You may wonder what the advantages are of having a checking account instead of stashing money in a safe place in the home. Why would you want to put your money in a credit union where you don’t have direct access to it? The fact is, there are many strong benefits to opening a checking account to store your money. Especially in our digital age, where shopping online is often done with a credit or debit card, we’d like to point out some of the many benefits of opening a checking account.
Knowing Your Money is Safe and Insured
When you store your money at home in a drawer or under the mattress, if something happens to your home, your money is not secure. If your home catches fire while you are away, or if there is a burglary and someone steals your cash stash, say goodbye to all of that hard-earned money.
On the other hand, if you keep your money in a checking account, for example at your local Rivermark Community Credit Union, if anything happens to the funds, the financial institution is insured, and you’ll be able to recover any possible losses to your funds. A huge benefit of a checking account is that most financial institutions are insured. If the financial institution is a for-profit, it’s insured by the Federal Deposit Insurance Corporation (FDIC). If the institution is a credit union, then it’s insured by the National Credit Union Association (NCUA). Both insurers will cover funds up to $250,000.
Faster Access to Funds with Direct Deposit
Some employers offer the option of receiving a paper check to be mailed to your home or delivered to you at work. Others offer the opportunity to set up direct deposit with your choice of financial institution. Waiting for a physical check to be mailed to your door and then having to go to the physical credit union branch to deposit the check and wait for it to clear takes a lot more time than setting up a direct deposit.
With direct deposit, you can have more than just your paycheck deposited electronically. You can also have your tax refund direct deposited, as well as other payouts, such as funds awarded to you from legal settlements. Direct deposit eliminates the risk of the check being lost in the mail or cash payouts being lost or stolen.
Access to Online Banking and Online Shopping
When you open a checking account with a financial institution, you also gain access to its online banking system, and you get a debit card that can be used as a credit card in stores and online. When using cash only, you lose out on the ability to shop online using a credit card number. But having a debit card allows you to purchase things either in-store or online without having to carry cash that can be easily lost or stolen. You have access to your checking account funds by either going to the ATM to pull out cash or by using your debit card as a credit card at the checkout register. There is no need to carry all of your cash on you in case you need it.
Having online banking allows you to have a paper trail of your transactions all in one easy-to-read place. If a company disputes your bill payment, and you used cash to pay the bill, there’s no proof unless you requested a physical receipt and then kept track of where you stored it for your records. If you paid your bill using your checking account, however, you can just log on to your credit union’s website from your smartphone, computer, or tablet to access your proof of payment.
Online banking allows you to manage your accounts without having to step into a physical branch. From one website you can pay bills, see all of your recent transactions, transfer funds to another account, view your checking account monthly statements, and more. Many credit unions even have an app that allows you to deposit checks right from your smartphone into your checking account.
Earn Rewards and Interest
Many checking accounts offer a rewards system where you can earn cash back when you spend using the debit card. That means you no longer need a credit card to earn rewards toward something you may have been saving for. It’s one of the benefits of choosing a checking account that offers a debit card that acts like a credit card.
You also can earn interest on your checking account balance with some financial institutions. Generally, most credit unions require a higher minimum balance to start earning interest on a checking account. Check with yours to see what account options are available.
Establish a Strong Credit History Early
By maintaining a positive balance in your checking account and by not bouncing any checks or causing overdrafts on your checking account, you can work toward building a strong credit report. You can even use automatic bill payments by setting up bill pay online with your mobile banking website or app to make sure you’re paying your bills on time. Missing or late payments could lower your credit score too.
You can also help your children establish a strong credit history by opening a checking account for them early on. Many credit unions offer accounts geared toward young adults, allowing them to start learning early on how to manage their finances responsibly.
As you can see, there are many strong benefits to opening a checking account. If you would like to find out more about opening a checking account, contact Rivermark Community Credit Union today.
