When there's an insufficient available
balance in your checking account to pay for any item, funds are automatically transferred from the linked Account to cover your checks and purchases.
Ideally, you should be aiming to have the equivalent of at least one month's expenses sitting
in your checking account at any given time.
It isn't taken out to cover a specific bill or item; the money can be borrowed and put
in a checking account for later use if the borrower wishes to take it.
An important consideration if you're trading off retirement assets for cash
in a checking account as that cash can be used income tax - free.
The recent rise in account fees makes it hard to justify keeping money
in a checking account when banks will charge you for the privilege.
If it's
not in your checking account, you're less likely to make as many purchases and this mental trick can help you get out of debt quicker.
Just a little extra something
in your checking account so you don't have to worry about overdraft fees if you decide to buy your mother - in - law's last minute gift.
This allows me to earn much more than I could
in a checking account yet at the same time be able to make the bank transfers and write the checks that I need to.
You might be able to negotiate a 5 % interest rate on those funds — much better than you'd
get in a checking account these days!
For example, if your employer pays by direct deposit, it is easy to match your pay statements to the deposits
in your checking account making the verification process easy.