Checking account: your everyday account for spending and transfers

A checking account is a bank account designed for everyday transactions, paying bills, making purchases, and receiving income. Here’s how it works and what to look for, particularly when opening a first account in a new country with plans to use it for sending money home.

What is a checking account?

A checking account is a type of bank account⁠(opens in new window) designed for frequent, everyday use, including debit card purchases, online bill payments, and receiving direct deposits. Unlike a savings account, a checking account typically doesn’t limit how often money can be withdrawn or spent, and it usually earns little to no interest.

Why a checking account matters for managing your money

For most people, a checking account is the hub that everything else connects to. A paycheck arrives through direct deposit, rent and utility bills are paid from the same balance, and a linked debit card handles day-to-day purchases. It’s also usually the account used to fund transfers, whether paying a bill or sending money internationally.

When comparing checking accounts, a few features are worth checking:

• Monthly maintenance fees, and whether they’re waived with a minimum balance, direct deposit, or another qualifying activity.

• ATM access, including whether a bank’s network reaches the areas where cash withdrawals will be needed.

• Overdraft policies, since checking accounts are the account type most commonly linked to overdraft fees when a balance runs low.

• Online and mobile banking features, which matter for anyone planning to manage transfers or bill pay primarily through an app.

Common mistakes with checking accounts

• Not asking about fees before opening an account. A monthly maintenance fee can quietly erode a balance without meeting the bank’s waiver conditions.

• Overlooking overdraft settings. Some accounts automatically enroll a customer in overdraft coverage, which can result in unexpected fees.

• Assuming any bank accepts the same identification. Documentation requirements for opening a checking account vary by bank,⁠(opens in new window) so confirming in advance is worth doing.

Checking accounts and international money transfers

For many senders, a checking account is a cost-effective way to fund an international transfer, since paying directly from a bank account is often less expensive than using a credit card, which can be treated as a cash advance by some card issuers.

Funding a transfer from a checking account typically runs through the ACH network, which processes payments in batches rather than instantly. That means a transfer funded by bank account may take a little longer to begin moving than one funded by debit card, so it’s worth planning slightly ahead if timing matters, for example around a bill due date for family abroad.

On the receiving side, a checking account is one of the more common destinations for a bank deposit transfer⁠(opens in new window) in countries where that delivery method is available. If a recipient doesn’t have a checking account, other delivery methods such as cash pickup or a mobile wallet remain available depending on their location.

Fees to watch for on a checking account

Common checking account fees include a monthly maintenance fee, an overdraft fee, and sometimes a fee for using an out-of-network ATM. Many banks waive the monthly fee for maintaining a minimum balance or setting up direct deposit, so it’s worth asking specifically about fee waivers when comparing accounts rather than assuming all checking accounts cost the same to maintain.

Choosing between a traditional bank and a credit union

Beyond traditional banks, credit unions often offer checking accounts with lower fees and more personalized service, though they may have narrower branch networks. For newcomers building a first U.S. banking relationship, comparing both options rather than defaulting to the largest, most familiar national bank name can sometimes reveal a better fit for specific needs.

Overdraft protection options worth understanding

Federal rules require a bank to get explicit consent⁠(opens in new window) before charging an overdraft fee on a one-time debit card purchase or ATM withdrawal, though banks can still charge one for a check or a recurring electronic payment that overdraws an account even without that consent. Many banks also offer optional overdraft protection, linking a checking account to a savings account or line of credit specifically to cover a shortfall automatically rather than declining a transaction or charging a standalone overdraft fee. Reviewing these options when opening an account, rather than after a first overdraft, helps in choosing the approach that fits a specific situation.

Linking accounts for easy transfers between checking and savings

Most banks make it simple to link checking and savings accounts for instant, fee-free transfers between the two, a feature worth setting up early since it makes moving money to cover an unexpected checking shortfall, or to top up savings, considerably more convenient.

In Summary

A checking account is the account most people rely on for everyday money management, from paying bills to funding a transfer to family abroad. Understanding how it works, including its fees, overdraft rules, and how it connects to international transfers, helps in using it with more confidence.

This publication is provided for general information purposes only and is not intended to cover all aspects of the topics discussed herein. This publication is not a substitute for seeking advice from an applicable specialist or professional. The content in this publication does not constitute legal, tax, or other professional advice from Remitly or any of its affiliates and should not be relied upon as such. While we strive to keep our posts up to date and accurate, we cannot represent, warrant, or otherwise guarantee that the content is accurate, complete, or up to date.