Table of Contents
A checking account is the financial equivalent of a home base — a central hub where your money comes in, rests briefly, and then goes out to cover your everyday expenses. It's designed to handle frequent transactions while keeping your funds readily accessible. Whether you're receiving your paycheck, paying bills, or making everyday purchases, a checking account provides the flexibility and convenience modern life demands.
In this guide, we'll explore exactly how checking accounts work, what they're best used for, and how to manage one effectively.
What is a checking account?
At its core, a checking account is a deposit account held at a financial institution that allows you to store money while maintaining easy access to it. It's like having a personal financial command center. Here are a few examples of how to access money in a checking account:
Debit cards: Make purchases directly from your account or withdraw cash from ATMs
Checks: Write checks for payments to individuals or businesses
Electronic transfers: Move money between accounts or to other people
Online bill pay: Schedule and send payments to service providers
Mobile banking: Deposit checks and manage your account from your smartphone
Depositing money will typically make your funds available within 1-3 business days, though some banks and credit unions now offer same-day or next-day access to your funds. For example, Sunward offers Early Pay or instant direct deposit.
How Checking Accounts Differ From Savings Accounts
Unlike savings accounts, which are more like long-term storage units for your money, checking accounts are designed to handle the regular ebb and flow of money in your daily financial life. With savings accounts, you'll typically enjoy significantly higher rates, but may face limitations on transactions.
Both savings and checking accounts are essential parts of a healthy financial strategy, but they shine in different situations.
Uses and Benefits of a Checking Account
With the basics in mind, we can now dig into more of the specifics around why checking accounts are a valuable part of your finances.
What Are Checking Accounts Used For?
For most people, a checking account serves as the primary financial account through which most of their money flows. Its main purposes include:
Managing daily expenses
Paying bills online or through automatic payments
Sending and receiving money
Storing and giving you quick access to your cash
Key Benefits of Checking Accounts
While checking accounts may seem like a basic financial tool, they offer several powerful advantages that make them indispensable in your financial toolkit. Here's why a well-chosen checking account can be one of your most valuable money management assets:
Convenience: Access your money 24/7 through ATMs, online banking, mobile apps, or debit cards.
Security: Your funds are protected by FDIC/NCUA insurance up to $250,000.
Payment flexibility: Choose from various payment methods, including peer-to-peer transfers, debit cards, checks, or automatic payments.
Record-keeping: Your account automatically tracks every transaction, creating an effortless digital paper trail for budgeting, expense tracking, and tax preparation.
Integration: Link seamlessly with budgeting apps, investment platforms, and payment services to create a connected financial ecosystem that simplifies money management.
Potential Drawbacks to Consider
Just as checking accounts have a wealth of benefits, it’s also worth noting a few things to watch out for, specifically:
Maintenance fees: Many banks charge monthly fees (anywhere from $5-15, on average) unless you meet certain requirements like minimum balances, direct deposits, or regular debit card usage. These requirements can be challenging for some to maintain consistently.
Overdraft charges: If you spend more than what's in your account, you could face fees up to $40 per transaction, though the exact numbers will always vary from bank to bank.
Limited interest: Unlike savings accounts, checking accounts offer minimal to no interest (for banks) or dividends (for credit unions) on your balance, meaning your money isn't growing while it sits in your account. The FDIC's national average interest rate for interest-bearing checking accounts stands at just 0.07% as of March 2025, with many offering rates as low as $0.01.
ATM fees: Using an out-of-network ATM will generally come with a fee, with average ATM fees climbing to $4.77 as of 2024, a rate that marks a 26-year high.
Once you have a sense of the potential drawbacks, you can make informed decisions to sidestep them. For example, Sunward accounts come with free overdraft protection, no monthly maintenance fees, and a network of 30,000 CU surcharge-free ATMs.
How to Open and Manage a Checking Account
Knowing the general process to open an account and manage it over time helps make the experience as smooth as possible, whether you're opening your first account or switching to a better option.
Opening a Checking Account
The process for opening a checking account might differ slightly depending on your financial institution, but a lot of the steps generally overlap. In this case, let’s look at an example of what the process might look like when opening an account with Sunward:
Gather your documents: Most financial institutions, including Sunward, require:
A government-issued ID (driver's license or passport)
Social Security card or number
Proof of residency (Sunward doesn’t require this)
- Choose your account type: Even when you know you’re goal is to open a checking account, there might be some decisions to make about what kind of checking account. In the case of Sunward, there are three checking accounts to choose from — all of which offer no minimum deposit requirement:
Money Manager Checking: Earn dividends on balances over $500 with unlimited free transactions at CU Anytime or CO-OP ATMs
Quick Cash Checking: Basic checking with unlimited free transactions at CU Anytime or CO-OP ATMs
Sunward Simple Spend: A checkless checking account with a debit card, no monthly maintenance fees, and unlimited free ATM transactions at partner networks
Complete the application: You can typically apply online in about 10 minutes or visit a branch for in-person assistance. The application will ask for your personal information, employment details, and how you plan to use the account.
Make your initial deposit: Fund your new account. While some banks require minimum opening deposits of $25-100, others allow you to open with any amount. (At Sunward, you can start your membership with as little as $1.)
Set up online banking: Register for digital access to manage your account anytime. This typically involves creating login credentials and setting up security features like two-factor authentication.
Activate your debit card: Your card will typically arrive by mail within 7-10 business days. Follow the enclosed instructions to activate it and create your PIN.
Managing Your Checking Account Effectively
Opening your account is just the beginning. These simple but powerful practices can help you stay in control of your finances and make the most of your account:
Monitoring your transactions regularly: Check your account activity at least weekly to catch any unauthorized charges or errors.
Setting up alerts: Configure notifications for low balances, large transactions, or when bills are due.
Maintaining a buffer: Keep a small cushion in your account (even just $100–200).
Setting up direct deposit: Have your paycheck or government benefits delivered to your account automatically.
Linking to a savings account: Connect your checking account to savings to enable easy transfers between the two.
This proactive approach to account management is also an important way to avoid common checking account fees. For example, maintaining that small buffer and setting up alerts provides overdraft protection in case of unexpected timing issues between withdrawals and deposits. By staying engaged with your checking account, you're not just organizing your finances — you're actively keeping more of your money where it belongs: in your pocket.
Choosing the Right Checking Account
Different lifestyles demand different features from a checking account, whether it’s an emphasis on the digital experience, a focus on low fees, or a strong brick-and-mortar presence. Here are a few examples of what priorities might look like for a few different user profiles:
For frequent travelers: Prioritize accounts with extensive ATM networks or ATM fee reimbursements to avoid charges when you're on the road. Sunward's Money Manager account, for example, offers access to thousands of surcharge-free ATMs through the CO-OP network.
For digital natives: Look for robust mobile apps with features like mobile check deposit, real-time alerts, and seamless integration with payment apps. All Sunward accounts come with our top-rated mobile app and online banking tools.
For those building savings: Consider accounts that make saving automatic, like Sunward's checking accounts that can be linked to savings for automatic transfers or allow you to earn dividends in some cases.
For busy professionals: Convenience features matter most—look for accounts with bill pay options, easy person-to-person transfers, and extensive customer support.
For young adults and students: Focus on accounts with no minimum balance requirements and forgiving policies for occasional overdrafts, like Sunward's Young Adult Checking with quarterly NSF refunds.
The right checking account should feel like it was designed with your specific financial habits in mind, rather than forcing you to adapt to its limitations.
FAQs
What is a checking deposit?
A checking deposit is simply the process of adding funds to your checking account. This can happen through:
Direct deposit from an employer or government benefit
Mobile check deposit using your bank's app
In-person deposit at a branch or ATM
Electronic transfer from another account or person
Once deposited, these funds become available for withdrawal or payment according to your bank's funds availability policy.
How do you access money in a checking account?
You can access your checking account funds through multiple channels:
Making cash withdrawals at ATMs or bank branches
Using your debit card for in-person or online purchases
Writing paper checks to individuals or businesses
Sending money through online bill pay or person-to-person payment services
Transferring funds between your accounts
Most checking accounts allow unlimited transactions, making them ideal for everyday financial needs.
What fees should I be aware of when using a checking account?
Common checking account fees include monthly maintenance fees (not at Sunward), overdraft fees, out-of-network ATM fees, paper statement fees, and returned item fees. Many of these fees can be reduced or eliminated by choosing the right account and following good account management practices.
A checking account serves as the foundation of your personal finances — a central hub for your day-to-day money management. It offers convenience, security, and flexibility that helps you stay organized while avoiding unnecessary fees.
Ready to experience better checking? Explore Sunward's checking account options designed to fit your lifestyle, with no minimum deposit requirements and access to thousands of surcharge-free ATMs. Visit a branch, call us, or apply for an account online today.
