Top 10 Benefits and Advantages of Checking Accounts (2024)

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Benefits and advantages of having a checking account

There are numerous benefits of having a checking account. The pros of checking accounts include: the ability to easily manage your money and pay bills through automatic payment, set up automatic transfers to other financial accounts, and getting paid faster through direct deposit of paychecks and IRS tax refunds.

Types of checking accounts

Credit Unions and Banks typically offer several types of checking accounts.
For example, CU SoCal offers Classic Checking and Rewards Checking accounts.

Regular checking. Also known as classic checking, a regular checking account has no extra features, it simply lets you write checks, receive direct deposits, and make ATM deposits and withdrawals. Regular checking doesn't usually have a minimum opening balance or a minimum balance requirement.

Rewards checking. As the name implies, these accounts let you earn points or cash based on purchase amounts when you use your debit card associated with your checking account. The more you spend, the more you earn. A low monthly fee may apply to these accounts.

Free checking. The Consumer Financial Protection Bureau defines “free” or “no cost” checking as an account that cannot have any monthly service fees, fees for exceeding a specified number of transactions, or any fees to deposit, withdraw, or transfer money. It also means the bank or credit union cannot charge you a fee for not meeting a minimum balance. However, a “free” account may still have certain fees such as ATM fees, overdraft fees, bounced check fees, balance inquiry fees, fees to stop payment on a check, fees on a dormant account, or check-printing fees.

Low balance checking. These accounts are designed for people who will maintain a low balance. This type of account can be good to open for kids who just starting to learn about and manage their own money.

Interest-bearing checking. One of the advantages of checking accounts is the ability to earn interest on your account balance. Interest-bearing checking accounts pay small dividends on your balance, but you will usually need to maintain a minimum balance to qualify for earned interest. If you do not maintain the minimum balance, you may be charged a penalty fee.

Premium checking. These accounts are offered to people who can deposit and maintain a high checking account balance. Premium checking account benefits often include free checks, no fees, and higher interests paid on the balance.

Benefits of checking accounts

There are numerous benefits of having a checking account, no matter which type you choose. Some of the main checking account benefits are:

1. Direct deposit. Almost all types of employers offer direct deposit of paycheck into employees’ checking accounts. Setting up direct deposit means you don’t have to make a trip to the bank, and it ensures that your money is quickly and safely deposited. The IRS also provides direct deposit of tax refunds.

2. Don't have to carry cash. Checking accounts are typically linked to a debit card which you can use for point-of-purchase transactions, which means you don’t have to carry large amounts of cash with you.

3. Easy access to money. ATMs can be found in just about all retail locations, from supermarkets and gas stations, to malls, and restaurants. When you do need cash you’re never far from an ATM. (CU SoCal has more free ATMs than Chase, Bank of America, and Wells Fargo.)

4. Online banking. Use your laptop to pay bills, move money, track you spending, and more. Online and Mobile Banking using your phone make it possible to do nearly any type of transaction.

5. Easy to open. Most credit unions and banks offer the option to open a checking account through an online application or in person. It’s easy!

6. Easy transfers. Transferring money to other checking, savings, money market, brokerage, and investment accounts is easy once you have a checking account.

7. FDIC / NCUA insurance. Both the NCUA and FDIC are independent federally owned agencies responsible for taking measures to keep financial institutions afloat. The Federal Deposit Insurance Corporation (FDIC) insures banks only. The National Credit Union Administration (NCUA) is an independent agency created by the U.S. government to regulate and protect credit unions and their owners. Just like the FDIC, the NCUA insures up to $250,000 to all credit union members and provides protection in the event of a credit union failure.

8. High-yield accounts. Most credit unions and banks offer checking accounts that pay interest when a large account balance is maintained.

9. Teach kids money management. Learning to manage money is essential to financial success. Opening a checking account for your child and showing them how transactions work will prepare them for their future.

10. Pay bills on time. Home mortgages, auto loans, credit cards, phone and utility bills are just some of the many types of bills that can be set-up for automatic payment through your checking account, so your bills are always paid on-time.

Learn more about how checking accounts work.

Are checking accounts worth it?

We think so! Financial transactions are an essential part of everyday life and having a checking account means you’ll have quick, easy access to your money 24/7, from ATMs, your laptop, mobile phone or tablet. All checking accounts come with a debit card that you can use around your neighborhood or around the world to get the money you need.

Checking account benefits are most significant if you can meet the requirements of interest-bearing checking or rewards checking.

Why savvy consumers choose CU SoCal

For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.

Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.

Get Started on Your Checking Today!