Why is a checking account necessary?

Safeguarding the money is a big concern nowadays, which can be accomplished effortlessly by opening a checking account. Checking account has many benefits apart from safeguarding the account holder’s money. Some of the reasons to open a checking account are:

  • Opening a checking account provides facilities like check writing and debit cards. Managing bill payments of any kind becomes easy with check writing.
  • It provides a good record of all the financial transactions on the month. It also helps determine the savings and the amount of money spent, with the help of account activity details.
  • Debit cards can be used for a wide range of financial transactions including online shopping, which is an added advantage.
  • Having a checking account helps manage paychecks better. Some companies offer direct deposits to employee’s checking account, which is very convenient. Checking accounts completely eliminate the need of cashing of paychecks at some charge.  

Every bank will have different policies for opening a checking account. Some banks will need the account holders to maintain a certain amount of minimum balance in order for the account to be free. If the minimum account balance is not maintained, the banks may charge a fee to keep the account open. Some things to consider before opening a checking account are listed below:

  • Checking account is beneficial if it is free of charge. However, checking the minimum balance required before opening an account will help in eliminating penalties and fees.
  • Many banks offer overdraft protection for checking account holders. Banks clear the check even if the funds are insufficient in the checking account. This can be done if one or more accounts are linked to the checking account, and the funds can be transferred from then on time. Although this service may charge a certain fee, it is worth having because check bouncing can be avoided.
  • The banks should offer free debit cards and checks to the account holder.
  • Opening a checking account at a local bank is always beneficial, since visiting the bank when needed becomes easier.
  • Some banks offer insurance for the checking account, which covers amounts up to $100,000. Accounts with insurance are better protected against recessions and economic fluctuations.
  • Checking accounts which provide online banking as one of the free services are a better option. Online banking adds the convenience of mobility and flexibility to account holders.

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