A vital component of personal finance is opening a checking account. These accounts can make specific tasks easier such as making purchases, paying bills, doing automatic deposits, and even transferring funds, among other finance activities.
Many banks now furnish free checking accounts. In fact, it is even feasible to get an account without instantaneously making a deposit. However, when it comes to internet savings accounts, it’s critical to ensure that the bank will not let you shoulder a maintenance fee, and that you will not be obliged to work with a minimum balance. Note though that while almost all banks provide free internet checking account, such accounts usually are coupled with lower rate of interest than other accounts.
Wow! It’s Free!
Some checking accounts online advertise that they are free, but do they really come without cost? Sadly, most of the time, the term “free” will make you shoulder significant amount of money. The objective of this article is to make you understand the factors to consider when looking for online checking accounts for free. Note that in the last ten years, the industry of banking has progressed and changed dramatically. Many banks became accustomed to the demands of new consumers, while many financial institutions have not.
You are granted the option to choose your bank that will serve as your personal accountant. With a little effort, you are guaranteed the advantage of having several of your monthly finance transactions on autopilot. The most advantageous accounts online can be utilized as your free personal accountant by providing you the following features:
- Automatic finance transactions to other banks or financial institutions
- Direct deposit
- FDIC Insurance
- Free bill payments
- Good customer service
- High IRA interest rates
- Huge ATM network
- No minimums or fees
- User-friendly website
- Overdraft protection
Benefits and Setbacks
The advantage of maintaining free checking account over brick and mortar financial institutions is that they come with lower overhead or operating costs. Banks keeping physical offices with huge amount of assets are capable of capitalizing on their economies of scale to cut down their operating expenditures. Such savings is accordingly passed down to you, which you receive in the form of higher rate of interest and lower maintenance fees.
Brick and mortar financial institutions on the other hand shoulder a lot more operating cost on a daily basis. Thus, they can’t offer their clients higher rate of interest. But these physical offices come with the distinct advantage of providing face to face interaction with their clients.
How to Use Online Checking Account
Your main objective should be to place your finances on autopilot. Acquiring investments and paying back loans are simpler to accomplish when carried out automatically. The following are a few tips and tricks to make the most out of your interest bearing checking accounts online:
- Take advantage of direct deposit
- Choose savings account that you can access as emergency fund, while you earn interest on it
- Get access to your loans or investments automatically after you receive your paycheck
- Pay your bills automatically every month
- Send paper checks without cost
- Create sub-accounts for your short term savings goals
- Escrow your taxes using a sub account
Opening a Checking Account Online
- Similar to opening a checkbook IRA, the first step in this venture is to choose the kind of bank that you want to work with. You can opt for an online or local bank. In general, local banks offer online banking options but also permit you to talk with a representative personally to answer all of your inquiries and questions. Online banks typically don’t have walk-in services, thus communication and deposits are handled by mail or phone.
- Remember that not all banks provide free online checking account, so it’s best to call the financial institution initially to know if they furnish the kind of account that you prefer. If you opt for an online bank, always perform a little research.
- Open an account. This is a simple and straightforward process. You just need to present proof of identification such as birth certificate, driver’s license, passport, military identification card, or security card. There are financial institutions that also require proof of residence.
- After learning about the policies relative to free checking accounts, you can then start banking. The bank will typically send you deposit mailing envelopes, or you can choose to electronically transfer your funds from another bank account if you maintain one.
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