Do You Have The Best Checking Account?

In the past banking was a lot different to how it is today. There used to be a time when you would have one local bank in your area, which you had to go into to deposit or withdraw your money.

Since there were no credit cards or ATM cash machines, banking was very personal because you always dealt with real people when it came to your money.

As a result, if you had any queries or concerns regarding your money you could easily get the help you needed there and then.

However today things aren’t quite like they used to be. Instead of having one bank in your area, you most likely have several banks.

In addition to this there is also internet banking, which makes it possible for you to put your money into even more banks.

With all these different options to choose from banking can become very confusing, especially when it comes to trying to decide what bank is right for you.

To make things even more confusing, once you finally find the right bank for you it gets merged with another bank, and suddenly you find that things have changed from how they used to be.

So with all the different options available to you, what sort of an account should you go for? In this article we shall have a look at some of these options.

Current Account / Checking Account

A current account, or checking account as it is called in some countries, simply involves an account where you can withdraw your money by writing a cheque or using a debit card.

The advantage of such an account is that it means you can keep your money in the bank, and so you don’t have to carry around lots of cash with you when you go shopping.

There are different types of current accounts available to choose from. Although in general, they all tend to offer lower interest rates than other types of accounts such as saving accounts (some accounts may even pay you no interest).

What this means is that your money will grow at a slower rate if you choose to keep it in this type of an account.

If you do get interest in your account, it is worth finding out how this interest is compounded. Ideally you are looking for something that compounds your interest daily, and credits you daily or every few months.

Cheques

Although most of these accounts started out by offering customers a cheque book, today most banks are starting to phase out the use of cheques. So if you do want to be able to write cheques, then you may have to look around a bit.

When writing cheques it is important to keep track of how much money you have in your account, as if you write a cheque but don’t have sufficient funds, your bank will charge you a large fee for your cheque bouncing.

If you deposit a cheque into your account, also bear in mind that those funds will not be immediately available to you. Depending on your bank, it could take up to 7 days for that cheque to clear.

Watch Out For Accounts Which Tempt You To Sign Up

Current accounts tend to be quite popular with young people who get a job for the first time, or are starting college or university.

As a result, you will often find many banks try to tempt young people to sign up with them by offering various incentives such as gifts, vouchers or even free money.

So if you are a young person or a student who is looking to open a current account, then it’s worth looking around to see who can offer you the best deal.

Overdrafts

Some accounts will also allow you to withdraw a certain amount of money in credit. This is known as an overdraft, although you should be aware of the interest rates you will be charged on the overdraft as rates will vary between banks.

However be very careful when it comes to overdrafts, as different banks offer different types.

For example, some banks will not allow you to go over the agreed upon credit limit, whilst others will impose a large fee if you do. So always make sure you are clear on this beforehand.

Overall a current or checking account is a good place to keep your money if you plan on spending it and need an easy way to do so.

However the lower interest rates such accounts offer, means that if you want to save your money you would probably be better off keeping it somewhere else.