When it comes to storing money, there are several ways you can decide to keep it. First, if you’re unsure about how to store your money for everyday expenses, you may want to consider opening a free checking account.
But before you open one, here are some fundamentals of checking accounts that you need to know. So let’s dive in and see what you should know before opening a personal checking account.
What Is a Checking Account?
A checking account is an account you can open at a financial institution, like a bank or credit union. Also known as a demand or transactional account. It allow you to deposit money that you can then withdraw to pay bills, make purchases, and more.
Generally, these type of accounts help keep money required for daily expenses like gas and groceries. Each of these account comes with different features, or different limits on certain features.
Checking Account vs Savings Account
Both checking and savings accounts can be opened at financial institutions like Banks. Nonetheless, they have several differences. Here are some notable differences between the two accounts:
They allow unlimited withdrawals: Most checking accounts permit unlimited withdrawals; on the other hand, savings accounts have limited withdrawals.
They offer low or zero interest: These type of accounts have low or no interest at all. Conversely, savings accounts usually offer significantly higher interest rates.
They offer greater flexibility: Generally they provide various ways to transact, such as debit cards, personal checks, mobile apps, and third-party services like Zelle. Conversely, savings accounts don’t offer several ways to transact, although some accounts may come with a debit card.
These are the key differences between a checking account vs. a savings account. Overall, according to the experts at SoFi, “these accounts are ideal for keeping money for everyday expenses. But, on the other hand, savings accounts are ideal for saving money for relatively long-term financial goals or large purchases.”
Checking Account Services
While savings accounts tend to offer limited services, checking accounts usually offer various services. So that’s it is quite popular among public especially among students. Here are some standard services that come with a checking account:
Direct deposit can allow you to have money directly sent to your bank account as long as you’ve shared your bank account information with the sender. For instance, you could allow your employer to deposit your paycheck straight to your bank account.
Debit cards can allow you to make purchases at brick-and-mortar stores or online and make withdrawals or deposits at ATMs. You can even use it for online shopping without any issue!
ATMs can allow you to access your money round-the-clock, outside of regular banking hours. However, it’s crucial to know any ATM fees you may incur to avoid unexpected charges. For instance, while some banks don’t charge for withdrawals from non-network ATMs, others will charge you for using ATMs outside of their network.
Wire transfers can allow you to send a large amount of money in 24 hours or less. They are a handy way to send money overseas.
A checking account is an excellent way to manage money for everyday expenses. However, consider factors like the the account’s fees, minimum balance requirements, ATM network, interest rates, and mobile app features before you open it in bank.
Once you examine these factors, determine which ones are a priority. Ultimately, the right checking account will depend on your unique circumstances and the features that matter most to you. Visit SoFI Invest (SoFi Bank) to discuss your financial options and find the best account for you.