Definition
A bank or credit union account for everyday money: paychecks go in, and bills, card purchases and transfers come out.
What it means
A checking account is the main account most households use to receive pay and pay bills. You can usually deposit money, use a debit card, write checks, set up direct deposit and send electronic payments. Many accounts charge a monthly fee unless you keep a minimum balance or have direct deposit, so it helps to read the fee schedule before opening one. Banks often check a consumer report of your past account history when you apply, and the CFPB explains what you can do if you are denied. Money in a checking account at an FDIC-insured bank is protected up to the standard insurance amount if the bank fails. Some banks accept an ITIN or a foreign passport instead of a Social Security number to open an account.
Example
If your paycheck of $2,000 is deposited and you pay $1,200 rent and $300 in other bills, your checking balance at the end of the month is $500, before any fees.
Illustrative numbers only. Your situation will differ.