Tips on choosing the best checking account
More people are using credit cards and checks to pay for purchases and services. Cash is actually disappearing in commercial transactions. Money is stored safely in banks and wired to different locations automatically. Checking accounts are convenient if you are looking for a place to keep money you intend to spend soon. Instead of carrying around a large amount of cash in your wallet, it may be wiser to keep it locked up in the bank. People normally access money in checking accounts through written checks, but it is also possible to do so with ATMs.
Carrying checks, instead of cash, is much safer. When money is lost or stolen, there is a slim chance of recovery. If you lose checks, a simple report can help you change your account number and prevent expensive losses. For further security, you can apply for a checking account in a bank that is insured. Most banks are, but it would be a good idea for you to be sure.
It is also safer to send checks through the mail. Most people use this avenue to pay their monthly bills. When a check reaches its destination, you will receive confirmation that the payment has been made. On the other hand, if you think that a check was lost in the mail, you can contact the bank and cancel payment on it. This may cost you a fee, but will prevent negative repercussions.
A checking account is effective only if it meets your needs. The first thing you need to do is figure out what those needs are. One of the primary things you should determine is how many checks you write per month. How much do you write out per check? Each bank imposes a minimum balance and going below it may require you to pay a fee. If you observe that you often go beyond your balance and end up with bouncing checks, you may choose to avail of overdraft protection. The fee will be much cheaper than the penalty you will be charged for a bounced check.
Some checking accounts have restrictions on the number of checks you can write each month. Basic accounts, in particular, limit the number of checks you can write. If you go beyond the prescribed number, you may have to pay a fee for every check you write. On the other hand, most checking accounts do not have a limit on the number checks. Most of the time, banks offer minimum fees on these accounts. However, in most cases, a free account will not gain any interest. In this regard, you should also decide if a high interest rate matters to you.
Most people use checking accounts for commercial transactions that will take place soon. So, if all you need is a safe place to keep your money before you spend it, then a free checking account may be helpful. If you are looking to get some interest for your deposits, there are banks that offer this but at a higher minimum. The interest rates may not be worth it if the maintaining balance is too high. If you want to save money, it may be wiser to apply for a Savings account.
Another factor you can consider is the type of package the bank is offering when you open an account. You can choose to take advantage of these incentives. For instance, some banks may offer free checking or free blank checks. For students, a high interest rate upon entry may be advantageous when paying tuition loans. Because electronic banking has become popular, it may also be a good idea to review checking accounts from online banks.
