7 Questions To Ask Before Opening A Checking Account



Personal finance is a major issue in the United States. Did you know that nearly half of all Americans who took a 2019 survey would prefer to chat about death, politics, or religion - all hot-button issues that are considered taboo to talk about - with someone than personal finance?

Financial issues are also a leading cause of divorce, with a 2010 Citibank survey reporting that financial issues were the cause of nearly 60% of divorces?

The best way to learn about personal finance is to ask questions. Here are 7 essential questions that everybody should ask before opening a checking account.

1. How Much Are Overdraft Fees?


An overdraft is what happens when you spend more money than your checking account has. Very few checking accounts don't penalize customers with overdraft fees, though these accounts will typically require minimum account balances to be maintained, monthly usage fees to be paid, and are picky when selecting customers.

Overdraft fees generally range from $25 to $40. NerdWallet found that, as of Sept. 2019, the average American bank charged $35 for every transaction that overdrew customers' accounts. The same study found credit unions charged $26, on average.

Always ask how much overdraft fees are before opening a checking account.

2. Are Continuous Overdraft Fees Charged?


Continuous overdraft fees refer to charging account holders whose accounts were overdrawn a fee for each day their accounts were in the red. The above study found that 58% of survey respondents charge these fees, also known as extended overdraft fees.

You generally don't want to do business with banks that charge continuous overdraft fees.

3. Are There Monthly Usage Fees?


Many banks charge customers monthly fees called usage fees.

A 2019 Bankrate survey asked banks that charged monthly service fees how much their rates were. Responses were split between accounts that bore interest and those that didn't.

As of 2019, the survey found the average monthly usage fee for interest-bearing checking accounts to be $15.05, whereas the average for their non-interest-bearing counterparts to be $5.61.

You may be able to find better service from banks that offer checking accounts with monthly usage fees. However, if you aren't well into the middle class and can afford to pay such fees, you should find a bank that offers free checking accounts. Many of these banks are just as competent, if not better, than those that charge money for checking accounts.

4. Can I Opt-Out of Overdraft Protection?


Many banks offer overdraft protection. In other words, you can elect for the bank to cover transactions that you don't have money to pay for.

Such transactions result in overdraft fees. Fortunately, some banks allow you to eschew the potential of being slapped with an overdraft fee by opting out of their overdraft protection program.

5. How Much Does Use ATMs Cost?


In satisfying your quest to find what to look for in a checking account, you should ask how much using ATMs costs.

Another 2019 survey shows that using ATMs costs an average of #3.09 per transaction. Using out-of-network ATMs costs an average of $4.72.

6. Is Mobile Banking an Option?


Although mobile banking is widely popular, it's not included by all banks. Ask all banks you may want to open a checking account at whether they offer mobile banking.

Mobile banking isn't important to everyone, though if you spend a lot of time on your smartphone, this is an important factor for you.

7. Are You in the MoneyPass Network?


Some banks enter partnerships in which members pay upfront institutional charges to satisfy all costs associated with maintaining automated teller machines such as the MoneyPass network. This makes all ATM transactions entirely free.

This isn't the only type of surcharge-free network to help you save money when using ATMs, through banks that do offer this perk are definitely ones you should consider doing business with.