Banks offers two types of deposit accounts; checking and savings account.

A checking account is very useful, especially if you have lots of bills to pay and would like to use your account to make purchases.  It's safe and convenient.  Plus, if you have checks you want to deposit on a regular basis it can save you money, especially since those check-cashing services charge a fee every time they cash your check.

A savings account is a great way to start saving for the future.  Your money will earn interest.  Also, a savings account ensures your money is safe and you can access it.  Also, the money is FDIC insured.

It's also important to consider the annual percentage Yield, or APY, when considering savings products. The APY includes the effect of compounding.As   you look at savings products, always compare the APYs, not the rates.

Checking Account Vs. Check-Cashing Service

This chart shows how much money you may be able to save by using a checking account instead of a check cashing service.  Let's say you open a new checking account that allows you to write and cash as many checks as you would like and it only charges you a $8.00 monthly service fee (which will be waved if your balance is over $500).  If you pay $8.00 a month for 12 months, you will end up paying $96.00 for a year. Since you will also need to order some blank checks, we will include $20.00 for check ordering charges.  So, at the end of 12 months you will end up paying $116. Now let's do the math for a check cashing service.  If you get paid weekly you would need to cash about four checks a month.  Let's say you are charged $5.00 for each check you cash at a check cashing service. That would mean that you could be spending $20.00 a month to cash your paychecks.

At the end of the year you could be paying as much as $240 just to cash your checks. As you can see using a checking account would cost you $124 less than if you were to cash your checks with a check cashing service. If your monthly balance is over $500 and if you do not order a check book and just use a debit card, you will save $240. That is a lot of money!