Learn About the Types of Checking Accounts and How to Use Them

Checking accounts come in a variety of forms. There are checking accounts for business, personal checking accounts, online only checking accounts that must be accessed via the web and more. There are even student checking accounts that offer such perks as overdraft protection.

The type of checking account you will require will depend on your financial needs and lifestyle. For instance, online checking accounts are a great option for individuals who don’t require the convenience of having access to their cash through ATMs such as is the case if you bank with a brick and mortar institution. Continue on for more information on the most common types of checking accounts available.

What is a business checking account?

A checking account for business typically works much the same as a private account. You can use it to write and deposit checks and to hold and transfer funds as needed. Business checking accounts, however, are designed specifically to hold business funds and to keep those funds separate and distinct from personal funds. Likewise, business owners with business accounts may have improved changes to obtain low-interest loans to keep their business afloat.

About the Types of Business Checking Accounts

You can open a business checking account online or in person with most large banks, including:

  • Bank of America business checking.
  • Axos Bank Basic Business checking.
  • Chase Small Business checking.
  • U.S. Bank Silver Business checking.

Each bank will offer a different combination of perks for business account holders. Examples of common perks include:

  • Low or waived opening deposit amounts.
  • Free transactions.  
  • ATM fee reimbursement opportunities.

In some cases, you may even be able to open a free business checking account online with no deposit. To select an account, look at key features such as required minimum balances, transaction fees and overall costs to determine which account will best meet your operating needs.

Business Checking Accounts vs. Personal Checking Accounts

You can use checking accounts for business to:

  • Pay yourself out of business profits.
  • Pay your employees or contractors.
  • Pay business bills or purchase business services and supplies.
  • Set up auto payments for recurring expenses.
  • Cash or deposit business income before transferring it to other accounts, if desired.  
  • Track payments and expenses cleanly and clearly for tax and accounting purposes.

Unlike personal accounts, business checking accounts may not be used to pay for private, non-business expenses of any kind. These accounts also typically offer terms, rewards and bonuses geared towards the needs of businesses rather than individuals.

How to Run a Business Checking Account for a Small Business

The most important principle of running a checking account for business is to never mix business and personal funds. Use your business account for business funds only. If you are transferring funds from your business account to your personal account, such as when you pay yourself, make sure that these checks or transfers are clearly marked for later tracking and reference.

To keep a strong free business checking account, you should also:

  • Track your receipts (hardcopy or digitally) so that you can reconcile discrepancies.
  • Automate annual fees and other account requirements to ensure that your account remains in good standing.
  • Periodically audit your account or have your accountant do so to ensure that everything remains in order, and so that you can quickly correct and problems or errors that arise.
  • Properly file and protect your account documents to prevent theft, identity theft, and unauthorized access.

Learn About the Best Online Checking Accounts

An online checking account can offer you nearly all the benefits of traditional accounts and a generous array of perks unique to the online market. They are not right for everyone, however, so do your homework before signing on.

What is an online checking account?

Online checking accounts are bank accounts offered by online banks. Some major banking organizations, such as Capital One have both brick-and-mortar banks and online banking alternatives. Many online accounts, however, are offered and operated by companies with no physical presence.

Online Checking Account Examples

Among the best online banks of 2018 were:

  • Aspiration Bank.
  • Radius Hybrid.
  • Chime Card.
  • Varo Money.
  • Bank if the Internet USA.

How is an online checking account different from an in-person checking account?

Financial institutions or banks online offering totally digital checking accounts vary in the terms, services and options they offer. As a general rule, however, online accounts differ from in-person accounts in that:

  • Online accounts offer lower fees and more perks.
  • Account holders do not have brick-and-mortar banks to visit to complete transactions or receive assistance.
  • Fewer branded ATMs are likely to available, potentially increasing ATM fees for account holders who regularly need to withdraw cash.
  • Accounts are set up to support fully-digital transactions, from deposits to transfers to account management needs.  
  • May offer cashback and other rewards more commonly associated with credit cards.

Applicants can choose between online business checking or personal checking accounts, among other options.  

Pros and Cons of Online Checking

Online checking accounts are best for consumers who are:

  • Comfortable handling their finances entirely or primarily through digital means.
  • Have access to banking apps on their computers, smart phones or other devices.
  • Do not need or desire to visit physical banks to complete transactions or receive assistance.
  • Interested in unique account perks and rewards not available from standard banks.

These accounts may not be appropriate for consumers who:

  • Prefer to conduct transactions in person.
  • Want to link their checking and savings accounts (as many online checking account providers do not offer savings accounts.
  • Struggle with, lack access to, or prefer to minimize their use of technology for financial purposes.

Should you get a student checking account?

Few consumers appreciate a free checking account more than perpetually cash-strapped students. Some of the best checking accounts for students are those designed specially to serve young adults enrolled in higher education programs.

What is a student checking account?

A student checking account is any account a bank or other financial institution offers to qualifying students, and for which one must be a student to be eligible. These accounts typically offer simplified terms and easy access to funds.   

What are the advantages of a student checking account?

The best bank for students will offer accounts with combinations of perks and features unavailable on other accounts designed to make successfully banking and account management easy. Examples include:

  • Overdraft protection.
  • No monthly fees or very low monthly fees.
  • Competitive interest rates.
  • Ready access to ATMs and banking branches.
  • Electronic statements.
  • Online and mobile money management apps.

What are the disadvantages of a student checking account?

Not all student checking accounts are created equal. Some may slap students with hidden fees or hefty penalties for common mistakes. They may:

  • Have heavy fees for overdrafts.
  • Charge high ATM, maintenance or annual fees.
  • Charge extra for paper checks.
  • Not support or charge for standard transactions and features, such as mobile banking, or peer-to-peer payment systems.

How to Qualify for a Student Checking Account

To qualify for the best student checking accounts, you may need more than to simply be a student. You can also expect to need:

  • Proof of identity and SSN.
  • A parent, guardian or other co-signer if you younger than 18 years of age.
  • An opening deposit that meets bank and account requirements.

Students have several options for saving and selecting the proper bank account is the first step.