. Other banks put the requirements higher and require the holder to be at least 18. In this case, you can still open a checking account, but it will have to a joint account with a parent. Banks do this because there could be legal issues if a minor’s check bounces, and as a minor the account holder assumes no responsibility. Therefore, the account will be in your name, but your parent will be connected to the account in case any problems arise.