Do You Need a Bank Account?

People who don’t maintain bank accounts keep their cash in sock drawers or under their mattresses. But how safe is your cash in those sack drawers or under your mattress? Because of cash’s vulnerability to theft, keeping them in a more secure place, like the bank, is better – for the sake of peace of mind.

Let me convince you how important opening an account with the bank is.

Bank accounts keep your money safe. Keeping large amounts of cash in unsecure places will more likely cause you to fall victim to fraud or theft.

Cash kept in sock drawers or under the mattress do not earn interest. Regardless of the rate of interest, a cash to spare will earn you a return without exerting any effort.

Cash readily available for use, like those kept in sock drawers and under the mattress make you prone to unnecessary and unplanned expenses.

Online transactions like PayPal require you to have a bank account. Your account will make receiving cash and paying expenses online more convenient.

Managing money in bank accounts is a lot easier. Online banking, which has become a popular feature of many accounts today, makes checking balances, setting up orders, and transferring money between accounts fast and easy.

Most lending institutions require the use of bank accounts to establish a borrower’s credit record. In fact, lenders use your banking information in making decisions on whether to extend credit to you or not.

Bank accounts provide access to bank services like check books, ATM cards, credit cards, and other loans.

You may also want to consider what kind of account is more appropriate for you. The most common would be the checking account and the savings account.

A current account is also called as checking account. Aside from issuing checks for withdrawals, current accounts can also accommodate deposits (including paychecks); allow withdrawals either directly at the bank or through bank-issued debit cards; and allow transfer of funds to the holder’s other accounts. Basically, current account holders can add and deduct money whenever they please without any hassle at all.

Saving accounts, on the other hand, are opened primarily for the purpose of “saving” money. As its name suggests, savings account are maintained to save some amount to defray unplanned and emergency financial requirements. Depending on the bank, charges may be imposed for withdrawals made to the account.

As soon as you are able to decide which kind of bank account would work best for you, shop around to find which banking institution offers the best deals for you. There are a lot of packages and features that would make banking easy for you.

Jason O. Joaquin is an accountant and freelance business consultant. Currently, he is employed as Internal Audit Manager in a group of companies in southern Philippines.