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A checking account allows you to deposit and withdraw money at your convenience. It can be used to pay bills, make purchases, and manage finances.
Here are four top reasons you should consider opening a checking account:
1. You Want Maximum Security
Checking accounts are protected by the Federal Deposit Insurance Corporation (FDIC), a government agency that insures bank deposits. The FDIC provides coverage up to $250,000 per person per account. Therefore, your funds are not affected by natural disasters or market downturns.
Banks also take additional security features, such as multi-factor authentication, biometrics, and transaction alerts, to prevent unauthorized access to your funds. If you’re looking for a bank account that offers maximum security, a checking account is your answer.
2. You Want Easy Access to Funds
The main benefit of a checking account is quick and easy access to your funds. Here’s how you can make transactions and access payments:
Direct Deposits: Share your checking account details with your employer, and all your paychecks can be deposited directly. No more dealing in cash or waiting days to get your salary credited.
Checks: Most checking accounts support paper checks. They are a quick and safe way to access funds.
Online Banking: Checking accounts are compatible with online platforms. You can pay credit card bills, electricity bills, and even monthly bills online. The banking app allows you to view your balance and track payments.
3. You Need a Debit Card
A checking account usually comes with a debit card. Here’s how debit cards can improve your banking experience:
Loan-free Transactions: Unlike credit cards, debit cards deduct money directly from the available funds in your account. This ensures thoughtful spending and budget control.
Record Keeping: A debit card keeps a detailed record of all your transactions, helping you stay on track and achieve financial goals.
Additional Security: A debit card has robust security features, including a microchip, PIN, and CVV. Whether you’re making a physical purchase or an online one, a debit card prevents unauthorized access and fraudulent activities.
Convenience: Debit cards are widely accepted across vendors, service providers, and retailers, providing convenience.
If you wish to avail the benefits of a debit card, opening a checking account can be the right choice.
4. You Wish to Keep a Stable Credit Score
A credit score is a number that represents the credit worthiness of an individual. It is affected by your payment history, credit utilization, and length of credit history. If you’re wondering does opening a checking account affect your credit score, read SoFi’s guide.
Checking accounts don’t include debt, so there are no reports sent to credit bureaus. However, there are some steps you can take to keep a stable credit score. This includes:
- Always pay any loans on time.
- Avoid overdrafting.
- Make sure your credit report doesn’t have any errors.
- Cut back when you get too close to the credit limit.
Savings and certificate deposit (CD) accounts can lower your credit score. Therefore, choose a checking account to maintain a good credit score.