If you are like most people, you probably have a personal bank account. If you do not, you should understand that there are certain advantages to having one. Hoarding money at home, whether in a safe or in the proverbial mattress, may not be the best way to hold on to your money. Here is a look at some of the benefits to owning your very own personal bank account.
Keep Your Money Safe
One of the biggest advantages to placing your money in a bank is safety. Keeping money in your house can easily be stolen or lost forever as the result of a disaster such as a fire. Any personal bank account in an FDIC (Federal Depository Insurance Corporation) member bank is insured up to $250,000. In the event that your bank suffers a disaster – robbery, fire, or bankruptcy for example – your deposits are protected.
Your Money Is Still Accessible
If you are worried about not having money physically, what you deposit into your bank account is always readily available. Most financial institutions will permit you to carry a debit card. You can use it to withdraw money from your account at an ATM (automated teller machine). You also have the ability to write checks, which is essentially the same as cash.
Earn While You Save
Many financial institutions offer different forms of deposit accounts that will actually reward you for storing your money. Banks may pay you interest on your deposits. Depending on the type of account, interest rates will vary. Simple savings accounts pay very little interest, while accounts like money market funds normally pay higher rates.
Establish Financial History
In the event that you would like to purchase a car or home someday, having a bank account is good for your financial history. Having a personal bank account can help you in borrowing from your bank. There are some loans, like car title loans, that you may obtain without having a bank account. Embassy Loans of Florida has helped thousands of customers borrow money. Borrowers don’t necessarily have to have a bank account, but many do.
Automatic Bill Pay
With your own personal bank account, you can easily pay many of your bills automatically. You can set up automatic payments to your electric company, mortgage company, and more. The money is automatically withdrawn and sent to the party to which it is owed. This saves you from having to remember to write out a check and mail it.