Checking Account : Meaning , Advantages and Types

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Fincrif India

Oct 17

05:47 AM

If you're looking for a checking account, you have a number of choices. The decision of whether to open an account at your neighborhood brick-and-mortar bank or an internet bank should be one of your first considerations.

Check what you need to bring with you before going to the bank. Remember that there may be a minimum age restriction for opening a checking account with your own bank as well as other variations in the rules from bank to bank. The bank will need to confirm your identity before allowing you to open a checking account. You might also need to bring cash for your initial deposit and one or more forms of identification. 

What is a Checking Account ?

A checking account is a sort of bank account that enables you to add and remove funds, write checks or pay bills using a debit card.


Because it is simple to use and can be used for daily expenses, this type of account is sometimes referred to as a transactional account. 


The majority of the time, account holders utilise these accounts temporarily to cover daily needs like food bills. Checking accounts do, however, come with some expenses, such as monthly service charges and overdraft charges. 

Advantages of Checking Account  

There are many benefits to opening a checking account if you're thinking about doing so.  


Earn interest: Some checking accounts pay interest, allowing for the growth of your funds even while they are only being held in the account.


FDIC insurance: If you have been storing your cash in jars or beneath your mattress, a checking account may be of interest to you. The FDIC insures the majority of checking accounts and provides coverage up to the permitted limits.


Easy access: You may easily access your money using checking accounts in a variety of ways. Generally speaking, you can deposit or withdraw cash by going to a bank, using your debit card at an ATM, writing a check or transferring money online.


Debit card: The majority of checking accounts include a debit card, making it simple to use the funds in your account at the checkout counter rather than paying with cash by tapping or inserting your card into a reader. By providing the necessary information, such as your name and credit card number, you can make a payment using your debit card online.


Direct deposit: Set up direct deposit with your company to have money deposited directly into your checking account. Paper checks no longer run the danger of getting lost in the mail. It may also be quicker than receiving it by mail if your paycheck is automatically deposited into your checking account on payday.

Different Types of Checking Account 

A checking account may be the best option for you if you're sick of managing cash (and tangoing with damp dollars in the washer). See what these various checking account kinds have to offer.

Checking accounts

A checking account often comes with checks, a debit card, and access to ATMs. Typically, a bank has a physical facility as well. Be sure to check as there might or might not be fees.

Accounts with online checkers

Online checkers offer online services. This implies that while they might not have any physical locations for you to visit, you can still do banking business online or through a mobile device from wherever you are.


Joint Checking accounts

That can be accessed by many people known as joint checking accounts. Couples who are already married or college students and their parents may find this to be a nice solution. Adding a joint account holder may boost the account's FDIC insurance, which is another thing to keep in mind.

Checking accounts for teenagers and children

A few banks provide checking accounts tailored exclusively for teenagers and kids. They might offer additional budgeting tools or security measures, such as the capacity to create savings goals and send transaction text notifications to parents, that make them suitable for a first step into managing money. A parent or legal guardian must normally maintain a joint account holder role in these accounts.

Checking accounts for businesses

If you own a business, you may want one of these. Keeping your personal funds and corporate finances separate is made simpler with business checking accounts.

How to Open a Checking Account 

You must take security precautions to verify your identification once you've selected the ideal checking account for you.


  • As you create your account, you must fulfil the following fundamental steps:

  • Submit a form in its entirety

  • Please present a photo ID and/or other form of identity, such as a social security card or birth certificate.

  • Please enter your social security number.

  • Your mailing address must be verified.

  • Sign the document

  • If your preferred banking institution requests it, make a deposit of the necessary funds.


In order to find out what to expect from your bank, get in touch with your banker. This process and its requirements may vary depending on the type of account you want to open.

Conclusion 

If you're looking for a checking account, you have a number of choices. The decision of whether to open an account at your neighborhood brick-and-mortar bank or an internet bank should be one of your first considerations. Online banks often provide benefits including fewer costs, greater interest rates, convenience, and cost-free access to an extensive network of ATMs. However, since online banks don't provide in-person support, you'll need to navigate a touchtone phone menu to speak with a live person.


Nevertheless, many consumers love having online accounts because the majority of banks now offer feature-rich apps that make it simple to deposit, withdraw, and transfer money. Reputable online banks with current security procedures are equally as safe as physical banks if Internet security is a concern for you.


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