Most Money May Be Virtual, But You Still Need an Actual Bank Account

Currently, there is a lot of confusion between digital money and virtual money. Digital money falls in the M2 and M3 financial systems categories. The physical coins and notes we use fall in the M1 category.

Technological advancements have made sure that the biggest percentage of money in circulation is digital, to a tune of 95%. Originally, virtual money was used when referring to currencies that did not exist and were mostly traded online.

However, virtual money has so far expanded. Today, there is no difference between virtual and digital money. Despite the popularity of virtual money, you need to open an actual bank account. Here are some reasons why you still need an actual bank account;

Helps You Save Money

Almost every other bank offers interest rates to customers who open and save money in a savings account. If, for instance, you open a SoFi savings account, you can grow your money over time from the interest rate generated from money saved in the account.

However, you should be careful when opening a savings account. Different financial institutions charge different fees for savings accounts. You need to ensure that the fees charged are only a fraction of the interest rate generated.

It would not make any sense if you are paying more in monthly or annual fees than the interest rate that your saved money generates. Those who have a checking account can automate the transfer of money to their savings account for efficiency.

A Bank Account is Safe

What are the chances of having your money stolen or lost when stored in your house or when kept in a bank? The truth is that depending on where you live, you have witnessed cases of theft or even been a victim yourself.

When this happens, the chances of losing all the money that you have with you are very high. You might be left with nothing and struggle to start again from zero. However, how would such cases affect the money kept in a bank?

Well, a bank account is safe. You can securely keep your money in a bank and then get it whenever you want. In addition, your money will be insured when kept in a bank account. In case of anything, you can be assured of getting your money back.

Bank Accounts Are Cheap

Bank accounts are among the cheapest options we have when it comes to money management. Even though banks charge fees for different transactions, you will likely not notice the deductions since they are quite low.

There are different services you can enjoy with your bank account. For instance, you can cash and deposit checks for free in your bank. You can also write checks, especially when paying bills for free.

As discussed above, you can transfer money to another account at some fee. This is also important when making payments such as salaries. Unlike credit cards, you can use a debit card to access money from your account for free or at some fee.

Bank Accounts are Convenient

Bank accounts come with a lot of convenience compared to keeping cash with you all the time. Let us assume that you have a checking account with bank X and you need to pay someone who uses bank Y and they are miles away from you.

There are different ways you can make this payment without any issues. One of them is by using a check and mailing it to them. You can also use an online bank transfer to make the same payment. This can be done from the comfort of your home.

If you need some quick cash from your bank account, you do not have to visit your bank. Instead, you can use your debit card and withdraw money from an ATM (Automated Teller Machine). You can also use this card to make payments.

You Can Improve Your Credit Score With a Bank Account

A credit score can be defined as a figure that is used to rate your creditworthiness. This figure plays an important role especially when you are applying for a loan. If your credit score is low or has been affected by poor transactions, you can use a bank account to rectify it.

All you need to do is open a bank account and then make sure that it is used regularly. In addition, you should make sure that you are careful with your transactions. Your bank will evaluate the account and generate a positive report that goes to your credit file. 

Bank accounts play a crucial role in our lives. Even though most money may be virtual, we still need actual bank accounts to handle our daily transactions.