Millennials are glued to their mobile devices for more than just scrolling through social media and snapping selfies. Thirty-eight percent of millennials use apps and mobile tools to pay their bills, according to a report from First Data, a credit card processing services company, and 64 percent use mobile payment services to send and receive money, according to data from finder, a product and brand comparison website.
“Aside from the convenience of sending money with the tap of a finger, virtual wallets are free to use and offer quick transfers,” says Jennifer McDermott, head of communications and a consumer advocate with finder.
Virtual wallets—also called digital wallets—offer a way to store different payment information and passwords from multiple accounts in one place.
They even “allow millennials to charge friends in real time, making splitting the costs of meals, gifts and housing easier than ever,” McDermott adds.
Thirty-eight percent of millennials use apps and mobile tools to pay their bills.
Since financial apps and tools are all the rage, do millennials need a checking account? The answer is still a resounding yes.
While there are financial apps to help you manage your money, there are good reasons millennials need a checking account as part of their financial strategy. The challenge is figuring out what millennials want from a checking account that apps simply can’t provide.
What checking accounts do that apps can’t
Checking accounts offer some benefits that digital wallets lack, McDermott says. One reason millennials need a checking account is that you can deposit checks and pay bills from your account. Digital wallets are not necessarily designed for this—they are simply for making purchases or sending money, McDermott ads.
Having a checking account also allows you to utilize direct deposit and skip the hassle of manually depositing each paycheck from your employer. If your account is insured by the FDIC, your money is safeguarded, too—if your bank fails, your deposits are insured up to the maximum amount allowed by law. And while often overlooked, you can even use your checking account as a budgeting tool.
“Checking accounts help you track your spending by reporting debit transactions in real time,” McDermott says. In the report from First Data, real-time information ranked at the top of the list of what millennials want from a checking account.
“With a digital wallet, it can be easy to get in the habit of spending money without keeping track of your [checking] account balance,” McDermott says. “For someone who’s just learning how to take care of their money, that can be an unfortunate habit to fall into.”
If you’re trying to find the right checking account for your lifestyle, a simple checking account can be just what’s needed when you’re in the early stages of financial management, says Mark A. Ranta, head of digital banking solutions at ACI Worldwide, an electronic payments solutions provider.
Traditional checking accounts have evolved to meet the need for easy access through online and mobile banking. “With today’s financial tools, you can see where your money is going and when it’s coming in, all in real time from your mobile device,” Ranta says.
“With a digital wallet, it can be easy to get in the habit of spending money without keeping track of your [checking] account balance. For someone who’s just learning how to take care of their money, that can be an unfortunate habit to fall into.”
Choosing a checking account
How millennials choose their checking account ties in to what millennials want from a checking account. If you’re anything like the millennials surveyed in the First Data report, you may routinely go online with your finances top-of-mind to:
- View statements and transactions
- Set up automated, recurring payments
- Transfer money electronically to friends and family
- Analyze your spending
A good checking account should allow you to do all of these things from your computer or mobile device. You could also add earning rewards to the list of reasons millennials need a checking account.
Discover Cashback Debit allows you to earn 1% cash back on up to $3,000 in debit card purchases each month.1 The incentive to earn cash rewards, which could be used to grow your savings or pay down debt, may factor into how millennials choose their checking account.
While there might be some commonalities in what millennials want from a checking account, you also need to consider which features are most important to you personally. Easy access to no-fee ATMs may be a priority for millennials who like to have cash in their wallet at all times, for example. For others, it might be avoiding checking account fees.
“There are so many flavors and options out there that it’s essential to start with asking some simple questions about your individual preferences,” Ranta says.
Making checking accounts and apps work together
While there are reasons millennials need a checking account, it doesn’t mean they have to give up on the idea of using money management apps altogether.
“Using both a checking account and a financial app offers the security and digital benefits you seek when managing your finances,” McDermott says. “By hooking up a checking account to digital payment and budgeting apps, you can easily track your spending and ensure your money is secure, while enjoying the convenience of sending money online and splitting purchases.”
How millennials choose their checking account comes down to personal preference. At the end of the day, the most important thing to consider may be how easily you can coordinate your choice of checking account with your favorite money apps to manage your financial life on the go.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.