Aligning the best checking account with your needs

There are many advantages to owning a checking account. First, it is a safe place to store your money. You can easily access it through written checks or the ATM. If you are a frequent traveler, it is safer to carry checks instead of cash. The risk of losing your money would be significantly reduced. In the event that checks are stolen, you can have the bank change your account number and postpone payments until the mess is sorted out. On the other hand, stolen cash will be lost forever.

There are different types of accounts, depending on the need they accommodate. They are also classified based on the size of the transactions and the services the bank offers. A personal account is often used for more basic transactions, which includes payment for common necessities and services. A household account, for instance, is used to pay precisely for household expenses. This includes purchasing shopping items and paying for monthly utilities. Such an account may be a joint checking account, so that a husband and wife can both access the funds. They will both be recognized as signatories on the check.

A student can open a checking account to help pay for school loans. A lifeline account, which is required by law in some states, is for people who have low incomes. Individuals aged 55 years and above also have a special kind of account.

Checking accounts are used primarily to accommodate immediate expenses. On the other hand, a savings account is best used for setting money aside. If you are keen on earning interest from your deposits, it might be wiser to open a savings account. Checking accounts do offer interest rates, but will also require a higher minimum. This means that you will have less money for payments on your checks.

Basic accounts are examples of checking accounts that offer low interest rates. However, they are often kept open with higher maintaining balances and a monthly service charge. In some cases, owners of this type of account have a limited of number of checks per month. Free accounts, in contrast, have a typically low minimum as well as no service charge. There are also no restrictions on the number of checks you can issue per month.

In finding the most suitable checking account, you will have to assess your own needs. First, review the number of checks you need per month. If it is your habit to frequently issue checks, go for an account that doesn’t impose a limit on the number of written checks. Second, figure out the minimum you can live with. A minimum can be as low as five to a hundred dollars. Be wary of banks that require a small deposit when opening account, but later impose a high minimum. You will have to pay a fee if you drop below the minimum or write a check with a larger amount.

Also, you must assess the incidence of your bounced checks. A check “bounces” or is invalid if it is written for an amount higher than your remaining balance. Most of the time, this happens when the account owner does not have a good handle on their checkbooks. Many articles have emphasized again and again how important it is to balance your checkbook. However, if you need more assistance in avoiding bounced checks, you can choose to purchase overdraft protection.

The bank can help cover the excess if you happen to write an overdrawn check. Some banks will automatically take the amount from your savings account or another existing account you specify. This will require an extra charge, but it will save you the greater expense of rectifying a bounced check.