Apart from a regular savings account with a bank, you might also have a checking account. Or perhaps you have ditched savings account altogether and relied on checking account for your liquidity needs.
Despite the countless fees and extra hassles of bank accounts, a lot of us need to have at least one bank account, and a checking account is the most straightforward type around. Normally, a checking account is simple to handle, offers better liquidity, and allows unlimited deposits. However, checking account also pays the least interest rate, if any, so it is never an ideal tool for investment.
Presently, depositors and account holders are no longer putting their eggs in the same basket. While in the past, people transacted with only one bank or financial institution for their savings, loans and credits, the scenario today is different. One bank may offer the best deal for a checking account but may not provide the best terms for consumer credit.
It is vital to compare bank offers for checking account to take advantage of not only a liquid account but also one that may actually earn you a considerable interest rate and without the hefty charges. Do not just open an account with the bank nearest your location. Convenience usually comes with a price – something that you do not want to pay out of an account meant for personal spending.
Banks charge several items on checking accounts including ATM fees, monthly fees, and overdraft fees. Be wary of these charges before you decide to open a checking account with a particular bank.
Also, there is the so-called check float, which refers to the gap between the time you issue a check for payment (check issuance) and the time the money is deducted from your account (check encashment). In the past, the float lasted about a week or longer, but shortened with online and mobile banking technologies. It is possible for you to take advantage of float in the sense that it buys you sometime. Again, make sure that you have enough funds in your account before issuing checks to prevent expensive fines, lawsuits and credit damage due to bounce checks.