According to the FDIC, 94.6% of Americans had bank accounts in 2019. A majority of this population had either savings and checking accounts or both. If you have a savings account, you may wonder, do you need a checking account? Will a checking account offer more benefits?
If you are debating whether to get a checking account, you will learn what it is and how it can benefit you alongside a savings account. For starters, it can help you access personal checks online. Read on to learn more.
What is a Checking Account?
The name ‘checking account‘ comes from the conventional use of banking accounts to write checks. Financial institutions such as banks offer checking accounts. In addition, you can use checking accounts with debit and credit transactions.
A checking account allows frequent withdrawals and paying daily expenses. The easiest way to know if you have a checking account is whether you can write checks. Checking accounts are pretty common in the U.S, especially as an alternative to cash.
When is a Checking Account Useful?
You can use a checking account with a savings account to enhance your money management. However, it is more suitable for daily withdrawals and frequent expenses than savings. Therefore, you can have a checking account for transactions and paying bills and a savings account for saving.
Here are instances where a checking account is the best option:
- When you need to manage money for daily use, such as morning coffee, groceries, or weekly shopping
- When paying rent to the property manager
- When it is required to use a check. Thanks to technology, you can write personal checks online.
- When you need to transfer money from one of your accounts to another
What are the Benefits of a Checking Account?
Checking and savings accounts have some similarities. However, their differences can make each applicable in different scenarios. Here are some benefits of opening a checking account:
- Accessibility: Checking accounts is easily accessible through debit cards, online banking, and checks. You can easily order personal checks online to keep physical track of your money.
- Easy to transfer money from one account to another: If you have two checking accounts under your name, you can easily transfer money to the other account, for example, by writing yourself a check.
- Unlimited Transactions: a checking account has no limit to the transactions you can make daily.
If you have a savings account, it might be easier to save for the future. However, a checking account is quite helpful if you need more access to your money for daily needs. You need to get one like yesterday – if you haven’t.
