MONEY AND FINANCE

Checking Account Basics

Checking Account Basics

A checking account is really a service. Most people don’t think of it in that way but boiled down to its basics, it is merely a service.

Checking accounts can be opened at any number of financial institutions. If you have a checking account, you already know you can deposit money with them and withdraw it at a later date. This feature makes them extremely valuable as it allows us not to have all of our cash with us everywhere we go.

Checking accounts are not your typical investment because they either pay a low, or no, rate of interest. Not only can you access your money almost anywhere at anytime but there is usually no limit on how many withdrawals you can make in a month. Hence, whether you have one bill or 20, it won’t cost you to write the 20 checks.

Fortunately, checking accounts come in different varieties. The most common type is what is called the individual account. An individual account has only one owner. As with all checking accounts, there may be fees, minimum required balances and other associated demands.

The next most common account is a joint account. It is similar to an individual account except there are more than one account holders. This means any account holder can withdraw all of the money. A husband and wife are examples of joint account holders.

Some financial institutions offer checking accounts, sometimes called special checking accounts, for seniors, college students and even teen agers. These accounts have a low or no minimum required balance and usually do not carry any fees.

The only fee you may have to pay is when you reorder your checks. Replacement check costs will usually be deducted from your account balance.

The last type of checking account is a business checking account. Obviously a business checking account is for people who own their own business. The business account is separate from their personal account for both business and tax purposes. It also makes bookkeeping a lot easier. Business checking accounts come with various fees and minimum required deposits.

Regardless of the type of account you need or select, it is advisable to check with as many different financial institutions as possible. While all checking accounts probably will have the same basic features, the cost is the bugaboo. Some are more expensive than others so you will want to pay close attention to pricing structure.

Checking Account Basics

Money and Finance