Checking Accounts: What You Need to Know

One often overlooks the most obvious things in life, and your checking account is probably one of them. Most people hardly ever consider this crucial account or how to handle it skillfully. Our goal is to alter that.

What you should know about checking accounts is as follows:

What Is a Checking Account?

You can easily and conveniently access your funds from your bank account. Opening a checking account with as little as a $25 minimum deposit is possible.

Checking accounts are intended to be used for routine financial transactions. The money in your account is accessible by debit card, paper check, ATM, in-branch, online transfer, and online bill payment.

Your account's available balance will be automatically deducted when transactions are made with the associated debit card or linked online account, lowering the balance accordingly.
Although a paper check is also directly linked to your account, it usually takes two business days to clear. Before using a check to pay for a purchase, be sure you have enough money in your account.

Maintenance Fees

For checking accounts, many banks impose a monthly maintenance cost. As per the latest Bankrate poll on checking accounts, the percentage of banks offering free checking has decreased to 38% from 79%. There are monthly fees that might reach $25.

Rates of Interest

Certain checking accounts provide an extremely low Annual Percentage Yield (APY) on deposited monies. A monthly fee is typically assessed by financial institutions that offer checking accounts with interest or dividends; the cost is larger for accounts with higher interest rates. Additionally, they usually demand a certain amount of debit card transactions made each month or a minimum amount in the account at all times.

To avoid paying a high maintenance charge, Bankrate's analysis indicates that you should maintain an average of $7,550 in an interest-bearing checking account at a bank.

Federal insurance coverage for security funds in a bank checking account is provided by the FDIC up to a maximum of $250,000. Credit unions, which offer government protection through the NCUA (National Credit Union Administration), provide comparable protection for your money at the same $250,000 cost. Therefore, you may feel secure knowing that Financial Plus is safeguarding your money.

1. Recognize your equilibrium

It is critical to always be aware of the balance on your account. By doing this, you can prevent overdrawing your account or running out of money before you can make your transactions.

Knowing how much money you have will also make it easier for you to stay within your means and follow a budget. You can check your FPCU balance by calling us, visiting the branch, or using our mobile app.

2. Set up financial automation

By using your bank account to set up automatic bill payments, you can slightly ease your life. You won't miss the headache of having to pay your bills on time each month, and you won't miss a payment ever again. Plus, you'll avoid paying the processing fee that credit card bill payments frequently incur.

To receive your paycheck directly into your account, you can also set up direct deposit.
To ensure that you never forget to contribute to savings, ask us about automatic monthly transfers from your checking account to savings.

3. Make sure your account has enough money, but not too much.

It's advised by financial experts to always have one to two months' worth of living expenditures in your checking account. In this manner, you won't have to worry about your account going overdrawn because you'll always have enough money to pay for your purchases.

Additionally, you will be able to pay for any pre-authorization holds that occasionally occur on your debit card transaction until it is cleared by the retailer.

Reducing the amount of money in your checking account is also crucial. When your savings equal two months' worth of living expenditures, or the sweet spot, it's ideal to put them in an investment or account with a higher annual percentage yield (APY), such as a share certificate or money market account.