You can walk into any regular bank and request to open a checking account. A checking account is a standard bank account in which you are allowed to make deposits and withdrawals anytime without stringent limits and rules. They can also be called transactional accounts or demand accounts. They offer you maximum liquidity, and you can always withdraw your funds using a check or an automated teller machine.
Banks are not the only entities empowered to open checking accounts; other financial institutions can also do so. There is a lot to learn about checking accounts, including the different types and uses.
In the meantime, let’s look at the various types of checking accounts, and how to know which one is right for you.
Types of Checking Accounts
Traditional Checking.This is the most popular checking account available to most people. If you need a personal bank account for spending money, where you get to write a few checks or use the ATM regularly, this account is perfect for you. This type of account may have a monthly maintenance fee, generally waived if you meet some criteria.
Premium Checking. For this, you have to meet several criteria to qualify for otherwise paid perks and benefits. The requirements for a premium checking account will differ from bank to bank, but most of them will have you maintain a minimum balance of a given amount. Some advantages you enjoy as a premium checking account owner include free money orders, waived ATM fees, and free paper checks.
Business Checking.A checking account is helpful for the day-to-day expenses of the business and payroll management. It’s also used for simple cash management activities of the business owner. This type of account does not earn any interest. It just makes it easy for cash to be readily available when necessary.
Interest-Bearing Checking.Some banks and financial institutions can create checking accounts that will earn APY the same way a savings account would. You may need to maintain a minimum balance given to you by the bank to earn the interest. Note that on most occasions, the interests are pretty low.
Student Checking Accounts.These accounts will help students and young adults learn to manage funds by themselves. There are requirements to meet to open these accounts, and the age limit is often between eighteen to twenty-three years. There are many perks to this kind of account, including overdraft forgiveness, free checks, and ATM fees reimbursement.
Why You Need a Checking Account
Managing your finances should not be strenuous, and a checking account can help make it easier. There are many reasons why you should have a checking account. Some include:
Direct Deposit. With this account, money and fees can be directly paid into your bank account and be available for you to spend. You no longer have to wait to receive a check, then go through the hassle of cashing it before spending your money.
Easy Access to Your Money.With different avenues to get your money, withdrawing cash is more accessible. You can either go to the bank and write a check, use the ATMs, or use your debit card for purchases.
Online and Mobile Banking.With online banking, you can make transfers, view your account balance for recent transactions, and even pay bills using your phone.
Conclusion
Although there are many benefits to having a checking account, you should remember that there are different types of these accounts, and each has its uses and perks. It would be best to research or speak to your account officer to know the checking account that best suits your needs before getting one.
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