A checking account is essential for accessing your money to pay your bills. It gives the facility of paying via checks written against your checking account. Nowadays, many people prefer to pay for all kinds of purchases by checks instead of cash. This has many advantages as the person does not need to carry cash with him all the time. One can also pay for things like groceries, clothes and other items through this method. However, to avail this kind of payment facility, you need to have a checking account. You can open such an account with a regular or an online bank.
Ensure That Your Bank Has FDIC Insurance
One of the ways by which the internet is making our lives easier today is through online banks. These banks save time and also pay a higher interest than regular banks on the accounts offered to them. A checking account might require you to maintain a certain minimum balance in your account. This amount might differ from bank to bank.
When you choose a bank to open a checking account, you must look for these features - Choose a bank which does not require a high minimum balance. Many banks may offer a certain interest on your account if you have the stipulated minimum balance needed to earn the interest. This minimum amount might be more than an interest free account. Gauge if it is really a good bargain to maintain a higher minimum balance just for the interest.
Most banks, including online ones, require a very small amount; say $100, to open a checking account. Choose a bank which has a good customer service so that you can easily clear your doubts regarding your bank statements. Some banks may give you an ATM facility along with your checking account but it is not right to withdraw money using your ATM card since that will just drain your account.
Choose a bank which has FDIC insurance and overdraft protection. This is important to protect your interests if your checks bounce. This also saves you embarrassment and the fee that you might be charged by the store for which you wrote the check.
Choose An Online Bank Which Offers Good Customer Service
It is important to use you checking account wisely. A good idea is to maintain a register where you keep a record of all the checks that you write against your account. If you use your ATM card to withdraw money from your checking account, that should be noted down as well. Though this is easier said than done, it is advisable to take this extra effort so that you know where your account stands after a check amount is deducted from your account.
Also, you can use your checking account to pay for larger expenses or bills and use cash for smaller purchases. When you receive your bank statement, check the amount withdrawn and the balance and if there is any discrepancy, you can check with the customer service at your bank.
A savings account is generally used to deposit money on which you can earn some interest from the bank. This is an investment for your future. You are free to withdraw money from your savings account as and when you need it, but you cannot write checks against this account. Most banks will require you to maintain a minimum balance in your account. Some savings accounts can earn you a higher interest if you keep the money fixed for a certain time period. Online banks pay a higher interest than regular or offline banks. Some online savings accounts also need a lesser minimum balance than the offline ones. While choosing a bank, look for one that pays a good interest.
Ideally, one should have a savings account for future investments and a checking account for making payments through checks.