Transactional accounts are bank accounts that provide depositors with quick and easy access to their money in several ways. Most commonly referred to as checking accounts, the money in transactional accounts can be accessed via paper checks, electronic transfers, ATM withdrawals or debit card payments.
Because banks know that depositors will need access to this money frequently, this money is not used for any of their in house business. For example, savings accounts pay interest as they cannot be accessed as frequently as transactional accounts and that money on deposit is often borrowed by banks during the course of business for whatever activity they need. Transactional accounts are set up to perform, thus if banks touch that money it becomes increasingly dangerous for depositors to bounce their payments. The only limitation to transactional account withdrawals is the amount of money on deposit.
Having a transactional account in your name is an essential tool when it comes to money management. With a transactional account you can pay off your debts in a timely manner and doing can help build your credit. Regardless of your financial level in life, a transactional account is an important instrument to help ensure that your money will work for you and provide you with control over your financial resources.
Imagine it is time to pay your bills and you had to drive all over town paying cash to your service providers. First stop, land lord, then the gas company, electric company, cell phone provider and so on and so forth. It would be rather inconvenient and a huge waste of time. Same scenario but you have a little book of paper where you can fill in the name of the payee, the amount of money due, drop it in the mail – and viola – the money is magically removed from your bank account. That is the beauty of transactional accounts.