Know your checking account

In recent years, many people have been using checks instead of actual cash in financial transactions. Written checks, along with credit cards, are beginning to replace coins and paper money as today’s currency. Everyday transactions are now completed with the swipe of a card or the signing of a piece of paper. Monthly bill statements can be paid by sending a check through the mail. Food and other basic necessities can be bought by simply writing a check. The money promised on these checks comes from a checking account, which is managed by its owner and the bank.

The biggest advantage of carrying checks instead of hard cash is safety. People who travel often prefer to carry checks, so they will not have to worry about large sums of money in their luggage. The risk of losing your money will be reduced, because it will be safe in the bank. If you need to make a purchase, you can just write out a check and the establishment will deposit it in their own account. The bank will facilitate the transfer from your own account to the one you need to pay. If you are meticulous with balancing your checkbook, the exchange will happen smoothly.

Checking accounts are available in most banks. A checking account is typically used for money that will be spent or moved soon. In contrast, a savings account is used for money that you intend to set aside for a later time. Because each caters to different needs, the bank may offer different services for each. Looking for the right checking account will depend on the type and size of transactions you will be expecting to make. There are different types of checking accounts, each with their own advantages and fees. In a nutshell, there are three major types of checking accounts: household accounts, business accounts, and corporate accounts.

The average consumer can opt to apply for a household account, which is best for simple, everyday transactions. Making common purchases, as well as paying monthly dues, can all be taken care of with this most basic checking account. The minimum deposit can range from five to a hundred dollars. A married couple can have a joint account, so they both can access funds from the account. A teenager or student can also avail of this type of account. A student account may have some incentives attached to it, such as a higher interest rate and free blank checks.

Business accounts may vary depending on the size of the business. Small business owners can avail of one with a lower deposit, so they can just use it to pay for expenses and other services. Larger businesses can apply for a bigger checking account, since greater sums of money will be moved. In these cases, the bank will require fees for their services. Business accounts are typically made to accommodate daily deposits. Sometimes, a bank may restrict the number of transactions per month.

Corporate accounts, on the other hand, are for even larger amounts of money. At this level, the transactions are automated. More recently, these accounts have been used for payrolls. Checks are made out to each employee and then deposited in their individual accounts. Their salary is transferred from their company’s corporate account into their own without any hassle. Other major business transactions may also be conducted through this avenue.

A checking account works best if you are consistent with balancing your checkbook. If all your checks clear successfully, you will be getting all of the advantages that come with an effective checking account. You will also not have to pay for extra fees or suffer the embarrassment of a bounced check.