The basics about checking accounts you should be aware of

A checking account is an account which allows individuals and businesses to deposit money and withdraw money from time to time. An account holder can withdraw money using checks or through automated cash machines or by cash withdrawals at the teller by filling in a withdrawal slip.

A checking account allows easy access to pay your bills and most of your financial transactions are made simple and easy. Payment of your routine monthly expenses has now become easy with rapid strides in electronic banking.

Most banks offer many options when it comes to checking accounts. But, you should first have a running balance to ensure that you have enough cash in your account. Every deposit and withdrawal from your account should be continuously monitored by you. This will prevent you from withdrawing excess money from your account. You have to remember that you need to maintain a minimum balance in your account and if you go below this, you will end up paying a fee to maintain your account. At the same time, for a free account you do not want to go negative either.

Most banks offer many options when it comes to checking accounts. You should compare different banks and their offers and then select the one that is best suited for your personal needs. Nowadays many banks attract customers by offering attractive features like personal loans, mortgages and certified deposits to make it more profitable for them.

A very few banks may expect a minimum fee from you if you hold a checking account; others may not charge even that. This is usually the case for most student accounts and senior citizen accounts.

There are a few banks which give you overdraft protection. Some banks link your account with another bank account you hold. This helps you when your account shows that you are holding less than the minimum money required to be kept in your account. In this way the bank is also assured of money in case of default by the customer. And most of the time, the checking account is linked to the savings account on the same account number. Its almost like having two operating accounts under one number.

Some banks also link a line of your credit to your checking account. This way, if you have offered a check to someone with no cash in the bank the credit account will send the money to your checking account and the check will be cleared.

Some banks have a better option. They will allow you to overdraw up to certain limit. But then, you will have to pay a very high interest rate or over draft fine. But in most cases, if the cash is returned soon enough the bank will just overlook the over draft and return the fine amount in a show of good will.

Checking accounts may include student account, joint accounts, and child accounts along with other types of accounts. Chartered banking institutions may offer a higher rate of interest to checking account holders and they will be insured up to $100,000 per deposit. Otherwise the rate of interest of a checking account holder is less than the savings account holder. So it is wise not to invest a large sum of money as deposit in checking account.

Always remember that before a bank issues you a checking account, it checks your credit balance and sees if there are any defaults from your side and then issues you the checking account. This ensures their safety. If it finds any default like non payment elsewhere, they will not issue you a checking account.