The Backup Checking Account

50/365: Hanging in the balance by Betsssssy on Flickr!Not too long ago, my wife and I combined our checking and savings accounts, mostly in an effort to make our personal finance management simpler.

However, instead of simply closing out our old checking accounts, we made the active decision to leave both of these open as free basic checking accounts. We left a couple hundred dollars in each account, put the checkbooks from these accounts into storage, and moved on with things.

Why would we leave these old accounts open? It’s simple – they’re backups.

The Purpose of a Backup Checking Account A backup checking account is exactly what it sounds like – it provides an easy solution in the event of an emergency. Here are some situations where it might come in handy.

Identity theft Let’s say your identity is stolen and someone drains all of the money from your primary checking account. During the interim period where you’re trying to get that situation resolved, you’re likely going to continue to need to carry on many banking activities – writing checks, using online banking, hitting the ATM, and so on. This is where your backup account can be useful. Just simply re-route many of your automatic deposits to this backup account for a while and use it as your primary account for a month or two until the situation is resolved.

Emergency money needs Another useful purpose for a backup checking account is for emergency money needs – the balance in the account can act as something of an emergency fund. In a true pinch, you can utilize the balance of this otherwise untouched account to help you make ends meet.

Teller access As more and more people move to using online banking services such as ING Direct (which is the bank I use), they’re often losing some of the convenience that comes with having a live teller available. For simple services such as cashing checks, exchanging currency (turning pennies into dollars, for example), and so on, a live teller can be invaluable. Thus, maintaining a checking account at a brick-and-mortar bank in your community can not only provide a great backup account, but it can leave the door open to many services one might otherwise lose out on.

Getting One Yourself (Without Switching Banks) It isn’t necessary to switch banks to get a backup checking account, although a bank switch is a great opportunity to get one (by leaving your old account in place).

My suggestion? Simply open a very basic free checking account at your local credit union. Get a checkbook for the account, then put those checks in a safe place and then forget about the account unless you have a specific need for it (teller usage, emergencies, or so on).

In effect, this is exactly what I’ve done with my old checking account. It’s now a very basic free checking account, with no maintenance fees or anything else. The account holds a small balance, and the checkbook for the account now resides in a hidden spot in our home. If there’s ever a reason for needing the account, I can simply go grab the checkbook and conduct business as usual, almost seamlessly.

A backup checking account is a personal security measure worth considering. It offers several little advantages at virtually no cost to you, and those advantages tend to shine when you need them the most. Think of it as a bit of security in the face of identity theft risk.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.