Checking accounts are a service which banks, credit unions, and other financial institutions offer individuals and businesses allowing them to deposit or withdraw their money from an account that is protected by FDIC insurance. Checking account terms typically vary from one financial institution to the next. However, they all have one convenience in common – the ability to write personal checks rather than paying cash for bills and other consumable items which is handy since you don’t exactly want to mail thousands of dollars in cash to pay off your mortgage. In most cases, credit and debit cards attached to your checking account may also be available but we are focusing on checking accounts right now.
Many banks and other financial institutions today offer numerous methods for monitoring their checking accounts as far as balancing and reconciling the account. You can receive monthly statements regarding your checking account or you can go the paperless route and conduct your banking activities online like I do. For reasons of convenience, online banking and checking accounts have become extremely popular with individuals and businesses as well, not to mention having less paper laying round.
Opening a Checking Account
Many individuals see checking accounts as being nothing more than a “high-tech wallet” however, checking accounts are just not that simple. If you are currently looking to open a checking account or have been considering switching your current checking account to another bank, here are a few critical questions to ask in order to make your final decision:
What are your specific checking account needs? Opening a checking account at the right bank is almost like trying to find the best fitting pair of jeans. The key to this part of the selection process involves beating the banks or financial institutions at their own game. And the best ways to do that are to do your homework before making your final decision on which bank to open a checking account at. It’s a matter or making a concise assessment of your specific checking account needs or requirements and doing some serious research. You want to compare the different accounts that are available as you move towards your decision.
How likely are you to bounce checks? Although this sounds laughable, after all nobody plans on bouncing a check, but this is an issue with many check writers and it can get very expensive for the habitual offender. Not only that but it can make opening a checking account extremely difficult. Statistics reveal that NSF (or non-sufficient fund) fees are the costliest of all. Here’s a suggestion. Even if you think you might never bounce a check (or only bounce one or two checks) each year, you should consider purchasing overdraft protection for your checking account. Otherwise, you will be subject to ridiculously high fees. You have enough expenses coming out of your checking account, don’t make fees another one.
Do you have an online checking account alternative? For many individuals today, the online checking accounts have been the best choice for having and maintaining a checking account. If you feel comfortable enough with exposing your banking and financial activities to the internet then it may be an option to consider opening a checking account at one of the many reputable online banks. This is especially true if you are looking for an interest bearing or money market checking account. Another benefit to consider about online checking accounts is that most tend to have lower balance requirements and charge lower fees.
Ultimately no matter where you choose to open a checking account be sure to take all of your personal circumstances in to consideration. If you traditionally have low checking balances then look in to overdraft protection, but if you tend to have high balances maybe a checking account that pays interest is a good option for you. If you’re a student you should also check out student checking account options where you can save on fees and get many other benefits. If you do your homework before opening a checking account you will find the best option for you and take an important step in your personal finances.
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