Banking Checking Accounts

What Is a Checking Account? It’s Like a Digital Wallet With Backup

A checking account is a type of bank account designed for daily transactions, from paying bills to buying groceries.

By Lindsay Frankel and Sarah Fulghum , Edited by Melinda Sineriz, ABFP®

Fact Checked by Kelly Wise

Updated March 31, 2026

A checking account is a type of bank account that keeps your money safe at a bank or credit union while allowing you to withdraw cash when you need it. It's designed for daily expenses rather than long-term savings goals. A checking account typically provides you with the ability to cash and write checks, pay online bills, get cash from an ATM, and access other services.

But not all checking accounts are the same; some charge monthly fees, have minimum balance requirements, or impose limitations, while others come with perks or earn a high interest rate. We'll cover the benefits of checking accounts, how to open an account, and how to choose the right account for your needs.

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SoFi Checking and Savings

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Learn More on SoFi's secure website, Member FDIC

Bonus Offer

Up to $400

Minimum Opening Balance

Monthly Fee

Why We Like It

Earn a $50 or $400 bonus with eligible direct deposit¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/2026. Full terms at <a href="https://www.sofi.com/banking/" >sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>. and up to 4.00% APY² Earn up to 4.00% Annual Percentage Yield (APY) on SoFi Savings with a 0.70% APY Boost (added to the 3.30% APY as of 12/23/25) for up to 6 months. Open a new SoFi Checking and Savings account and pay the $10 SoFi Plus subscription every 30 days OR receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 3/30/2026. Rates variable, subject to change. Terms apply at <a href="https://www.sofi.com/banking/#2">sofi.com/banking#2</a>. SoFi Bank, N.A. Member FDIC. on your money
Limited-Time Offer: +0.70% Boost on Savings APY to up to 4.00% for up to 6 months on new accounts. Terms apply.² Earn up to 4.00% Annual Percentage Yield (APY) on SoFi Savings with a 0.70% APY Boost (added to the 3.30% APY as of 12/23/25) for up to 6 months. Open a new SoFi Checking and Savings account and pay the $10 SoFi Plus subscription every 30 days OR receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 3/30/2026. Rates variable, subject to change. Terms apply at <a href="https://www.sofi.com/banking/#2">sofi.com/banking#2</a>. SoFi Bank, N.A. Member FDIC.
No account, overdraft, or monthly fees³ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a>.
Get your paycheck up to two days early with direct deposit⁴ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.
Access additional FDIC insurance up to $3 million⁵ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/sidpterms">SoFi.com/banking/fdic/sidpterms</a>. See list of participating banks at <a href="http://sofi.com/banking/fdic/participatingbanks">SoFi.com/banking/fdic/participatingbanks</a>.

Learn More on SoFi's secure website, Member FDIC

Key takeaways

With a checking account, you can deposit money at a bank or credit union to keep it secure and withdraw money when you need to spend it.
Checking account features vary, but you can often use a debit card to make purchases, withdraw cash from an ATM, write and deposit checks, and pay bills online.
Some checking accounts come with minimum opening deposits, minimum balance requirements, and monthly maintenance fees, but there are also checking accounts you can open with $0 and have no minimums.

How does a checking account work?

You start by opening a checking account online or at a local credit union or bank branch. You'll need to make a deposit, prove your identity, and sign some documents to activate your account. Your financial institution will assign a unique account number that identifies your account. If your account has check-writing capabilities, that number will appear on your paper checks, along with a routing number that identifies your bank or credit union.

Once your checking account is set up, you can make deposits as you earn income and withdraw money when you need to make purchases. Your bank or credit union will keep your money secure when you're not using it. If the account is FDIC-insured, funds up to $250,000 will also be protected against bank failure. That means your money is guaranteed by the government, even if you don't trust banks. With some accounts, you may need to maintain a minimum balance to avoid paying a fee, but there are also plenty of free checking account options.

While checking account features vary, most financial institutions offer multiple options for making deposits and withdrawals. Many checking accounts come with a debit or ATM card and online or mobile banking services. You can typically receive direct deposits from your employer and pay bills automatically from your account.

What can you do with a checking account?

The best checking accounts are packed with useful features that make it easier to manage your finances. For example, you can:

Write and deposit checks

Most checking accounts allow you to write checks and deposit checks you receive from others at no charge. Many banks also offer mobile check deposits, so you can snap a photo of the check with your phone to deposit the money into your checking account.

Pay bills online

You can typically pay bills with a checking account online or from your mobile phone, which saves you the hassle (and postage) of needing to mail a check. You can also set up automatic payments and track your spending more easily with a checking account. Many bank account mobile apps have built-in budgeting tools that help you stay on top of your finances.

Spend with a debit card or get cash from an ATM

Most checking accounts come with a debit card linked to your checking account. You can use the card to make purchases at retailers, and the money is automatically withdrawn from your checking account balance. You can also use your debit card (or a separate ATM card in some cases) to withdraw cash from an ATM. Many financial institutions have large ATM networks where you can withdraw cash for free, so you can get cash even if you're not near a branch.

Receive direct deposits

Most banks and credit unions allow you to set up direct deposits, so you can receive paychecks, government benefits, and tax refunds directly to your checking account. Direct deposit is more secure and faster than depositing a paper check you receive by mail. In fact, some checking accounts feature early pay programs that allow you to access your earnings up to two days before the funds hit your account.

Send money to friends and family

Many banks and credit unions use Zelle, allowing you to safely send and receive money between peers in minutes through your financial institution's mobile app. Zelle is useful if you need to pay a friend back for a pizza or send money to your house cleaner. The funds come directly from your checking account.

How does a checking account benefit me?

Having a checking account benefits you in several ways.

Keeps your money safe yet easily accessible
Gives you the tools to manage your finances with greater convenience
Sets you up to grow your savings, borrow money, and access other financial services
Saves you money on financial transaction fees

In about 5.6 million households in 2023, no household members held a checking or savings account, according to the FDIC. While some people face other barriers to opening a bank account, the most commonly cited reason for not having an account in 2023 was not having enough cash to meet minimum balance requirements, and one-third of unbanked households said their main reason for not having an account was related to either fees or minimum balance requirements.

If those reasons are deterring you from opening a checking account, just know that there are no-monthly-fee checking accounts with no minimums. And if you choose to manage your finances without a checking account, you could end up paying more for financial services. For example, cashing a printed check at Walmart costs around $4 to $8, and sending a money order through USPS costs $2.55 to $3.60, depending on the dollar amount. These fees add up if you need to pay every time you cash a paycheck or pay a bill, both services that are free when you have a checking account.

How do you open a checking account?

It's easy to open a checking account. Here's how the process typically works, step by step.

Choose the right checking account for you: Choose a checking account that meets your needs. See the section below for guidance on how to choose.
Gather your info and documents: Along with your name, address, and date of birth, you'll need to provide your Social Security number or Individual Taxpayer Identification Number. The bank or credit union will also ask for a form of ID, like a driver's license or passport.
Complete and submit the application: Most financial institutions offer online applications you can complete from your home computer or mobile phone. If your bank or credit union has physical locations, you can also apply in-person with help from staff.
Make your initial deposit: Traditional banks typically require an opening deposit, which you can make by visiting a branch or using a prepaid card, debit card, or electronic transfer. But some online banks, like SoFi and Capital One, allow you to open a checking account with no minimum opening deposit.
Sign the banking agreement: To activate your account, you'll need to sign an electronic or paper copy of your banking agreement, which will also outline any incidental fees you may be responsible for.
Set up your account: To make the most of your checking account, set up direct deposit, activate your mobile banking account and virtual debit card, and enroll in Zelle.

How do I choose the best checking account?

There's no single best checking account for everyone. When selecting a checking account, think about your financial goals and the services you'll use the most. Consider the following.

Online vs. in-person support: Online-only financial institutions tend to charge fewer fees, but their checking accounts come with some limitations. If you want to be able to walk into a bank and deposit a bag of loose change, get an instant cashier's check, or simply enjoy face-to-face customer service, you might prefer a brick-and-mortar financial institution. Most still offer online banking tools.
Bank vs. credit union: Banks tend to offer more financial products and services and more locations when you travel, while credit unions are not-for-profit, member-owned institutions that focus on financial education. Credit unions tend to have lower fees and higher savings rates than banks.
Types of checking accounts: If you're in college, you might look for a student checking account. If you have children, you might explore family checking accounts with parental controls. If you plan to open a business, look for a bank or credit union that supports small business checking.
Checking account fees: Some checking accounts make it easier to avoid overdraft fees than others. Some checking accounts have no monthly maintenance fees. Other accounts have fees you can avoid by maintaining a minimum balance, and these tend to have premium features.
Future financial needs and goals: Even if your primary objective right now is to open a checking account, think about what else you might want from your bank or credit union. If you have savings goals, you might want a checking account with an integrated high-yield savings account, like SoFi. If you struggle to stay on top of your bills, you might look for an account that offers paycheck advances and credit-building tools, like Varo or MoneyLion.

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AWARD WINNER Best Online Checking

SoFi Checking & Savings - Earn Up to $400 When You Set Up Direct Deposit

Limited-Time Offer: Earn a $50 or $400 bonus with eligible direct deposit and up to 4.00% APY on Savings (3.30% APY¹with +0.70% APY Boost) for up to 6 Months on new accounts. Terms Apply.² FDIC Insured.⁵

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Enjoy $400 as a new Chase checking customer

When you open a new Chase Total Checking® account with qualifying activities.⁶ FDIC Insured. Offer valid through 4/15/2026.

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FAQs

Why do they call it a checking account?

Historically, money transfers from checking accounts were primarily made through writing paper checks, which is why they call it a checking account. Today, a checking account serves many more purposes, but it's still a deposit account designed for daily expenses.

Is a checking account the same as a banking account?

A checking account is a type of banking account designed for frequent transactions. You can deposit money and withdraw money from a checking account on a regular basis. A savings account is another type of banking account designed to hold money for a longer period of time. Other common types of banking accounts include certificates of deposit and money market accounts.

What is a disadvantage of a checking account?

The disadvantage of checking accounts is that they typically earn little or no interest. The average APY for interest-bearing checking accounts is just 0.07%, according to the FDIC. Even high-yield checking accounts don't earn as much as high-yield savings accounts, with many earning more than 3% APY. That's why it's a good idea to keep some money in a high-yield savings or investment account as well as a checking account.

Bottom line

A checking account keeps your money safe while letting you use the funds for your everyday transactions. While some people worry about minimum opening deposits and fees, you can open a checking account with $0 and no monthly fees. A checking account might even save you money and offer a more convenient way to receive your paycheck, pay your bills, make purchases, and send money to friends. Check out our list of the best checking accounts to find an account that works for you.

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AWARD WINNER Best Online Checking

High APY of up to 4.00% on Savings (3.30% APY¹ with +0.70% APY Boost) for up to 6 Months on new accounts. Terms Apply.²

Paycheck access up to 2 days early with direct deposit⁴

No monthly maintenance or overdraft fees³

Streamlined savings and savings goals with Vaults

Access to a large ATM network⁷