Checking Accounts – What You Should Know

Key Points:

• Checking accounts are great for managing everyday expenses and accessing cash in a hurry.
• Try to keep up to two months’ worth of living expenses in your checking account.
• After that, put extra money in accounts that generate more interest. 

What is a checking account?

A checking account is an account with a financial institution, like a bank or credit union, where you can deposit money and access it as needed to manage your day-to-day finances. You can typically deposit money to a checking account through a variety of options, including: 

• ATM deposits
• Direct deposits
• In-person deposits at a credit union or bank
• Mobile check deposits, and more

What is a checking account used for?

A checking account is used to manage daily and recurring expenses. For example, you may deposit your paycheck into your checking account and then access that money by writing checks, withdrawing cash at ATMs, and making online and mobile transfers. You can use that money to pay your mortgage or rent, get cash for daily expenses, pay bills, buy groceries, etc. 

How much money should I have in my checking account?

Checking account balances fluctuate due to the number of withdrawals and deposits. Generally speaking: 

• Try to keep up to two months’ worth of living expenses in your checking account.
• Make sure there’s always enough money in the account to avoid overdraft fees. (An overdraft happens when you spend more money than you have in your account at the time of a transaction.) 

Use Affinity’s Account Alerts to Help Manage Your Account

You may run the risk of overdrafts if it’s been a while since your last deposit. Fortunately, with Affinity Online Banking, you can sign up for account alerts that will let you know: 

• When your balance falls below a certain level, say $1,000, $500 or whatever amount you pick.
• If withdrawals over a certain dollar limit post to the account. Again, you get to pick the amount.
• When deposits, such as direct deposits from an employer, are made to your account.

And remember, two months’ worth of living expenses can fluctuate based on new or expiring expenses, or in times of inflation. Make sure to adjust accordingly. 

Affinity checking accounts come with free withdrawals at over 30,000 ATMs, and we’ve got you covered with several overdraft protection options.

Are checking accounts insured?

Yes, credit union checking accounts (including Affinity checking accounts) are insured up to $250,000 by the National Credit Union Share Insurance Fund. Bank checking accounts are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC).

Does a checking account come with a debit card?

Yes, checking accounts come with a debit card, which you can use to access your money at ATMs and to pay for expenses at stores and restaurants instead of using cash. Your bank or credit union will issue you a debit card soon after you open a checking account. 

How can I get a free checking account?

Many credit unions and banks offer “free” checking accounts, which means they do not assess monthly maintenance fees. Just be aware you may still be charged fees for things like overdrafts, stopped payments, using out-of-network ATMs and more. 

What is an online checking account?

An online checking account can be an account that is offered by an online-only bank, or it can refer to having online access to a checking account offered by a traditional credit union or bank. When opening a bank account, consider if you will want or need in-person access to bank personnel and resources. If so, a traditional brick-and-mortar bank or credit union may be a better option than an online-only bank. 

What’s the difference between a checking account and a savings account?

Checking and savings accounts are both deposit accounts, but here are some differences: 

• Checking accounts are used for routine transactions such as bill payments, purchases, and ATM withdrawals. These accounts usually earn little to no interest, so you should avoid keeping large balances in them. 

• Savings accounts are used to hold on to money and let it generate more interest than it would in a checking account. Many savings accounts limit how often you can withdraw money each month, so be careful to not overuse savings account for routine transactions. 

Should I open a checking account or a savings account?

That depends on your financial needs, but many people likely need both. At a minimum, you may need a checking account to take care of your daily expenses. If you regularly find yourself with more than 2 months’ worth of living expenses, you can consider opening a savings account to enjoy a better interest rate. 

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How do I find my routing and account numbers?

Here’s how to find the account number and routing number for your checking and savings account: 

• If you have a check – Look for three sets of numbers from left to right at the bottom of the check. The first is the routing number, and the second is the account number. (The third is the check number.)
• If you’re on the financial institution’s website or mobile app – Go to the account summary page for the checking or savings account, and you should see an option to view account details. The account details page should include the account and routing numbers.

NOTE: The routing number is the same for checking and savings accounts if both are at the same financial institution.