In ideal world in your checking account you should keep as little money as possible. Even if checking account earns interest, you should move excess of money to a high yield savings account. High interest savings accounts are better suited to carry your emergency fund.

Here are few considerations on how much you can leave in checking account. If you leave too little money your risk of overdraft increases. If you are not tolerant to overdrafts you can consider the following.

Find the largest monthly recurring transaction and keep your balance above the number. So if your rent is $2,500 per month, then your average balance should be somewhere near $3,000. So once your rent is paid, you should add more funds to your checking account. This seems reasonable, but what if you get two bills at the same time?

Alternative way is to keep the total of all your monthly bills in checking account. So at the end of every month there are always a few bucks left. However, this way has weak point of unexpected transaction.

Overdraft protection

To cover unexpected transactions you should setup overdraft protection for your checking account. There are few common options.

Decline transaction

Some people don’t like to leave negative balance on their checking account. Especially for younger folks, who don’t have much mandatory bills overdraft is not acceptable.

Transfer money from savings account

If you have enough money, but don’t want to leave too much money in your checking account, it maybe better to keep money in savings account. This way in case of emergency your checking account can handler overdraft.

Line of credit

If your checking account often deeps below 0 for a long time, you can apply for a line of credit. In this case you leave no money in your checking, but always pay your bills.

As you can see, if you prefer to be on a safe side and keep much money in your checking account, earning interest gets even more important.

You may also want to read about overdrafts in PNC Bank.

If you only had checking account at a big traditional bank like Chase, Wells Fargo, Bank Of America then you may think that checking accounts never earn interest. At the same time you may see that even savings accounts of those banks earn very little interest. The national average savings interest paid by banks and credit unions over the last years ranges from 0.07% to 0.13% How much do you expect from a checking account to earn interest?

Some banks like Capital One pay as much as 0.1% APY (Annual Percentage Yield) on checking account balance. This is way better than your current account which earns nothing. This seems like not a big deal but keep in mind, that to earn the interest you don’t have to do anything. Just live your life.

Another point you should understand is that although interest is paid monthly, but it is accumulated daily. Let’s say half of a given month your checking account balance was $10,000 and the rest it was only $1,000. Bank will calculate your interest for balance every day and you’ll get paid the sum.

You may think, that it is not a big deal. Why should I care about it? After all 0.1% of $10,000 is $10, right? However, if interest goes up to 1% and above and years fly by, the pennies are going to keep accumulating. All you have to do is find a good bank and switch to a better checking account.

I am not saying you should run away from your current bank, but you should think about it. Usually banks that have high interest on checking account have even higher interest on savings. They often have better customer support, can give you a signup bonus if you try their account.

Some of these banks are less known than big national banks. For example, Ally Bank is a 25th largest bank in the US, but you may never heard about it.

Banks that pay interest

Here I’ve collected a short list of bank accounts and how much interest they pay.

For example, Fidelity Cash Management account pays 1.19% interest on your balance and offers $100 signup bonus. All you have to do is open new account using promo code Fidelity100 and deposit $50. Why am I so sure? I just got my bonus.

Keeping an eye on interest rates can put you in a more savvy state of mind and open an IRA or just a brokerage account.

If checking account earn interest, then how much money to keep in checking account?

Can I deposit a check to my Netspend prepaid card? That is the question people should ask themselves before they sign up for the prepaid card. Usually mobile only banks like Netspend have mobile applications and one of the key benefits is mobile check deposit.

Netspend calls it Mobile Check Load. To deposit a check to Netspend prepaid card you have to download its mobile app. Then on the main screen on the app at the bottom find the “Move Money” button and tap on it. In the menu you can find “Mobile Check Load”. After you tap on it, you should accept terms and then can take two pictures of the check. First take the front picture and then the back side. Make sure to take pictures in a place with good light and place the check on a dark contrasting surface. You can also read more about mobile check deposits in my post.

In theory everything sounds great and easy, but for some reason Netspend decided to outsource the check deposit feature to Ingo Money. It is a popular way for new online only banks to handle mobile deposits. The issue I’ve faced many times, that after automatic review Ingo Money declines my check. To be clear, I’ve tried handwritten checks and pre-printed checks. As a result I have to deposit a check through another bank like Bank Of America. Overall big banks like Chase, Wells Fargo are doing a better job in depositing checks.

However, even without this problem, Ingo Money is not very convenient. It takes 10 days to clear a paper check and deposit money to your account. This is simply unacceptable. Without Ingo Money deposit usually happens on the next business day.

So the answer to your question is the following. In theory you can deposit a check, but in practice it is a long and unreliable process. I would strongly recommend avoiding using Netspend when you deposit a check.

When you need cash you can use your debit card at an ATM. Bank Of America has 16,000 ATMs where you can withdraw bills in various denominations. Some ATMs allow you to deposit money and paper checks as well. Deposit enabled ATMs are usually located near bank’s branches.

How much can I withdraw from an ATM?

The maximum you can withdraw from a Bank Of America ATM is $1,000 and up to 60 bills. The best idea is to setup withdrawal in advance using the Bank Of America mobile app. The amount you can withdrawal is limited by availability of funds. If your account has $500, you cannot withdraw $600.

How much can I deposit to an ATM?

Bank Of America ATMs allow you to deposit paper checks. The only known deposit limit of Bank Of America ATMs is that you cannot insert more than 60 bills at once. You can deposit a lot of cash in multiple transactions. Keep in mind that if you deposit more than $10,000 in cash, Bank Of America can put hold on your funds and contact you to clarify the origin of the funds.

Overall Bank Of America ATMs are similar to ATMs of other banks like Wells Fargo, Chase and others. If you want larger network your can use MoneyPass or AllPoint. For example, MoneyPass has 40,000 and AllPoint has 55,000. But these ATMs don’t allow you to deposit money. It means every bank has its pros and cons.

If you want to withdraw money from your Varo bank account but lost your card here is what you can do. First don’t forget to lock it, so that if someone finds the card, they cannot use it. Second step is to order a replacement. While you are waiting, you can use the following ways.

Using an ATM

Be patient, because using an ATM without an actual card is going to be hard if possible at all. If you added a Varo Debit Card to your virtual wallet like Google Pay or Apple Pay, then you have few options. You can try to use a cardless ATM. This may not work. Alternative is to buy something using your virtual wallet in a retail store like Walmart or Walgreens. At the checkout you can request cash back at the terminal when you make the purchase.

Transfer money to another bank account

Alternative is to transfer money to another bank. ACH transfer usually takes a couple of days. Then you can use another bank’s debit card to withdraw money at an ATM. For example, Charles Schwab debit cards have unlimited rebates. So you can withdraw money at any ATM.

Overall I would recommend to always have a backup checking account, which you can use if Varo has some issues. My favorite is the Capital One 360 checking account.

Varo to Varo transfer so that a friend can withdraw money for you

If your family member has a Varo account, you can send money to their account. Money is transferred almost immediately and should be available within a few minutes. Then your partner or friend can take cash from an ATM in the same way as you would do. Keep in mind that ATM withdrawal is limited to $1,000 per day.

These are my 3 ways to withdraw money from Varo Bank if you lost your debit card.

Are you are curious what effect you checking account has on your credit score? Don’t worry. Banks check your credit score when you open credit accounts like loans, mortgages, and credit cards. Creditors send a request to credit bureaus like TransUnion, Equifax, and Experian. Then the bureau registers the inquiry and every future creditor knows that someone checked your creditworthiness. Checking is another type of bank account.

When the bank opens a checking account aka a debit account, it requests ChexSystems. It is another bureau that keeps records of issues like a closing checking account with a negative balance. As a rule of thumb you should always keep some extra money on your checking account when you are about to close it. Opening and closing a checking account by itself doesn’t affect your credit score. But if you close an account with a negative balance, the bank makes a record in ChexSystems that you are not a trustworthy client so that other banks be aware.

Some banks like to check information about future customers before approving them for a new account. It means if you have a bad reputation some big banks can reject your next application for a checking account. It is a big deal if you like to churn a signup bonus from big banks. Banks like Chase, Wells Fargo, and PNC Bank often offer a bonus of $200 when you open a checking account and receive a direct deposit. However, you can use prepaid cards like American Express Bluebird or second-chance banks like Chime bank. The negative mark on your name is not forever, it will expire and disappear from ChexSystems after 7 years.

Opening a Bank Of America checking account doesn’t affect credit score too. It works in the same way for other banks. But when you apply for a Bank Of America credit account, it makes a hard pull of your credit score and it drops FICO a few points south.

Here is a list of new credit accounts that includes credit cards and auto loans. Can you see that there are no checking accounts are in the list?

With this in mind we conclude that opening bank account doesn’t affect your credit score. If you open a no fee account like Chime with a signup bonus can actually give you a $100.

Extra Debit Card is made to assist in building credit scores. It is effectively a charge card, where you cannot carry any balance. So the balance is paid in full every 30 days.

At the end of every month Extra reports your purchases to credit bureaus. The problem is that Extra reports to Equifax and Experian only. However, it doesn’t report to TransUnion. Reporting payments has a positive effect on your credit score within scores of these credit bureaus.

Extra doesn’t have APR. Since it is paid in full every month there is no balance on which to pay interest. That is pretty obvious.

You have to link an external bank account to Extra using Plaid. This is how they’ll get your money.

But Extra Debit Card is not a free meal. It charges you a monthly fee. It has two plans. First is Credit Building, that costs $8 per month with not many benefits. Second is Rewards + credit building costs $12 per month. You can earn 1% rewards on some purchases. Every time you purchase something, Extra pulls money out of your checking account.

Should you open Extra Debit Card?

To be honest, Extra card is a useless waste of money. On their website they go as far as misinform you on how secured credit cards work.

1. They claim that secured credit cards require a security deposit “1-2 times the credit limit”. In practice, none of the secured credit cards require you to deposit 2 times the credit limit.
2. They claim that secured credit cards have limited impact on your credit score because “credit bureaus know you’re lending money to yourself”. The truth is credit bureaus know nothing about it.
3. Unlike Extra Debit Card, secured credit cards usually report your payments to credit bureaus.

Good secured credit cards that have graduation are a cost efficient way to build your credit score. For example, US Bank Secured card has graduation.