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Budgeting and Saving

Understanding Checking Accounts

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We care about your financial health as much as you do. For many of our customers, a checking account is something you’ve had for a long time, maybe even since childhood. It’s always our goal to make sure you have every financial insight at your fingertips.  So, no matter how familiar you may be with checking accounts, we’ll break down the ins and outs, show you some of the lesser-known benefits they offer and make sure you’re getting the most out of yours. For instance, while you may know you can use your checking account for everyday withdrawals and deposits or to pay for purchases, you might not know that different accounts come with different benefits and features. We’ll help you find the type of account (or accounts) that best meets your banking needs and helps protect and/or grow your money.


What makes it a checking account?

In the most basic sense, a checking account is an all-purpose spot to put your money so you can access it easily. You can use it to receive your paycheck or to pay bills automatically, and it’s also attached to a debit/ATM card, checkbook and wire-transfer service, which you can use to make purchases or send money at any time. It tends to receive lower interest rates than savings accounts or no interest at all, as it’s understood that in most instances, the money in your checking account is designed to move around. While you use your savings account to set money aside for a rainy day or an emergency, a checking account acts as a handy place to hold the money you use to buy the things you want or need on a regular basis.1


However, it’s important that you don’t assume all checking accounts are the same. Some, but not all, will have monthly fees attached, while others draw higher interest for customers who maintain a significant balance. Please review all checking options and make sure you choose the checking account that works for your needs."2


The perks of a checking account

Checking accounts offer a wide range of benefits and features that make them valuable to you—but do a little research to find the one that fits best. Here are some key aspects to consider:


  • They’re the easiest way to access your cash from your bank via a debit/ATM card.
  • They’re safe and insured by the FDIC up to $250,000 per account per bank.3
  • Many offer various overdraft protections to help you if you withdraw more than the amount available in your account.
  • You can write checks, if you need to.
  • They allow you to set up direct deposit with an employer for contactless payments that are automatically transferred into your account each pay period.
  • Some accounts offer higher interest if you maintain a set balance—look to see if your typical checking balance can offer you a better rate with a specific checking account type.
  • You might be able to qualify for reduced interest rates on equity lines of credit and loans if you keep a high-enough set amount in your account.


We offer a range of checking accounts so you can select the right tool for any specific needs or goals you may have.


Things to be aware of when selecting a checking account

It’s important to remember that checking accounts shouldn’t be used for everything—they have a specific purpose—receiving and sending money safely and efficiently. Here are some things to look out for when selecting and using yours:


  • Because they’re not designed for growth, checking accounts typically have very low interest rates. If you’re looking to grow your money, high-interest savings accounts or financial investment products may be more effective.4
  • Some checking accounts have different requirements to gain access to certain benefits. If you don’t plan to maintain a lot of money in your checking account, you might miss out on higher-value benefits.4
  • Fees can sneak up on you if you don’t use the account regularly. If you plan to let the money sit or use the account infrequently, other types of accounts (money market or savings) might be more beneficial.


We’re here to help you find the right account to fit your finances. Reach out to a banker or explore our checking account today.

Looking at the big picture

Checking accounts should be just one of many accounts, tools and resources at your disposal as you work to maintain healthy finances. Make sure you’re using each account properly as part of your broader financial planning. Many experts recommend several banking accounts to help manage personal finances. This could mean, for instance, a couple checking accounts and a couple savings accounts for different purposes to help track and manage your funds. Personal-finance expert Tiffany Aliche suggests one checking account for bills and another for spending money, plus two savings accounts—one for emergencies and another for bigger goals.5


And while checking and savings accounts are the early building blocks of your financial portfolio, as your goals grow and change, you should explore other products that might be smart and/or necessary to keep your financial ship sailing smoothly. Products like credit cardsauto loansmortgagesHELOCs and others can help you make the most of your money and resources. Don’t hesitate to reach out to a Flagstar banker or look at the multiple products we offer that can help.

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1DeMatteo, Megan. “Here’s When You Should Put Money in a Checking Account vs. Savings Account.” CNBC, September 21, 2020.


2Bessette, Chanelle. “What Is a Checking Account?” NerdWallet, Jul 14, 2021.


3“Deposit Insurance at a Glance.” FDIC, October 15, 2021.


4Burnette, Margerette. “Checking vs. Savings Accounts: The Difference and How to Choose.” NerdWallet, August 20, 2021.


5Tarpley, Laura Grace, Certified Expert in Personal Finance. “How Many Bank Accounts Should You Have? An Expert Says 4 is the Magic Number.” Business Insider, July 26, 2021.