What Is the Definition of a Checking Account?
A checking account has many purposes designed to help a person manage her money more efficiently and effectively. All banks do not have the same terms and agreements for checking accounts. You can call several banks to see which terms are most likely to help you achieve your goals and objectives. Some checking accounts allow you to save money by avoiding excessive fees.
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Definition
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A checking account is a bank account that allows you to withdraw money on demand by writing checks or by using a debit card at an ATM.
NSF Fee
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If you write a check that is larger than the balance in your checking account, you could incur a nonsufficient funds fee. If you use your debit card while the account has a negative balance, the transaction will still complete, but you will receive a fee from the bank for each transaction completed.
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Earn Interest
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You could earn interest on your checking account balance, but it will depend on the bank with which you choose to do business.
FDIC Insured
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Checking accounts are insured up to $250,000 per account per depositor by the Federal Depositors Insurance Corporation. If the bank fails, you will not lose your money. The amount of insurance can increase depending on the ownership of the account.
Minimum Balance
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Some banks will require you to have a minimum balance. If you go below the balance you could be charged a fee.
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