Be sure to consider a checking account’s interest rate and fees when shopping for a deal.

Figuring out which account offers the best interest rate is usually pretty simple: the higher the interest rate, the better. Internet banks often offer the best rates. Credit unions also have good deals. However, their basic checking deals tend not to be better than online-only banks. Car loans, mortgages, and certificates of deposit are where credit unions really shine.

You need to think about a few factors when evaluating checking account fees:

1.) ATM Fees. Any bank that doesn’t have branches won’t have many (or any) ATM machines either. Figure on getting hit with a $2 or $3 fee every time you use an ATM that doesn’t belong to your bank. The good news is that many Internet banks reimburse you for fees charged by other banks’ ATMs. Ask about the reimbursement policy and make sure it isn’t capped.

2.) Account Minimum Fees. Many big banks charge you a monthly fee if your balance is below a certain amount. (They make more money off of accounts with high balances.) Most Internet banks don’t charge these fees, but be sure to check.

3.) Overdraft Fees. Bounced checks are of a bygone era. These days, banks make a lot of money by letting you overdraw your account and then charging you a $30 fee (or interest on the amount you overdrew, or both). Many banks will automatically sign you up for this overdraft service, without asking you first.

It’s best to avoid overdrawing your account. But if you’re frequently down to the last dollar then figure out what it will cost to use your bank’s overdraft features.

Want to Know More?

• What's a Checking Account?
• Where Should You Open a Checking Account?
• What Are the Pros and Cons of Internet Banking?
• Whats the Deal with Overdraft Protection?
• What Happens To My Student Checking Account When I Graduate?
• Grilling Guide: Questions to Ask the Bank