Many people will prefer to open a savings account. But having a current account is essential to manage your money on a regular basis. Here are five reasons why you should have a current account, according to everythingfinanceblog.com.
- A current account provides a proof of payment
Cheques provide a paper trail or a written proof that you paid someone. Each time you write a cheque that ultimately clears your account, there are several records of it.
Having this proof is important for tax purposes (when you make tax deductible charitable donations) and whenever you’re paying a person or company.
Where can you look for these records? In your bank statement, your chequebook, a carbon copy, if you are using a duplicate cheque.
A printable front and back image of your cleared cheque accessible with online banking
It is always a good idea to have these handy in case you ever need to double-check your records in the event of fraud or a duplicate charge.
- Cheques provide more security
This is a tip for older generations, but paying by cheque is safer than cash.
Cash can be taken and spent by anyone without a trace. The paper trail of cheque leaves discourages theft.
Additionally, if you like to send people cash for special events, such as the holidays, anniversaries and birthdays, sending a cheque is much better than sending cash.
As a bonus, cheques are also less expensive than money orders or cashier’s cheques – another alternative to paying by paper.
- Pay bills (or people) easily, and get paid easily
Most current accounts come with free bill pay these days. That means you can manage and pay all of your bills online.
This is a great option to have if you are sick of all the paper clutter that’s gathering in your kitchen or on your desk in your office. Cut down on the paper by opting for e-statements, and switch to making payments online instead.
Beyond that, you can often pay people via your current account as well. Most banks (especially online banks) offer person to person payments, for free. If you owe a friend or relative money for something, send them a payment quickly via bill pay. (This can come in handy if you are splitting rent with someone, too!)
Current accounts also come with debit cards, which allow you to make purchases online and track your spending with ease. When you use cash, you have to manually keep records of where it is going. With a current account, you can simply view your recent transactions to see where you have been spending.
Finally, and most importantly, when you have a current account, you can set up direct deposit with your job. You can say goodbye to collecting a cheque, going to the bank, and cashing or depositing it. Your pay cheque is automatically deposited into your account with direct deposit (hence the name). How convenient!
- Ease of access with online banking
Imagine if you decided not to have core banking options, and instead kept all of your cash in an envelope or a bag. Think of how crazy and out of hand that would get.
Most people don’t even balance a chequebook anymore. They simply link their financial accounts to software such as Mint.com or Personal Capital, and manage their money from there.
However, having a current account with online access gives you a much easier way to keep track of everything.
- No transaction limits
Current accounts have no limits on the number of electronic transfers you can make each month. That’s pretty limiting if you think about how often you spend money!
Your best bet is opening both a current and savings account, with transfers going directly from your current to your savings. This is also one of the best ways to save your money! It sure beats having all your money laying around in a pile somewhere, not earmarked for specific financial goals.
Overall, having a bank account is a necessity when it comes to managing your money quickly and easily. The best banks are usually online-only banks, which offer the most convenience, and have the least amount of fees.