This article will give you 10 Reasons to Open a Checking Account. With these reasons, you will discover what you are missing out on and stop wondering why you need to open a checking account.
This account is very important when it comes to managing your finances. So, why open a checking account? Read on to learn why.
10 Reasons to Open a Checking Account
Almost every bank and credit union offers checking account services to customers. So, what is a Checking account? This is a type of account that allows you to deposit and withdraw money for daily purchases and other transactions.
This account is very easy to access and most times, the deposit and withdrawals made on it are unlimited.
This account is useful for daily expenses and you can easily access the funds through online transfers, writing checks, or with a debit card which is the most common. Discussed below are the benefits of having a checking account.
Checking Account Keeps your Money Safe
Apart from theft, there are so many risks attached to keeping your money safe. Your money could be destroyed by floods, fire accidents, and other natural disasters. When you open a checking account in any FDIC Insured bank, you are assured that your cash will be kept safe.
Apart from your money being stored in a safe place, it is also insured and if anything happens to the money, you are covered. Credit unions also have National Credit Union Association (NCUA). Both FDIC and NCUA offer insurance coverage per account.
Bills Payment Becomes Easier
One of the Purposes of a Checking account is to make bill payments easier. You can easily make payments with a checking account. Currently, most banks offer online banking services. With this, customers can pay credit card bills, utility bills, and other bills from their account balance at their convenience.
This is much easier than paying bills with cash. Also, you can set up automatic bill payments with your account. Simply put, with your checking account, you can pay, review and even receive bills online.
Easy Access to Direct Deposit
Direct deposit simply means when funds are directly deposited into a bank account as opposed to the traditional paper check or cash. Most people use direct deposit to receive payment from their employers, pension providers, insurer, or other benefits providers.
Having a checking account will help you receive direct deposits. This will save you the stress of visiting your bank anytime you get paid. This also saves time and you can review the payment history.
Checking Accounts helps you Establish Credit
A good credit score gives you access to better financing options. Some credits are linked to checking accounts. If you manage your credit card well by paying bills on time, it will reflect on your account and credit report.
When you pay your bills on time and avoid bounced checks it improves your credit score. So, a checking account may help you build a good credit score.
Opening Checking Accounts Can Help You Earn Interests
When you open a profitable checking account, the funds you deposit in the account will grow interest. This however applies to interest-earning accounts. This gives you the opportunity to grow the balance on your account with little effort.
Checking Accounts Help You Keep Track of your Spending
When you make transactions on your checking account, you receive bank statements. Also, you will be sent a monthly statement by your bank or credit union.
This helps you track your spending, payments, and balances. With this information, you can create a budget to manage your spending. This is also beneficial for teenagers as it educates them and managing money.
Checking Accounts Gives You Proof of Payments
When you make purchases with your checking account, it reflects on your monthly statement. This proof of payment helps you dispute claims that you have not made payments.
It also helps you keep a track of your spending. With a checking account, you have more payment options, you can choose to pay via check, with a debit card, or through digital transfers.
No Limit for Transactions
When you open a checking account, there is no limit to the number of transactions you can carry out on a daily or monthly basis. This is opposed to the savings account where individuals are limited to a number of transactions per month.
You can make unlimited transactions on withdrawals, card payments, money transfers, and lots more.
You Can Conveniently Make Purchases Online
In most cases, you will be issued a debit card that you can use to make transactions. With this card, you can shop online. You also have access to other financial products offered by your bank. This includes credit cards, loans, mortgages, auto loans, etc. This helps you achieve your financial goals.
You Can Also Earn Rewards
Some banks and credit unions offer rewards to their customers. This may include discounts, perks, insurance offers, and lots more. As long as you meet the requirements of the reward, you can get perks and benefits with your checking account. These are the 10 Reasons to Open a Checking Account.
How to Open a Checking Account
Opening a checking account is not as hard as it may sound. Before opening the account, you need to compare the services of different banks and credit unions. Ensure you carry out thorough research before you decide on the account type and bank you want to open an account with.
Look for accounts that come with a low minimum balance, broad ATM Network, and sign-up bonuses. Also, ensure the financial institution is FDIC or NCUA insured.
After deciding on the bank and account type you want to open, prepare the documents you will need. This includes means of identification, proof of address, and opening deposit. The next step is to begin the application process either in person or online.
What Do I Need to Open a Checking Account?
Generally, the requirements for opening a new checking account include your Social Security Number, A valid Government issued ID i.e., driver’s license, passport, military ID, etc.
Since the requirements for opening a checking account differ by bank or credit union, you may be asked to provide additional information. Also, some financial institutions may ask for a minimum deposit.
What is a Checking Account Used For?
A checking account is used mainly for daily transactions. There is no limit to the daily transactions you can make with this account. You can set up a direct deposit and withdraw funds from the account with a debit card.
What are the Benefits of Opening a Checking Account?
There are so many advantages of opening a checking account. The most important benefit is that helps you keep your money safe and monitor your spending. Also, you get access to access to useful tools and products that helps you improve your financial health.
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