What Makes a Good Bank Account When You’re Broke? Here’s What to Look For

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When you’re broke, you might not put a lot of thought into choosing a bank.

In the past, I’ve chosen banks pretty much based on their proximity to my house, selecting the basic account recommended after a smart banker asked me a few questions.

All I wanted was a place to stick my cash, checks to pay rent and a debit card to shop online.

But even when you don’t have a lot of money to manage, you should be selective in choosing a bank account. Maybe a high APY doesn’t mean anything to you, but these factors should:

  • Minimum required balance
  • Minimum required monthly deposit
  • Monthly fees
  • ATM fees
  • Overdraft policy

Considering these factors when you choose your bank account could save you a lot of money.

What to Look for When You Choose a Bank Account

If you’re broke, you’ll want to find an account with no monthly fee, regardless of whether you maintain a certain balance or make a minimum deposit.

Monthly fees of $5 or $10 can eat away at what little you have, and you might not notice until it’s too late.

You’ll also want to find an account that offers free ATM use, ideally, and a favorable overdraft policy.

Many banks let you use their network ATMs for free, so if you stick close to one area and the network is convenient to you, this may not be an issue.

If you tend to travel or move around often, consider an online bank like Schwab Bank for accounts that not only offer free in-network ATMs, but also reimburse you for any out-of-network ATM fees.

What makes a good overdraft policy might surprise you. Overdraft protection” sounds like a helpful feature, but it can actually be dangerous, Money magazine points out.

When your checking account includes overdraft protection, a debit transaction or ATM withdrawal that pushes your balance below zero usually results in an overdraft fee. Several of these transactions can occur before you realize you’ve gone negative, resulting in hundreds of dollars in fees.

Instead, look for an account that allows you to choose whether or not to allow overdraft protection. My checking account at U.S. Bank, for example, allows me to turn the feature on or off with the tap of a button in the mobile app or online, and it will be effective immediately.

This allows me to prevent an everyday debit card transaction from pushing my account into the red and racking up a fee, but also to accept the fee if the account balance isn’t enough to cover an important payment, like rent.

To find the account that’s right for your needs, check out our list of the top six checking accounts graded on fees, rewards, accessibility and mobility.

Your Turn: What features do you look for in a bank account?

Disclosure: You wouldn’t believe how much coffee The Penny Hoarder team goes through. This post contains affiliate links so we can keep the grinds stocked!

Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more.