Advantages of having a checking account

In your banking toolbox, think of a checking account as the hammer or nails. Hammers and nails are essential to every toolbox, just like a checking account is essential to helping you reach your financial goals.

You can make deposits, pay bills and make purchases from the money in your checking account. This allows you to easily monitor everyday spending. Is most of your money going toward needs like housing and groceries, or toward wants like entertainment or the latest devices?

Assessing your spending habits can help you create your budget. It can also help identify opportunities to save. But if you hear “checking account” and think of your grandparents scribbling on a paper check or balancing a physical budget book, you’re missing the innovative advantages of having a checking account in the 21st century.

Types of checking accounts

Different banks and financial institutions offer different types of checking accounts. If you’ve never had a checking account, be sure to ask what’s available and how the terms and conditions for each type of checking account may vary.

7 checking account benefits

These days, many advantages of having a checking account are the additional digital tools and services. Though paper checks are still an option, if that’s what you prefer, there are some key digital benefits that might come with your checking account.

1. Get paid early.

If you set up direct deposit on your checking account, your bank may give you access to those funds on the same day they receive notice of the upcoming deposit from your employer. Many times, this is earlier than your employer’s official calendar payday. But don’t let getting paid early put you into a poor financial situation by not having enough money left over before the next paycheck arrives.

2. Keep your money safe.

Carrying cash can be risky as it is more easily stolen and some people find it easier to spend. Conducting transactions with your debit card or through online payments helps eliminate the need to keep track of paper money. Purchases will typically be reflected in your balance within a day or two, so you will be able to see in real time how much remains in the account. Most debit cards come with limited fraud liability, with your bank monitoring your account for suspicious activity around the clock.

3. Access your money easily.

You can use your debit card at ATMs to withdraw funds you may need. Most banks don't charge fees if you withdraw from an affiliated ATM and may offer a set number of out-of-network ATM transactions at no charge. Either way, the good news is that you'll be able to get to your money from almost anywhere. This is an especially important benefit for military members, giving them access cash in the local currency while they're stationed overseas.

4. Manage your money through your phone.

Most financial institutions operate in the digital space these days and offer a free suite of mobile banking features. Benefits can include bill payments, mobile deposits and transfers, quick views of balances and spending, and third-party services, such as Zelle®, Apple Pay®, Google Pay® or Samsung Pay®. Different banks will offer different features.

5. Open an account with a small deposit.

You may be able to open a checking account with, for example, as little as $25.

6. Teach kids money management.

One way to help kids and teens learn to manage their money, with parental oversight, is with a youth checking account. Then, when they're older and beginning to handle adult financial matters on their own, they may be able to avoid a difficult learning curve. Teaching kids good money management habits sooner can help set them up for financial success later.

7. Transfer funds easily.

If you have different checking accounts for different reasons, you can set up one-time or recurring transfers between your accounts. You can also set up transfers to external accounts you, or your friends and family, may have at other banks.

As you use your checking account, don't forget about saving. Set aside money to save for a specific purpose or goal and have those funds automatically transferred into a savings account. The automatic transfer is one of the best ways to fund financial goals like saving for an emergency fund. But, no matter what your goal is, moving money out before you are tempted to spend it often gives you the best chance of reaching that goal.