Do I Need a Checking Account?
Enjoying financial confidence includes putting your money where it is safe and accessible. When considering where to put your money safely, bank accounts are a great option. The type of account(s) that you choose, will depend on your specific needs. One of these accounts is a checking account. If you've never opened one before or are only familiar with savings accounts, you may wonder why you'd open a checking account.
What Is a Checking Account?
A checking account is one of the several types of accounts you can open in a bank. A checking account allows you to deposit money1 and allows you make purchases or pay bills with checks, or a debit card. You can also use a checking account to make electronic transfers. At First Commonwealth, to make your transactions more convenient, your checking account will also come with a mobile application with digital payment features like Zelle.2
Types of Checking Accounts
- Traditional checking account: Also known as a basic or standard checking account, this type of account allows you to write checks and may charge a monthly fee. It pays little or no interest.
- Premium checking account: These accounts often require a higher balance but also have upgraded features and benefits, often including the ability to earn interest on your checking balance.
- No Overdraft checking account: These accounts are set up to help you avoiding spending more money than what is available in your account, which often means they do not allow checking writing. In the event that an overdraft does occur, these accounts will not be charged an overdraft fee.
- Student checking account: These accounts are typically tailored for high school and college students seeking convenient ways to manage their money.
- Business checking account: These accounts may be offered to businesses and organizations to cover expenses. You'll need to provide documentation to prove your business is legitimate.
Differences Between Checking and Savings Accounts
A savings account is opened to save money for financial goals. Unlike a checking account, you cannot draw a check against a savings account, and there may be limits on the number of free transfers or withdrawals in a month.
While you can use your checking account for everyday or frequent transactions, a savings account is used to save money for longer periods of time and will earn interest. Savings accounts typically offer higher interest rates than checking accounts. While many checking accounts don't earn interest, a savings account often does.
Benefits of Having a Checking Account
Having a checking account has the following benefits.
Keeps Your Money Safe
The money you deposit in a checking account is insured for up to $250,000 through the FDIC. In addition to FDIC insurance, banks use robust security features to minimize fraud, loss of personal data, theft or malpractice that can lead to losses. You can also add identity protection measures to reduce the likelihood of identity theft, like Mastercard ID Theft Protection, allowing you to store money securely with a checking account.
Better Financial Management
Most checking accounts allow you to access your paycheck, tax refund or benefits check via direct deposit. If you don't have a checking account, you may have to wait for the check to arrive in the mail and then cash it by visiting your bank.
Pay Bills Conveniently
A checking account allows you to make payments faster and easier. You can link your account and/or debit card to your account to make card payments. In addition, a checking account enables you to send checks electronically and receive payments via wire transfer or other online payment services. Automated teller machines (ATM) eliminate the need to visit a physical bank location, and online banking platforms and mobile banking apps allow you to transact anywhere.
Budget on the Go
Checking accounts make managing finances convenient by helping you budget. They provide you with real-time records of your spending, allowing you to track your expenditures. In addition, many banks offer free budgeting tools that sync to your checking account. These budgeting tools are easier to use than stand-alone budgeting apps and spreadsheets. You can even use your mobile banking app to deposit paper checks wherever you are.
Choosing a Checking Account
Consider the factors below when choosing a checking account:
- Requirements: Check the requirements for opening and maintaining a checking account with the bank. Some checking accounts have minimum monthly balance requirements you must meet to avoid service fees or maintenance fees. Find out the minimum deposit requirement to open an account.
- Fees: Checking accounts can include overdraft fees, insufficient funds fees, monthly maintenance fees, wire transfer fees and non-network ATM fees. Find out if there are options to waive or receive reimbursement for some of these fees.
- Banking features: You may want to know if the bank offers online and mobile banking access, ATM access and convenient branch locations. You might also want to confirm whether the mobile banking app has the specific features you want, such as the ability to deposit paper checks from the app.
- Interest: If you prefer interest-bearing checking accounts, find out the interest rate offered. Compare the interest rate earned against potential fees or the minimum balance requirements.
- Reputation: This is one of the most crucial factors to consider. Research the bank's reputation for financial stability, customer service and other key features to ensure a worry-free banking experience. While doing the research, find out if the bank insures its customers' deposits.
Opening a Checking Account
Opening a checking account is easy. Choose a reputable bank like First Commonwealth Bank, prove your identity and provide proof of your residential address. You will make an initial deposit when you submit your application. You can apply online or in person at the bank.
Managing Your Checking Account
You are responsible for meeting your bank's requirements to maintain your checking account. Proper account management will ensure you avoid unnecessary fees. In addition, managing your account effectively will keep it in good standing, making it easy to qualify for specific privileges and benefits the bank offers account holders.
Some accounts require a minimum balance, and you should monitor the balance as it changes when you deposit, withdraw, make payments or make transfers. With most banks, you can sign up for email or text alerts that tell you when transactions occur.
Closing a Checking Account
Closing your account is typically straightforward. Review your account agreement for information on the closure process and any applicable fees. Withdraw your money or transfer it to a different account and send the bank a request to close your checking account. You can close your account by visiting a local branch, calling customer support or using the bank's online platform. You should also request the bank to send you a written or electronic confirmation that the account is closed.
Open a Checking Account With First Commonwealth Bank
If you're looking for a banking solution that will allow you to make frequent transactions, you need a checking account. At First Commonwealth Bank, our mission is to improve the financial lives of our neighbors and businesses. We offer competitive lending rates, the Confidence Checking account with no overdraft fees and Mastercard benefits for cardholders. Apply online or visit your local branch to open an account with us.
1 We don’t charge for these services but standard message, data, and internet service provider rates may apply so check with your carriers.
2 Transactions typically occur in minutes when the recipient’s email address or U.S. mobile number is already enrolled with Zelle®. To send or receive money with Zelle®, both parties must have an eligible checking or savings account. Zelle® and the Zelle® related marks are wholly owned by Early Warning Services, LLC and are used herein under license.