Paperless transactions provide the same ability to make purchases and withdrawals from your checking account without the hassle of hand-writing a check on the spot. And if you can’t even remember the last time you wrote out a check, here is some good news: There is a checking account designed to help you ditch your checkbook entirely.
Checkless checking accounts can offer you a secure way to manage your finances with a reduced risk of overdrawing your account, which can save you money on overdraft or insufficient-funds fees.
What is a checkless checking account?
A checkless checking is a type of bank account that does not allow you to write checks against the account. This account can help you avoid overdraft fees by limiting your ability to spend more than your available account balance. That said, some accounts may still allow you to overdraw your account by transferring funds from a linked savings or money market account.
Generally speaking, a checkless checking account may be the right fit for you if you seldom write checks or want to limit the potential of an overdraft fee.
This account may also be suitable for someone who has been denied a traditional checking for having an outstanding negative balance, according to Matt Steenson, PNC Bank's head of consumer banking.
Additionally, checkless checking accounts can be a secure way for teenagers and young adults to establish strong financial habits. Some accounts offer a discounted monthly service fee when the account owner is under a certain age or is enrolled in school.
How do checkless checking accounts work?
“Overall, a checkless account works exactly the same as a typical checking account without the ability to write checks,” says Steenson. “These accounts will normally still come with a debit card and allow for customers to make payments, transfer funds, and check their balances through online banking platforms or mobile apps.”
Most checkless accounts offer you the ability to:
- Deposit and withdraw funds in person, online, or at an ATM
- Have access to money orders, cashier’s checks, and online bill-paying tools
- Make purchases online or in-person using a debit card or digital payment method
- Schedule meetings with your personal banker online or in-person at your local branch
Pros and cons of checkless checking accounts
The inability to overdraw from your checking account can be a benefit to some current and prospective checkless checking account users.
Additionally, most banks require a low- to no-minimum opening deposit requirement, which is a bonus, says Steenson. That said, it may be more difficult to waive your monthly service fee for this account type, which can negatively impact your savings in the long run.
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Pros
- Reduces your risk of overdrawing your bank account, which improves your banking history in the long term
- Helps you avoid overdraft and non-sufficient funds fees
- May be easier to qualify for if you have had difficulty getting approved for a traditional checking account in the past
- Some banks may offer a lower- or no-minimum opening deposit and may have a monthly service fee waiver for qualifying account owners
Cons
- May need to purchase a money order or cashier’s check if you need to make a purchase using a paper check
- Your transactions may be declined if you do not have enough available funds to cover the purchase
- You may still have a negative balance on your account if a transaction was approved for one amount, but the final charge was greater than the initial amount, such as when you leave a tip after dining out at a restaurant
Checkless vs. traditional checking accounts
A checkless checking account works similar to a traditional checking account, except it has no check-writing ability. Both allow you to make deposits and withdrawals, and conduct purchases in stores or online.
But unlike a traditional checking account, checkless accounts can protect you from costly overdraft and non-sufficient funds fees by automatically declining a purchase when you don’t have enough funds in your account.
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| Checkless checking accounts | Traditional checking accounts |
| Cannot write checks against the account | Can write checks against the account |
| May not offer overdraft protection | Offer overdraft protection |
| Help you avoid overdraft or non-sufficient fund fees | May charge overdraft or non-sufficient fund fees |
The takeaway
The main difference between a checkless and traditional checking account is that a checkless account does not allow you to write personal checks against your account. Checkless checking accounts are a secure way to reduce your risk of overdrawing your bank account, which can help you avoid paying overdraft fees and non-sufficient funds fees on your purchases.
It’s important to remember that you may still have a negative balance in your checkless account in rare circumstances, so it’s a good idea to use this account as a tool to build your good financial habits and stay on top of your transactions so you can be ready to add funds to your account if this happens.
