Everyday finance questions and decisions

basics of banking

the breathtaking pace of the banking evolution shows no sign of slowing down.

Managing your personal finances is a continual balancing act—keeping track of your earnings, paying your bills, and accumulating savings to pay for the things you need and want. For most people, it also involves having access to credit, including a credit card and loans to buy a home or a car.

Banks and credit unions can help you handle these tasks efficiently using insured checking and savings accounts. And, if you’re looking for help with financial planning or making investments, most banks and credit unions offer these services too.

The reasons for working with a bank or credit union haven’t changed very much since automatic teller machines (ATMs) were introduced in the 1970s. But over time the way you bank, and the way a bank delivers its services, have undergone a radical and largely digital transformation.

checking accounts

you pay your bills with a checking account even if you rarely write a check.

When you pay a bill from your bank account, you’re using what’s known as a demand deposit or transaction account. Demand means that your money is available when you want it, without giving the bank prior notice. Transaction means that you can tell the bank to transfer money from your account to another account. You’re the payer in this situation and the person or institution you’re paying is the payee.

Whether you use a paper check, computer, tablet, or mobile phone, you must provide the same information:

• The name of the payee

• The amount you want transferred

• Your authorization, using either a handwritten or electronic signature

Most of the information that’s imprinted on a paper check—the bank routing number, your account number, and the number of the check—is built into the bank’s bill-pay program.

Timing checks to make sure your payments arrive on time requires some planning whichever way you pay. With a paper check, unless you pay in person, you have to allow time for mail delivery, which can vary by region and distance. If you pay electronically, you can schedule the date the payment is made, but you may still have to allow two or three days for the electronic funds to transfer, or longer if your bank is sending a paper check because the payee doesn’t accept electronic payments.