12 Reasons to Open a Checking Account

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Key takeaways

A checking account offers a secure place to keep your money. It minimizes the risk of theft or loss and ensures that your funds are safeguarded.
Checking accounts provide easy access to your funds through checks, debit cards, and online banking. It is easy to manage daily transactions, pay bills, or transfer money.
Many checking accounts offer budgeting tools, will track your spending, and allow you to set up automatic payments. All of which help with financial management.

Roughly 4.5% of American households are unbanked, meaning no one has a checking or savings account. It is true that you can manage your money without a traditional bank, especially with the myriad of new digital tools available. Even so, a checking account remains a cornerstone of everyday money management.

Beyond the basics of holding and accessing funds, a checking account offers numerous benefits that can save you time and money, plus make your life easier. Whether it’s for direct deposits, automatic bill payments, or financial security, a checking account provides essential services that digital tools alone can’t fully replicate.

Let’s take a closer look at why a checking account is not just convenient but remains crucial.

1. Easier to Pay Bills

Paying bills becomes significantly easier with a checking account. You have the flexibility to write checks, make electronic payments, or set up automatic bill payments, ensuring you never miss a due date. This is especially beneficial for recurring expenses like utilities, subscriptions, or loan installments, which can be seamlessly managed through automatic payments.

A checking account also provides a reliable record of all your transactions, making it easier to track your expenses and budget effectively. You can also receive notifications for upcoming payments, helping you stay on top of your financial obligations. In short, having a checking account simplifies bill management, offering convenience, reliability, and peace of mind.

2. Able to Get Direct Deposits

The ability to receive direct deposits is a significant advantage of having a checking account. Gone are the days of waiting for paychecks to arrive in the mail and then standing in line, often paying a fee, to cash them.

Today, most employers prefer direct deposits, where your salary is electronically transferred directly to your bank account. This method is faster and more reliable, allowing you to access your money sooner without the hassle of physical checks.

Direct deposits also enhance security, reducing the risk of lost or stolen checks. Moreover, they streamline financial management by providing immediate access to funds, which can be automatically allocated to savings or bill payments. This convenience not only saves time but also ensures that your earnings are promptly and securely deposited, giving you peace of mind and greater control over your finances.

3. Keep Your Money Safe

Keeping your money safe is one of the most compelling reasons to have a checking account. Storing large amounts of cash at home is neither safe nor advisable, as it can be easily lost, stolen, or destroyed in a fire.

In contrast, a checking account at a reputable bank provides a secure place for your funds. Most importantly, if the bank is FDIC insured, your deposits are protected up to $250,000 per depositor. This means that in the unlikely event of a bank failure, the Federal Deposit Insurance Corporation (FDIC) will reimburse your balance up to that amount, effectively reducing your risk to nearly zero.

Overall, the security and peace of mind offered by a checking account are invaluable, ensuring that your hard-earned money is protected and readily accessible when you need it.

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4. Quick Access to Funds

Quick access to funds is a major advantage of having a checking account. With ATMs and bank branches conveniently located almost everywhere, you can easily withdraw cash whenever you need it. This accessibility means that whether you are traveling, shopping, or facing an emergency, your money is always within reach.

Checking accounts provide the benefit of electronic transfers and online payments, allowing you to manage your funds from the comfort of your home or on the go. Mobile banking apps and online platforms make it possible to transfer money, pay bills, and monitor your account balance with just a few taps on your smartphone or clicks on your computer.

This level of convenience ensures that your funds are always at your fingertips, eliminating the need to carry large amounts of cash and providing a secure and efficient way to manage your finances. A checking account truly simplifies the process of accessing and using your money whenever and wherever you need it.

5. Debit Card Privileges

Having a checking account almost always includes the benefit of a debit card. A debit card lets you easily purchase everyday items or withdraw cash from ATMs.

Many debit cards attached to reward checking accounts come with additional perks, such as rewards programs or cash-back offers, similar to credit cards. These rewards can range from earning points for every dollar spent to receiving a percentage of your purchases back in cash. If you primarily use cash for your transactions, you might miss out on these valuable incentives.

Using a debit card not only simplifies payments but can provide opportunities to save money if your bank offers roundups to the nearest dollar. Rounding up a few cents here and there won’t be much, but it can add up over time.

6. You Have a Paper Trail

Having a checking account provides the invaluable benefit of a clear paper trail for all your financial transactions. This detailed record-keeping is essential for various aspects of money management. With every deposit, withdrawal, and payment meticulously documented, you can easily track your expenses and monitor where your money is going. This transparency is crucial for effective budgeting, helping you identify spending patterns and areas where you can cut back.

A transaction history simplifies the process of resolving disputes with merchants or service providers. If any issues arise, such as being charged incorrectly or not receiving a product, you can log in to your account and find the proof of payment quickly and efficiently. In contrast, paying with cash leaves you without this documented evidence, making it harder to verify transactions or address discrepancies. Overall, the paper trail provided by a checking account offers peace of mind and a practical tool for managing and safeguarding your finances.

7. Get Online Banking and Mobile Apps

Having a checking account with online banking and mobile app access greatly enhances your ability to manage your finances conveniently and efficiently. Most banks now provide sophisticated online platforms and mobile applications that bring your banking needs to your fingertips. With these digital tools, you can check your account balances, review transaction histories, transfer money between accounts, and even deposit checks by simply taking a photo with your smartphone. This level of accessibility means you can handle your banking tasks anytime, anywhere, without the need to visit a physical branch.

These apps often come with features like bill pay, spending alerts, and budgeting tools, helping you stay on top of your finances in real-time. The convenience of online banking and mobile apps not only saves time but also offers peace of mind by allowing you to monitor your accounts closely and respond quickly to any discrepancies or suspicious activities. In essence, these digital banking solutions transform the way you manage your money, making it simpler, faster, and more secure.

8. Automated Transactions

One of the key advantages of having a checking account is the ability to set up automated transactions. This feature allows you to easily schedule recurring payments or transfers, removing the burden of remembering each due date. Whether it’s paying your monthly gym membership, utility bills, or mortgage, automation ensures that your payments are made on time, every time, without any additional effort on your part. This can help avoid late fees and maintain a good credit score.

You can automate transfers to savings accounts, retirement funds, or investment accounts as well, making it easier to consistently save and grow your wealth. By taking advantage of automated transactions, you streamline your financial life, reducing stress and freeing up time to focus on other important aspects.

9. Easier Money Management

A checking account greatly simplifies money management, making it easier to take control of your financial life. With monthly statements and the ability to view transactions online, you gain a clear, real-time picture of your spending habits and income. This transparency allows you to monitor where your money is going, identify unnecessary expenses, and adjust your spending accordingly.

Setting budgets becomes more manageable as you can track your progress and ensure you are living within your means. Many online banking platforms also offer tools to categorize expenses, set financial goals, and receive alerts for various account activities. By consistently reviewing your statements and utilizing these tools, you can make informed financial decisions and even find opportunities to start saving money.

10. Easy Money Transfers

Easy money transfers are one of the most convenient features of having a checking account. Whether you need to split a bill with a friend or send money to a family member, checking accounts often come with a variety of quick and easy transfer options. Services like Zelle, which are integrated into many banking platforms, allow you to transfer money almost instantly to others, whether they are using the same bank or a different institution. This seamless capability ensures that you can handle financial transactions efficiently without the hassle of cash or delays associated with traditional methods.

For those who prefer more traditional methods, checking accounts also provide the option to write checks, offering a reliable way to pay for goods and services. This combination of modern digital transfers and traditional check writing makes managing your finances more flexible and accessible.

11. Potential Overdraft Protection

A significant benefit of many checking accounts, particularly those offered by online banks, is the availability of overdraft protection. This feature is designed to safeguard you from the inconvenience and financial strain of declined transactions or hefty overdraft fees when you accidentally overspend.

Overdraft protection can be a lifesaver in emergencies, providing a financial cushion when unexpected expenses arise or if you make an error in your budgeting. Without this protection, overdraft fees can average around $35 per incident and can accumulate rapidly if multiple transactions are affected.

By linking your checking account to a savings account, credit card, or line of credit, overdraft protection automatically covers shortfalls, ensuring that your essential payments and purchases go through smoothly. This not only helps you avoid costly fees but also provides peace of mind, knowing that you have a safety net in place for those moments when you might need a little extra financial support.

12. Have a Banking Relationship

Establishing a checking account helps you build a valuable banking relationship, which can lead to numerous additional benefits. Banks often reward loyal customers with preferential terms and interest rates on various financial products, such as savings accounts, loans, and mortgages. By maintaining a checking account and managing it responsibly, you demonstrate financial stability and trustworthiness to your bank. This positive relationship can be especially advantageous when you need to apply for a loan or credit card, as banks are more likely to approve applications from customers with a proven track record.

Being a loyal customer can grant you access to exclusive services, personalized financial advice, and potentially lower fees on transactions. Developing a strong banking relationship not only enhances your immediate financial convenience but also paves the way for future financial opportunities and support.

Bottom Line

A checking account is far more than just a secure place to store your money. It serves as a versatile financial tool that simplifies managing your daily finances. With a checking account, you can enjoy a variety of benefits that make everyday transactions smooth and efficient, such as easy bill payments, direct deposits, and quick money transfers. It also provides safety for your funds through FDIC insurance and offers conveniences like online banking, mobile apps, and debit card privileges.

If you haven’t already opened a checking account, consider doing so to take full advantage of these numerous perks and enhance your overall financial well-being.

1. Paycheck Advance is For eligible customers only. Your actual available Paycheck Advance amount will be displayed to you in the mobile app and may change from time to time. Conditions and eligibility may vary and are subject to change at any time, at the sole discretion of Finco Advance LLC, which offers this optional feature. Finco Advance LLC is a financial technology company, not a bank. Expedited disbursement of your Paycheck Advance is an optional feature that is subject to an Instant Access Fee and may not be available to all users. Expedited disbursements may take up to an hour. For more information, please refer to Paycheck Advance Terms and Conditions.

2. Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Member FDIC, and Cross River Bank, Member FDIC. The Current Visa® Debit Card is issued by Choice Financial Group pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Current Visa® secured charge card is issued by Cross River Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank. Current Individual Account required to apply for the Current Visa® secured charge card. Independent approval required.

3. Individual results may vary. Using your credit card responsibly may allow you to improve your credit score. Credit building depends on various factors, including your payment history, credit utilization, length of credit history, and other financial activities.

4. Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to timing of payer’s submission of deposits.

5. Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group. Funds held in Savings Pods are FDIC-insured on a pass-through basis up to $250,000 at our partner bank Choice Financial Group, member FDIC

6. Actual overdraft amount may vary and is subject to change at any time, at Current’s sole discretion. In order to qualify and enroll in the Fee-Free Overdraft feature, you must receive $500 or more in Qualifying Deposits into your Current Account over the preceding 30-day period. For more information, please refer to Fee-free Overdraft Terms and Conditions.

7. You may earn Points in connection with your everyday spending and by completing other actions that Current designates as subject to the Current Points Program. The amount of Points granted for different actions as well as the purchase requirements necessary to earn Points will vary, and is subject to Current’s sole discretion. After qualifying, please allow 3-5 business days for points to post to your Current account. The Current Points program is not available to Teen Account holders. See Current Points Terms and Conditions.

8. Some fees may apply, including out of network ATM fees of $2.50 per transaction, late payment fees of 3% of any total due balance outstanding and past due for two or more billing cycles, foreign transaction fees of 3% of the full transaction amount (minimum $0.50), card replacement fees per card of $5 for regular delivery and $30 for expedited delivery, cash deposit fees of $3.50 per deposit, and third party processing fees.

9. Boost Bonuses are credited to your Savings Pods within 48 hours of enabling the Boost feature and on a daily basis thereafter, provided that the Savings Pod has accrued a Boost Bonus of at least $0.01. The Boost rate on Savings Pods is variable and may change at any time. The disclosed rate is effective as of August 1, 2023. Must have $0.01 in Savings Pods to earn a Boost rate of either 0.25% or 4.00% annually on the portion of balances up to $2000 per Savings Pod, up to $6000 total. The remaining balance earns 0.00%. A qualifying direct deposit of $200 or more is required for 4.00%. No minimum balance required. For more information, please refer to Current Boost Terms and Conditions.

10. Cryptocurrency services are powered by Zero Hash LLC and Zero Hash Liquidity Services LLC, and may not be available in all states. Terms and conditions apply. When you buy or sell cryptocurrency, a difference between the current market price and the price you buy or sell that asset for is called a spread. However, unlike most other exchanges Current does not charge an additional trading fee. Cryptocurrency transactions are a form of investment, and all investments are subject to investment risks, including possible loss of the principal amount invested. Cryptocurrency is not insured by the FDIC or any other government-backed or third-party insurance. Your purchase of cryptocurrency is not a deposit or other obligation of, or guaranteed by, Choice Financial Group or Cross River Bank. The cryptocurrency assets in your Zero Hash account are not held at Current, Choice Financial Group, or Cross River Bank. Current, Choice Financial Group, and Cross River Bank are not responsible for the cryptocurrency assets held in any Zero Hash account. Neither Current, Choice, nor Cross River Bank is involved in the purchase, sale, exchange of fiat funds for cryptocurrency, or custody of the cryptocurrencies. Terms and Conditions apply (platform and user agreements). Crypto on Current is not currently available in HI. Licensed to engage in Virtual Currency Business Activity by the New York State Department of Financial Services. This does not constitute investment advice.

11. Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group. Your money is FDIC-insured on a pass-through basis up to $250,000 at each of our partner banks, Choice Financial Group and Cross River Bank, members FDIC.

12. Average value based on Fine Hotels + Resorts bookings in 2023 for stays of two nights. Benefits include daily breakfast for two, room upgrade upon arrival when available, $100 amenity, guaranteed 4PM late checkout, and noon check-in when available. Certain room categories not eligible for upgrade. $100 amenity varies by property. Actual value will vary based on property, room rate, upgrade availability, and use of benefits.

13. Up to $500 per Covered Trip that is delayed for more than 6 hours; and 2 claims per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

14. The maximum benefit amount for Trip Cancellation and Interruption Insurance is $10,000 per Covered Trip and $20,000 per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

15. Baggage Insurance Plan coverage can be in effect for Covered Persons for eligible lost, damaged, or stolen Baggage during their travel on a Common Carrier Vehicle (e.g. plane, train, ship, or bus) when the Entire Fare for a ticket for the trip (one- way or round-trip) is charged to an Eligible Card. Coverage can be provided for up to $2,000 for checked Baggage and up to a combined maximum of $3,000 for checked and carry-on baggage, in excess of coverage provided by the Common Carrier. The coverage is also subject to a $3,000 aggregate limit per Covered Trip. For New York State residents, there is a $2,000 per bag/suitcase limit for each Covered Person with a $10,000 aggregate maximum for all Covered Persons per Covered Trip. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

16. Car Rental Loss and Damage Insurance can provide coverage up to $75,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.

17. Coverage for a Stolen or damaged Eligible Cellular Wireless Telephone is subject to the terms, conditions, exclusions, and limits of liability of this benefit. The maximum liability is $800, per claim, per Eligible Card Account. Each claim is subject to a $50 deductible. Coverage is limited to two (2) claims per Eligible Card Account per 12 month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

18. When an American Express® Card Member charges a Covered Purchase to an Eligible Card, Extended Warranty§ can provide up to one extra year added to the Original Manufacturer’s Warranty. Applies to warranties of five (5) years or less. Coverage is up to the actual amount charged to your Card for the item up to a maximum of $10,000; not to exceed $50,000 per Card Member account per calendar year. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

19. Purchase Protection is an embedded benefit of your Card Membership and requires no enrollment. It can help protect Covered Purchases made on your Eligible Card when they’re accidentally damaged, stolen, or lost, for up to 90 days from the Covered Purchase date. The coverage is limited to up to $10,000 per occurrence, up to $50,000 per Card Member account per calendar year. Coverage Limits Apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

20. Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

21. The secured Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.

22. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.

23. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

24. There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.

25. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

26. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

27. Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.

28. On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

29. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

30. SpotMe® on Debit is an optional, no fee overdraft service attached to your Chime Checking Account. To qualify for the SpotMe on Debit service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your Visa debit card. Qualifying members will be allowed to overdraw their Chime Checking Account for up to $20 on debit card purchases and cash withdrawals initially but may later be eligible for a higher limit of up to $200 or more based on Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Debit limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime’s sole discretion. Although Chime does not charge any overdraft fees for SpotMe on Debit, there may be out-of-network or third-party fees associated with ATM transactions. SpotMe on Debit will not cover any non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe on Debit Terms and Conditions.

31. Tipping or not tipping has no impact on your eligibility for SpotMe®.

32. Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

33. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.

34. Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.

35. Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.

36. Funds are automatically debited from your Checking Account and typically deposited into the recipient’s Checking Account within seconds. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed.

37. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed. Non-Chime members must use a valid debit card to claim funds.

* EarnIn is not available for Connecticut residents

Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor’s credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor’s degree in journalism and an MBA.