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10 Reasons to Open a Checking Account

June 20, 2023 • Adulting

In spite of their name, checking accounts are for so much more than writing checks. In fact, checking accounts are more relevant today than ever. For starters, people are now choosing to buy things online over going to physical stores. This is because consumers can directly send money across states and countries without traveling to make a purchase. They can also pay bills without going to utility payment centers. All of this and more is possible when you have a checking account. With a checking account, you can save time and energy from physical transactions and keeping physical records. Instead, the online platforms of your bank or credit union will do it for you. If you’re reading this article, you probably should open a checking account. Truthfully, anyone who engages in modern commerce should have a checking account. In this article, we'll explore the advantages opening a checking account can give you. By the time you have reached the end of this article, we hope to have answered your question if opening a checking account is for you.

What is the Difference between a Checking and Savings Account?

Checking and savings accounts share the similarity that both are deposit accounts offered by banks and credit unions. However, they couldn’t be any more different. Checking accounts are used for day-to-day transactions of paying your bills, receiving payroll deposits, withdrawing money to use, and buying things online. Savings accounts are designed to hold your money long-term, and sometimes with higher interest than checking accounts.

What is the Purpose of Opening a Checking Account?

Opening a bank or credit union account is one of the first and most important steps in your financial roadmap. While savings accounts help you save by limiting your transactions, checking accounts help you send money, pay for purchases, and get returns from vendors. Checking accounts give you financial safety and convenience. Below, we will elaborate on why opening a checking account is vital for managing money.

Your Money is Automatically Insured

There are two major reasons to open a checking account: safety and security. Large cash reserves attract robberies and are vulnerable to floods, fires, and other calamities. But when you store your money in a bank or credit union, your money is automatically insured by a federal agency up to $250,000 per person, per institution, and per account category. Federal Deposit Insurance Corporation (FDIC) insures bank customers’ money. National Credit Union Administration (NCUA) insures credit union members’ money. With FDIC or NCUA, you keep up to $250,000 of your money when a bank or credit union fails.

Expand Ways You Send Money

With a checking account, you can have your cake and eat it too. A checking account is safe, insured, and protected from fraud. At the same time, you can access it easily in a diverse way of transferring funds. You can send money to friends and family easily through digital transfers. You can write checks. You can even pay with a debit card if you don’t have cash. You can even shop online by connecting your bank account to a secure e-store like Amazon, or payment service like PayPal, or you can simply pay with your debit or credit card

Pay Bills without Waiting in Line

Another reason to open a checking account is convenience. No more going to payment centers, writing forms, and getting in line. Credit unions and banks have online platforms allowing you to pay bills. You no longer have to go to each location to pay electricity, phone, credit card, and other bills. Companies will recognize you by your identification number or associated checking account. You don't even need to send a payment through the mail and use a stamp! There is even a feature where you can set an automatic bill payment straight from your checking account. You only need to set which company to send it to, how much, and how often. Simply receive, review, and pay your bills from the comfort of your home through your phone, laptop, or tablet.

Automatically Receive Pay, Refunds and Settlements

Most employers these days don’t pay in cash. They either do a direct deposit or wire transfer. But when you have a checking account, your paycheck automatically goes to your account. You no longer have to worry about check-cashing fees, another reason to open a checking account. You can automatically receive refunds and settlements when you open a checking account. You no longer have to go through the trouble of traveling to locations to claim it.

Build Credit

When you have a checking account, overdraft protection is an option. Overdraft protection prevents you from overdrawing from your account. Using overdraft protection responsibly, you can build credit, proving to banks that you can manage your finances. You can even establish your financial history. When your checking account’s financial history is stable, you are more likely to get approved for loans and credit cards.

Prove Your Payments

Another reason to open a checking account is to create a paper trail. Your checking account automatically creates e-statements for your every transaction. For example, an error occurs while you’re paying your bills. To your dismay, the company neglects to credit you. So what do you do? You can send them the e-statement proving that you have paid.

No Transaction Limits

Unlike most savings accounts, checking accounts don’t have a limit to transactions. You can withdraw and deposit as many times as you need. Remember the minimum balance requirement of your bank or credit union’s checking account.

Manage Your Money Easily

Financial management is another reason to open a checking account. When all your money is in one place, you no longer have to count bills and remember where you put all your money stash. Instead, you can open your account online and transfer funds as you see fit: to your savings account, investments, payments, and more.

ATMs and Online Banking

Credit unions and banks today have branches and ATMs in many locations. You can now withdraw money and have it physically with you. Or you can access your account digitally through their apps and mobile websites.

Rewards, Returns, and Benefits

A final reason to open a checking account is the member-exclusive deals, discounts, and freebies you can use. For example, credit unions can give you auto insurance and travel packages at lesser prices. A checking account can also give you monthly dividends, provided you keep their minimum balance requirement.

When you open a Rewards KASASA Checking Account with Canopy Credit Union, the rewards are even more enticing. Option include a cashback account that rewards debit card users with up to $12 in cashback every month, or a high-dividend earning account that currently earns up to 4.07% APY* on up to $25,000. That's a checking account that can earn you up to $84 every month, or over a thousand dollars every year in reward cash! Go here to learn more about these rewarding, no-minimum checking account options.

Opening a Checking Account: Is it for You?

There are many reasons to open a checking account. Checking accounts give you convenience in your day-to-day transactions. They also have your money insured and secure. A checking account can help you outside the limits of your savings account. If you have decided that opening a checking account is for you, sign up for one of Canopy's Checking Account options here to know which one suits you best.

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