Checking Accounts: What You Need to Know

Posted on January 7, 2021 at 8:38 AM by Megan Stelter

The most obvious things in life can be overlooked, and your checking account is often times one of them. Most people hardly give a thought to this important account and how to best manage it effectively. We’re here to change that.

Here’s all you need to know about checking accounts:

What is a checking account? 
Your checking account offers easy and convenient access to your funds. The minimum deposit required for opening a checking account can be as low as $25. At Financial Plus, our Classic Checking option has no minimum balance requirements, and you are allowed an unlimited number of debit card transactions every month. 

Checking accounts are designed to be used for everyday expenses. You can access the funds in your account via debit card, paper check, ATM or in-branch withdrawals, online transfer or through online bill payment.

Making transactions using the connected debit card, or through a linked online account, will automatically use the available balance in your account and lower the balance appropriately.

A paper check is also linked directly to your account, but will generally take up to two business days to clear. It’s important to ensure there are enough funds in your account to cover a purchase before paying with a check.

Maintenance fees 
Many banks charge a monthly maintenance fee for checking accounts. According to Bankrate’s most recent survey on checking accounts, only 38% of banks now offer free checking, compared with 79% in 2009. Monthly fees can be as high as $25 a month.

Fortunately, as a member of Financial Plus Credit Union, you never have to worry about steep fees. Our Classic Checking accounts have no monthly fee!

Interest rates
Some checking accounts offer a very low Annual Percentage Yield (APY) on deposited funds. Institutions that offer checking accounts with interest or dividends will generally charge a monthly fee, with the fee being higher for accounts that have higher rates. They also generally require a minimum balance in the account at all times or a minimum number of monthly debit card transactions. According to Bankrate’s survey, you’ll need to keep an average of $7,550 in an interest-yielding checking account at a bank to avoid a steep maintenance fee.

At Financial Plus, we offer a Plus Checking option, which is for members who have a daily balance of $2,000 or more. For those members, there is no fee associated with the account. If the daily balance falls below the $2,000 amount, there is a $7.00 fee assessed. In addition to unlimited withdrawals, these members receive the following APY on their deposited funds:

Balance Rate APY
$0.00 - $1,999.99
$2,000.00 - $9,999.99
$10,000.00 - $24,999.99
$25,000.00 - $49,999.99
$50,000.00 - $74,999.99
$75,000.00 or More


Funds that are kept in a checking account at a bank are federally insured by the FDIC for up to $250,000. Credit unions feature similar protection for your funds at the same $250,000 rate, offering government protection through the NCUA (National Credit Union Administration). So you can rest assured that your funds are safe with Financial Plus.


Managing your checking account 
Managing a checking account is as simple as 1-2-3:

1. Know your balance
It’s important to know how much is in your account at all times. This way, you can avoid an overdrawn account, or having insufficient funds to cover your purchases. Being aware of how much money you have will also help you stick to a budget and spend within your means. You can check your FPCU balance online or in our mobile app, by coming in to the branch, or by giving us a call. 

2. Automate your finances
Make life a little easier by setting up automatic bill payment through your checking account. You won’t miss the hassle of paying your monthly bills, and you’ll never be late for a payment again. As a bonus, you’ll save on the processing fee that is often charged on bill payments made via credit card.

You can also set up direct deposit to have your paycheck land right in your account.

Finally, ask us about automatic monthly transfers from your checking account to savings so you never forget to put money into savings. 

3. Keep your account well-funded, but not overfunded
Financial experts recommend keeping one to two months’ worth of living expenses in your checking account at all times. This way, you’ll always have enough funds to cover your transactions without fear of your account being overdrawn. You’ll also be able to cover the occasional pre-authorization hold that a merchant may place on your debit card transaction until it clears.

It’s equally important not to keep too much money in your checking account. Once you’ve reached that sweet spot of two months of living expenses, it’s best to keep your savings in an account or an investment that offers a higher APY, such as a money market account or a share certificate.

Checking accounts offer the ultimate in convenience and accessibility. Now that you’ve learned all about these often overlooked accounts, let this financial tool help you manage your finances in the most effective way possible.

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