Bank Accounts

Bank Accounts: Checking and Savings

Opening a savings or checking account is easy and is usually free for students. Some people have a checking account to pay bills and another savings account to save money for vacations, trips, or special purchases.  Some savings accounts allow you to earn interest on the money you save, although at this time, interest rates for savings accounts are very low. Most people use a checking account to pay their monthly bills and a savings account to save money.

There are many benefits to having a bank account:

 

  • You can cash your paycheck for free and you won’t have to pay a fee for a check cashing service. Some check cashing services charge you a percent of your check as a fee. Others, like Walmart charge a flat rate like $3.00 to cash a check. If you cash your checks at Walmart for a year of 52 weeks, you will have paid Walmart over $150 of your hard earned money to do what a bank will do for FREE!!!

 

  • You will benefit from the advantages of online banking which includes Direct Deposit which is where your employer will automatically deposit your paycheck into your bank account. Online bill paying saves you money because you don't need stamps, it saves you time because it is much faster and easier than writing a paper check. Most banks have Apps for your Smart Phone where you can track your account activity.

 

  • You can track where your money is going and how you are spending it. This is all part of your monthly budget which helps you track your spending (and savings) habits.

 

  • You will improve your credit score. If you have a good credit score it will make getting loans for a car, education, or a home much easier. This allows lenders to see that you have a history of saving and spending – think of it like your “money reputation”.

 

Things to Keep in Mind:

  • Debit Cards allow you to get instant cash at ATMs (Automatic Teller Machines). Beware of fees if you use an ATM not at your usual bank – even if the ATM says there is no charge, your bank may charge you.

 

  • NEVER use a debit card for an online purchase; if someone steals your information, they will steal your CASH, only use a credit card to buy things online. If you don't have a credit card, consider using a Visa or MasterCard gift card.

 

  • Beware of fees – especially fees for bouncing checks, which is writing a check for an amount that is over your account balance, also known as an “overdraft”. Not only is this a waste of your money because you've been irresponsible, but this will hurt your credit rating as well.