With the turmoil in the financial markets today, many people are wondering if a bank account is worth the hassle. Bank account owners have to constantly be vigilant against electronic theft from the accounts, excessive banking fees, and overdrafts. However, having a bank account can provide you with some important protections that you will not have if you keep your money under your mattress. Here are some good reasons why you need to keep your money in a bank account.
One of the most important reasons to get a bank account is for the check cashing services that they provide. Almost nobody pays in cash anymore, so if you expect to get paid, you can expect to receive a check for your services. Although it is possible to cash a check without a bank account, it will cost you a significant amount of money in fees and you will have to re-verify your identity every time. Many people also choose to write checks to pay their monthly bills instead of having to get an individual money order for each one that needs to be paid.
Information about your bank accounts is often necessary on applications for loans or mortgages. Many lenders and creditors will not even consider extending credit to someone that does not have a basic bank account. Being able to manage a bank account is a signal that the person has good financial management skills. If you do not have a bank account, the lender is going to wonder why and suppose something negative happened in the past.
Protecting Your Money
There are many protections in place to keep your money safe in your bank account. If your money is taken or the bank fails, the deposits are insured to guarantee that you will get your money back. On the other hand, if your money is stolen out of the safe in your house, your money may be gone forever. Keeping your money in a bank account keeps it safe until it is needed and you can withdraw the money in small increments to limit your risk of loss.
Accurate Financial Records
If you are paying cash for everything, there is a good chance that you are not documenting where all of your money is going each month. You could be spending more than you think in certain areas of your life. A bank account tracks your spending through debit cards and checks and documents your deposits on a single statement. You can review this statement each month and see exactly where your money has gone.
There are many benefits to having a bank account. Some people believe that the benefits outweigh the risks while others do not agree. Do you have a bank account or do you prefer to use other financial options? Share your comments with us.