Last year, close to half of Americans didn’t write a single check.
Makes sense, right? Who needs to pull out a check book when you can Venmo your cousin’s wedding gift and CashApp your landlord?
Here are a few more
statistics about the state of check writing:
- 23% of Americans wrote just one check a month
- 15% wrote a few checks a month
- 12% wrote less than six checks
- Only 5% of people wrote more than a dozen checks
Knowing this, you might think the checking account is dead. If you’re one of the many people relying solely on peer-to-peer apps as the center of your financial universe, you might ask: Why do I need a checking account?
In this article, we’ll explain why having a checking account today is more important than ever for your financial health.
Beyond the check book
No longer is a checking account centered on a paper checkbook. A digital checking account is the hub of a financially savvy person’s cash flow. Personal finance influencer
Ramit Sethi puts it plainly: "Your checking account is the backbone of your financial system."
Never before has money management been more accessible, efficient, secure, and empowering than with digital checking accounts. The integration of technology has simplified banking processes and provided consumers with a range of convenient features and
services.
While payment apps like Venmo, Zelle, and CashApp make paying people quick and easy, online checking accounts were designed to do much more: They facilitate the flow of your money from your paycheck to your payees (including yourself) and provide a full
suite of money management services. This includes:
Anytime account access: An online checking account with a
mobile banking app allows you to check your balances, transfer funds, and view your transactions anytime and anywhere from your mobile device, providing greater control over your finances. If you opt into paperless
eStatements, you can access your account statements electronically, providing easy access to your transaction history.
Direct deposit: Having a checking account enables you to receive your pay checks from your employer directly, at predicable intervals. This eliminates the need for paper checks and ensures quick and automatic access to your funds. [Side note: If
your employer still gives you a paper check, a good online checking account will include a
mobile check deposit feature in their banking app, allowing you to deposit your check into your account from your phone.]
Automatic transfers: Many online checking accounts include options to set up
transfers between accounts at the same financial institution and, with external transfers, other institutions. This allows you to "pay yourself first” by automatically transferring money into savings and/or
investment accounts on a regular basis. Doing so is the most reliable way to meet your saving goals.
Easy payments: With a checking account, you often have the option to set up all your monthly payees using
Bill Pay software. Once payees are added, you can pay them manually each month or set up automatic payments. This simplifies your financial management by ensuring your bills are paid on time, helping you avoid late
fees and maintain a good credit score. You may also have the option to connect your checking account to a payment app like
Zelle so you can pay people you know quickly and securely.
Easy shopping: If you have an
NFC-enabled smartphone, you can add your checking account’s debit card to your phone's
digital wallet (e.g.
Apple Wallet)
and use the
tap-to-pay feature to cover your restaurant tab, your groceries, your coffee, your clothes, and pretty much anything else you buy from
a retail store.
Anywhere cash access: For those increasingly rare moments when you still need cash, you can use your debit card to withdraw cash from an ATM near you. This provides you with access to your money 24/7, even if your bank or credit union is closed
(avoid fees by
finding an ATM in your financial
institution’s preferred network).
Increased security measures: Online checking accounts often include enhanced security measures to protect your information and prevent fraud. These measures include two-factor authentication, biometric authentication (fingerprint or facial recognition),
and advanced encryption protocols. In the event of loss or theft, funds in a checking account are generally protected by various security measures and can be easily monitored and reported.
The backing of federal deposit insurance: Unlike many nonbank payment apps, money stored in a credit union or bank checking account is typically insured up to $250,000 by either NCUA (credit unions) and the FDIC (banks). Payment apps and other fintech apps are not always insured, putting your money at risk (note this recent advisory from the Consumer Financial Protection Bureau advising consumers to transfer balances to insured credit unions and banks from payment apps).
Make the most of your checking account
In this day and age, you’re unlikely to have to write a paper check anymore. Yet even in these times, a
good digital checking account should
still be part of your financial game plan.
When looking for the ideal checking account, make sure you take into consideration factors like fees, interest rates, and account features as well as the options for customer service when questions arise.
For example, CAFCU offers a robust Rewards Advantage Checking account
designed to help our members master their finances. The beauty of this account is that, in addition to offering the many financial management tools mentioned above, it allows members to earn rewards when shopping with their debit cards. Account
maintenance fees can easily be avoided simply by using the account regularly and setting up eStatements.*
Get free expert advice
Have questions about how to make the most of your checking account and improve your financial health? CAFCU can help! Whether you are a member or not, you can schedule a
free financial coaching session with one of our certified financial wellness representatives.
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