Checking accounts are the most common form of cash management alternatives. Checking accounts generally come in two forms: (1) non–interest-bearing accounts and (2) interest-bearing accounts, also called negotiable order of withdrawal accounts (NOW). Because checking accounts allow immediate access to your funds, they are among the most liquid of all cash management alternatives. However, with that high liquidity comes low interest rates. The rates on interest-bearing accounts are generally low and fixed.

Minimum balances on checking accounts are generally low, but there is some variation depending on the type of account. Checking accounts from banks are very safe; they are insured by the FDIC, and they carry no penalties for early withdrawal. Banks, credit unions, and other financial institutions can give you more information on setting up a checking account.