There are numerous advantages to checking accounts, and they certainly beat stowing money under the mattress, or in the mattress, as a safe means of storing money. You can get checking accounts from any bank, most credit unions, and most savings and loan companies. Frequently you don’t even need to be 18 to obtain one. There are plenty of kids that have their own accounts, though usually they’re accessible by ATM cards, more often than by checks.
As mentioned above, safe storage of money is an excellent reason to have checking accounts, or at least a single account. Most accounts in the US are also insured, for up to $250,000 US Dollars (USD) by the Federal Deposit Insurance Corporation (FDIC). Just verify that your money will be insured in this manner, so that in case anything happens to the bank you are still entitled to that money.
One of the distinct advantages of checking accounts, especially in recent years, is the ability of employers to make direct deposits of your paycheck into the account. Instead of waiting to get a paycheck, and then having to make a trip to deposit it, your money can be instantly deposited into your account, saving you time. You should still always look at your paycheck to be certain no mistakes are present on it, and you’ll usually get a copy of the check from your employer. Still, with most of us having little time for extra errands, the convenience of direct deposit is undeniable.
Though many think of checking accounts as accessible only by check, more commonly people are accessing their accounts with ATM cards, or using their bank’s online services to pay bills. Cash is becoming a less common method of paying for things, and in fact there are plenty of people who don’t appreciate taking cash. It’s also more secure to send a check to pay a bill than it is to send cash in the mail. Once you’ve received the check back as paid, you have a receipt of your payment. Further, if you suspect anyone may have taken the check and it hasn’t arrived at its destination, you can stop payment on a check — though this may sometimes be assessed a fee by your bank. Once cash is stolen, which is a distinct possibility, there’s no replacing it. If checks are stolen, you can change the account number, stop payment on a check or report these to your bank to stop charges to your account.
Online banking has added new convenience to checking accounts. Many banks offer this service and you can even watch as your ATM transactions are posted, or checks are cleared. If you’ve notoriously had trouble balancing your account in the past, online banking makes this very easy, though you still may not have instant posting of checks that are outstanding. Many banks allow you to download your information to programs like Quicken® so you can easily balance your account and make sure you have accounted for all money withdrawn from the account. Further, online banking allows for quick paying of your bills and you can even set up monthly regular bill payment.
People used to be assessed a small fee to hold checking accounts. This is not always the case now, and many banks offer free lifetime checking accounts. They may even pay you money if you use your ATM. Washington Mutual®, for example, offers you three cents back on every ATM purchase you make. Financial institutions also have interest bearing checking accounts, if you maintain a minimum balance. This means you can make money on money sitting in your account, though it’s usually not equivalent to the interest offered by savings accounts.
If you thinking of establishing a checking account, shop around and look for the following:
- Free lifetime checking accounts with free online access
- FDIC insured accounts
- No hidden charges, like ATM charges or bank service charges
- Minimal fees for over-withdrawal of the account
- Money back for certain use, or interest on minimum balances
