Why You Need More Than A Savings Account

Posted on: 20 March 2019

When you obtain a checking account, you might believe that the only purpose of the checking account is to cash checks. However, there are many other advantages to having a checking account and you may even open a checking account without having any checks. There are several other services, such as debit cards, online bill pay, direct deposit, and mobile banking.

Receiving Money

In some cases, you just need a checking account. Sure, you could rely on a savings account to receive a direct deposit, but you are only allowed to make a limited number of withdrawals from your savings account. However, a checking account can be a conduit for your cash flow. You may use a debit card to immediately use money that your employer deposits directly into your account or you may transfer some of it to your savings account to earn interest.

Paying for Services

Checking accounts provide you with a broader range of opportunities to make payments. Paying by check provides you with a paper trail and allows you to even make payments that can't be cashed until the future. For example, if you are paying ahead for a service that has not yet been rendered, you may postmark the check so it cannot be cashed until a future date. It's safer to send a check than to send cash by mail, since it's easier to hide a check and it can be obvious that an envelope contains money. Also, if a check is lost, it will never be cashed and you won't lose the money.

Sometimes, checks are not accepted and you'll instead want to rely on other forms of payment. Debit cards are instant and are more likely to be accepted because it's guaranteed that the vendor will be paid. However, debit cards require special hardware to process. Any business that accepts credit cards will usually accept debit cards. Debit cards are more secure than cash because you can place a hold on a stolen credit card.

Controlling Your Money

Having multiple banking services can make it easier to manage your money. For example, you may set up accounts for other purposes. Banks can send alerts when you receive a direct deposit or when you withdraw money so it's easier to determine when you have funds or how much income is coming in. For this reason, you shouldn't see a savings account as being enough for your banking needs.

For more information about bank account services, get in touch with a local bank or credit union.