A conventional deposit account in any financial institution that allows withdrawals and deposits is called a checking account. They can be accessed through automated teller machines or ATMs, checks, and many other methods. One of the advantages of using these types of accounts is that the checking account services do not include any limitation on financial transactions. However, this might be a matter of concern when it comes to savings accounts that put a limitation on both withdrawal and deposits in a single month.
Let us discuss the various ways in which consumers can be benefitted from these types of accounts.
1. Protection of the hard-earned deposits of consumers
Storing cash at home might appear safe; however, this comes with multiple threats in the form of theft, natural disasters and many other factors. On the other hand, the Federal Deposit Insurance Corporation’s or the FDIC’s standard deposit insurance offers protection to the money deposited in federal insured banks and financial institutions. As a result, account holders not only enjoy the various checking accounts services but also feel content with the thought that their hard-earned money is stored in a safe place. The FDIC covers up to around $250,000 for every account held by a single person.
2. Convenient payment of bills
Having a checking account can make the entire process of bill payment convenient and easy. If the users do not hold such accounts, they have to resort to either money orders or be physically present to make bill payments in cash. This entire process can be inconvenient. Being an account holder can allow them to write checks and they can also avail many other checking accounts services. Many businesses also allow automated payment of bills, where the money gets deducted from the account as a form of bill payment every month. Customers can either set this feature on their service provider’s website or they can use the online dashboards of banks that allow the auto-payment method.
3. Easy cashing of checks
Cashing one’s paycheck can be troublesome if the person does not hold an account in that specific bank. Banks only offer cashing check services to a non-customer if the check is being issued by them. This can again cause some inconvenience as the customers are required to visit the branches of that particular bank. Additionally, banks may charge a cashing fee while carrying out this specific service for non-customers.
Though many other check-cashing services are available, sometimes flat or percentage fees are involved as well. When a person is required to frequently deposit checks, these types of fees start adding up. Opening a checking account can make this entire process convenient and help the customers to avoid additional expenses. They can also enjoy various other checking accounts services as well. By directly depositing their earnings to their account, the employers can save time and money as they do not have to visit the bank branches for this purpose.
Checking accounts offer flexibility and convenience in terms of banking services which contributes to their popularity among people.