That is an excellent question. In fact, there are several good reasons to establish a checking account. Once your funds are deposited in your bank account they are insured by the FDIC up to $250,000. A checking account is safer than carrying cash and they provide a convenient means of paying your bills (either by check, debit card, or online). Checking accounts give you the ability to track your income and expenses, make it possible to receive your paycheck electronically (you get your money faster and don’t have to go to the bank on payday), and you can easily get cash by going to the bank or an ATM. A checking account also gives you free access to online banking, making banking easier and more convenient than ever.
In the past couple of years banks have been offering more options with your checking account – from making person to person payments electronically (like Biddeford Savings’ Popmoney feature) to depositing checks from your smartphone (coming soon!). Most banks offer mobile apps in addition to online banking that allow you to do your banking anywhere, anytime. While a savings account offers many of these features, only a checking account offers them all.
But remember with a checking account you do have additional responsibilities – it is important to record all transactions in your register (whether paper or online) and you need to be sure you have adequate funds before writing a check, using your debit card, or paying bills online. Each month when your statement arrives it is best to balance your account – by doing so you make sure only transactions you initiated are being posted to your account. Your monthly statement will also provide you with the information you need to track your income and expenses (maintain a budget, in other words) and most banks even offer software or apps to help you do this – Biddeford Savings offers FinanceWorks to help our customers.
To summarize, checking accounts are useful in many ways and in the coming posts I will talk about the different types of checking accounts, offer some tips on using them most effectively, and then a little bit about business checking accounts. Stay tuned.