Financial Fundamentals Blog

Exploring the Pros and Cons of Different Types of Checking Accounts

young woman researching checking account options while talking to a teller on the phone


Regardless of the type of checking account you choose, one thing should always be true: Your checking account should give you more power over your money.


That said, you do have options.


To make the most of your money, it’s important to evaluate the pros and cons of each type of checking account so you can make the best decision for your unique situation.


The Most Popular Types of Checking Accounts You Can Choose From

Here are four types of checking accounts you’ll come across, along with a helpful rundown of their most intriguing, relevant-to-you features.


Why Choose a Traditional Checking Account? 

Traditional checking accounts offer standard essential features, including check-writing abilities, online bill payment options and access to a debit card. These straightforward accounts are a solid choice for simple finance management.


Traditional Checking Pros

  • Wide availability
  • Essential services, including access to debit cards and online banking

Traditional Checking Cons 

  • Possible monthly fees, which can add up over time if waiver conditions aren't met
  • Lack of earned interest
  • Lack of the features and perks of more specialized account types

Why Choose a Premium Checking Account? 

Premium checking accounts can come with higher opening deposits and balance minimums, but offer intriguing benefits in return. With a premium account, you may enjoy ATM fee reimbursements, waive monthly fees, get cash-back rewards and even earn dividends.


Premium Checking Pros

  • Higher potential for earning than traditional checking accounts
  • The ability to earn more benefits as your balance grows over time
  • Potential perks such as free checks and discounts on other banking services

Premium Checking Cons

  • Higher minimum balance and opening balance requirements
  • Possible monthly fees if you don’t meet any existing account requirements

Why Choose an Interest-Bearing Checking Account?

Checking accounts don’t usually earn you interest. That’s a feature of savings accounts, where money tends to sit longer.


With an interest-bearing checking account, you can access the best of both worlds—the ease and convenience of a checking account, along with the increased earning potential of a savings account.


Interest-Bearing Checking Pros

  • Ability to earn interest and access your funds simultaneously

Interest-Bearing Checking Cons 

  • You may need to meet specific criteria (such as transaction counts or minimum balances) to earn interest
  • Available interest rates tend to be lower than those associated with savings accounts


Why Choose a Student Checking Account?

Student checking accounts are typically for college students between 18 and 23. To help support young adults and their specific challenges, student checking accounts may come with perks such as no monthly maintenance fees, overdraft forgiveness and even free checks.


Student Checking Pros

  • Usually offer low (or no) monthly maintenance fees
  • Provide young adults some leeway with features like overdraft forgiveness

Student Checking Cons 

  • Limited eligibility — you must demonstrate your student status to qualify for this account.
  • Any associated benefits may no longer apply after graduation.
  • May have fewer features than more premium types of checking accounts.

After learning about your options, your head might be spinning. There are a lot of perks, options and features to consider, after all.


Which considerations are most important?


Here’s Exactly What You Need to Consider When Choosing a Checking Account

Follow these three simple steps to find the right checking account for you.


1. Ask the right questions. Reflect on the way you use your money, and then ask:

  • How often do I use my debit card for transactions?
  • What is my average monthly balance?
  • Will I need overdraft protection?

This information will help you select an account appropriate for your lifestyle.


2. Weigh your options with care. Find the checking account information at your preferred financial institution and compare the fee and feature structures available.


(Pro tip: Keep an eye out for account fees, minimum balance requirements and dividends potential.)


3. Consider what you value most! Then, you can find an account that meshes with your needs. For example:

  • If earning potential is your priority, opt for an account with interest or one that earns dividends.
  • If avoiding fees is crucial, select an account with minimal charges, even if it offers lower interest.
  • If you know you’ll carry a consistently high balance, consider an account with maximum benefits.
  • If you frequently use your debit card, make sure your account carries no (or low!) transaction fees.

Need Further Support Finding Your Perfect Type of Checking Account? 

If you’re ready to take a significant step to manage your finances effectively and make navigating your daily life much easier, you’re in luck: Checking accounts are here to help. Your team at 7 17 Credit Union is also here to support you as you choose between our checking accounts — all of which offer no or low service fees, zero minimum balance requirements and competitive rates.


For more information and guidance, click here for an overview of our checking account options. Feel free to reach out to our friendly team for any assistance you may require!