Checking 101


If you currently have a checking account or are looking to get one, there are several things you should know.


A checking account allows you to write checks to pay bills and buy goods.  The financial institution takes the money from your account and pays it to the person or company named on the check.


For a long time, the only way you could access money from your checking account was through checks or by visiting your branch. Luckily, there are now more convenient ways.


Most checking accounts have debit cards associated with them. A debit (check) card looks like a credit card, but immediately pays with funds from your checking account. They are accepted anywhere credit cards are accepted. It can also work as an ATM card, providing you with electronic access to your checking and savings accounts from automated teller machines.


When you open a checking account, you may choose to order checks through us, which you can write to others as payment. Traditionally, the merchant or individual to whom you wrote the check will either deposit or cash it. Your check (or an electronic image of it) travels to a clearinghouse to be processed and then comes back to us, where the funds are debited from your checking account. Today, millions of checks are processed electronically – debiting your account almost immediately.


The two important rules to remember with a checking account:


                        1. Put money in before taking it out, and

                        2. Keep track of every transaction



Keeping a Register

It is best to keep a checkbook register.  Registers are included when you order checks, or you may pick them up free from the credit union.  In the register, you should document every deposit, check, debit card transaction, etc. and keep a running total (adding and subtracting as you go).  One of the most common mistakes that people make is forgetting to write down a transaction and subtract it from their balance.  Not keeping an accurate register could cause you to overdraw your account, which can be a costly mistake due to Non-Sufficient Fund (NSF) Fees, not to mention the embarrassment of a returned check.  You should also balance your checking account register to your statement each month, or better yet, use online banking to balance your register more frequently.  Below is an example of a checkbook register.  If you are unsure how to balance your account with your statement, or how to maintain your register, please don't hesitate to stop by the credit union.  We're happy to help!




Endorsing a Check

There are several ways to endorse a check.  The most common is to simply sign the back of the check.  Be careful, though, to safeguard the check, because once it is signed, it is fully negotiable by whomever holds the check - think of it like cash - it can be used by anyone that has it.  You should never endorse a check until immediately before you cash it or deposit it.



If you will be depositing the check, it is advised that you write "For Deposit Only" in the endorsement line, and then write your account number.  This is called a "Restrictive Endoresement."  By endorsing your check this way, should the check be lost or stolen, the person that finds/steals it cannot cash it.




If you wish to sign the check over to another person, you would simply write "Pay to the order of..." as part of your endorsement.  This is known as a "Special Endorsement."  Now, the only person that can cash the check is the person you designated in the endorsement.



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