Checking Account Basics


Checking Account Basics

Most people know how much money is in their checking account and probably not much else. There are various types of checking accounts with varying options to best suit your financial needs.

Checking accounts offer more flexibility than a savings account

“A checking account differs from other bank accounts in that it often allows for numerous withdrawals and unlimited deposits, whereas savings accounts sometimes limit both,” according to Investopedia.

This flexibility is the tradeoff for having lower interest rates than savings accounts. Your checking account is the one that you will draw from when you need immediate money to pay for things like bills, groceries or online purchases.

Money can be deposited automatically, such as from your paycheck, or it can be deposited at an ATM or through a teller.

There are many options for withdrawing also, such as using a debit card or a check at a store or by using an ATM card to withdraw cash. You may also be able to pay bills online, directly from your financial institution’s website.

There are multiple types of checking accounts

Many people don’t realize that there’s more than one type of checking account, and that mistake can be costly.

“Checking accounts can include business accounts, student accounts and joint accounts along with many other types of accounts which offer similar features,” states Investopedia.

Making sure to open the correct type of account means that the account will best suit your needs. Student accounts are beneficial to people who may not meet deposit or balance minimums, while business accounts maximize the benefits that entrepreneurs need most and help business owners keep their personal and business finances separate.

You can have more than one checking account

In addition to the fact that there are multiple types of checking accounts, many people don’t realize that they can have multiple of the same type of checking accounts at anytime. Having multiple checking accounts is even encouraged by some financial experts, as an easy way to budget and prevent overspending on certain expenses.

For example, many couples prefer to maintain separate accounts for each partner while also sharing a joint account for bills and other family-related expenses.

“This allows couples the flexibility to make independent financial decisions, since not every financial decision is going to involve both parties,” says certified financial planner Kristen Euretig for Fox News Business.

Other families may wish to split accounts even more, such as having one for account for rent and utilities, another for food and so forth. This makes it easy to see if there is enough room in the budget to head to a restaurant or if cooking at home is a better idea.

If you would like to learn more about the different types of checking accounts Colonial offers, please visit our website, or contact us today.

 

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