Sure you have a checking account – nearly everyone does. And you probably selected for perfectly reasonable considerations at the time: the bank because it was where your parents set up your savings account when you were three, or there was a branch near your school, or you thought they had a great radio ad.

But now that you are out on your own, it is probably time to check out the competition. Rest assured, with a potential for steady income, every bank in town wants you as its customer. Of course, once you get past the marketing hype, you need to look at things like their monthly minimum balances and the many creative ways they have to charge you extra fees. Once you do, you may start to wonder who exactly wants to give these people their money in the first place.

To avoid being one of those souls stuck with a boring checking account in a thankless bank, here is a checklist of things you should consider when a doing a checking account review:

1. Nearby branches – You are going to receive a lot of checks in your life. Having a branch nearby where you can immediately make a deposit will make all the difference in the world. You are simply asking for trouble when you have a bunch of checks you drag around with you day after day, waiting until you swing by a branch to deposit them.
   And while rates may be better with some online banks, don’t underestimate how inconvenient it is to to mail every check you receive to someone far, far away and wait for the check to clear. This may be fine for secondary accounts (more on that in Part 2), you will want to have your primary account somewhere very close to home.
   Want to find all your local choices? Go to maps.live.com or maps.google.com and type in “bank near your address” and see who comes up. That is your starting point.
2. Nearby ATMs – Most banks have ATMs out front, but don’t forget all the other places you regularly go where you may need cash. Think of places like the office, the grocery store, your favorite afterhours hangout, or the airport. Remember too that while regional (think smaller) banks often have lower fees, if you plan to travel regularly, a national bank could save you a lot in nuisance ATM fees.
3. Zero monthly fees – There was a time when free checking was a big deal, but now banks view checking accounts as an inexpensive way to get you accustomed to banking with them. As banks have become more competitive, free checking is a given.
   Of course, banks had to come up with some clever ways to get money from you anyway. Today, free checking can come with some serious strings, like minimum account balance, or guaranteed direct deposit of your paycheck, or something really unusual like a commitment to use their debit card as a credit card a few times every month. Personally, I can’t imagine spending my free time stressing out about whether I used a debit card ten times a month to save a few bucks on checking, especially when there are better deals around the corner.
   Unless you are certain the bank’s requirements for free checking will not be a problem for you, feel free to check out another bank.
4. Overdraft protection – It happens to everyone sooner or later. Even with your diligent attention to your checking balance, at some time in your life, you will inadvertently bounce a check. When you do, you will learn just how many creative ways your bank has created to remind you that you don’t want to do this a second time. Returned check fees, insufficient fund fees, redeposit fees and more – the list gets longer every year.
   The antidote to bounced check fees is overdraft protection. Overdraft protection is a loan that you only use when you need it. When you withdraw more funds from your account than you have on hand, money is taken from the overdraft account to make up the difference. Of course, you owe the money back, but paying a few days interest is far more attractive than $50 in bounced check charges.
   Ask about overdraft as you are setting up your checking account, and get it set up at the same time. If you can get a credit card, you can get overdraft protection from your bank. It’s worth the hassle.
5. Online access – Today, nearly every financial institution offers online access to your account. You should be able to view balances and recent transactions at the very least, and to make payments and transfer funds if the bank really wants to impress you.
   Don’t just accept that the bank has online access available – find out what online services they really offer. Don’t settle for poor online service. The best ones offer services like SMS messages to let you know that your funds are dangerously low, mobile applications for your cell phone, and automatic feeds to financial products like Quicken or mint.com.
   Insist on online access as part of giving them your business, and look for banks that think of online services as an integral part the way they do business.
6. Cold hard cash – Okay, you found two banks with everything you are looking for. How do you pick the winner? Thirty years ago or so, banks used to lure in new customers by giving away free household appliances, like toasters or electric can-openers. Really, you’ve got to marvel at the creativity. Nothing says quality banking services like a small electric skillet.
   Today, because basic banking services like checking and savings have become a commodity, many banks have taken the less subtle approach to lure you in – cash. The idea is that once you find how convenient they are, you will stick with them. If they meet every other criteria and are willing to pay you to prove it, who are we to say no?
   Once again, though, read the fine print. Often the requirements that go with that cash (direct deposit, remain active for 180 days, limited online capabilities, nearest branch two states away) can make it less attractive that it first appears.

We’ll have even more thoughts on checking accounts and banks in the next post. Stay tuned… Check out 4 Ways to Further Improve Your Checking Account.

(Photo Credit – aeropw)