What is a Checking Account?

A checking account lets you safely store your money in the bank and allows you to spend it anytime you want by writing a check. There are many benefits to having a checking account. The first is safety. Checks are safer to carry around and send through the mail than cash. Unlike cash, a blank check is worth nothing without the proper signature. And because the bank will only pay the person the check is made out to, checks are harder to steal.

A second benefit of a checking account is proof of payment. Banks keep very good records of each check that is presented for payment. A cancelled check is as good as a receipt.

Budgeting is also a benefit of having a checking account. By keeping records of your checking activities, you will be able to track your income and expenses and make smarter spending decisions.

Another important benefit of a checking account is establishing credit. A checking account is a big responsibility. Every time you write a check to someone, you are promising, with your signature, that you have that much money in your account. This is why it is important to keep good records, and make sure your account balances. What happens if you make a mistake? As long as it is an honest mistake and you fix the problem quickly, it will just cost you some money in fees. However, if you ever knowingly write a check that you don’t have money for, you could end up in jail.

Proving you can manage a checking account responsibly will not only keep you out of trouble, but it will also help you to get a loan or other type of credit in the future.