A bank account is an arrangement made with a bank whereby one may deposit and withdraw money and in some cases be paid interest. Bank accounts may also be loan accounts in which case the customer owes money to the financial institution. The account is maintained by a financial institution on behalf of the customer.
It is important to have a bank account because:
1. Bank accounts offer convenience
With technological advancements in banking, you can pay your bills online saving you time and money of going to the bank. A debit card also allows you to have unlimited accessibility to your account as well as use it to transact at a point-of-sale.
2. Bank accounts are safe
Your money will be protected from theft and fires. Plus, your money will be insured so if your bank closes, you will get your money back.
3. It is an easy way to save money
Many banks offer an interest rate when you put your money in a savings account. The interest will help your money grow over time.
4. Bank accounts can help you access credit
Banks can help you access credit to acquire a home, a car, or personal loan, because banks tend to favor existing customers, particularly those who manage their money well.
While bank accounts are preferred, banks will also have ledger and transaction fees that you should be aware of. Also, depending on the type of account you have, you must maintain a minimum balance of a certain amount to avoid being charged.
Therefore, the most important thing about having a bank account is security, keeping your money safe and being able to draw cash whenever you need it is better than finding yourself far from home and unable to access your money in a financial emergency. The fast-paced lifestyle of today makes paying with cash difficult and even unsafe. Rather than taking the chance of leaving cash at home or carrying it with you, using a bank account is the way to go.