A checking accounts is an important banking tool that you can have aside from a savings account. Both are guaranteed by insurance up to a certain amount. Why do you need to supplement your savings account with a checking account in the first place?
A checking account comes with the following items;
1) Checkbook-this is the primary item that comes with the account. This is the legal instrument that you sign that authorizes the recipient’s bank to transfer money from you account to the recipient’s account.
2) Debit card-Debit cards are very convenient now in comparison to ATMs. With the debit card, you can immediately debit money from your account. You PIN in on the machine so that the transaction can be completed and you sign the transaction slip
Checking Account Versatility
Checking accounts are very versatile in the sense that they have various purposes that make them important to the account holder. Primary consideration is you don’t have to carry cash. You can use the checks for the following:
1) to pay bills and other household utilities-you use a checks to pay the bills and utilities and best of all the check is receipt or record of the transaction
2) to pay someone for services rendered or goods purchased- the recipient has to trust that you are going to fund the check that you handed out
3) to pay for items bought via mail- this is an important safeguard in buying items via mail
4) to pay off loans- you can pay high interest consumer loans with a check
5) to buy items in installment like a house- you have to issue a series of postdated checks to the lender
In order for you to handle your checks carefully, observe the following tips:
1) Always balance your checkbook after each transaction-this is important so you won’t be issuing checks that are in excess of the money in your balance
2) Keep track of debit card purchases-since you can also withdraw money with a debit card, you have to keep track of debit card transactions also
3) Do not sign your checks beforehand- it is important that you don’t sign checks beforehand because it could be picked up by someone else and money can be withdrawn from your account
4) Keep your checkbook in a safe place-this is to avoid people from getting your check and forging your signature.
Checking Account Downside
1) Your signature can be forged if you misplace your checkbook
2) Higher balances are required in a checking account as compared to a savings account The balances here earn minimal interest.
3) Checking accounts come with fees and penalties from using the facility and misusing the facility
4)You might have a limited number of checks that you can issue out
A checking account may have an interest smaller that a savings account but it is still necessary in your daily living. Having a checkbook is convenient and makes life easier for you. You just need to balance the pros and cons of maintaining a checking account and make the most of owning one.
Find out why getting a checkbook is important to your day to day transactions and how to make the most of having one at checking account.
Checkbooks no longer exist where I am. I find them tedious and it’s easier to pay off with a debit card or online. Often, I also prefer to pay in cash for small purchases.
Yeah I assume checkbooks willl probably be phasing out everywhere eventually. But surprisingly, they’re hangin on!
Checking account provides the versatility of both on-the-counter and online payments. You will be able to make installmental payments and arrange for standing order with your bank. But, the holder’s signature has to be kept confidential always against theft.
Checking out is something like current account. Am I correct? I think I failed to get the key concepts clear. However, the article gives an exhaustive list of banking activities that might not be done with the help of an ordinary savings account.
Yes, checking accounts basically use your own funds and they have a debit card and checks attached to them for your options to use when making purchases or other transactions. Standard savings accounts don’t have these perks. A savings account is basically just that: a place to save/hold your money while earning some interest. Earning interest is one advantage that a savings account has over a checking account, because with most checking accounts you cannot earn any interest at all.
Checking accounts in the new thing when it comes to monetary transactions, its the most convenient and will be useful if someone is keen enough to follow all the instructions. Enjoying the services fully
If you can keep your checkbook safe, this is the best way to make payments. This way, you are not required to keep a huge amount of money with you always, anticipating a need to make unexpected payment. Use of debit cards is very convenient too.
I have had several Checking Accounts in the United States for Awhile(25 years).
Moved to Mexico City about a year ago,I have not opened up a Checking Account yet.
Funny enough,I don’t miss being charged unnecessary Fees…
Yes, fees are definitely one of the drawbacks of a checking account. Gotta really be careful to avoid these whenever possible.
I have always found that checking accounts are very convenient and versatile. With such an an account it is not necessary for me to carry cash in large amounts, wherever I go.
It is gd to have a check book anytime you are outside the house or country. I think it is very common to have a debit card too.
Yes, most everyone has one these days.
I think there are great benefits to be derived from having checking accounts because if you apply for credit then you can also show the provider your bank statements. Also the fact that there is the convenience of having a debit enabling your to withdraw cash whenever it is convenient for you.
If you keep your account in credit then sometimes you can benefit things like cheaper mortgages, cheaper insurance, cash backs and other perks.
You have pointed out a lot of great benefits. Thank you for your comment!
This article is very good for college students and late teen/early 20 somethings that may not have a clue how checking accounts and other such things work, but this article to me seems outdated. Who pays for anything by check anymore? Bills, and even rent now is paid online, through direct deposit, or through apps. I honestly haven’t even written a check in YEARS.
You’d be surprised at how many people still use/balance checkbooks. It may be phasing out, but not yet. Just like people still use cash, many are still holding on to their old school checkbooks.
Balancing a checkbook ledger every time is not necessary if you make a habit of always leaving more than enough money in your checking account. I have been writing checks for 15 years and have never touched my ledger, nor ever had an overdraft.
Smart man! Do what works for you.