Aside from savings accounts, there is another type of bank account that most people and business owners use. Let’s get to know checking accounts more and see how we can utilize it.
In this day and age, almost all people have been using fewer checks and switch over to debit and credit cards. That comes as no surprise since people won’t need to write any figures in their checks. However, we can’t deny the fact that checking accounts might be the best tool if we are dealing with small and frequent expenses.
Checking Account: What It Means
Checking accounts is a type of bank account where we get ourselves checks. This is where we write up the amount and the recipient of the check can withdraw the amount we listed there. Nowadays, modern checking accounts also include debit cards in the package.
Many financial advisors like the idea of a modern checking account since we have the option of paying our bills through our debit cards or we can send them checks as our payment. Even with that edge over a regular savings account, we still see a steady decline in using checks in our current market.
Some banks offer perks and cash incentives for checking account users. They either give out gift cards for new checking account clients or if we arrange direct deposits to our account. Putting a lot of investments in a checking account may sound tempting at first but we need to make sure that we are making the most of it.
Kinds of Checking Accounts
There are various checking accounts to choose from and if you are planning to get one, make sure that it will fit our needs. Here are the most common checking accounts offered in banks.
- Standard Account – The most typical and basic checking account in the market. It requires a flooring or a maintaining balance for the system to waive the monthly fee of the service.
- Online Account– Specifically created for people who don’t need any face-to-face transactions. This account has one of the lowest fees in this category while maintaining one of the highest interest rates.
- Business Account – A checking account made for business owners who are busy with their investments. It has one of the highest spending and withdrawal limits out of the bunch and typically comes with a tool that will monitor the cash flow in our account. Of course, it has one of the highest base balance requirements in its class.
- Premium Account – Most offered to people with significant investments in banks. It comes with more perks compared to other types but also packs a punch for minimum balance requirements and other associated fees.
- Second-Chance Accounts– This is specially made for people having issues with their credit records and setting up their bank account. It is helpful if we are building up our credit. However, fees and other charges are on the high side.
There are other types of checking accounts such as student and senior accounts and it comes with their pros and cons.
There are terms that we also need to take note of such as monthly fees and spending limits. Let’s take a look at what they mean.
- Monthly Fees– Free checking accounts nowadays are hard to come by and we should assume that we will always get a monthly maintenance fee off from our savings. Good thing, most banks waive this charge if we satisfy or exceed a certain balance for the account. With that said, we should probably keep our gas tank full on this one.
- Withdrawal and Spending Limits– These are caps placed by our banks for all of our daily transactions. If we happen to reach that limit, we will have to wait the next day for us to use the service once again.
Now that we have all learned some of the most essential details behind checking accounts, we can now weigh in all the pros and cons. Examine closely if we really need to open up a new checking account. If we are still in the middle of the road deciding whether to get it or not, it would be best if we contact our trusted financial advisor and have a brief chat with them.