Tuesday, July 28, 2015

6 Ways to Get the Most from a Checking Account

A checking account may have fees and requirements, but it can also offer perks. From online access to rewards, this type of account can make your financial life easier and deliver returns on your money as well. Here are six strategies to help you get the most from this basic service.


1. Watch out for fees

If you make any big transfers or purchases from your checking account, make sure you still maintain whatever minimum balance may be required to avoid fees and get the best returns or rewards. Also take care when using ATMs — some may cost you a fee to use.


2. Go mobile and online

 Mobile apps and online banking services provided by financial institutions like Michigan Community Credit Union let you track funds more readily and quickly see how much money you have available before shopping trips or vacations. Online and mobile tools are a lot more efficient than monitoring your account via paper statements sent in the mail.


3. Harness direct deposits

Having your income go directly into your account makes it easy to transfer funds fast. You don’t have to wait to put a check in an account or worry about trying to cash one when you’re out of town. Direct deposit is one automatic service that definitely saves you time. When coupled with automatic bill-paying, it provides the convenience of having part of your incoming cash going directly to paying off bills and any debt you have. You don’t even have to think about it.


4. Earn rewards

Some financial institutions provide free debit cards with checking accounts, including some that offer reward points for each use. Points might be redeemable for travel benefits, merchandise, gift cards and even charitable contributions.


5. Returns on balances

If you agree to go all-electronic with your account and meet other minimum requirements, some financial institutions will deliver a return of as much as 1.75% on your balance, on an annual percentage yield basis. That’s significantly higher than the average rates paid on savings or checking accounts nationwide, according to the National Credit Union Administration, a regulatory agency.


6. Upgrade your account

If you keep a relatively large amount of cash in your checking account, you may do better by moving to one that requires a higher minimum balance in exchange for better returns.


Remember that your checking account is more than just a place to keep your money before you spend it. From mobile banking to reward programs, you can take advantage of convenient access while using perks to boost what you get from checking this year.


Spencer Tierney, NerdWallet

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