The Drawbacks of A Free Checking Account

Most of the banks offer free checking accounts, whereby the clients have to deposit a minimum sum of money to open it and maintain a certain balance. There are other checking accounts that do not require a “minimum” deposit; however, the bank deducts a certain amount on withdrawal. The financial crisis has made them rather scarce, but small banks and credit unions still offer free checking accounts. Banks offer such services to increase customers, with the promise of saving them money.

The Drawbacks

Although it may sound like a good idea, you should know about the drawbacks of a free checking account. If you have such an account, you’ll most likely not get any interest.

Services Not Offered

With a free checking account, you might not be able to see your checks once they’ve been paid. Only some banks put up the check images online. This isn’t a major drawback, though. You rarely need to view your check for personal accounts, and there are always other ways to track payments. You can still request a copy of a particular check from a free checking account.

Though it saves you money, choosing a free checking account deprives you of the advantages of Stop Payments and Cancelled Check Return. If you aren’t fond of shopping then you aren’t missing on a lot, but if you like to shop around, you should consider an account that offers these services.

Hence, these accounts are a good idea if you don’t need the extra services and your balance is relatively low. If you do require the services while keeping this account, you’ll have to pay a fee for each service.

Make Your Money Count with a Free Checking Account

Make Your Money Count with a Free Checking Account
The best thing for you to do is to stop hiding your money in the freezer and put it into a bank’s free checking account. With a free checking account, your money is insured by the federal ban; so, wherever you have chosen to deposit your money, be it a bank or credit union, you will get your money back even if they are shut down.

Banking Benefits

Paying through a free checking account is safer, cheaper and more convenient due to a number of reasons.

Paying bills through checks is easier than buying money orders, not to mention that you have a proof of the payments made.

Banks now offer ATM (Automated Teller Machines) cards that make paying at stores just as easy as it is with a credit card. Also, with an ATM card, you have access to your money 24/7.
When you open a free checking account, most banks offer a certain amount of interest in case it is a savings account. Over time, this helps your money to grow much more than its original amount. Hence, even when your money sits idle in an account it continues to increase.

Having your money in a free checking account can open many doors for you. Getting a loan for a house or a car or taking a significant life decisions is made easier as banks tend to favor their existing clients more than outside customers. If you are a student, getting a student loan also becomes easier, since having a checking account helps making your credit rating better and shows the bank or other private lenders that you are capable of managing your money.

Online banking is another convenience you get to experience when you start banking. With online banking, you can access your money and bank records anywhere in the world. It offers all kinds of services, from online transactions to checking your account activity, with a click of a few buttons. You can even download your banking history and balance your account manually.

With this facility, even if you are on vacation in another country, you can pay your bills online in your own country. Long gone are the days when banks used to charge customers for even having an account with them. Now in the fresh new world of free checking accounts, banks literally pay you for using some of their facilities like the ATMs or their credit or debit cards.