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Although many young adults do not need to write checks, it still may be convenient to have a checking account. A checking account will usually allow you to use a debit card for your purchases, give you access to cash machines, and make online banking possible.
However, not all checking accounts are the same, even within the same bank. You must shop around and compare features in order to find the checking account that best fits the needs of the business or individual. For example: Where is the nearest location? What is the minimum deposit to open an account? Does the bank offer on line banking without a fee? Is there a monthly service fee? What is the cost of 200 checks? Is there a minimum balance required to avoid a fee? Is there unlimited check writing? Does the bank have interest-bearing accounts?
Fees should carefully be reviewed as well. Common fees include charges for ordering checks, automatic teller machine (ATM) withdrawals, monthly service fees, and a fee for insufficient funds should the amount on the check presented for payment exceed the available funds in the account.
The Almighty Dollar Bank (ADB) Student Value plus checking account requires $500 to open a checking account with no minimum balance requirement. There is a$5 monthly service charge but no ATM fees unless used at a bank other than ADB, in which case a $3 fee would be imposed by both ADB and the other bank. The first 200 checks are free. Subsequent check orders cost$17.95 for 200 checks. There is a $35 fee for insufficient funds. Online banking is offered free for the first three transactions each month.
The People Friendly Bank (PFB) Free Student Checking Account has no minimum initial balance but charges a$5 fee if the balance falls below $50. This account pays 1 % annual interest on balances over$5,000 and has no monthly service charge. There is no charge for ATM withdrawals. Checks cost $12.95 per 200, and there is a$25 fee for insufficient funds. Online banking is free.
- Explain why a business would open a checking account instead of a savings account to manage cash.