Which of these is an advantage of checking accounts? This is a common question among today’s bank consumers. As a result, we’ve written this article to assist you. A checking account is a crucial instrument for keeping track of personal money. All checking accounts are operated in the same way by all financial institutions. Let’s find out which of these is an advantage of checking accounts.
However, account features and fees differ. Maintaining a checking account provides several benefits that you should think about before deciding on a bank and its checking account possibilities.
According to research, nearly 17 million Americans do not have a bank account. This is due to various factors, including widespread skepticism of financial institutions. Another aspect contributing to this figure is that some individuals have made bad financial decisions and cannot open a bank account.
However, an increasing proportion of younger Americans feel they do not need a checking account. A checking account is required to keep track of your finances regularly. Having a checking account is essential for using the vast array of alternative financial technology solutions available, like Apple Pay, Samsung Pay, Android Pay, Venmo, and PopMoney, to name a few.
According to research, some consumers are hesitant to create a checking account because they assume that all checking accounts levy a monthly service fee or a transaction fee.
According to a survey of over 1,000 checking accounts, there are several highly appealing offerings with no fees, no minimums, and no transaction fees that are readily accessible. Even if you’ve got a poor experience with a bank, this might be enticing.
Basics of Checking Accounts
Before going into detail about which of these benefits of checking accounts, it’s a good idea to brush up on the fundamentals of checking accounts. A checking account gets mainly used for day-to-day activities.
A financial institution, such as a conventional bank, an internet bank, or a credit union, holds checking accounts. You may lodge and withdraw money from a traditional checking account (either at the bank or an ATM), write checks, pay bills, and use a debit card to make purchases.
Checking accounts come in diverse shapes and sizes, but they always have the same fundamental features:
You may deposit in person at a physical location, at an ATM, or online/via a mobile app. You may also set up an automatic from an employer or transfer cash from another bank account.
You may make a cash withdrawal at an ATM or in person. There are no limits on how frequently you may withdraw money from particular accounts or how much money you can remove at once. Some accounts, however, need a minimum balance to avoid paying a monthly service charge. As a result, it’s preferable if you don’t dip below that threshold.
This is the card you’ll use to get cash from an ATM. You may use a debit card to make in-store and online payments. You may also use an ATM to get some money. After establishing an account, you should get your debit card between 7-14 business days. It’s also ready to use after it’s launched.
Most checking accounts allow you to make checks to pay for things using the money in your account.
Which of these is an Advantage of Checking Accounts?
We understand that having a checking account is the first approach toward financial security and independence. Here are some of the reasons to open an account right now:
Keep your money safe.
Paying for products using a checking account is safe and secure. We all know that carrying a large amount of cash with you to cover rent, electricity, petrol, and groceries is not a secure or prudent method to handle your finances.
Even in a so-called “secure area,” keeping cash at home is fraught with dangers such as robbery, fires, and natural catastrophes. You may lose some or all of it. You might also lose track of your expenditures and find yourself short at the end of the month.
A checking account lets you utilize paper checks, a debit card, or internet transfers and bill payments.
Additionally, consumer bank accounts get covered by the FDIC’s regular deposit insurance. Your money is protected up to $250,000 per individual. Consumers have benefited from the protection provided by FDIC insurance and the certainty that their savings get protected up to the FDIC protection limit since the institution’s inception.
Paying bills and expenditures is significantly more straightforward, and it costs you nothing more.
Monthly bills are a feature of contemporary living, from rent to utility and mobile phone fees. Money orders or personally delivering cash are the only ways to pay such expenses if you don’t have a bank account.
Both of these may be inconvenient, not to mention costly. You may pay using a Visa or MasterCard debit card linked to your bank account if you have one. When debit card payments are not accepted, you may write checks to pay your expenses if you like.
Many companies provide automated bill pay, enabling you to schedule a monthly payment. This makes it simple to pay on time every month.
You can keep track of your expenditure and make modifications as needed.
Debit cards get included with checking accounts, allowing you to make purchases online and keep track of your spending. When you utilize cash, you must keep track of where it goes manually.
You may easily browse your recent transactions in a checking account to discover where you’ve been spending. Having a bank account with internet access makes keeping track of your finances much easy — far more accessible than having cash on hand.
We suggest utilizing a specific app to monitor and manage your financial accounts if you add a savings account or credit card to your financial portfolio.
Direct deposit allows you to collect your money quickly.
You may set up a direct deposit with your workplace if you have a bank account. You can no longer collect checks, take them to the bank, and cash or deposit them.
Your paycheck is transferred into your account automatically. The monies are also instantly accessible since the money is electronically put into your account.
Overall, if you want to manage your money swiftly and efficiently, you’ll need a checking account. No fees, no minimums, powerful online capabilities, and great smartphone applications are all hallmarks of the finest banks.
Frequently Asked Questions
Is it worthwhile to open a checking account?
Yes. As highlighted above, setting up a checking account is worth it because of its advantages.
What factors should I consider when picking a checking account?
Choosing a checking account is a relatively simple procedure. You can do so through the following instructions:
Step 1: Look at several checking accounts. Do you prefer a regular checking account or a low-fee online account? Begin the checking account application process by determining which checking account best suits your requirements.
Step 2: Get a checking account application from your bank (or through the bank’s website). Bring your driver’s license or another unique identifier with you. Many banks may want evidence of residence, so bring a copy of your most recent utility or phone bill to prove your residency.
You’ll also need a small sum of money to make a required starting deposit – at least $25 would suffice.
Step 3: Complete and submit the application to the bank to the best of your abilities. The bank will gladly assist you if you have any queries along the road.
Step 4: Wait for your application to get reviewed by the bank (it should only take a day or so). To pass muster with the bank, you may get subjected to a credit check.
You’ll get a bank routing number, a bank checking account number, a debit card, and a package of checks if the bank confirms your application. You’ll also have to agree to the conditions of the checking account contract.
Step 5: Set up direct deposit with your financial institution and company so that your paycheck gets automatically put into your bank account. This saves you a journey to the bank at the end of the month and allows you to get your paycheck money sooner.
Can I open a checking account with a credit union?
Yes. Credit unions are gaining traction as a viable alternative for bank clients. Credit unions charge cheaper costs and provide more customized services than larger banks.
It may afford to offer checking accounts with higher interest rates than non-profit organizations. You’ll also become a credit union member if you use a credit union (most credit unions are owned and operated by members).
To join a credit union, you must pay a one-time membership fee. On the other hand, credit unions do not have as many physical bank branches as bigger banks. Furthermore, they lack the larger financial institutions’ extensive web presence.
Is a debit card the same thing as a checking account?
No. A checking account gives you access to your money by allowing you to make deposits and withdrawals. A debit card is a transaction card that gets connected to your bank account.
You may also use it to withdraw or deposit money from ATMs. This is in addition to the fact that it may get used at physical and virtual shops.
In conclusion, a checking account provides numerous benefits for its users. And if you need more assistance in this regard, the tips above will aid you immensely.
I am Lavinia by name and a financial expert with having a degree in finance from the University of Chicago. In my blog, I help people to educate by making wise choices regarding personal investment, basic banking, credit and debit card, business education, real estate, insurance, expenditures, etc.