A checking account is a dire need to keep up with daily financial needs. With the world moving towards digitization, having one is a must.

A checking account is a financial account for daily withdrawals and deposits of cash. Writing checks, using a debit card, and transferring money online — all features provided by a checking account — let you use your money whenever needed.

Keeping money in a checking account is easy, convenient, and serves as an all-purpose way to save money. This account allows you to use payment apps like PayPal, for example, making transactions smoother.

In all, a checking account can help you to manage your finances.

Factors to consider when opening a checking account

A low or no fee with a low or no minimum balance is a good option. Checking accounts that are free do not require minimum balances or charge fees.

Make sure the ATM service is extensive. Consider a bank that has a wide ATM presence if you expect that you’ll need to withdraw and deposit cash frequently.

Check the interest rate on the account. You can find some accounts that offer a decent interest rate, but most checking accounts don’t offer such.

As well as banks and credit unions, non-bank financial service providers should also be considered. Unlike traditional banks, online institutions might have some advantages. Online banking services are generally free, offer reasonable interest rates, and are easy to use on mobile devices.  While customer service at credit unions is often exceptional, the interest rates are higher than in traditional banks.

What makes a checking account different from a savings account?

With a checking account, you typically receive checks and an ATM card. Your card will probably be your most frequent method of accessing your money.

The interest rates on checking accounts are typically lower than those on savings accounts. However, the interest rates for some checking accounts are higher at online financial institutions.

How to set up a checking account?

You can open a checking account at a bank branch or on the website of the financial institution. Deposits can be made through (ATMs), direct deposits, and in-person deposits. You can access your funds by writing checks, making use of ATMs, or by using your debit or credit card.

Checking accounts have become more convenient thanks to advances in electronic banking. The ability to pay by e-transfer has eliminated the need to write and mail paper checks to customers. You can also set up automatic payments of routine and can use smartphones to make deposits or transfers.

Types of checking accounts

In the banking system, checking accounts are essential since they allow people to carry out routine banking transactions. Checking accounts come in a variety of kinds, so you need to think about factors such as fees, interest, and convenience before opening one.

  • Regular checking accounts have all the features you’d expect from an account of this type.
  • You may be offered many perks with a premium account, but you are often required to maintain a high balance.
  • A free checking account may not incur a monthly service fee, but it still incurs fees for overdrafts or usage of ATMs outside the network.

How does a checking account add value to your life?

The most significant checking account benefits include:

Make money by earning interest. Some checking accounts earn interest, so your money can still grow while it sits in your account.

You can use a debit card. If you have a checking account, you typically receive a debit card, which allows you to pay with the money in your account rather than with cash. Tap or insert the card into the reader at checkout to use the money directly in your account. Online payments can also be made with your debit card by entering the requested information, such as your name and card number.

Keep track of your spending. You can see how much money you have coming in and going out of a checking account since the account keeps track of your deposits and withdrawals. You can also lock your debit card with some checking accounts if it’s ever lost or stolen to prevent unauthorized use.

A checking account allows you to transfer money instantly with just a few clicks. If you need to make a payment or pay for your bills, a checking account makes it convenient to do so.

A checking account allows you to set up an automatic payment system for recurring bills. Instead of looking for bills and making payments, you can integrate utility bills into your checking account and set dates for it to make payment for you every month.

To sum it up, a checking account offers the following benefits:

  • It’s safe, and you don’t have to carry cash
  • NCUA or FDIC insures your checking account
  • You can obtain proof of payment from your bank
  • You can build your credit score with a checking account
  • By scheduling payments in advance, you can increase your credit score
  • It’s convenient as it gives you cashless access to your funds
  • You can use your debit card or online banking to pay bills and make purchases