What is a checking account?

Why should you open a checking account, and how should you use it?


Simply put, a checking account is a bank account designed to be used for everyday expenses. Checking accounts keep your money safe until you need it. And then allow you easy access when the time comes.1 Plus, some even pay interest to help your money grow.2

When you need to make a purchase, you can access your money using a debit card, a checkbook or online banking services. If you need cash, you can typically use an ATM or visit a local branch of your bank. Money to deposit? There are plenty of ways to do that too.2

Keep reading to learn more about how checking accounts work.

Advantages of a checking account

So why should you open a checking account, and what do you use a checking account for? You can use a checking account to manage the money that you earn and spend. Being able to see how much comes in and goes out every month may help you keep better track of where your money is really going. Some common uses for checking accounts include:

Everyday purchases

If you receive a debit card when you open your new checking account, it will come in the mail with instructions for selecting your PIN—that’s the “personal identification number” that will help safeguard your account.3 Once it’s set up, you can use your debit card to buy anything from groceries to gas to movie tickets. Just be sure to memorize your PIN, as you may be asked to enter it during a transaction.

You can also make online purchases with your debit card. You may be asked to enter information such as your name, address and debit card number along with its expiration date and the three-digit code on the back of your card. 

However you use your debit card, the money will come directly out of your checking account.4 Just remember to keep an eye on your balance so you can try to avoid spending more than you have (more on that in a moment).

Postage-free payments

One popular feature of most checking accounts is the option to pay bills online with just a few clicks.5 From utilities to credit cards, bills can generally be paid from the comfort of your office, couch or car (once you’re safely in park). In the bill pay area of your bank’s website, you can enter information such as the company you’d like to pay and the account number on your bill. Your bank may be able to help if you need a little guidance. Once each account is set up, you’ll see all of your payees, and if the vendor offers it, your monthly bills, in one place—which can make them easier to keep track of and harder to forget. This can help you avoid late payments and potential fees.

Some banks even allow you to sign up for text or email alerts to let you know when a bill is due, if your balance drops below a certain amount or when a deposit or withdrawal has been made.

Prompt paychecks

Going to the bank or another check-cashing business every time you get paid can be a hassle, not to mention the delays you may experience on weekends and holidays.

With direct deposit, your employer puts your paycheck straight into your bank account for you.6 No check cashing or travel expenses. If you’re interested, ask your employer if they offer direct deposit and how to get started. It’s usually a matter of filling out a single form. Just have your bank account information handy.

You might even be able to divide your paycheck between several different accounts. You might put the bulk of your check into a checking account for easy access and everyday needs, while sending a smaller amount to a savings account. For some people, this is the easiest way to get in the habit of saving, because it’s done automatically.

Using your checking account

Let’s get down to checking account basics. After you open your checking account, you may find it helpful to keep a running balance. This means documenting every withdrawal or deposit you make from your account so you can balance your checkbook. This can help you avoid overdrawing your account and getting hit with fees.

How do I choose the right checking account?

Since people use money in different ways, there’s no right answer for everyone. But as you’re looking at what checking accounts different banks have to offer—either online or at a local branch—there are a few things to think about:2

  • Find out how much money you’ll need to deposit to open your new checking account. Some banks require an initial deposit, while others let you open an account and add money later.
  • See if the bank charges monthly maintenance fees or overdraft fees. Avoiding these may keep more money in your wallet, and that’s a win. Fee-free checking accounts and ATMs do exist, as well as overdraft protection options, which can shield you from fees if you spend more than you have in your account (oops). 
  • You can even look for checking accounts that pay interest—that’s money you can earn just by keeping money in the bank. While checking accounts usually earn less interest than savings accounts, it may be worth exploring because every penny counts.
  • Finally, be sure that the bank you choose is FDIC-insured. That’s the gold standard in banking that ensures your money is protected from a bank failure up to allowable limits.7

Checking Account vs Savings Account

If you’re thinking about opening a checking account, consider what you’re looking for in a bank account. If you want an account for everyday spending with easy access to your money, a checking account may be right for you. Most come with debit cards that can typically be used wherever credit cards are accepted.8

Savings accounts, on the other hand, are typically used for money that you don’t plan on accessing frequently.1 Savings accounts may have a monthly withdrawal limit and don’t come with debit cards.9 However, they generally come with higher interest rates than checking accounts.2

Now that the meaning of a checking account is more clear, you can decide whether this is the right place to stash your cash.


This site is for educational purposes. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

  1. Opening a Bank Account (undated). Retrieved February 1, 2022, from https://www.consumer.gov/articles/1003-opening-bank-account.
  2. What is a checking account? (July 26, 2021). Retrieved February 1, 2022, from https://www.bankrate.com/banking/checking/what-is-a-checking-account/.
  3. Glossary of Banking Terms and Phrases — Personal Identification Number (PIN) (undated). Retrieved February 1, 2022, from https://www.helpwithmybank.gov/glossary/index-glossary.html#p.
  4. Glossary of Banking Terms and Phrases — Debit & Debit Card (undated). Retrieved February 1, 2022, from https://www.helpwithmybank.gov/glossary/index-glossary.html#d.
  5. If I paid someone through my bank or credit union's online bill pay service, why did the person receive a paper check? (August 25, 2020). Retrieved February 1, 2022, from https://www.consumerfinance.gov/ask-cfpb/if-i-paid-someone-through-my-bank-or-credit-unions-online-bill-pay-service-why-did-the-person-receive-a-paper-check-en-1123/.
  6. Glossary of Banking Terms and Phrases — Direct deposit (undated). Retrieved February 1, 2022, from https://www.helpwithmybank.gov/glossary/index-glossary.html#d.
  7. Deposit Insurance FAQs (December 8, 2021). Retrieved February 1, 2022, from https://www.fdic.gov/resources/deposit-insurance/faq/.
  8. Using Debit Cards (undated). Retrieved February 1, 2022, from https://www.consumer.gov/articles/1004-using-debit-cards#!what-to-know.
  9. Most savings accounts still come with limits on withdrawals even after Regulation D lifted them (May 11, 2021). Retrieved February 1, 2022, from https://www.bankrate.com/banking/savings-account-withdrawal-limits-top-banks-who-lifted-them/.

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