Free Vs Traditional Checking Accounts: Which Is Right For You?
When it comes to the products and services you need, price is not always the most important aspect to consider. For instance, while many people will benefit from the use of a free checking account, others will find that a traditional checking account that requires them to pay a small monthly fee will actually be the more beneficial option for their particular needs. This is because price is not the only difference between free and traditional checking accounts. Taking the time to consider all of the other differences between these products can help to ensure you are truly choosing the account that is right for you.
Associated Products And Services
Free checking accounts will often provide you with just the basic services, such as the ability to deposit and withdraw money via an ATM or bank teller. These accounts will also offer you the ability to pay for products or services using either a written check or debit card. However, any other products or services that you require may come with an additional fee. For example, while there may be no charge associated with your ability to write a check, you may need to pay for your checks.
Traditional checking accounts on the other hand will often offer a variety of additional products and services free of charge. For example, many of these accounts will offer free checks and savings account services.
If the majority of your banking is done via ATM or debit card, choosing a free checking account will prove to be the better option. However, if you write a large number of paper checks, choosing a checking account that offers free checks may actually prove to be the more cost effective option.
Earning Interest
Interest bearing accounts give you the opportunity to put your money to work for you. By paying you a set percentage on all of the money on your average daily balance each month, these accounts will allow you to grow your money rather than simply saving it.
Free checking accounts will not typically offer you the ability to earn interest. After all, the bank cannot afford to give you their services for free and pay you for using those services. Consequently, you will often need to choose a traditional fee based checking account if you wish to earn interest on your savings.
Since the amount of interest you earn is based on the average balance in your account, choosing this type of checking account is only cost efficient for those individuals who maintain a relatively high balance in their account. For everyone else, the fees associated with an interest bearing account would far outweigh the benefit of earning a few cents each month.
For more information, contact Norwood Bank or a similar institution.
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