Let’s start at the beginning. Within bank accounts, I’ll start with checking accounts before moving onto savings accounts.
This post is a more general overview of what checking accounts and how they work. I will go into more specifics in proceeding posts.
The checking account is probably the most widely used bank account. It is a convenient place to store your money because it allows you to dip into it whenever you need. You use your debit card to purchase goods and withdraw cash from ATM’s.
An important note with checking accounts and debit cards are that when a transaction occurs, the money is immediately deducted from your bank account. This differs from a credit card, which I will discuss in a later post.
Your checking account balance probably fluctuates frequently on both a daily and monthly basis. It’s like your virtual wallet. If you make a salary and want to direct deposit, you will probably want to send it here. Depending on which bank you use, you may also receive a small amount of interest on the balance.
A checking account is essential, and I assume many (if not all) of you currently have one.
When choosing a checking account, there are some key criteria you will want to consider.
- Minimum opening balance
- Minimum balance requirement
- Monthly and maintenance fees
- ATM availability and the fees associated with them
- Ease of deposits
- Other fees such as overdraft and ordering checks
After years of using a traditional brick & mortar bank, Bank of America, I’ve recently opted to use an internet bank for my checking needs because it offers more services and further maximizes my wealth.
Is there anything about checking account basics that I did not cover and that you have a question about? Ask away in the comments!