5 Surprising Perks of Checking Accounts

Quick Answer

Checking accounts give you easy access to your money, but there are a few surprising perks you may not know about. You may be able to make early direct deposits and earn rewards, for example.

woman using her debit card to use her checking account, sitting at her laptop

People generally open a checking account to deposit their paycheck and set aside money until it's needed for everyday purchases or bills. But they also offer other perks you may not know about.

If you don't yet have a checking account, you're unsure you need one or you simply want to get the most out of your account, take a look at these five checking account features and benefits that may surprise you.

1. Make Early Direct Deposits

Most checking accounts give you the ability to make early direct deposits, which give you faster access to the money you've earned. Rather than waiting to cash a check, like a paycheck from your employer, a benefit check or tax refund, direct deposit may allow access to your funds much faster. Besides, who wants to make an unnecessary trip to the bank?

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Direct deposit, or electronic funds transfer (EFT), is safe, efficient and typically less expensive than paper check payments. But you'll need a checking account and your account and routing numbers when setting up direct deposit. If you wish to deposit your paycheck via direct deposit, check with your employer to learn how to set it up.

2. Earn Rewards

Although rewards are a common benefit with credit cards, some checking accounts also offer rewards, usually in the way of cash back and higher interest rates. Reward checking accounts also may offer perks like welcome bonuses, points, low or no monthly service fees, ATM fee refunds or discounts on purchases made with your debit card. if you regularly make purchases with your debit card, these might be perks worth getting excited about. Besides that, you won't accrue interest on your debit card like with credit cards.

Also, unlike credit cards that may charge an annual fee, reward checking accounts typically do not. However, it's possible to incur a fee if you don't maintain a minimum balance in your account. Many bonus offers require you meet certain other conditions, such as enrolling in online banking or making a certain number of deposits.

3. Earn Interest

While you might deposit enough money in a checking account to pay for everyday expenses, you might also open an interest-bearing savings account to stockpile any surplus cash or build an emergency fund. But did you know that some checking accounts pay interest rates on par with savings accounts?

Select banks and credit unions offer high-yield checking accounts with above-average annual percentage yield (APYs). Interest rates vary, but some accounts offer APYs of around 4%—sometimes more. The trade-off is that you'll likely need to meet certain requirements to earn the highest APY, like making a specific number of debit card transactions each month or signing up for direct deposit and online banking.

4. Open an Account Easily

Opening a checking account is easy and can often be done in person or online by filling out an application. You'll likely need two forms of identification, such as a driver's license, state ID or Social Security card, proof of address and money to use for an opening deposit.

Depending on the bank, credit union or other financial institution, you may be required to provide additional information. You may be asked for a signature so when you cash a check or make a deposit, your signature is on file. You'll also find out what fees (if any) and features are attached to the account, like overdraft protection or transaction limits.

5. Keep Your Money Safe

Make sure you open a checking account at a bank that is insured by the Federal Deposit Insurance Corporation (FDIC), or the National Credit Union Administration (NCUA) if your account is at a credit union. This insurance gives you the confidence your money is safe—up to $250,000 per depositor, per account type—in the unlikely event a bank or credit union fails. If your bank or credit union isn't insured, your money may be at risk.

The Bottom Line

Another benefit worth mentioning is once you open a checking account, you might have access to other products from the bank, such as credit cards, savings accounts, auto loans and mortgages. And although some banks charge fees just for having an account, the perks of checking accounts firmly outweigh the limitations.

Because banks and credit unions typically don't report your checking account information to the three major credit bureaus, your credit score won't be directly affected. Go a step further and sign up for free credit monitoring from Experian to keep an eye on your credit and monitor your spending.