After working hard and earning your money. It is only fair that you get to store it in a safe and easy to access manner.
The modern-day existing banking system provides services to ensure that these needs are met. Your money can also earn some interest while stored depending on the rates of the bank.
However, at times there is a need for additional functionality that the normally available systems just can’t provide.
This is where a checking account comes in. It varies from the normal systems available to ensure that the needs are met. Without any further ado, here are a few things about credit union checking accounts that you must know.
What is it?
In comparison, it is almost like a savings account in the sense that it allows the user to deposit and withdraw money.
The difference is mainly in the policies as it allows for unlimited deposit and huge withdrawal of funds as opposed to the usual accounts that limit such.
They are managed by banks and other relevant financial institutions hence the transactions can be done through common means like the ATM, checks, and various cards.
Still, the transactions are regulated in that overdraft, using checks too much, and having less than a certain amount as your balance is penalized.
How does it work?
The basic principle is to offer such attractive services to increase the number of customers thereby indirectly increasing the consumption of other expensive services being offered by the institution.
Therefore, it ensures that you can easily store and access your money for your day-to-day needs without having to worry about the constraints of the normal accounts. That being said, most of them don’t pay interest, and those that do pay very little.
Other than that, they are just like the others. They support the transfer of funds, use of credit and debit cards, visiting the bank for deposits and such.
What are the types available?
As the name suggests, this is a free account that doesn’t charge fees for purposes such as maintenance and having less than a certain amount left as the balance. However, it is still subject to penalties involving overdraft and misuse of checks. Nowadays, they are quite rare than in the past when the concept was first introduced. They are mostly found in the community and online banks.
With these, your money will be able to earn interest. The rates are typically low. They also allow you to use checks and debit card to pay for goods and services. The downside is that they have strict requirements some of which can be unfavorable. For instance, the maintenance fee and the minimum balance that you are supposed to be having in your account are high.
They offer additional valuable services such as discounts and financial advice. They are also expensive considering the high charges and their minimum balance policy.
These are but a few examples. Other common types include Joint, Trust, and Student checking accounts. See this link to read more.
How to choose the best
There are several factors that one must consider ensuring that they pick the one that best suits them. Here are some of them.
This is the first thing that you should consider. You have to go for the one that is in line with your needs.
For example, if you are a student looking for a safe place where you can store and conveniently access your funds then you should opt for the Student checking account.
You are allowed to use it free of charge until you graduate. On the other hand, if you plan to store huge sums of money then you should go for the premium. It also has its advantages.
Some are more expensive than others. The charges include maintenance fee, overdraft fee, and other penalties. In total, these can amount to a lot of money.
Thus you need to choose one that you can easily afford. Otherwise, you might end up paying more than what you are receiving considering the low or no interest rates.
In the past, there have been cases of such financial institutions collapsing which results in great losses for the customers.
For this reason, it is important that you go to a bank that has a means of giving back your money in case such a mishap occurs.
You need to make sure that the bank provides insurance from a legitimate insurance firm. The Federal Deposit Insurance Union is one such body.
The main objective is to ensure convenience. You should be able to perform most of the transactions without having to go to the local branch. Technological advancements have allowed for the integration of mobile apps that can facilitate transactions such as requesting a loan or transferring your funds. You should opt for those that support such functionality. Click here to learn more.
Other than the additional functionality and difference in policies, checking accounts operate just like savings accounts. They allow you to deposit and withdraw your money with ease. They pay little or no interest depending on the policies of the institution.
The variety of options available makes it possible to cater to people with different types of needs. You should carefully consider them before you settle for any particular one. Make sure it provides insurance from the relevant legitimate firms, is affordable, and convenient. If you are not sure about which one to choose consult an expert.