Whether you’re exploring the idea of getting a checking account or have had one for years, by now you’ve discovered there are many different options out there.
Checking accounts differ from other accounts in the way they collect interest, while having fewer restrictions on accessing funds, an issue you would run into with savings or certificate of deposit (CD) accounts.
There are many benefits to having your own checking account. They make it easy to deposit money, pay bills and use the convenience of a debit card for safer, cash-free purchases.
Rewards checking, free checking, money market checking, they’re all different and they all have their pros and cons.
- Rewards Checking: often come bearing interests, bonuses or gifts, but also have requirements such as automatic deposits, paperless statements or maintaining a certain balance.
- Free Checking: is just that, free. However, it usually does not accrue interest.
- Money Market Checking: these accounts are for large deposit amounts, while earning a higher interest than the rewards checking, but usually less than a CD. The benefit of a Money Market Checking over a CD is you have access to your funds without being penalized for withdrawing before the term of the CD.
This is not the last lesson, of course. If you’ve learned a lot in Checking Accounts 101 but want to know more, you can contact Essential FCU.