Checking Account

Checking Account

Also known as ‘demand deposit accounts’ or ‘demand accounts’, Checking Accounts are deposit accounts in banks and other financial institutions (like loans and savings, credit unions, etc.) , for allowing easy access to funds, on demand. Checking accounts, like same day cash loans is a perfect solution for emergency cash .Checking accounts are non-profit-oriented bank accounts which are not meant for interests or savings. It is intended for withdrawal at any time as the need arise. Hence investing in a Checking account is similar to putting your money into a locker and retrieving them as and when you require. The customer is free to put in or withdraw money as frequent as he likes. It is a debit and is usually used to pay out bills, etc. Checking accounts can be easily withdrawn by writing checks, or using debit cards.

Checking accounts is a must to manage money effectively. Once you get a checking account you should get a Debit card and this can be used to pay out bills at stores, for online purchases, etc. It is better not to set the withdrawal mode as just by cash alone, since it may restrict many of the benefits of Checking accounts.

For getting access to a checking account, the basic requirement is a bank account and a passbook. One can receive payments by way of an array of services such as cash, check or as debit cards. In the U.S the payment is by way of e-checks.

The customers can access the money with the help of cash machines, branch networks, internet banking, telephone banking and mail banking, etc as per convenience. Once you have a checking account it is very important to have to balance it every month. All means should be followed to prevent your account from overdrawing. It is very important to balance your checking account regularly in order to avoid bounces (as in overdrafts), to identify thefts and fraud, correct the mistakes made by you or the bank. Once you balance your checking accounts you will be able to know the balance amount in your account, to correct mistakes from the side of the bank as in overcharging, or loss of money, etc.

Overdrafts occur when the withdrawal amount exceeds the balance amount. This will create a negative balance which means you are on credit. If the overdraft is within the agreed limits, the interests will be agreeable. But once it goes beyond the cut off limit, it will lead to higher interests. Hence care should be taken not to overdraw your account. In many banks, there is an optional feature of ‘Overdraft protection’ along with the checking account, in which case the bank pays the overdrafts when an account holder incurs one. Hence it is otherwise called ‘courtesy pay program’.


Most of the banks require you to set a minimum balance for your account. Minimum balance is the minimum amount of money which your account must have to keep the account alive. This minimum balance can be set as per your conveniences. It is advisable not to put a minimum balance which you cannot keep. Hence set a minimum balance option at a rate you are comfortable to keep.

Banks also set forth certain conditions for your account, like the number of transactions that can be made over a day, the number of transactions that can be made per month, the number of checks that can be written per month, no of bills you can pay from your account and such. The customer should carefully read the conditions and choose the options wisely.

If you have plenty of money to bank, checking account is not the option for you. For instance it will be foolish if you put in $ 10,000 into your checking account. This is because checking accounts are meant for your day-to-day transactions like paying out bills and stuff. Hence very low interest or no interest is usually applied for these kinds of transactions. Hence it is better if you put in your money in a savings account since it allows higher interest rate and it will be a good investment.


Hence checking accounts can offer you a great deal of goodies in terms of safely paying out your bills, depositing money from payroll checks, purchasing online, provided you keep an eye on your account balance from time to time. Notwithstanding the fact that a savings account can offer you a higher interest than a checking account, checking account is always a way ahead if you need large amounts of money to cater to your day-to-day needs like paying out credit card bills, mortgage payments and other routine debts.