Managing Personal Finances with Demand Deposit Accounts
Demand deposit accounts offer individuals many different options and benefits when managing their personal finances. Deposit accounts can be used to manage everyday expenses, keep track of personal cash flow and save for the future while earning a return. There are many different types of deposit accounts, each offering a means to achieve specific goals. In the following pages, I will break down some different types of accounts, discuss their purpose and show how each one can make achieving personal financial goals a simpler, more attainable task.
Demand Deposit Accounts, or DDAs, are accounts offered by ...view middle of the document...
Financial institutions also issue statements for a specified period that itemize all activity for the account including both debits and credits. Statements can be used to keep track of where your money goes and also to verify actual balances versus the balance in your personal ledger and makes it much easier to identify any errors.
The type of checking account offered by a credit union is commonly referred to as a “shares account.” While the terminology can be quite different for a shares account, the basic functions remain the same. The term shares account comes from the fact that credit unions are actually owned by their depositors, therefore when you make a deposit, you are actually buying ownership, or shares. These accounts offer the ability to issue share drafts, which are fundamentally the same as a standard check.
There are many features and benefits of most common checking accounts that make accessing your funds quite simple. One feature is direct deposit, which enables others, such as employers, to directly deposit funds or wages into your account. This saves both time and money by saving you a trip to the bank to deposit or cash a payroll check, and ensures that your money is always there on time. Direct deposit eliminates the possibility of a check being lost or stolen because it is a safe, secure, and instant electronic transfer that is immediately available.
Another feature offered by most institutions is an electronic transaction card called either an ATM card, check card, or debit card. An ATM card makes funds available at any of thousands of automated teller machines located all around the world. Clients can use this card to deposit, withdraw or transfer funds electronically. A check or debit card has all of the features of an ATM card, plus the ability to perform point-of-sale transactions at any business that accepts major credit cards. ATM and check cards are protected from fraud and limit the liability of the cardholder for losses incurred when a card is lost or stolen.
In recent years, most financial institutions have began to offer more technologically advanced ways to access your account and perform transactions. Online banking offers clients the ability to perform nearly any transaction that can be performed in person at a branch from anywhere with internet access. Clients can securely log in to their account via the internet to view statements, transfer funds and even pay bills 24 hours a day, 7 days a week. The newest technology is mobile banking, allowing users to perform any of the same transactions from their mobile phone.
There are many different types of checking accounts designed to meet the needs of all types of clients. The most basic accounts offered by most institutions are referred to as “free checking” because they require no minimum balance and there is no monthly maintenance fee. Other types of accounts may have features specifically tailored to certain types of clients and may require a monthly...