Most banks offer checking account services, which are one of the most common types of bank accounts opened by customers. Here’s what you need to know about checking account services.
1. Checking accounts
Checking accounts and savings accounts are the two most common types of bank accounts. Savings accounts offer interest, and the bank insists on the account holder maintaining a minimum balance. Checking account services offered by banks, on the other hand, allow its customers to open checking accounts that do not offer interest, but there is no requirement for a minimum balance either. If the account holder maintains a minimum balance, they may be given interest.
2. Features of a checking account
A checking account is also referred to as a transactional account, and an individual or business can use this account to carry out all their transactions. Some of the prominent features of a checking account are as follows:
- It is an account that can be opened by an individual or by a commercial organization or business. Students can also have a checking account in their name, and it can also be opened as a joint account.
- The main feature of a checking account is the liquidity it offers. You can easily withdraw money and write checks on the account. While some savings accounts have restrictions on withdrawals, a checking account has no such restrictions.
- All checking accounts do not offer interest. Some banks may offer you interest if you maintain a certain amount as balance in the account, but the interest rate is lower than that of a savings account. Some banks have a sweep facility, where excess funds in the account are swept into a fund that earns interest.
- All types of transactions like issuing checks, withdrawing cash from the branch or ATM, making online payments, and making transactions on the account through a debit card can be done through checking accounts.
- There is a monthly service fee that banks may charge in case you meet the minimum number of transactions in a month. When you open an account in a credit union or an online bank, this fee would be very less. Since opening a checking account involves low costs, it is a popular option that can be used by anyone.
- There is an overdraft facility available with a checking account. If, for instance, you issue a check and your balance is low, the bank would cover the difference to prevent the check from being dishonored. In return for this service, they would charge interest or overdraft charges, which depends on the amount covered under the overdraft.
- You can use a checking account to receive your monthly payments from your employer. The employer can transfer money to your account through electronic fund transfers every month. When a business opens such an account, the bank would provide a free checking account for all the employees.