No matter where you are in your financial journey, one thing most of us have in common is the ownership of a checking or checking and savings account. In fact, the latest FDIC numbers numbers show that only 6.5% of Americans were “unbanked,” meaning that no one in the household had a checking or savings account. For the rest of us, the average checking account balance was $3,500 .
Way back when, a checking account was literally that: an account from which you wrote checks. If you didn’t have enough cash on hand, or didn’t want to use it, a check was an obvious alternative.
Check-writing is still a viable option for even the most tech-savvy bankers, but 21st-century checking and checking and savings accounts now offer a lot more than just a place to hold your money.
What Is a Free Checking Account?
While some banks still charge hundreds of dollars a year in account fees, a growing number of financial institutions are starting to offer free checking, including traditional and online banks, credit unions, and even some credit card companies. And “free” can mean anything from no account fees to no minimum balances to free overdraft protection.
But is it really free, or is there an asterisk somewhere in that promise?
Do Free Hybrid Accounts Exist?
In addition to a debit card and checks, a checking and savings account might also include online deposit and bill payments, and P2P cash transfers like other checking accounts.
Where it stands apart is its dual function as a savings and investment account, with high-yield interest, which means the money you don’t spend will grow.
It’s a good idea to keep in mind that not all checking and savings accounts are created equal. Some are backed by FDIC insurance while others aren’t.
As always, it’s important to do your research and read the fine print to determine whether a checking and savings account is right for you.
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Choosing the Account for You
The huge variety of options is one of the best things about the proliferation of free checking accounts. But it can also be a huge headache when you’re trying to narrow your choices. Use these guidelines to choose the checking account that’s best for you.
First, Figure Out Your Goals
What do you need your checking account to do? Beyond just storing your money, a checking account can come with lots of bells and whistles. If you’re mostly a cash person but need a way to pay bills online, you may want to opt for ease and convenience. Seek out features like no-minimum-balance requirements, simple linking for online bill payments, and a slick, easy-to-navigate app.
Conversely, if you use your checking account so much you know your debit card number by heart, you may want to choose perks that can help you save as much as you can. Look for zero maintenance fees, high interest rates, and free access to a large network of ATMs. Consider how many checks you’ll likely write, how many account transfers you’ll need to make, and whether or not you need to interact with human bank tellers.
Do You Need a Physical Location?
Some financial institutions will only accept deposits into their branded ATMs, so if you’re planning to deposit cash on the regular, you may need to choose an institution where you can easily accomplish that.
If you’re planning to rely solely on direct deposit, however, this isn’t as much of a concern. Instead, look for financial services that offer a large network of partner ATMs where you can withdraw cash without paying a fee.
What Else Should I Consider?
We’ve covered the general must-haves, but if you’re still torn between two or three institutions, it’s a good idea to compare benefits like fraud protection, cash-back, or other loyalty rewards. When you open an online checking and savings account with SoFi, you’ll also gain access to financial planners, career coaching, and a large community of other, like-minded members.
Whichever money management account you choose, don’t sign on the dotted line until you read the customer account disclosure to make sure there aren’t any unknown fees.
Also be sure that the financial institution is reputable and insured by the Federal Deposit Insurance Corp (FDIC) or the National Credit Union Administration (NCUA) so that your money is safe.
If it’s a new-ish institution, or you feel like an offer is too good to be true, take another look at the account disclosure to confirm terms and conditions.
How to Open a Free Online Checking Account
Once you’ve completed your research and found the right account, getting started can be as easy as a few clicks. Here are some steps you might encounter:
• Prove it’s you. This can include your Social Security or other ID number, driver’s license number, or other financial-institution numbers, such as debit cards, routing numbers, or account numbers. (You may also need these to transfer in your first deposit or link accounts.)
• Decide on your account type. Are you opening an account just for you, or is it a joint account? Are you wanting checking, savings, or both?
• Fill out the application.
• Make your first deposit. You may be able to add money to your account right away, or if doesn’t require a minimum deposit, you can wait until you have the funds.
• Download the app. It can include perks such as spending-tracking, notifications, and bill pay reminders.
About SoFi Checking and Savings
Ready to get started? SoFi Checking and Savings is a checking and savings account where you can spend, save, and earn all in one place. Earn 4.00% APY (subject to change) on all your cash and get reimbursed for ATM fees anywhere in the world (subject to change).
3 Great Benefits of Direct Deposit
- It’s Faster
- It’s Like Clockwork
- It’s Secure
As opposed to a physical check that can take time to clear, you don’t have to wait days to access a direct deposit. Usually, you can use the money the day it is sent. What’s more, you don’t have to remember to go to the bank or use your app to deposit your check.
Whether your check comes the first Wednesday of the month or every other Friday, if you sign up for direct deposit, you know when the money will hit your account. This is especially helpful for scheduling the payment of regular bills. No more guessing when you’ll have sufficient funds.
While checks can get lost in the mail – or even stolen, there is no chance of that happening with a direct deposit. Also, if it’s your paycheck, you won’t have to worry about your or your employer’s info ending up in the wrong hands.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with direct deposit can earn up to 4.00% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 3/17/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet