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Are you ready to reinvent the way you manage your money, pay your bills, and earn while you spend? Then it’s time to experience the electronic revolution in checking accounts and join the 50% of U.S. households paying their bills online.
With money in an online checking account, you can use a debit card, authorize an electronic transfer, or write a check. And you can make all those moves from your computer - or - in some cases - from your mobile or PDA.
Try our Checking Account Toolkit to see how you can get the most out of your transaction account.
Lights, camera, transaction
A checking account is a transaction account. It’s meant to handle a regular inflow and outflow of money – pay bills, buy gifts, make donations, and anything else that requires transferring money to another person, business, or organization.
The great news is that you can rest easy knowing your money is safe and secure. Nobody but you — or someone with whom you have a joint account — can access it.
Did you know?
You can enjoy the convenience of checking with the earning power of savings with a 360 CheckingSM account from Capital One 360SM. Learn more about how you can make money while you manage your money.
Checking accounts are different from savings accounts – both are known as deposit accounts. A savings account allows you to accumulate assets to meet future goals and some, by law, allow only six withdrawals per month. But six is probably a lot fewer than the number of bills you pay each month.
The main purpose of a checking account is to make your financial life more convenient. Some banks might have a limit on the number of debits you can authorize (depending on the terms of the account), transfers you can make, daily withdraw amounts, or checks you can write, so get all the details before making any decision.
So, do you need a checking and saving account if you’re earning interest on both? The short answer is yes – for the same reason you need different shoes for work and the gym. You need different deposit products to fit different needs.
You want to keep a balance in your checking that’s big enough to cover the amounts you need to spend, but not big enough to tempt you to spend too much. The easiest way to have money available is to set up direct deposit – an electronic transfer of your paycheck or other regular income directly to your account. Just ask your employer to route your paycheck directly into your checking account – or, better yet, split it between your checking and savings account. To set it up, simply provide your employer with the routing number and account information and sign your request.
If you use online checking as your primary account, it’s a good idea to electronically link it to an account in a traditional bank. Then you can make deposits at the bank’s ATMAutomatic Teller Machine or at a teller’s window and instruct your online bank to move money electronically from your local account to your online checking or savings, either on a regular schedule or when you initiate a transfer.
Tools of the trade
When you’re ready to pay a bill or make a purchase, you have a few payment options:
- Debit cards allow you to make purchases in a store, online, or over the phone and pay directly from your account. When making an in-store purchase, you have the option of entering your PIN or signing a receipt to complete the transaction. For purchases online or over the phone, you use an electronic signature or provide your account number, like you do with a credit card, except with a debit card you aren’t borrowing.
- Electronic transfers let you authorize one-time or recurring bill payments that are deducted directly from your account.
- Checks, which may be electronic or paper, let you write a payment order, naming the person or business you're paying and specifying an amount.
Want to learn more about how the money in your bank account is protected? Visit the FDICFederal Deposit Insurance Corporation at www.fdic.gov
Keeping your money in check
A checking account also makes it easier to manage your money. With an online account, you can keep track of where you are — financially speaking — in real time. Your account record provides a running tally of money in and money out, so you know what bills you have paid and how much you have left before your next deposit. Your monthly statement, which may be electronic or paper depending on where you bank and what you prefer, summarizes all your deposits and withdrawals plus the interest you earned (if applicable), to give you an overview of what you earned, saved, and spent.
Saving money doesn't have to mean sacrificing convenience. It fact, with online checking, you face fewer hassles.
Because you can verify your real-time account balance online before you use your debit card, you reduce the risk of an overdraft and a potential fee for nonsufficient funds (NSF).
Because you can set up automatic bill pay for regular expenses and pick the date the bills will be paid, you reduce the risk of a late payment and a nasty late-payment fee. But don't cut it too close. Even electronic payments take a little time to process. Building your savings account, creating a CDCertificate of Deposit ladder, or opening an IRA can all be easier with an online checking account, because there's no paper work, no hassle, no kidding. Just results.
And the benefits of keeping your money in checking don't stop there. The Federal Deposit Insurance Corporation (FDIC) insures bank checking deposits just as it does savings accounts, so you can sleep easier at night knowing your money is safe.
Your electronic accountant
With all the transactions you can make in your online account, it is key that you always have access to up-to-date information on your current balance.
But managing money means more than keeping your balance above $0. That's why, in addition to making your account balance instantly accessible by web, many online banks allow you to link directly to software you can use to manage your money.
Linking your online checking account to a program like Quicken® or Microsoft Money® puts the tools for managing your whole financial life at your fingertips.