How to Manage Your Checking Account

Quick Answer

You can better manage your checking account through various actions, including checking your account balance routinely; setting up direct deposit, banking alerts and two-factor authentication; and using in-network ATMs.

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Checking accounts may earn little or no interest and come with few frills, but they are a key financial tool. A checking account is a place to store cash for everyday transactions, and using one can be safer than keeping a large stack of bills in your wallet or under a mattress. Whether you're opening your first bank account or looking for tips to make the most of one you already have, here are seven steps to better managing your checking account.

1. Check Your Account Balance Routinely

Keeping a close eye on your bank account balance can help you notice unauthorized purchases and low balances before you overdraw the account. An overdraft occurs when a transaction takes your balance below $0, and some banks may charge expensive fees of about $35 per overdraft transaction.

Most banks and credit unions offer online or mobile tools you can use to view account balances and account activity from your device. Consider logging in to your account from your computer, phone or tablet at least once or twice a week to review transactions and confirm you have sufficient funds before making purchases or paying bills.

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2. Set Up Direct Deposit

Direct deposits are electronic transfers that deposit your paycheck directly into your bank account each pay period. Direct deposits can be a faster and safer way to get paid since you don't have to receive and deposit individual checks. Also, some financial institutions offer early direct deposit, which gives you access to your paycheck several days before payday so you can use funds to handle financial emergencies or pay bills sooner.

3. Sign Up for Banking Alerts

Banking alerts are notifications you can set up with your bank that notify you through email, text or push notifications when specific financial events happen.

Setting up banking alerts can make you immediately aware of what's happening with your money when a situation needs your attention. For example, your bank or credit union may offer the following alert types:

  • Low balance alerts
  • Large deposit alerts
  • Large withdrawal alerts
  • Large expense alerts
  • Overdraft or negative balance alerts

It's free to set up account alerts, and you can customize them to get notified of financial events that are most important to you.

4. Set Up Two-Factor Authentication

Securing your online bank accounts is vital in case someone gets access to personal information like your username and password. Two-factor authentication is a system that uses two authentication methods to confirm your identity when logging in to an account, making it harder for unauthorized people to log in and access your money.

For example, your bank may ask you to enter a username and password to log in to your account, which is the first authentication factor. Then, the bank sends a security code to your phone or email that you must enter as the second authentication factor.

Setting up a password or face ID on your device is another way to prevent unauthorized access to your banking apps if someone gets ahold of your phone, tablet or computer.

5. Understand Banking Fees and How to Avoid Them

Monitoring your bank fees and comparing them against what other banks charge can help you make sure your account fees are competitive. Financial institutions can charge different routine maintenance and usage fees. For example, some banks might charge maintenance fees ranging from $5 to $8 per month (or as high as $25 in some cases) if you don't maintain a balance above a certain minimum or have a certain number of monthly deposits into the account.

Other service fees to watch out for are bank charges for paper checks, wire transfers, overdrafts and paper statements. If you're comfortable with banking mainly online, however, many online-only bank accounts charge no monthly maintenance fees and have low fees for extra services, which can save you money.

6. Sign Up for Bill Pay

Bill pay is a service offered through banks and credit unions that you can use to manually or automatically pay different companies or people directly through your bank account. If your financial institution provides a bill pay option, you can set up recurring payments for ongoing expenses or individual payments for bills.

On the scheduled date, your bank processes payment for the payee as long as the funds are in your account. Setting up bill pay is typically free, and it could help ensure each of your bills is paid on time without you having to remember to write checks or make individual payments to each service provider. Plus, the bank can keep records of each payment, which can help you maintain a more detailed history of where your money is going each month.

7. Use In-Network ATMs

Using in-network ATMs can help you avoid ATM surcharges from the ATM operator and out-of-network ATM fees charged by your financial institution. Often banks and credit unions will have an ATM finder page on their website or mobile app where you can locate fee-free ATMs, and if you draw cash often, using free ATMs could potentially save you $2 to $5 per withdrawal.

The Bottom Line

Since banking happens primarily online these days, you might be used to taking a passive approach to managing money. However, it's still a good idea to actively monitor your bank account balance, review transactions and check your banking fees. If you forget to check in periodically, setting up banking alerts can notify you of account updates, and setting up multi-level authentication can give you peace of mind that there are several layers of security protecting your money.

If you're thinking about opening a new checking account, the Experian Smart Money™ Digital Checking Account & Debit Card can help you build credit without debt by automatically linking to Experian Boost®ø, which gives you credit for eligible bill payments. You will also pay no monthly fees¶ for Experian Smart Money, have access to more than 55,000 fee-free ATMs worldwide** and could receive your paychecks up to two days early when you enroll in direct deposit†. You can get an Experian Smart Money Account through a free or paid Experian membership, which also gives you access to your FICO® Score , Experian credit report and more. See terms at