Did you know that tens of millions of Americans don’t have a bank account at all? Some people feel as if they don’t have enough money to justify using a bank. Others prefer to deal with cash rather than worrying about checks or debit cards. Some—especially among the millennial age range—developed a mistrust of banks following the 2008 financial crisis. Still, the fact is that virtually everyone from teenagers and up can benefit from opening a checking account. In this post, we will take a closer look at the benefits of a checking account and the best practices that make having one such a good idea.
It’s a way to keep your money safe:
Storing large amounts of cash at your home is a risk. Even if you have a secure place to put it, such as a safe, large cash reserves in the home attract robberies and can be destroyed by fires, floods, or other disasters. When you have your money at a bank or credit union, it is not only stored in a secure place, but it is also insured. Banks have FDIC insurance, while credit unions (including Resource One Credit Union) are insured by the National Credit Union Association (NCUA). Both FDIC and NCUA insurance covers up to $250,000 per person, per account.
You have more options for paying:
What is a checking account, exactly? Essentially, it is an account designed to give you easy access to your money. So, while a savings account is intended as a place to keep your money for a long period, a checking account offers a way to keep your money secure while also keeping it accessible. You can make deposits or withdrawals regularly if you prefer to continue dealing mostly in cash. Alternatively, you can use your checking account to expand your payment options. Checking accounts enable you to write checks, pay with a debit card, or initiate digital transfers.
Dealing with checks is easier:
The entire structure of our society is skewed in favor of people with bank accounts. Most employers don’t pay in cash; they pay with check or via direct deposit. If you don’t have a bank account, direct deposit obviously isn’t an option. Even cashing a check can be a challenge without an account. Many banks will cash your payroll check but will require you to pay a fee if you aren’t a member. With a checking account, you can collect, deposit, or cash your paychecks in a more convenient (and ultimately less expensive) way.
Paying bills is a breeze:
Today’s checking accounts typically come with intuitive online banking features. Among those features is a bill-paying dashboard. Use this system to pay credit card bills, utility bills, or other bills directly out of your account balance. If you have a bill that is the same every month, you can even set up your account for automatic bill pay. In any case, paying bills online is easier than paying them in cash or money order.
There is a paper trail:
Another risk with paying bills or other expenses in cash is that you run the risk of the payment not being tracked or filed appropriately. What do you do if you pay a $300 utility bill with cash and the utility company neglects to credit the payment to your account? How can you prove that you ever made the payment in the first place? When you’re paying with cash, debit card, or via online bill pay, everything gets tracked via statements and transaction ledgers. You have a paper trail to prove every payment you ever make.
There are no transaction limits:
There is value to having both checking and savings accounts, especially if you are trying to accumulate wealth or save money for specific financial goals. However, if you are only going to have one type of account, a checking account is usually the smart go-to option. One of the big reasons is that there are no transaction limits on checking accounts. With a savings account, you can typically only make a few withdrawals or write a few checks from that account per month. With a checking account, you aren’t limited in terms of withdrawals, debit card payments, checks, or money transfers—giving you more financial freedom across the board.
They make it easy to manage your money
Beyond online bill pay, the other benefit of a checking account’s online banking features is easy money management. Instead of having to count cash or think about how much money you have in various hiding places, you can enjoy a single view of your financial situation by just typing in a password. You can even link your account with budgeting software (such as Mint) to streamline the money management process further. This benefit is especially useful for teenagers, who can use a checking account to learn about budgeting and managing money for the first time.
They offer more features than digital wallets:
Services such as Venmo and PayPal make it easy for people to send money to each other digitally. These services and other digital wallet apps are part of the reason that more members of the millennial and Gen-Z generations might be turning away from traditional banking. However, the fact is that a checking account still offers many, many more features than any digital wallet app—from direct deposit to bill pay.
You can get cash from an ATM:
While many people with checking accounts use debit or credit cards for virtually all their payments, ATMs still remain a major benefit of having an account. If you do need cash, you can just go to an ATM and make a withdrawal. If you don’t have a bank account, your options for accessing cash are limited by your proximity to wherever that cash is stored.
Many banks or credit unions have benefits or perks that they only offer to their customers or members. For instance, when you open a Resource One checking account, you enjoy benefits that span everything from retail discounts to insurance offers.
Why open a checking account?
Ideally, you now see the benefits and are considering a checking account for yourself or your son or daughter. If you are thinking about opening a checking account, Resource One Credit Union is here to help. We will show you how to open a checking account, give you the answers to any key questions you might how (such as “How often should you monitor your checking account?” and “How much should I keep in checking?”), and just generally work to make sure you have a terrific banking experience. Contact us today to get started.