Checking Account: Definition and Basics

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There are many types of bank accounts and checking accounts are the most common.

This article will teach you everything you need to know.

Take a look at our breakdown of checking accounts to find the best type for you. 

What is a checking account?

A checking account is a bank account that allows easy access to your money.

They come with linked debit cards that you can use at ATMs to take out cash and at stores to buy things.

It’s that simple. 

A bank stores your money and allows you easy access to it.

How do I open a checking account?

Bank accounts can be opened in person at a local branch or online.

To start a checking account, you may need an initial deposit, so check the guidelines at the bank of your choice to see what the rules are.

Usually, in seven to ten days after the account is approved, you’ll get a debit card in the mail. Once you activate the card, you’re good to start using the card.

Who should use a checking account?

Checking accounts are for people who want to access their money easily. It’s more convenient than cash and allows you to handle money issues online. 

Make sure when you set up your account that you keep track of your spending and bank statement. 

When you’re spending on plastic it’s easy to lose track of how much money comes and goes from your account.

If you withdraw more money than your account has, you’ll have to pay overdraft fees, which can be steep.

Why get a checking account?

Here are the top reasons you might consider opening a checking account:

• You’re tired of carrying around cash.
  If you don’t want to carry cash or don’t like tripping to the ATM, a checking account can help. 

 

• Some businesses won’t accept cash.
  Many companies are going cashless, so you may have to open a checking account to shop at your usual businesses. 

 

• You want to save money with online shopping.
  Buying things on the internet lets you shop around for the best deals quickly, and you can’t shop online without a bank account. 

 

• Automatic bill pay sounds like heaven.
  Anyone who dislikes sitting down every month to pay their bills might benefit from automatic bill pay. Connect your debit card to take out the amount due each month.

Things to look out for

Before you apply for a checking account, you’ll want to check a few things. 

Check for fees. Some banks charge monthly service fees, high overdraft, or low balance fees.

These can add up and be costly. Read the fine print.

Also, debit cards don’t offer as many protections for you as a credit card. 

If someone steals your debit card information and goes on a shopping spree, you may not get the cash back in your account for a few weeks. 

Checking accounts are simple by design and if you can afford to have one you should.

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