For the Banking Beginner: What is a Checking Account?

In your financial journey, you may have found out that to stay financially responsible, you may need different types of accounts to manage your expenses. One of the most crucial bank accounts you’ll need is a checking account. If you’re wondering how to use a checking account, whether we write checks or cheques in the Philippines, or what benefits you can expect from this type of account, then you’re on the right page.

In this banking for beginners article, we tell you everything you need to know about checking accounts.

What is a Checking Account?

A checking account is a type of bank account that allows you to have better access to your finances. These types of accounts come with an ATM card, checkbook, and transaction journal to help you keep track of your cash flow. This is especially helpful if you consider the number of transactions you need to go through every day from paying for bills to purchasing groceries.

With a checking account, you have fewer transaction limits so, you can easily use your money for your needs without worrying about your limits refreshing. Checking accounts also provide you with the flexibility to withdraw money from ATMs, write checks for large purchases, and transfer money via your online banking account. Basically, you get easy access to your money in a myriad of ways.

But, one thing to remember is that checking accounts are usually used for daily transactions, so it makes sense that it has a lower interest rate than savings accounts. This means that if you want to store your money in your checking account for long-term goals, you may want to look at other options so you don’t sacrifice your money’s earning potential.

What are the Benefits of a Checking Account?

Checking accounts can provide you with a new level of convenience when it comes to handling your money. Here are some of the benefits you can expect from this type of account:

Write Checks

The privilege to write checks is one of the most important benefits of a checking account. Before scheduled transactions were available on online banking apps, post-dated checks were essential to certain businesses, like real estate, to ensure that you’d pay for your dues on the dot. 

Checks are also important for making large purchases such as houses, lots, and cars. Most if not all brokers will require that you write post-dated checks to ensure that you’ll be paying for your acquired assets promptly. 

Withdraw Using ATMs

Checking accounts come with an ATM card that allows you to withdraw money from ATMs. This gives you easy access to your funds wherever you may be and whenever you need it.

Online Banking

Thanks to online banking, paying bills, transferring money, and monitoring your account has never been easier. You can enroll your checking account on your bank’s online banking application and you’ll have complete control and visibility over your account.

Additionally, online banking apps have made it possible for you to schedule transactions and pay your bills. Depending on your financial institution, your online banking app may also come with other helpful features to make your financial journey much easier.

What are Some Fees You May Encounter with a Checking Account?

Much like any other type of bank account, checking accounts may also charge you certain fees for certain services. These fees can vary per bank, but here are some of the checking fees and charges you may encounter at RCBC:

Monthly Service Fee

The monthly service fee is the fee you pay if you don’t meet your bank account’s minimum maintaining balance or Average Daily Balance (ADB). This charge will reflect on your account during the first of the month. 

To avoid incurring this charge, make sure that your bank account never falls below this required amount. We recommend that you ask your bank what the minimum maintaining balance is and top up your account to ensure that it never falls below that amount.

Early Closure

Early closure is a fee that some banks charge for when you’re closing your account before a certain time frame. The early closure time frame varies per bank, so make sure to ask your bank what this time frame is so you don’t incur charges should you decide to close your account.

Regular Checkbook Charge

Using your checkbook for purchases and bills means that you may run out of it eventually. When you run out of checks, you’ll need to place an order from your bank, this is what a regular checkbook charge is.

However, some banks may offer a free checkbook for their clients annually so, make sure that you ask your banks first if you qualify for this benefit.

Check Retrieval

The check retrieval fee is a fee charged when customers need to verify a check transaction if there’s a charge that they do not recognize.

Bounced Check Fees

If you write a check and your checking account doesn't have enough funds for it to push through, you’ll get charged a bounced check fee. Bounced check penalties vary depending on the check amount and the bank’s regulations. 

Check Encashment Fees

Check encashment fees are usually charged when you’re encashing a check from a different region or different branch. 

Who is a Checking Account for?

The truth of the matter is that checking accounts are for everyone. Especially if you have several financial responsibilities that you need to stay on top of. A checking account can make your life so much easier.

The best part? There are different types of checking accounts that are suited for different types of individuals. Depending on your lifestyle and your goals, you can sign up for a certain type of checking account.

What are the Different Types of Checking Accounts That RCBC Offers?

At RCBC, we have five different types of checking accounts for the Philippine market. All of these accounts come with an ATM card, checkbook, and transaction journal.

OneAccount

OneAccount is RCBC’s hybrid account that allows you to experience a savings and checking account in one. This customizable account gives you the freedom to add features to your bank account such as personal accident insurance, free withdrawals at Bancnet ATMs, and card insurance.

Dragon Checking

Dragon Checking is RCBC’s premium checking account. It has a higher minimum balance to earn interest, but it also comes with tiered interest rates, allowing you to earn more money, the more money you deposit into your account.

The Dragon Checking account also comes with the benefit of unlimited withdrawals. 

eWoman Checking

RCBC has created the eWoman Checking, a checking account made for women to give every woman the flexibility to pursue their goals and live the lifestyle they want while staying financially responsible. 

The eWoman Checking account comes with free life insurance. 

Corporate Dragon Checking Account

RCBC’s Corporate Dragon Checking Account allows you to handle your business’ finances and grow your money in just one account. This makes it much easier for you to fulfill any financial obligations to your suppliers, partners, and employees.

OneAccount Business

OneAccount Business is a business checking account that comes with the benefit of tiered interest rates. The OneAccount Business also comes with Cash Management Services products to help you manage your business’ money much more efficiently.

Tips to Help You Make the Most Out of Your Checking Account

In this section, we give you some of our best tips to help you make the most out of your checking account. That way, you can maximize this account’s use for a better financial future.

How to Write a Check

Writing a check can seem so official and daunting. One mistake can render your check useless, which can be a waste of precious checks. So, we’ve made this short guide to help you navigate through writing a check with centavos in the Philippines:

1. Fill out the date of when the check should be encashed on the top right side of the check.

2. Write the person or company to whom the check will be addressed on the line of PAY TO THE ORDER OF.

3. Next, beside the pay to the order of line, write the check amount in numbers. 

4. On the PESOS line, write out the amount in words. The number you write here should match the amount that you've written in numbers. Make sure to write the word “ONLY” at the end to ensure that it cannot be tampered with.

5. On the bottom right box, affix your signature to make this check official. Remember to try to make your signature identical to the specimens you’ve given to the bank, or else the check you issued may be returned. 

If you’re worried about misspelling words on your check, you can use a website that can translate the check amount from number to words so that all you need to do is copy this. 

Additionally, every time you write a check, you should note it down in your checkbook to record this transaction. 

Regularly Balance Your Checkbook

Regularly balancing your checkbook is a great way to stay organized. Even if you have an online banking account, you still want to make sure that you have a personal record of your transactions. This will help you avoid the risk of overdraft and identify any suspicious activities happening in your account. 

Finding the Right Bank for Your Checking Account in the Philippines

At RCBC we believe that you have the right to a better future by providing you with the tools you need to pursue your dreams. Our checking accounts are just one of the many ways we can help you with your financial goals. 

If you’re looking to learn more about the services we can provide for you to help you on your financial journey, make sure to visit our website or drop by any of our branches.