Did you know that 17 million Americans don’t have a checking account?
There are a number of reasons for this, including a general distrust of financial institutions. Another contributing factor this this number is that some people have had made poor choices about their money and are unable to get a bank account. But there is a growing number of younger Americans who do not believe they need a checking account at all.
Having a checking account is essential to managing your money on a regular basis. In fact, a checking account is a core driver behind being able to utilize the incredible number of alternative financial technology tools such as Apple Pay, Samsung Pay, Android Pay, Venmo, and PopMoney to name a few.
Our research also seems to indicate that some people hold off on opening a checking account because they believe all checking accounts come with a monthly service charge or transaction fee. Our latest analysis of over 1,000 checking accounts showed that there are some very attractive offers that have no fees, no minimums, no transaction fees, and are widely available to everyone… even if you have a bad experience with a bank.
We think having a checking account is the first step to financial health and freedom. Here are 4 main reasons to get an account today:
1. Protect your money.
A checking account is a safe and secure way to pay for things. We all know carrying a big roll of cash with you to pay for rent, utilities, gas, and groceries is not a safe or smart way to manage your money. Even in a so-called “safe place,” storing cash at home poses several risks, including robberies, fires, or natural disasters. There’s the chance you could lose some or all of it, or lose track of how much you are spending and wind up short at the end of the month. A checking account lets you pay bills and manage your money using paper checks, a debit card, or online transfers and bill payment.
Plus, consumer bank accounts are subject to protection thanks to the FDIC’s standard deposit insurance. Your funds are fully insured up to $250,000 per person. Since the creation of the Federal Deposit Insurance Corporation (FDIC), consumers have enjoyed the security offered by FDIC insurance and the knowledge that their deposits are safe up to the FDIC coverage limit.
2. It’s much easier to pay bills and expenses and costs you nothing.
From rent to utility to cell phone payments, monthly bills are a fact of modern life. Paying those bills without a checking account involves money orders or physically delivering cash, both of which can be a chore — not to mention expensive. With a checking account, you can pay with a Visa or MasterCard debit card tied directly to your account. If you prefer, you can write checks to pay your bills when debit card payments are not accepted.
Many businesses allow for automated bill pay, which allows you to set up a monthly automatic payment. This makes it easy to pay on time every month without fail. Having a checking account allows you to easily fund person-to-person (P2P) payment systems such as Venmo® or Popmoney®. If you owe a friend or a relative money for something, send them a payment quickly via a P2P service.
3. You can track spending and make adjustments.
Checking accounts come with debit cards, which allow you to make purchases online and track your spending with ease. When you use cash, you have to manually keep records of where it’s going. With a checking account, you can simply view your recent transactions to see where you’ve been spending. Having a checking account with online access gives you a much easier way to keep track of everything – certainly easier than having your cash laying around. If you add a savings account or credit card to your financial portfolio, we recommend using a service such as Mint.com (free) to view and manage all your financial accounts.
4. You get fast access to your paycheck with direct deposit.
When you have a checking account, you can set up direct deposit with your employer. You can say goodbye to collecting a check, going to the bank, and cashing or depositing it. Your paycheck is automatically deposited into your account. And because the money has been directly deposited into your account electronically, the funds are available immediately.
Overall, having a checking account is a necessity when it comes to managing your money quickly and easily. The best banks have no fees, no minimums, robust online features, and strong smartphone apps. Check out our list of The 5 Best Free Online Checking Accounts.