Why are checking accounts important?

Opening a bank account for financing is a better idea because of the convenience and control it gives over managing finances. Checking accounts are accounts through which one can manage the payment of bills, monthly expenses and various other money transactions. Banks today provide a variety of benefits to customers who wish to open checking accounts.

Checking accounts are accounts from which regular withdrawals can be made with ease. Some banks offer online banking options to enable customers transfer sums of money from one checking account to another. This means that the direct deposits are available for access immediately after the deposit has taken place. Most of the banks provide debit cards, which can make withdrawals from ATMs from anywhere and at any time convenient for customers. Checking accounts are also useful salary accounts, to which employers can make direct deposits of salary every month.

Most banks provide free checks and debit card for account holders of checking accounts. Most checking accounts are free to open, but there are some banks that charge a fee every month for the services. Making sure of conditions before opening an account can help in avoiding any such additional charges. Sometimes, free checking accounts come with a lot of strings attached. The banks may require the account holder to maintain a certain amount as minimum balance and can charge a fine if the amount goes below the limit. Some banks might have an upper limit set on the amount that can be withdrawn in a single transaction. Additional fees may come in the form of service charges if the account holder withdraws amounts that exceed this set limit. Paying these surcharges does not make the checking account a very convenient option.

One of the most important uses of checking accounts is the overdraft protection that is offered to the account holder. Checking accounts can be linked to any other savings account, even if it is in a different bank. If there are bounced checks or risks of overdrafts, then the bank transfers the money from the savings account which is linked to the checking account, to avoid unnecessary transaction fee and service charges. Account holders of checking accounts need not worry about bounced checks or overdrafts, if the banks offer this service. Any service charge for this offer defies the purpose of overdraft protection, so opening accounts in banks that do not charge fees is necessary.

Some checking accounts in certain banks can be insured by FDIC, to protect the money in the bank. This insurance covers amounts up to $100,000, and can help recover the money, if it is lost under any circumstance. This is an added bonus that some banks offer, for all their checking account holders. It is beneficial to search for banks that include this service in their checking account offers.

Checking accounts are a necessary part of every financial planning because of the multiple advantages they offer. Paying bills becomes a breeze without even having to carry cash or check everywhere, transferring money can be done by just a click of button through internet banking, and it helps structure the spending habits of the individual.