Did you know that 17 million people in the United States don’t have a bank account? The reasons can vary, but many millennials think they don’t need one. Despite the growing distrust in financial institutions, having a checking account is essential for managing your money every day. Here are five solid reasons why you need one:
1. **Proof of Payment**
When you write a check, it becomes a written record of your payment. This proof is important for things like taxes and mailing payments. You can find these records in your bank statement, checkbook, online banking, and even as check images you can print out. This documentation is handy to protect against fraud or double charges.
2. **Safety**
For many older folks, checks are safer than cash, especially when shopping by mail, because they leave a paper trail that discourages theft. If you like giving cash as gifts, writing a check is a safer way to do it. Plus, checks are usually cheaper than buying money orders or cashier’s checks.
3. **Easy Bill Payments**
Most checking accounts come with free online bill pay, making it simple to manage and pay all your bills. This reduces the need for physical paperwork. You can also pay friends directly through most banks, which makes splitting expenses easier. With a checking account, you also get a debit card to track your spending, and direct deposit makes payday hassle-free.
4. **Convenience of Online Banking**
Imagine keeping all your cash in a bag instead of using a bank – it would be a chaotic mess! Balancing a checkbook might seem outdated, but platforms like Mint.com or Personal Capital make handling finances much easier. With a checking account, you can manage everything online, which is much simpler than dealing with physical cash.
5. **Unlimited Transactions**
Unlike savings accounts, which limit you to six electronic transfers a month, checking accounts don’t have these federal restrictions. This freedom is better suited for regular spending. It’s smart to have both checking and savings accounts for easy transfers, helping you save money more efficiently than just stashing cash away.
In conclusion, having a bank account is crucial for managing your money quickly and easily. Online-only banks often offer more convenience and lower fees than traditional banks, making them a great choice.