Basics of a checking account

Haven’t we all faced the hassles of having to go to the bank just to deposit or withdraw money? This practice is now a thing of the past. The invention of the checking account has provided a safe and easy way of transferring, depositing and withdrawing money without having to go to the bank for these purposes. Checking accounts are federally protected services provided by banks and other financial institutions. With the introduction of the checking account, monotonous and time consuming visits to the bank can greatly be decreased. This service is provided by almost all banks.

Terms of a checking account

The terms and condition vary for each bank. Some banks might have an initial deposit for opening a new account; others may charge fees for the issue of checks. To cater to the needs of students and other low income individuals few banks offer the no-frills checking account. This means there will be a waver of fees associated with the account. The option of interest payment is occasionally offered by banks for the maintenance of a high minimum balance. This means that if an individual has the capability of maintain an high balance in is his account, the bank might reward him with a certain amount of interest. There are few schemes that offer advantages to senior citizens. This is available in certain states as they offer a ‘life line’ checking account to senior citizens.

How it is useful

Individuals may have direct access to their accounts by means of either an ATM card or a debit card. The era of technology has simplified life even in the field of finances. Now money withdrawals and deposits can be made through the ATM machines.

How it works

The account has to be maintained carefully through diligent deposits and withdrawals. The bank where an individual holds an account issues a certain number of checks to the owner. The account owner can pay any individual by writing a check. These checks have to be filled out correctly. Checks are, as good as money. The recipient now has to submit the check into his own bank account.  The check now undergoes a series of verifications. The bank worker then files this check and sends the information to the check writer’s account. The funds are then debited from the check writer’s account and transferred to the recipients account. Checking accounts offer an easy way of transferring funds to the third party.