Around the world, a lot of employees have savings accounts. Research found that 61% of millennials felt financially secure. Three out of four people, however, claimed to be at least somewhat stressed out by money management. As people start saving aside some money to manage their personal finances, opening a transaction account is the first step towards becoming financially responsible.
A transaction account serves a purpose similar to a savings account. Here is what you should know about transaction accounts and why you might want to open one.
1. Security
The National Credit Union Association (NCUA) or the Federal Deposit Insurance Corporation (FDIC) cover the majority of transaction accounts. Your money is safer in your bank account than it is under your mattress thanks to this insurance, which covers up to $250,000 in your account.
Additionally, your money is less likely to be stolen or misplaced if you keep it in an account. You are no longer required to wait for pay envelopes to be delivered to your mortgage or energy provider. And to avoid financial devastation, just halt payments or start a new account if your checkbook or debit card are lost or stolen.
Secure internet banking is another perk of a transaction account. Due to the security and protection measures your financial institution has put in place, you can deposit checks, pay bills, and transfer money between accounts with confidence.
2. Avoiding Extra Service Charges
For withdrawals, check cashing, and other services, most bank accounts collect fees which can add up to a sizable sum of money. Transaction accounts are intended for spending, therefore there are rarely any fees associated with any transactions you make.
3. No Limitations
When trying to acquire money or save cash for certain financial goals, it can be beneficial to have both transaction and savings accounts. However, a transaction account is generally the wisest choice if you only intend to have one sort of account. There aren’t any transaction restrictions on checking accounts, which is one of the main reasons.
You can normally only take a small amount of money from or write a small number of checks from a savings account each month. With a checking account, you aren’t constrained when it comes to cash outs, debit card payments, checks, or money transfers, allowing you greater general financial freedom.
4. Convenience
You can manage the funds in your transaction account in addition to making checks through the branch, ATMs, website, and mobile site. When you need money, you can comfortably easily deposit or withdraw it from a number of access. Because it allows you to save time while getting a piece of mind, this may be one of the most beneficial transaction account benefits.
5. More Features
People may easily transmit money digitally to one other thanks to services like Venmo and PayPal. The millennial and Gen-Z generations may be turning away from traditional banking in greater numbers as a result of these services and other digital wallet apps. However, a transaction account still has plenty more functions than any kind of digital wallet software, like direct deposit and bill payment.
6. Paper Trail
Cash payments are challenging to trace unless you have an official receipt as confirmation of your payments. Checks include serial numbers, which makes it simpler to keep track of them. Knowing who you give cash checks to makes your money safe. You can keep track of where it goes and who it should eventually be sent to.
7. Build Your Credit Score
Keeping your transaction account open might be quite beneficial if you want to establish credit or if you want to raise your credit score. You may demonstrate to lenders and credit reporting agencies that you manage your money wisely by maintaining your account balance above zero, avoiding rejected checks, and paying your payments on time.
Make the Most Out of Transaction Accounts
To strengthen your financial situation, open a transaction account. Now is the right time to do this. Your transaction account, in addition to your savings account, can aid in expense tracking and safe, responsible spending.