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How to Manage a Checking Account

A checking account is one of the most fundamental tools in personal finance. To make the most of your account, and your money, it's important to know how to manage a checking account effectively.

 

Tips for managing your checking account

Managing your checking account can help you stay on track with your financial goals and make the most of your income. Here are some strategies that might help.

Know your balance

One of the most fundamental aspects of managing a checking account is keeping tabs on your account balance. Use online and mobile banking tools to monitor your account frequently. Staying informed about your balance can help prevent overdraft fees and keeps you aware of your spending habits.

Flag any fraudulent charges. Keep an eye on your transactions and bank statements to spot any unauthorized or suspicious activity. If you notice any issues, report them immediately to your bank to protect your money. Many banks offer alerts for transactions, which can be a useful tool for staying updated on your expenses and learning of possible fraudulent activity.

Make a budget. Successful planning usually begins with a clear understanding of your monthly income and expenses. By creating a budget, you can allocate funds for bills, savings, and discretionary spending, which might help avoid overspending. Managing your budget carefully can help you keep enough money in your account to cover recurring payments while working toward building an emergency fund.

Avoid Fees

  • Overdraft fees. These may be assessed if you try to spend more than your account holds. See if you can set up low-balance alerts to help you stay within your spending limits and prevent accidental overdrafts. Some banks even offer overdraft protection options that link your checking account to a savings account.
  • Maintain account minimum balances. Many checking accounts require you to maintain a minimum balance to avoid incurring a monthly fee. Always be aware of your bank’s policies and try to keep enough funds in your account to avoid these fees.
  • ATM fees. If you frequently withdraw cash, stick to ATMs in your bank’s network to avoid additional fees. ATM fees for out-of-network withdrawals can add up, especially if you make frequent cash withdrawals, so always check your bank's policies regarding fees.

How to choose the right checking account

Choosing the right checking account is important for managing your income, controlling your expenses, and working toward your financial goals. Here are some important factors to keep in mind when assessing different accounts.

Compare fees

  • Monthly fee. Many checking accounts come with a monthly fee that can be waived or reduced by maintaining a certain minimum balance or by meeting other criteria like setting up direct deposit. It’s important to be aware of the fees associated with each account and how you can avoid them. For example, some banks offer accounts with no fees, but they may have fewer features compared to premium accounts.
  • Overdraft and ATM fees. Choosing an account with low or no overdraft fees or one that offers fee reimbursements for ATM withdrawals can save you money in the long run. Compare the fee structures of different banks to get the best deal for your specific needs.
  • Additional fees. Watch out for other potential charges, like fees for paper statements, wire transfers, or foreign transactions.

Compare benefits and requirements

  • Minimum balance required. Many accounts have a minimum balance required to avoid fees or to qualify for extra perks. Consider what balance you will be comfortable maintaining.
  • Earning interest. Some checking accounts allow you to earn interest on your balance. This can be an appealing option if you plan to keep a significant amount of money in your account. Compare interest rates for other types of accounts to see if you can truly benefit. It’s possible that a savings account, certificates of deposit, or another option may offer higher returns.

Types of checking accounts

Different checking accounts are designed to meet the diverse needs of consumers. Here are a few common types:

  • Basic checking account. This type can be good for day-to-day money management and usually comes with low or no fees. It may be a good fit for individuals who need a simple account to manage income and expenses without extra frills.
  • Premium checking account. These accounts often come with added benefits, such as higher interest rates, free ATM usage, or personalized services. They may also have stricter minimum balance requirements or higher monthly fees, so it’s important to assess whether the perks justify any costs.
  • Student checking account. For students, banks may offer specialized accounts with low or no fees, no minimum balance, and the flexibility to meet the needs of younger individuals starting their financial planning journeys. These accounts are a good option for those focusing on building good habits around budgeting and money management.

Checking accounts from TD Bank

TD Bank offers a range of checking products to help meet your financial goals, whether you're looking for convenience or benefits.

TD Beyond Checking

An account loaded with perks, including interest

TD Complete Checking

A checking account made for everyone

TD Essential Banking

No checks and no overdraft fees or services

TD Business Simple CheckingSM

An ideal account with no minimum balance requirement

TD Business Convenience Checking Plus

The essential account features you need to run your business

TD Business Premier CheckingSM

Rewards for your business deposits, TD Bank relationship and more

This article is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.

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