Which type of bank account is best for everyday transactions​?

Some bank accounts, like savings accounts and certificates of deposit (CDs), are designed for long-term savings. Generally, when you put money into these accounts, you intend to leave it there for a period of time — a month, a year, or more. But where should you put money you plan to spend tomorrow?

Checking accounts are typically the best bank accounts for everyday transactions. Most offer a debit card and ATM access, plus very few restrictions on the number of transactions you can make. These accounts make spending convenient, whether you’re shopping online, making a purchase at a store, or paying your bills.

Learn more about why checking accounts are the best bank accounts for everyday transactions and how you can maximize the features of your account.

A checking account is a type of deposit account you can open at most banks and credit unions. Checking accounts allow you to deposit and withdraw money via bank branch transactions, ATMs, checks, debit cards, and/or electronic transfers.

While savings accounts are designed to hold your money long term, checking accounts are best for day-to-day transactions and money management. Unlike many savings accounts, checking accounts don’t limit your frequency of withdrawals.

On the other hand, they typically don’t earn much interest (though some high-yield checking accounts do). But this isn’t a big deal if you maintain a low checking account balance and keep savings in a separate high-yield account.

Checking accounts have several features that make them ideal for everyday transactions. Some common features you’ll find among popular accounts include the following:

• Debit card: Many checking accounts come with a debit card, which you can use to make purchases in stores or online. You can also use your debit card to withdraw money from an ATM.

• Checks: Most checking accounts come with check-writing abilities and even free checks. Though checks may not be as common as they used to be, they’re useful for certain types of purchases.

• Direct deposit: Setting up direct deposit allows you to receive your paychecks efficiently and securely so you don’t have to keep track of physical paychecks.

• Bill pay: Many banks have a bill-pay feature you can access through your checking account, allowing you to make payments for free. This lets you pay all your bills through one platform rather than through each utility company’s individual website.

• Online and mobile banking: With online and mobile banking, you can deposit checks, transfer money, pay bills, and manage your checking account without setting foot in the bank.

• ATM network: Checking accounts typically provide ATM access, allowing you to withdraw (and sometimes deposit) cash without visiting a branch.

• Overdraft protection: Many checking accounts offer overdraft protection, a feature that covers any overdrafts on your account in case you spend more than your available balance.

While some checking accounts are bare bones, others provide additional features or perks that can be particularly advantageous. Use the following tips to find checking accounts that maximize savings and rewards:

If minimizing bank account fees is your top priority, look for checking accounts with few or no fees. Free checking accounts have no monthly maintenance fees, regardless of your balance. They often have no minimum deposit requirements and charge few, if any, other fees. For example, they may waive or reimburse overdraft or ATM fees.

See our picks for the 10 best free checking accounts available today>>

While interest-bearing checking accounts aren’t common, they do exist — and they can be valuable for those who keep a high checking account balance. While the current average interest-bearing checking account earns just 0.07% interest, the best interest-bearing checking accounts earn up to 7% APY.

Keep in mind that you often have to meet certain criteria to earn the highest rate, such as making a minimum number of transactions or enrolling in direct deposit.

See our picks for the 10 best high-yield checking accounts today>>

Like credit cards, some checking accounts allow you to earn rewards when you spend. Generally, rewards come in the form of cash back when you use your debit card. In addition to earning cash back, rewards checking accounts often have no monthly fees.

While checking accounts make a good choice for everyday spending and money management, there are some alternatives that serve a similar purpose. Consider the following options if you want to supplement or replace an existing checking account.

Money market accounts (MMAs) share features with both savings and checking accounts. For example, MMAs often come with debit cards, checks, and ATM access. But they also earn interest — typically at a higher rate than traditional savings accounts. However, some MMAs can have high minimum deposit requirements or limit your monthly transactions.

Similar to money market accounts, cash management accounts (CMAs) combine certain aspects of checking and savings accounts. Like high-yield savings accounts, they often earn a competitive interest rate. And like checking accounts, they can include a debit card and checks.

However, CMAs are offered by brokerages, not banks. They can also incorporate investment options, pooling your everyday spending and long-term investments together under one account. This feature is convenient for some, while others may find it confusing.

The number of bank accounts you should have is a personal choice, but most people should have at least two. These should include a checking account for everyday transactions and a savings account for long-term goals.

Generally, you should keep long-term savings, or money you don’t plan to spend in the near future, in a savings account. Meanwhile, you should keep enough for one or two months of expenses — plus some extra buffer to avoid overdrafts — in your checking account.

Theoretically, you can keep more in your checking account, but you’ll likely miss out on higher interest you could earn from your savings account. Plus, FDIC insurance generally only covers deposits up to $250,000, meaning anything above this balance may not be safe in case of bank failure.

Read more: How much money should you keep in your checking account?

Whether you want to keep all your money in one bank or spread your cash across multiple banks is up to you. Keeping your money in one bank can make managing both your money and your account information easier, but it limits your options.

For example, you may choose a credit union for its high-yield checking account but find a better savings account at an online bank. Another perk of spreading your money over multiple banks is that you can take advantage of more FDIC coverage, which insures up to $250,000 per depositor, per account ownership category, per insured institution.