Advice for choosing the best checking account
A checking account is often used to store money intended for immediate transactions. In contrast, a savings account is best used for long-term saving. All banks and most credit unions offer checking accounts. Many people open bank accounts precisely for this service.
There are a number of advantages that come with owning a checking account, the foremost being security. A checking account provides a safe place for you to keep your money. Instead of walking down the street with a large sum of cash in your wallet, you can just carry checks. This significantly reduces the risk of loss or theft. Actual cash, when misplaced or stolen, can no longer be recovered. On the other hand, lost checks can be replaced. It is possible to get a new set of checks and a different account number.
There are some factors you need to take into account when choosing the most suitable checking account. There are a multitude of types and services, so you need to be prepared when making a decision. First, you need to consider the minimum balance. Some banks require a small deposit to open an account, but impose a higher minimum to maintain. Be wary of these packages. A low minimum would be most effective in checking accounts since you intend to move the money anyway.
A household account, for instance, is best for the common consumer. It requires a low minimum, which can range from about five to a hundred dollars. It is essentially a personal account, which can be used to pay for household expenses and monthly utility bills. It can also be used to purchase shopping items and other personal services. Here, you can decide whether to have a single or joint account. The latter is often used by married couples, who want to share expenses on joint property and expenses.
A student account also has a low minimum, so that individuals still in school have a better chance of paying off tuition loans. These accounts are also equipped with high interest rates to further assist students with their expenses. A lifeline account, required by law in some states like New York and Rhode Island, are for people who make low incomes. This is a simple account, made to satisfy the most basic needs. A certain number of checks are allowed per month. Senior citizens may also avail of special accounts particularly suited to their needs and expenses.
Second, consider the fees imposed by the bank. These small charges can later amount to a staggering expense, so find out if you can do without them. Some banks may impose monthly charges for maintaining the checking account. This is reasonable for business or corporate accounts, which move large sums of money. If you are looking only to keep a personal account, make sure you don’t get charged monthly for very small deposits.
Third, review your history with bounced checks. A check “bounces” when you write an amount beyond the money left in your account. It helps to be thorough in balancing your checkbook. However, if you feel that you need assistance in avoiding overdrawn checks, you can avail of checking cash security. This allows the bank to protect you from overdrawing your account. In some cases, the bank will automatically transfer funds from your savings account to cover the excess. You will be charged an extra fee for this, but it will be helpful in avoiding the larger expense and embarrassment of a bounced check.
There are other factors to consider such as the number of transactions allowed daily or the number of checks you can write over a period of time. Remember that it is best to be well-informed when choosing the best checking account to accommodate all your banking needs.
