As you’ve considered your banking habits and looked at all the accounts you need to manage, have you ever asked yourself a question like this:
If any of these questions sound familiar, you’re in the right place! I’m here to help explain the advantages and disadvantages of having a checking account to help you understand the benefits.
Psst… if you haven’t done so already, check out the Basics of a Checking Account to get a general overview and understand the difference between checking and savings accounts.
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The point of a checking account is to have a secure place to deposit and withdraw your money for everyday transactions. In the early days, if you wanted to spend money in your checking account, you’d have to use a checkbook or visit a branch to withdraw the cash you needed. Thankfully, that’s no longer the case and, with the help of technology, you have a ton of new ways to access your money in a secure way.
Like Skyla, credit unions are regulated by the National Credit Union Association (NCUA). It's an independent federal agency created by the U.S Congress insuring deposits at federally chartered credit unions. Credit unions are federally insured by the National Credit Union Share Insurance Fund (NCUSIF), which is backed by the full faith and credit of the U.S. government. The bank equivalent is the (more widely known) Federal Department Insurance Corporation (FDIC). This agency is also backed by the full faith and credit of the U.S. government.
You can learn more about your money being secured at a credit union or bank here.
QUICK TIP: Financial institutions like Skyla offer free checking accounts and you can open more than one which is great for budgeting purposes. |
Many financial institutions offer online and mobile banking features, giving you easy access to your checking account 24 / 7. You can track your spending, transfer funds, and more!
Not to mention, having a checking account comes with a debit card where you can easily use your money in your account without carrying cash. You can access your checking account on the go with a debit card and withdraw money from your account using at an ATM or select retailers using the handy-dandy cash-back feature.
With a checking account, you can track your transactions online. Many financial institutions offer online banking and mobile banking where you can monitor your spending in your account. If you belong to an institution that doesn't offer online banking - you can use a third-party digital services app like Mint App to track your spending.
Having direct deposit set up with your checking account provides convenience. You're able to access your paycheck without waiting for them to arrive in the mail or having to deposit a check at a physical branch. This removes the chance of your money getting lost or stolen, damaged, or delayed if it was to arrive in the mail.
Today, checking accounts exist to serve and benefit you. So, depending on where you are in life or whatever financial opportunity you may have, there's a checking account for it! Some of the checking account types include:
These are just to name a few. You can learn more about checking accounts and types here.
Well… that depends on the financial institution you’re opening a checking account with. Since there are so many types of checking accounts, there are of course different types of account fees. Here are a few types of checking account fees you might come across:
Unlike savings accounts, checking accounts are typically not interest-earning accounts since they are designed to spend and manage funds. Yes, you can absolutely save money in a checking account, but you'll be able to save (and earn) more money with a designated savings account.
Even though there were more advantages than disadvantages to checking accounts, it's understandable if fees are the deal breaker. But guess what? There are ways to avoid many checking account fees. I talk about it in the latest checking account article Understanding Checking Accounts.
Other than fees, checking accounts truly is a safe place for holding your money where you can stay on top of your transactions and access your funds wherever you need 24/7. Here's a full look at what checking accounts offer, how they work, and more.
If you decide to open a checking account, first research the financial institution and the checking accounts offered so you know what you’re interested in getting, then ask about fees if the account comes with any, and how to avoid them. Here's a look at what Skyla offers.