A checking account is like any other bank account but with the facility of plenty of withdrawals and deposits. Withdrawals can be in any form, through ATMs, checks, cards etc. It is unlike any other bank account as through this account one can make numerous deposits and withdrawals every month or so. Therefore, these accounts get very low amounts of interest from the banks.
They can also be referred to as a transactional account or a demand account pertaining to its function. Checking account holders cannot opt for credit cards.
Checking accounts can be used for several purposes. Many businessmen, students, joint account holders and such use checking accounts for their transactions. However, it the interest rates depend on the institution you open your account in.
Though many institutions or banks have a variety of checking accounts, a few of the common ones have been named below:
- Basic Checking Account: this is the commonest of the checking accounts. It is used by those who plan to use their accounts regularly, whether it is for paying bills or other sorts of daily transactions. These types of accounts do not yield the account holder any rate of interest. The charges for these accounts also vary with every institution, but many of them have certain amount of charges for withdrawals through cards, checks and ATMs.
- Free checking account: This account is like the Basic Checking Account. However, the only difference is that in this account you will not be charged for every transaction that you make, lest you keep a minimum amount of balance in the account. Should the minimum amount is withdrawn from the account, the bank will start charging you fees for the withdrawals. It is better than a Basic Account as it is free, and lets you keep a certain amount of balance at all times.
- Interest- Bearing Account: The banks or institutions will provide you with certain amount of interests on your balance in these types of account. The account holder needs to have a minimum ‘high’ balance in their accounts to be eligible to get the interest. The minimum balance to be kept in the account is also quite high as compared to other accounts. If the minimum balance in the account is also withdrawn, fees much higher than the interests will be added to your account.
The interests on the balance are paid at the end of the month. So, one has to keep their money in the account till the end of the month.
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