All about accounts.
A checking account is a kind of bank account. In fact, when most people talk about their bank accounts, they’re probably talking about a checking account.
But let’s take a step back. What is a bank account?
Well, technically, an account is just what it sounds like: a record or log of events. In the case of a bank account, what is recorded are transactions—the inflows (credits) and outflows (debits) of money. And of course, bank accounts enjoy the notable distinction of being one way of storing your cash at a financial institution. In other words, “having a checking account” describes a relationship in which a bank or credit union has agreed to hold onto and provide easy access to your money.
Most checking accounts still maintain their function as a “record,” too. Customers with checking accounts expect to be able to access their account history in a variety of ways—on the web, on their mobile device, by telephone, or through paper statements. As you might imagine, keeping track of inflows and outflows is a critical piece of the puzzle for anyone looking to improve their financial health.
Way Better Than Your Bedroom.
Besides the fact that putting money into checking means you’re less likely to spend it, every dollar of your hard-earned cash is actually insured. You may have heard of the Federal Deposit Insurance Corporation, usually shortened to FDIC. They’re the U.S. governmental agency that guarantees your money (under $250,000) is safe no matter what—even if the bank goes out of business! The Nation Credit Union Association (NCUA) does the same thing for credit unions. And since 1933, when the FDIC began, not one person has ever lost money in an FDIC-insured bank or credit union. That’s why we’ll always recommend only banking with an FDIC- or NCUA-insured institution. Thankfully, it’s pretty rare to find a bank or credit union that doesn’t insure its money.
On the other hand, cash tucked under your mattress is susceptible to robbery, house fires, flooding and other natural disasters, and of course—just wandering off. If an unexpected emergency occurs in your home, your money may be gone for good. Banks and credit unions safely store your money in a locked, fireproof safe. With that kind of security comes peace of mind, so it becomes easy to see why some people really love their banks.
What’s it all for?
Since most people use checking accounts to do things like pay bills, cash checks, make daily purchases and withdraw cash, many checking accounts offer a suite of services that make these types of activities easier.
Common features of checking accounts are things like automatic online bill-pay (which is exactly what it sounds like!), free check cashing, and mobile deposit (depositing a check into your account by just snapping a photo of it with your mobile phone). Many employers will work with your bank to directly deposit your wages in your checking account—meaning no more trips to the bank to deposit your hard-earned check! This is called direct deposit, and it’s so convenient, many banks will waive certain fees to reward you just for using it! Not to mention, checking accounts almost always provide ATM or debit cards, which make quick access to cash and online purchases a breeze. Depending on your lifestyle, some of these services might become absolutely indispensable once you begin using a checking account!
If you’re serious about becoming financially healthy, checking accounts are the place to start. They act as a kind of homebase or headquarters for your money, and you’ll later be able to use them to put money into (or fund) other types of accounts, like savings, investment, and retirement accounts.
Not only that, but a checking account demonstrates that your life is together. Sometimes landlords, real estate brokers, lenders, car salesmen, government offices issuing ID cards, or even potential employers may request to see a bank statement. Such requests pop up in order to do things like obtain proof of address, verify income, or just confirm that you are who you say you are. And with all these doors that checking accounts can help to unlock, it’s easy to see why many people consider having a checking account to be foundational to a stable life.
Putting it all together.
When looking for the right checking account, it's important to keep in mind that there are different types, and the features they provide can vary. For example, some accounts are online only. Some will earn interest when certain requirements are met, allowing you to make money just by leaving money in your account! In deciding, it’s recommended that customers think about which checking account features are important to them, as some may come with a fee. Others, however, may have fewer features, but are completely free.
With Lifesaver, finding and keeping track of the right checking account for you is easier than it’s ever been. We’ll only match you with the best accounts from outstanding banks and credit unions in your community. From there, we help you live your best financial life—every step of the way.
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