11 Reasons to Open a Checking Account

By Marcy Lovitch · May 05, 2023 · 11 minute read

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11 Reasons to Open a Checking Account

Checking accounts are the foundation of personal finance and the way the majority of Americans conduct their daily finances. In fact, according to a recent survey, more than 91% of people in the U.S. have a checking account, the highest percentage among all types of accounts.

Opening a checking account can make good money sense. Without a checking account, it can be harder to pay bills, deposit your paycheck, and keep tabs on where your money is at all times. Having your money in a safe, secure account gives you peace of mind and more protection than keeping cash in your wallet.

Read on for 11 reasons why opening a checking account can be a game-changer.

Reasons for Opening a Checking Account

1. Depositing Checks with Ease

When you have a checking account, you can manage your finances in a more streamlined way. If you receive a check, you’ve not only got an instant home for it, but it’s often the fastest way to get access to the funds.

Your money should be available within a day or two if you deposit it before the bank’s cutoff time. A bank generally must make the first $225 of a deposit available at the start of the next day after the deposit was made. ​​The remaining money typically will be available the second business day.

Many banks and credit unions offer the convenience to deposit a check through their mobile app, saving you a trip to the bank or the ATM. Once you have the bank’s app, you can simply endorse the check, take a photo of both of its sides with your mobile device, and submit.

2. Streamlining (and Saving on) Payments

Another good reason to open a checking account is that it facilitates payments. You can arrange for timely bill payments and eliminate the need to sit, write out, and mail paper checks to utility and credit card payments, for example. You can sign up for automatic bill payment withdrawals, or send an electronic check (also known as an e-check) directly from your account. Whichever method you choose to pay your bills online, you need a checking account from which the money can be deducted.

By using your checking account to manage payments in this way, you may be able to save money. These actions can help you avoid pricey overdraft and NSF (non-sufficient funds) fees if you wind up in negative balance territory.

3. Accessing Your Money

These days most checking accounts come with a debit card linked to your account. Debit cards can be used to withdraw money from an ATM or swiped or tapped as a payment method virtually anywhere. The convenience and accessibility are major perks. You can get cash anytime and also deposit checks or cash at an ATM.

And, it’s becoming increasingly more common to be able to make a cardless withdrawal at an ATM if you don’t have your debit card. With a cardless transaction, you can use your phone or smartwatch to get your debit card information from the bank’s mobile app, or store your debit card information in a digital (electronic) wallet, option like Apple Pay, Google Pay, or Samsung Pay.

You’ll need to confirm the ATM you’re using can accommodate a cardless transaction. It’s likely you’ll pay a fee if you are using a machine operated by another bank or company, no matter what kind of transaction you are conducting. Another point to consider when using an ATM is whether or not your bank has an ATM withdrawal limit.

4. Your Money Is Safe and Insured

Here’s another reason to have a checking account: Stashing a lot of cash at home, even if it’s in a safe place, puts you at risk of theft and loss. Why tempt fate?

When you keep money at a bank insured by the Federal Deposit Insurance Corporation (FDIC), your cash is protected. The FDIC, an independent agency of the U.S. government, protects $250,000 per depositor, per ownership category, per insured institution in the rare event that a bank fails.

Using an insured credit union also offers the same type of protection. The National Credit Union Association (NCUA), also independent of the federal government, protects deposits at all federal credit unions and the vast majority of state-chartered credit unions. Like the FDIC, NCUA insurance covers $250,000 per depositor, per ownership category, per insured institution.

You can search for a FDIC-insured bank by using the FDIC BankFind Suite tool and find a NCUA credit union at mapping.ncua.gov .

Quick Money Tip: Typically, checking accounts don’t earn interest. However, some accounts will pay you a bit and help your money grow. An online checking account is more likely than brick-and-mortar to offer you the best rates.

5. Getting Paid Is Easier

Most employers use direct deposit as a way to pay their employees. This eliminates processing a paper check which can get lost or take more than a day to clear. Direct depositing your paycheck means it’s typically available to you on the morning of payday, and you don’t have to be bothered with depositing it yourself.

Automatic direct deposit isn’t only for employers. You can sign up to have your tax refund or other government payments such as Social Security or unemployment benefits automatically put into your checking account. Have a friend who owes you money for that theater ticket, or are you selling something and don’t want to deal with cash? You can receive payment directly deposited into your checking account through a mobile payment service such as Venmo, Cash App, or Zelle.

6. Creating a Record of Payments

A checking account gives you an automatic record of what money’s going in and what’s coming out. Your monthly bank statement spells it all out in black and white, so you can clearly track deposits, payments, or any other transactions like transferring your money from your checking account to a savings account. Basically, with a checking account, you’ve got proof of all these financial transactions in one place.

Having a record of transactions can be especially helpful if, for instance, a vendor claims you didn’t pay a bill on time or they never received it. You’ll also be able to see if someone has made a fraudulent purchase or if the bank made an error right there by scrolling through the list.

Many financial experts recommend people monitor their checking account often, say, once or twice a week. Not only can it help prevent any errors from slipping through the cracks, but it can also help you stay on top of expenses and avoid breaking your budget. You can get your paper statements mailed to you by the bank, or simply monitor your account online through the bank’s website or mobile app.

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7. Building a Relationship with a Bank

Here’s another reason why you should have a checking account: It can help you establish a business relationship with a financial institution that can benefit you down the line. You can have access to a banking team that can answer questions and offer personalized service. For example, if you’re in need of a personal loan or want to apply for a mortgage with that bank, a bank officer can navigate you through the process and you might even get a better rate. Need to establish credit? Your bank may be able to issue you a credit card with their institution, offering a lower interest rate.

8. Earning Benefits and Rewards From Your Bank

Many banks offer some great incentives if you open a checking account with them. These bonuses can include zero or low fees, free overdraft protection, the ability to earn interest, and even receiving a sign-up bonus of a few hundred dollars or more.

One caveat: Many of the offers of cash bonuses come with qualifying requirements, such as needing to make a minimum opening deposit or have a direct deposit of $500 or more within a certain number of days.

9. Few or No Limits on Transactions

Checking accounts typically don’t limit the number of transactions you can make because these accounts are meant for day-to-day financial transactions. With a savings account, there may be more limits on how many transactions you can conduct, depending on the bank.

It can, however, be worthwhile to check the fine print when opening a checking account to see if there are transaction limits, including how much cash you can withdraw per day from an ATM or a daily dollar-amount ceiling on debit card use.

10. Saving You Money

Without a checking account to draw upon, your options for making payments and cashing checks can cost you. If you’ve got to pay a bill, you can get a money order or cashier’s check and mail in your payment or visit the bill payee’s payment location in person with cash. Both of these options mean shelling out extra money along with spending additional time making these stops. A money order can cost from $1 to $5 and a cashier’s check generally clocks in between $10 to $15.

If you have a checking account, you can write a check or set up autopay for those bills, saving you time and money.

A checking account can save you money when receiving funds, too. If you don’t have a checking account, you might either have to visit the bank where the check was issued and see if they will cash it or go to a check-cashing outlet. The latter usually charge a percentage-based fee, around two to 10% of the value of the check , or a flat fee which can be at least $3.

Recommended: Where to Cash a Check Without Paying a Fee

11. More Payment Options

Checking accounts can broaden your payment options. With this type of bank account, you can write checks, use a debit card for purchases and ATM cash withdrawals, make online payments, and electronically transfer money into another account, such as a savings account.

A note about saving: Once you’ve got a checking account, you can see how much money is sitting there and identify whether you can allocate some towards savings. It can be difficult to save money, but once you have a checking account, you can open a linked savings account (often even if it isn’t at the same bank) and start putting money away for the future.

Opening a Checking Account

Opening a checking account may take online minutes, especially in today’s world of online banking.

•   First step is to identify your needs. For instance, do you want to use a large bank with a vast network of branches and ATMs, or are you more interested in the higher interest rates and lower fees you might get at an online vs. traditional bank? Are you living paycheck to paycheck? You may want an account that doesn’t require you to have a minimum balance and doesn’t charge any monthly maintenance fees or for insufficient funds.

•   Shop around to find a financial institution that is a good match.

•   Complete an application, either online or in person at a bricks-and-mortar bank. You’ll usually need to have proof of your address (a lease or utility bill will work), plus valid photo identification such as driver’s license, passport, state or military ID.

Once you’re approved, you’ll receive documents with your new account number along with any other account details. You should then be able to make your first deposit .

Can You Have Two Checking Accounts at the Same Bank?

Yes, you can have two (or more) checking accounts at the same bank. Financial institutions typically allow you to open more than one checking account, which can be very convenient and help you keep finances organized.

There are multiple reasons why someone may want to have two checking accounts with the same bank. Perhaps you want your own individual checking account but also want a joint checking account with your partner. Parents may want to open a second checking account with their child to help teach them about money. Having a business or side hustle to keep earnings separate is another reason for possibly having a second checking account.

The Takeaway

A checking account allows you to keep your money in a safe, insured place and monitor your finances. It also provides convenience in terms of making payments, receiving funds, and having a debit card for purchases and accessing cash. What’s more, checking accounts can help you save money and, in some cases, even earn some. In a nutshell, it can serve as the hub of your financial life.

If you’re thinking of opening an online bank account, a SoFi Checking and Savings Account can be an excellent option. You’ll spend and save in one convenient place, and SoFi doesn’t charge any monthly fees, offers a competitive annual percentage yield (APY), and gives you access to more than 55,000 fee-free ATMs within the Allpoint® Network.

Better banking is here with up to 4.20% APY on SoFi Checking and Savings.


What is the purpose of having a checking account?

A checking account gives you a secure, insured place to store and manage your money. It enables you to handle life’s everyday financial transactions, such as accessing cash, depositing money, paying bills, and receiving funds, without needing to buy money orders, get a cashier’s check, or visit a check-cashing outlet.

How much money should be kept in a checking account?

There’s no hard and fast rule, but the general rule of thumb is to aim to have at least one to two months of living expenses in at all times. At the very least, be sure to meet any minimum balance requirements; otherwise you could incur fees.

What do you need to open a checking account?

To open a checking account, you’ll need to fill out an application online or in person at the bank. You’ll likely need a valid photo ID (such as a driver’s license or passport), your Social Security number, proof of address, along with your contact information, date of birth, and any money required by the bank for an opening deposit.

Photo credit: iStock/Yaroslav Olieinikov

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SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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