5 Reasons You Must Have a Checking Account (2024)

FAQs

5 Reasons You Must Have a Checking Account? ›

Having a checking account sets you up for financial success. Being able to access your money quicker, pay for things easily in person or online, withdraw cash, and bank online puts you in the driving seat of your financial life.

Having a checking account sets you up for financial success. Being able to access your money quicker, pay for things easily in person or online, withdraw cash, and bank online puts you in the driving seat of your financial life.

Why? Because putting your money in an FDIC-insured bank account can offer you financial safety, easy access to your funds, savings from check-cashing fees, and overall financial peace of mind.

The purpose of a checking account is to keep your money safe and make it convenient to pay bills. Opening and maintaining a checking account is not difficult. To open an account, complete the proper paperwork, show identification, go through account verification, and sign a signature card.

There are no restrictions on the number of checking accounts you can have at more than one bank. But it's always a good idea to only open as many checking accounts as you can effectively manage.

Checking accounts are typically used to make frequent deposits and withdrawals and to cover everyday expenses. Meanwhile, a savings account holds money for medium- and long-term needs. A savings account typically pays higher interest rates than a checking account.

Checking accounts are better for regular transactions such as purchases, bill payments and ATM withdrawals. They typically earn less interest — or none. Savings accounts are better for storing money. Your funds typically earn more interest.

Benefits of having a checking account. With a checking account, you can deposit money, make transfers, write checks, withdraw cash, pay bills and take care of other banking transactions either in person at a branch, an ATM or online.

Make withdrawals and deposits with your ATM card. Visit your local branch to make withdrawals and deposits. Use the bank's online bill pay service to pay one-time bills or set up recurring payments. Set up automatic payments through a company where you have an account, such as utilities and credit cards.

A traditional checking account, also referred to as a standard or basic checking account, offers the ability to write checks. It also provides access to a debit card that you can use to make purchases and withdraw cash at ATMs. This type of checking account may charge a monthly maintenance fee.

What is a reason for using a checking account rather than a savings account? ›

Checking accounts allow quick access to your funds on an ongoing basis, and some checking accounts are interest bearing. Savings accounts usually earn more interest compared to checking accounts and are typically used for a financial goal or specific purpose (vacation, home remodel, etc).

Reconciling your spending with your balance helps prevent overspending, which could lead to overdraft fees or checks being returned due to insufficient funds. A great way to stay ahead of spending is to keep a running balance of what's available in your account.

A checking account can be used to manage money for daily spending and expenses through the use of a debit card, checks and automatic payments. A savings account can be used for longer-term savings, such as an emergency fund.

You can have as many checking accounts as you want. Keeping track of multiple accounts is more complicated than a single checking account. However, opening and using multiple accounts can help you better manage your budget, cash flow, and other financial needs.

Once a child hits their teen years, consider introducing a checking account. This requires more financial responsibility and will teach them how to balance an account, keep track of spending limits, and more. A teen checking account may come with a debit card and ATM access, as well as mobile and/or online banking.

The primary benefit of checking accounts is the ability to store money you intend on spending, either through debit card transactions, checks, or cash withdrawals. However, the downside is they typically don't pay interest.

Checking Accounts Make Finances Convenient

Banks provide periodic statements detailing your transactions, so it's easier for you to monitor your spending, identify any errors and keep track of your budget. You can also use mobile apps to check your account balance and transaction history quickly and easily.