A checking account is basically a deposit account held at a bank or financial institution that allows easy access to the deposited funds. These bank accounts are highly liquid in nature allowing withdrawal and deposit facility on request and thus, are also called demand accounts or transactional accounts. The funds can be accessed through cheques, online transactions and ATMs. However, most of the times checking accounts are confused with the savings account, though there is a slight difference between both the accounts. While savings accounts allow restricted number of banking transactions, checking account often allows unlimited access to the bank account through numerous withdrawals and deposits.
Who can open checking account?
Checking accounts come handy for short-term to medium term financial purposes and therefore, are best suited for the businesses, students, and joint accountholders. Often business sector prefer opening checking account for their employees in order to deposit their monthly salary directly into their accounts.
On the other hand, some banks and financial institutions have a special checking account plan for college-going students, which often remain free until students complete their graduation. Furthermore, a joint checking account is opened by two or more people, usually having blood-relations or are marital partners. All the joint accountholders are given rights to write cheques on the account.
What features to look for when opening a checking account?
As the competition in the financial sector is exceptionally high, it is significant to consider certain features while opening a new checking account with the bank or financial institution. Even if the bank claims to deliver the best banking experience, checking out these factors would help an individual to choose a bank that suits best to their needs and priorities. It has been said that due to sky-rocketing banking costs, there’s a lot of room for the consumers to save good amount of money by boarding the right bank.
Rate of interest – When it comes to managing finances, it’s always best to opt for a bank that yields high returns over a period of time. While some banks may offer 2 to 4% of interest rate on checking accounts, other banks might reward their customers with above-average rate of interest. However, if you’re looking for a basic checking account, it could be challenging to find a bank that pays high interest. This is because, most interest-bearing accounts have higher average balance requirements and might even come for comparatively higher fees and charges.
Account bonus and rewards – It’s always exciting to earn rewards and bonus points on every transaction. What’s more exciting is that these reward points can be redeemed for cash or travelling and shopping vouchers as per the bank’s redemption catalogue. In fact, there are plenty of banks and financial institutions that offer enticing reward points for every deposit and withdrawal transaction in the checking account. Thus, if you want to get the banking experience, it’s advised to look for a bank who offers tempting rewards and bonus points on every transaction.
Fees and charges – Another key feature to look for while opening checking account is the associated fees and charges. Remember, in this age of inflation, nothing comes free of cost, not even the banking services. Post 2008, it is mandatory for banks and financial institutions to be more transparent in terms of its services and fees structure. So, before zeroing down on a certain bank, it is essential to check its fee structure, which is easily available through their official website. Banks usually charge ATM fees, account maintenance fees, overdraft fees, minimum average balance, and documentation fees.
ATM Network – Today, even if you forget to carry cash, there’s nothing to worry about as almost every bank has its own ATM network across the country allowing the accountholders to easily access their funds from anywhere and at anytime. Hence, it is important to check the bank’s ATM network if it is available in your city or area, so that you can conveniently withdraw cash whenever required.
Internet banking facility – With the emergence of Smartphones, getting access to everything and anything is just a tap away and banking transactions are no different. In fact, most accountholders visit their home branch only thrice a year on average. Thanks to online banking and mobile banking facility that has made extremely easy and convenient to access the bank transactions. With the help of internet banking facility, you can check your account balance online, make fund transfers, pay bills, and deposit cheques without even leaving your comfort zone.
FAQs related to checking account:Is savings account and checking account are same?
No, savings account and checking account are both different and functions differently from each other. While checking account is suitable for number of transactions in a day, savings account is not intended for everyday use as there is restriction on maximum number of transactions allowed in a month. In addition, savings account offer slightly higher rate of interest than the checking account for the fact that the funds in checking account are frequently withdrawn and deposited on daily basis; thus, making it a bit difficult to calculate interest on average balance.
Can a minor open checking account?
In order to open a checking account, an applicant must be 18 years old or above. In case, an applicant is aged between 16 to 18 years, the account can be opened jointly with a legal guardian as co-owner of an account.
Who can I open joint checking account with?
Joint checking account can be opened with any eligible co-accountholder aged above 18 years. It is not mandatory to have blood relations between the accountholders and can be opened with business partner or any eligible co-applicant.
What is overdraft facility in checking account?
Banks generally provide its accountholders overdraft facility to withdraw funds even if the account balance is zero. However, banks do charge overdraft fees for the amount withdrawn. So, before using the facility, it’s always better to check the overdraft charges with the bank.