Checking accounts frequently allow for free withdrawals. Compared to savings accounts, which are limited to six withdrawals per month by law, this gives you more control over when you can access your money.
Checking accounts have lower interest rates. Because checking accounts have modest interest rates averaging.04%, it is preferable to place substantial sums of money in savings accounts with interest rates of 1% or higher.
How to Open a Bank Account
It’s relatively simple to open a checking account after you’ve decided on one. You can enroll online or in person at a local branch. Personal information such as your name, residence, and birthday, as well as your social security number, will be required.
The bank may do a credit check in some situations, but it will likely be a mild pull that does not harm your credit. You can confirm this by double-checking the terms before opening an account. Depending on the bank, you may be needed to deposit to open your account, which can be done in cash, by check, or via internet transfer. This can range from $1 to $50 or more.
Check if the checking account is protected by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). The FDIC and the NCUA offer a basic insurance level of $250,000 per depositor, bank, or credit union. If your bank or credit union collapses, this insurance protects and reimburses you up to your amount and the legal maximum.
