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Why You Still Need a Checking Account

min read

check-register-calculatorThe proliferation of mobile wallets and other digital payment systems has made having a checking account seem as 20th-century retro as listening to a cassette tape or using a land line.

Even though new technologies tend to replace older alternatives as they become obsolete, there are still some functions a checking account can perform that most digital payment systems cannot.

In other words, even in 2019, you probably still need a checking account.

7 reasons you may still need a checking account

Here's when it may be more useful to have a checking account than to rely solely on digital payment systems:

  1. Getting paid
    Banks these days don't like to cash checks for people who don't have accounts with them, and the time it takes you to transfer your paycheck to a digital payment system could delay how quickly you get access to your money.

    However, most employers are set up to seamlessly deposit your paycheck directly into a bank account - if you have one.
  2. FDIC protection
    Is your balance on a digital payment system insured? Nobody worries about things like that until something goes wrong, often during a financial crisis.

    With a bank checking account, your money is protected up to the FDIC insurance limit of $250,000 per depositor at each institution.
  3. Getting cash
    You still remember cash, don't you? Whether it's to buy a hot dog from a street vendor or to pay for something when electronic options are down, cash comes in handy on occasion, even here in 2019.

    With a checking account, you should have access to a network of ATMs that can provide you with cash on demand.
  4. Dealing with landlords
    Landlords often require a check for security. If they aren't geared up to use digital payments as an alternative, you may miss out on the apartment you wanted because someone else showed up with checkbook in hand.
  5. Paying certain vendors
    Even in large, urban areas there are still plenty of stores, from bodegas to boutiques, that have not made the investment to participate in digital payment systems and are unlikely to anytime soon.
  6. Keeping good budget records
    If you want to manage your money via a budget that is a little more advanced than simply spending down your digital balance till it's gone, it can help to be able to review your transactions to see what you are spending money on.

    Whether you use an electronic or paper version, a check register can lay this all out for you.
  7. Paying bills automatically
    Something else that can help your budget run smoothly is automatic bill-paying. Checking accounts are more likely than digital wallets to allow you to set up certain accounts for automatic payment. This can help you avoid late fees, interruptions to service, and damage to your credit history.

What to look for in a checking account - digital plus full service

While checking accounts still have a role to play in today's society, they are not all created equally.

There are literally thousands of banks offering the protection of FDIC insurance, but some of these banks are more competitive than others.

Here are some things to look for when choosing a checking account that will give you the best of both worlds in terms of old-fashioned services plus digital convenience:

  1. Free checking

    The latest MoneyRates.com Checking Account Fee Survey found that about 70 percent of checking accounts charge a monthly fee, and these fees on average add up to a total of $162.96 a year.

    However, while free checking may be the exception, it is still offered by many banks. Choosing free checking removes one of the main knocks against still having an account.

  2. Choose online accounts

    You could more than double your chances of finding a free checking account if you look online.

    MoneyRates.com found that 63 percent of online checking accounts have no monthly fee, compared with just 25 percent of traditional, branch-based accounts.

  3. User-friendly apps

    If it's mobile flexibility you are looking for, check out the apps an account has available before you sign up.

    Everything from how you deposit money to how you keep track of your transactions varies greatly from bank to bank, so look for one that makes these things easy to do both at home and on the go.

  4. Free debit card

    A debit card can give you the flexibility of using the account much like a mobile payment system but with the traditional advantages of a checking account. Just make sure you won't be charged extra for the convenience of having a debit card.

It's easy to see how the line between traditional checking accounts and digital payment services may become increasingly blurred in future years. Still, the best checking accounts are well on the path toward digital sophistication, even as they continue to offer the benefit of FDIC insurance.

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