What Is A Checking Account?

A checking account is a financial vehicle of a transactional nature by which you make deposits and withdrawals.

Deposits and withdrawals can be made in many forms, most of which apply to both.

1. Cash
2. Checks
3. ATM’s
4. Auto Deposits or Withdrawals
5. Transfers

Cash is easy enough to understand, you get a hold of some cash, take it to the bank and they apply the amount to your account. You can also make cash withdrawals to say, purchase a car from an individual or even if you just need lunch money for the kids.

Making a deposit with a Check can be from your employer, an individual or even another business. Paychecks, Tax refunds, or even rebate checks from buying a new computer. Withdrawals by check: You write a check to pay a bill, the company sends it to your bank, and your bill is paid. Easy Peasy!

Deposits and withdrawals by automatic teller machines (ATM’s). They are everywhere and you can get cash 24/7. You can also deposit cash and checks thru ATM’s.

Auto Deposits or Withdrawals are set up in a way that you can pay a bill or receive funds without doing anything. Common auto deposits are paychecks, tax refunds, social security checks and income received from investments. Almost any payment that you need to make regularly can be set up for auto withdrawal: Utilities, car payments, mortgage, ect. Most businesses like auto withdrawal because it insures that they receive their payment on time each month.

Transfers are moving funds from one account to another at the same financial institution. Transferring funds from savings account to checking accounts is very common.

Simply put, you safely store your money in a bank and then take your money out when you need to spend it. Your money is safe in most banks because it is covered under the Federal Deposit Insurance Corporation (FDIC).

Read more to to determine if you really need a checking account.