What is a checking account and what types are there?

Checking accounts and savings are two of the most widespread cash deposit instruments. Except for minor differences we could say that they have the same characteristics.

In savings accounts we can withdraw the funds we have deposited at any time.

In order to open a savings account, a contract must be signed with the bank. A copy of the contract must be given to the client, in which the general conditions will be reflected.

With the contract, the financial entity gives the client a nominative savings. This is non-endorsable and non-transferable.

In addition, the savings book will reflect all the operations that are carried out.

The savings book is not tied to any branch, but can be used in any branch that is part of our financial institution's network.

Another characteristic of savings is that they normally have a magnetic strip used to facilitate mechanized processing. This also incorporates certain security measures.

The holders of the passbook usually sign it through a procedure that only allows the signatures to be seen through ultraviolet light.

Otherwise there is no difference between a savings book and a checking account.

Both the interest rates and fees associated with savings accounts and current accounts are the same.

A checking account is an irregular deposit contract, i.e. they are not periodic and are not pre-established, between the bank and the customer. Through this, the entity is obliged to keep the money received, committing itself to have it always available for the client. It must also accept all kinds of deposits and payments.

Types of checking accounts

Joint accounts

This type of accounts are those that have more than one holder and require the signature of each and every one of them to carry out any operation. At the time of opening, it is decided whether it is going to be joint or indistinct. If one or the other is not specified, it will be understood to be a joint account.

The main advantage of this type of account is that it provides great security to the account holders, since it prevents transactions from being carried out without the consent and knowledge of all of them.

Indistinct accounts

These accounts also have more than one account holder, and any of them can carry out operations without the need for the concurrence of the others. A relationship of trust is assumed between the holders as there are joint and several powers.

Financial accounts or super accounts

What differentiates these accounts from traditional accounts is the profitability they offer. Although nowadays they have lost attractiveness due to the low level of interest rates, at the time they broke with a status that was characterized by the less types of the liabilities offered by the entities of the banking system.

In this type of account, the funds collected are placed in the money markets and customers are offered an interest rate quite similar to that negotiated in the money markets.

Linked savings accounts

The main feature is that the savings deposited in these accounts have a specific purpose. The typical example is that of home savings accounts, whose objective is the purchase of a home with two advantages: better financing conditions and favorable tax treatment.