A checking account is a bank account that can be used to write checks or accessed in various ways. It is usually the primary bank account for day-to-day transactions.
Even if you don’t usually carry a checkbook or write paper checks, you can still benefit from a checking account. These instruments are an essential part of the banking system, and anyone can use Current accounts as a fundamental source of funding. Often, some companies deposit salaries into them, which you can use to make payments.
Reasons for having a current account
- Household financial management systems should be simple, but it would not be easy to make large financial transactions easily without a current account.
- There are many reasons for not having a checking account. Whether you had a bad experience, don’t trust your bank, or don’t have the time, you are still missing out on the benefits of a checking account.
- Stop wondering why you need to open a checking account, get the information you need and make a decision that will ultimately lead your finances in the right direction.
1. Safety and security
Even in so-called “safe” places, many risks are associated with leaving cash at home, including burglary, fire, and natural disasters. On the other hand, consumers’ bank accounts at federally insured financial institutions are protected by the FDIC’s standard deposit insurance, which guarantees up to $250,000 per bank for individual account holders. Since the FDIC’s inception, consumers have enjoyed the peace of mind that comes with FDIC insurance, knowing that their deposits are safe within FDIC insurance limits.
2. They have more payment options
What is a checking account? Essentially, it is an account that provides easy access to money. So, savings accounts are meant to hold funds for a more extended period, while checking accounts allow you to access your money while keeping it safe. If you want to continue to spend primarily on cash, you can make regular deposits and withdrawals. A current account also gives you a more comprehensive range of payment options. Current accounts allow you to write checks, make debit card payments, and transfer funds digitally.
3. Ease of use
Checking accounts also provide quick and easy access to money.
- In-branch. Banks and credit unions have branches, sometimes in person, to conduct financial transactions.
- ATMs: Even when bank branches are closed, you can easily withdraw money from ATMs.
- Debit cards: Paying with a debit card allows you to get money back on your checking account at many stores. You can also access debit cards, which are the most popular form of purchase today.
4. Convenient and free check cashing
Without a bank account, paying wages can be complicated. Banks will only cash non-customer checks if they are issued by a particular bank, which requires a visit to a branch of that bank. Many banks also charge a fee for cashing non-customer checks.
Other checks cashing services are available, but they tend to charge a flat fee or a percentage. If you need to deposit checks frequently (even one or two per month), these fees can quickly add up. Opening a bank account can help you avoid these fees, and setting up direct debits through your employer can also save you time and money by avoiding the physical steps.
5. The convenience of debit cards
Debit cards eliminate the need to carry large amounts of cash, and many banks offer protection against card loss or theft. Debit cards are not only safer, but they also provide a more convenient way to make payments.
Many banks also offer MasterCard and Visa cheque cards to current account holders. You can use cheque cards like a regular credit card anywhere MasterCard and Visa are accepted.
6. There are no restrictions on transactions
It makes sense to have both a checking and a savings account, especially if you are trying to build wealth or save for a specific financial goal. However, if you only want one type of account, a current version is usually a reasonable option. One of the main reasons for this is that there are no restrictions on transactions with an existing account. You can usually withdraw funds or write checks several times a month with a savings account. With a checking account, there are no restrictions on withdrawals, debit card payments, checks, or transfers, giving you financial freedom in every way.
7. Build a relationship with your bank
When you open a personal checking account with a bank, you also build relationships. Access a team of bankers who offer financial products, including personal loans of up to $2,500, to help you achieve your financial dreams. As one of the few community banks in New York City, we pride ourselves on knowing our customers well. We provide personalized service to our personal and business checking account holders, giving them access to wealth-building tools they can’t get anywhere else.
10. A paper trail
Another risk of paying bills and other expenses in cash is that payments may not be tracked or processed correctly. What happens if you pay a $300 bill in cash, but the utility company doesn’t deposit the money into your account? How can you prove that you made the payment in the first place? If you pay by cash, debit card, or online, everything is trackable through your bank statements and transaction records, and you can document each payment.
- Checking accounts are used to deposit money you want to spend. They are different from savings accounts, which anyone can use to save money for the future.
- Choosing the correct checking account is not as easy as opening an account at your local bank. You want to find an affordable and accessible account to help you achieve your goals.
- Current accounts are a safe and easy way to save and withdraw money, but there are many to choose from, and it cannot be easy.
Lily Poole is a Property and Home Insurance officer by profession. She is pretty well experienced in the Disability Insurance and accounting field and has an impressive profile in the training and development industry.